SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 4, 1998
Panavision Inc.
(Exact Name of Registrant as specified in its Charter)
Delaware 001-12391 13-3593063
- ------------------------------------------------------------------------------
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction Identification No.)
of corporation)
6219 De Soto Avenue
Woodlands Hills, California 91367
- ------------------------------------------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (818) 316-1000
-----------------------
N/A
- -----------------------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT &
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 4, 1998, as contemplated by (i) an Agreement of
Recapitalization and Merger, dated as of December 18, 1997 (the
"Recapitalization Agreement"), by and among PX Holding Corporation, a
Delaware corporation ("PX Holding"), PX Merger Corporation, a
Delaware corporation (the "Merger Sub") and Panavision Inc.,a
Delaware corporation (the "Company"), and (ii) an Amended and
Restated Voting and Stockholders Agreement, dated as of April 16,
1998 (the "Stockholders Agreement"), by and among Warburg Pincus
Capital Company, L.P., a Delaware limited partnership ("Warburg"),
the Company and Mafco Holdings Inc., a Delaware corporation
("Mafco"), the Company consummated a merger whereby Merger Sub was
merged with and into the Company (the "Merger"), with the Company
remaining as the surviving corporation.
Immediately prior to the consummation of the Merger, PX Holding
purchased 5,784,199 shares of the Company's common stock, par value
$.01 per share ("Panavision Common Stock"), from the Company at a
purchase price of $26.69 per share, or an aggregate of $154,376,801
(the "PX Stock Purchase").
At the effective time of the Merger, all shares of stock of
Merger Sub issued and outstanding immediately prior to the effective
time were converted into ten shares of Panavision Common Stock. As a
result of the Merger, (i) 5,466,120 shares of Panavision Common Stock
were exchanged for $27.00 per share, or an aggregate of $147,585,240,
and (ii) 745,380 shares of Panavision Common Stock were retained by
holders either through election or proration. In addition, as part of
the recapitalization of the Company, Warburg exchanged 88%, or
11,190,960, of the shares of Panavision Common Stock it beneficially
owns for Series A redeemable preferred stock of the Company, which
was redeemed immediately after consummation of the Merger at a price
equivalent to $26.50 per share of Panavision Common Stock.
In connection with the Merger, the Company entered into a new
credit agreement with The Chase Manhattan Bank for a maximum
commitment amount of $340 million. In addition, the Company assumed
the obligations of PX Escrow Corp. ("PX Escrow"), a wholly owned
subsidiary of PX Holding, under the 9 5/8% Senior Subordinated
Discount Notes due 2006 (the "Notes") issued by PX Escrow for gross
proceeds of $150 million in an offering to qualified institutional
buyers exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 144A and to certain persons in offshore
transactions in reliance on Regulation S thereunder. The Company also
received an equity contribution from PX Holding of approximately $154
million which represents the consideration for the PX Stock Purchase
described above (together with the new credit agreement and the
assumed Notes, the "Recapitalization Financings"). The Company has
used the Recapitalization Financings to retire existing indebtedness,
fund the payment of the cash consideration and the fees and expenses
in connection with the Merger and to provide working capital for the
Company.
As a result of the Merger, PX Holding, a wholly owned
subsidiary of Mafco, the sole stockholder of which is Ronald O.
Perelman, has acquired an approximately 72% interest in the Company.
Warburg now owns approximately 19% and the other stockholders own
approximately 9% of the Panavision Common Stock. The Merger has been
accounted for as a leveraged recapitalization for accounting and
financial reporting purposes. A copy of the press release announcing
the Merger is attached as an exhibit to this Form 8-K.
The PX Stock Purchase shares are, and shares of intermediate
holding companies may from time to time be, pledged to secure
obligations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business acquired: None.
(b) Pro Forma Financial Information: Attached hereto as Annex A.
(c) Exhibits.
The following Exhibits are filed as part of this report:
Exhibit 4.1 Indenture, dated as of February 11, 1998,
between PX Escrow Corporation and The Bank of
New York, as Trustee.
Exhibit 4.2 Supplemental Indenture, dated as of June
4, 1998, among Panavision Inc., PX Escrow
Corporation and The Bank of New York, as
Trustee.
Exhibit 4.3 Credit Agreement, dated as of June 4,
1998, among Panavision Inc., the Several
Lenders, Chase Securities Inc., as Advisor
and Arranger, and The Chase Manhattan Bank,
as Administrative Agent.
Exhibit 4.4 Assumption Agreement, dated as of June
4,1998, between PX Escrow Corporation and
Panavision Inc.
Exhibit 99.1 Press Release of Panavision Inc. dated
June 4, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
Panavision Inc.
Date: June 19, 1998 By: /s/ William C. Scott
---------------------------
Name: William C. Scott
Title: Chief Executive Officer
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
Exhibit 4.1 Indenture, dated as of February 11, 1998, between PX
Escrow Corporation and The Bank of New York, as Trustee.
Exhibit 4.2 Supplemental Indenture, dated as of June 4, 1998, among
Panavision Inc., PX Escrow Corporation and The Bank of
New York, as Trustee.
Exhibit 4.3 Credit Agreement, dated as of June 4, 1998, among
Panavision Inc., the Several Lenders, Chase Securities
Inc., as Advisor and Arranger, and The Chase Manhattan
Bank, as Administrative Agent.
Exhibit 4.4 Assumption Agreement, dated as of June 4,1998, between PX
Escrow Corporation and Panavision Inc.
Exhibit 99.1 Press Release of Panavision Inc. dated June 4, 1998.
ANNEX A
PANAVISION INC.
INDEX TO PRO FORMA FINANCIAL STATEMENTS
Page
Unaudited Pro Forma Condensed Consolidated
Balance Sheet at March 31, 1998......................................A-1
Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the
three months ended March 31, 1998....................................A-3
Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the year ended
December 31, 1997....................................................A-5
UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated statements
of operations for the year ended December 31, 1997 and the three months ended
March 31, 1998 give pro forma effect to the acquisition of Visual Action
Holdings plc's Film Services Group ("FSG"), the recapitalization of Panavision
(the "Panavision Recapitalization") and the Recapitalization Financings as if
such transactions had been consummated on January 1, 1997. The pro forma
condensed consolidated balance sheet as of March 31, 1998 gives pro forma
effect to the Panavision Recapitalization and the Recapitalization
Financings as if such transactions had been consummated on March 31, 1998.
The pro forma financial statements do not purport to represent the results
of operations or the financial position of Panavision and its subsidiaries
that actually would have occurred had the foregoing transactions (the
"Transactions") been consummated on the aforesaid dates.
The pro forma condensed consolidated statements of operations and
other data exclude the following nonrecurring charges which will be
reflected in the Company's statement of operations in connection with the
Panavision Recapitalization and the Recapitalization Financings in the
period in which the transaction closes: (i) $29.3 million relating to the
cash settlement of unexercised stock options; (ii) approximately $17.5
million relating to the purchase by the Company of shares acquired through
the exercise of certain stock options; (iii) $6.0 million relating to
transaction expenses; (iv) $2.3 million increase in the valuation allowance
on deferred tax assets in connection with the Panavision Recapitalization;
and (v) an extraordinary charge of $1.8 million relating to the write-off
of deferred financing cost relating to the repayment of borrowings under
the Company's existing credit agreement.
The Panavision Recapitalization will be accounted for as a
recapitalization as there will be a significant continuation of stockholder
ownership. Accordingly, the transaction will have no impact on the
historical basis of the Company's assets and liabilities.
The acquisition of FSG (the "FSG Acquisition") has been recorded
under the purchase method of accounting, and accordingly, FSG's operating
results have been included in the Company's consolidated financial
statements since the acquisition date of June 5, 1997. The purchase price
of the FSG Acquisition plus direct acquisition-related costs have been
allocated based on fair values of the acquired assets and assumed
liabilities. The Company has also provided approximately $6.3 million to
cover the estimated transaction costs, lease cancellation costs and
severance related to the acquired businesses. Goodwill of approximately
$9.7 million was recognized as part of the transaction and is being
amortized over 30 years. The amounts for FSG included in the accompanying
unaudited pro forma condensed consolidated statement of operations for the
period ended December 31, 1997, is based on unaudited management
information compiled for each FSG operation form January 1, 1997 up to the
date of the acquisition, June 4, 1997. All FSG amounts have been converted
into U.S. dollars at the appropriate exchange rates (after adjustment for
minor differences between U.K. and the U.S. generally accepted accounting
principles).
<TABLE>
<CAPTION>
Panavision Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(in thousands)
March 31, 1998
-------------------------------------------
Actual Recapitalization Pro Forma
------ ---------------- ---------
Assets
Current Assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 5,835 $ 144,000 (a) $ 10,571
300,650 (b)
154,377 (c)
(444,145) (d)
(29,264) (e)
(121,997) (f)
(6,000) (g)
7,115 (i)
Accounts receivable, net 25,932 25,932
Inventories 8,510 8,510
Prepaid expenses and other current assets 19,665 (7,115) (i) 12,550
--------------------------- ----------
Total current assets 59,942 (2,379) 57,563
Property, plant and equipment, net 205,102 205,102
Deferred tax assets 2,329 (2,329) (h)
Goodwill 9,866 9,866
Other 7,085 6,000 (a) 15,684
4,350 (b)
(1,751) (f)
--------------------------- ----------
$ 284,324 $ 3,891 $ 288,215
=========================== ==========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable $ 9,810 $ $ 9,810
Accrued liabilities 22,777 22,777
Current maturities of long-term debt 3,685 (3,484) (f) 201
Deferred tax liabilities 5,387 5,387
--------------------------- ----------
Total current liabilities 41,659 (3,484) 38,175
Long-term debt 118,516 (118,513) (f) 455,003
150,000 (a)
305,000 (b)
Deferred tax liabilities 6,380 6,380
Other liabilities 2,461 2,461
Common stock 189 58 (c) 81
(166) (d)
Additional paid-in capital 80,094 154,319 (c) 3,041
(231,372) (d)
Retained earnings (accumulated deficit) 36,935 (212,607) (d) (215,016)
(29,264) (e)
(1,751) (f)
(6,000) (g)
(2,329) (h)
Foreign currency translation adjustment (1,910) (1,910)
--------------------------- ----------
Total stockholders' equity (deficit) 115,308 (329,112) (213,804)
--------------------------- ----------
$ 284,324 $ 3,891 $ 288,215
=========================== ==========
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
</TABLE>
Panavision Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(in thousands, except share data)
a. Reflects the assumption of the 9 5/8% Senior Subordinated Discount
Notes due 2006 (the "Notes") net of the initial purchasers discount and
related fees and expenses.
b. Reflects borrowings of $305,000 under the Credit Agreement, among the
Company, the Several Lenders, Chase Securities Inc., as Advisor and
Arranger, and The Chase Manhattan Bank, as Administrative Agent, dated
as of June 4, 1998, (the "New Credit Agreement" ) net of related fees
and expenses.
c. Reflects the purchase by PX Holding of 5.8 million shares of Panavision
Common Stock at $26.69 per share.
d. Reflects the conversion of 11.2 million shares of Panavision Common
Stock owned by Warburg into redeemable preferred stock of the Company
and the redemption of such stock at a price equivalent to $26.50 in
cash per share of Panavision Common Stock and the purchase of 5.5
million shares from the public and management at a price of $27.00 per
share of which $17,547 will be charged to expense in the Company's
statement of operations due to the cash settlement of shares acquired
through the exercise of certain stock options.
e. Reflects the cash payment made to settle unexercised options in
connection with the recapitalization of Panavision (the "Panavision
Recapitalization") which will be charged to expense in the Company's
statement of operations.
f. Reflects the payment of existing debt of the Company and the write-off
of related deferred charges of $1,751.
g. Reflects fees and expenses related to the Panavision Recapitalization
which will be charged to expense in the Company's statement of
operations.
h. Reflects the increase in valuation allowance on deferred tax asset in
connection with the Panavision Recapitalization.
i. Reflects the repayment of notes due to the Company from officers and
key employees upon completion of the Panavision Recapitalization.
Panavision Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
(In thousands, except per share data)
Three Months Ended March 31, 1998
-----------------------------------------
Actual Recapitalization Pro Forma
------ ---------------- ---------
Revenues $ 43,154 $ $ 43,154
Cost of revenues 24,093 24,093
-------- -------- --------
Gross margin 19,061 19,061
Operating costs 14,569 383 (a) 14,881
(71)(a)
-------- -------- --------
Operating income (loss) 4,492 (312) 4,180
Interest income 166 166
Interest expense (2,294) (10,191)(b) (10,243)
2,242 (b)
Foreign exchange gain 277 277
Other, net 994 994
-------- -------- --------
Income (loss) before
income taxes 3,635 (8,261) (4,626)
Income tax (provision)
benefit (1,163) 1,018 (c) (145)
-------- -------- --------
Net income (loss) $ 2,472 $ (7,243) $ (4,771)
======== ======== ========
Basic earnings (loss)
per common share $ 0.13 $ (0.59)
Shares used in the
computation 18,929 8,056
Diluted earnings (loss)
per common share $ 0.13 $ (0.59)
Shares used in the
computation 19,354 8,056
See Notes to Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the three months ended March 31, 1998.
Panavision Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
(in thousands)
a. To reflect the elimination of historical amortization of deferred
financing charges on debt retired and the amortization of deferred
financing charges on the Notes assumed in connection with the
Panavision Recapitalization and the New Credit Agreement.
b. To reflect interest expense on the Notes, compounded semiannually,
borrowings under the New Credit Agreement and elimination of historical
interest expense:
Three Months
Interest expense March 31, 1998
---------------- --------------
Notes at 9.625% $ 3,965
Revolving Facility at 7.9663% 1,295
Tranche A Term Loan at 7.94% 1,787
Tranche B Term Loan at 8.238% 3,089
Other fees 55
---------
10,191
Interest expense on retired debt 2,242
---------
Net interest adjustment $ 7,949
=========
A 0.125% change in the interest rate payable on borrowings under the New
Credit Agreement would change annual interest expense as follows:
Notes $ 47
Revolving Facility 20
Tranche A Term Facility 28
Tranche B Term Facility 47
---------
$ 142
=========
c. The pro forma provision for income taxes primarily consists of state,
local and foreign taxes. Pro forma tax adjustments reflect the
elimination of federal and state income taxes (other than certain state
minimum taxes) as a result of additional interest expense and
amortization of deferred charges related to the Panavision
Recapitalization. The Company has not reflected a federal tax benefit
relating to its losses as it is more likely than not that it will not
be able to realize benefit for such losses in the future.
<TABLE>
<CAPTION>
Panavision Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
(in thousands, except per share data)
Year Ended December 31, 1997
---------------------------------------------------------------------------------
Historical
-----------------------------
FSG Pro Forma Adjustments
January 1, 1997 ---------------------------------
to FSG Panavision Panavision
Panavision June 4, 1997 Acquisition Recapitalization Pro Forma
---------- --------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 176,863 $ 27,802 $ (1,819)(a) $ $ 202,846
Cost of revenues 90,879 16,751 (1,819)(a) 105,726
(85)(b)
--------- --------- --------- --------- ---------
Gross margin 85,984 11,051 85 97,120
Operating costs 52,069 10,488 130 (c) 1,531 (g) 63,467
(500)(d) (251)(g)
--------- --------- --------- --------- ---------
Operating income 33,915 563 455 (1,280) 33,653
Interest income 484 484
Interest expense (6,869) (280) (1471)(e) (39,339)(h) (39,339)
8,620 (h)
Foreign exchange (loss) (105) (105)
Other, net 1,315 276 1,591
--------- --------- --------- --------- ---------
Income (loss) before
income taxes 28,740 559 (1,016) (31,999) (3,716)
Income tax (provision)
benefit (9,252) (179) 287(f) 6,273(f) (2,871)
--------- --------- --------- --------- ---------
Net income (loss)
before extrodinary
item $ 19,488 $ 380 $ (729) $ (25,726) $ (6,587)
========= ========= ========= ========= =========
Basic earnings (loss)
per common share $ 1.07 $ (0.82)
Shares used in the
computation 18,174 8,056
Diluted earnings (loss)
per common share $ 1.03 $ (0.82)
Shares used in the
computation 19,012 8,056
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1997.
</TABLE>
Panavision Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations
(in thousands)
a. To eliminate intercompany revenues between the Company and FSG and
the related cost of sales.
b. To adjust depreciation expense for the revaluation of assets and to
conform estimated useful lives.
c. To reflect the amortization of goodwill resulting from the FSG
Acquisition.
d. To eliminate management fees paid to Visual Action Holdings, plc.
e. To reflect higher interest expense due to additional borrowings
required for the acquisition of FSG.
f. The pro forma provision for income taxes primarily consists of state,
local and foreign taxes. Pro forma tax adjustments reflect the
elimination of federal and state income taxes (other than certain
state minimum taxes) as a result of additional interest expense and
amortization of deferred charges related to the Panavision
Recapitalization. The Company has not reflected a federal tax benefit
relating to its losses as it is more likely than not that it will not
be able to realize benefit for such losses in the future.
g. To reflect the elimination of historical amortization of deferred
financing charges on debt retired and the amortization of deferred
financing charges on the Notes assumed in connection with the
Panavision Recapitalization and the New Credit Agreement.
h. To reflect interest expense on the Notes, compounded semiannually,
borrowings under the New Credit Agreement and elimination of historical
interest expense:
Year Ended
December 31,
Interest Expense 1997
---------------- --------------
Notes at 9.625% $ 14,438
Revolving Facility at 7.9663% 5,178
Tranche A Term Loan at 7.94% 7,146
Tranche B Term Loan at 8.238% 12,357
Other fees 220
---------
39,339
Interest expense on retired debt 8,620
---------
Net interest adjustment $ 30,719
=========
A 0.125% change in the interest rate payable on borrowings under the New
Credit Agreement would change annual interest expense as follows:
Revolving Facility $ 77
Tranche A Term Facility 113
Tranche B Term Facility 187
---------
$ 377
=========
Exhibit 4.1
PX ESCROW CORP.
TO BE ASSUMED BY
PANAVISION INC.
95/8% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2006
AND
95/8% SENIOR SUBORDINATED DISCOUNT EXCHANGE NOTES DUE 2006
INDENTURE
DATED AS OF FEBRUARY 11, 1998
THE BANK OF NEW YORK
TRUSTEE
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions........................................1
SECTION 1.02. Other Definitions.................................21
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act...................................21
SECTION 1.04. Rules of Construction.............................22
ARTICLE II
The Securities
SECTION 2.01. Form and Dating..................................23
SECTION 2.02. Execution and Authentication.....................23
SECTION 2.03. Registrar and Paying Agent.......................24
SECTION 2.04. Paying Agent To Hold Money in Trust..............25
SECTION 2.05. Securityholder Lists.............................25
SECTION 2.06. Transfer and Exchange............................25
SECTION 2.07. Replacement Securities...........................26
SECTION 2.08. Outstanding Securities...........................26
SECTION 2.09. Temporary Securities.............................27
SECTION 2.10. Cancellation.....................................27
SECTION 2.11. Defaulted Interest...............................27
SECTION 2.12. CUSIP Numbers....................................27
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee...............................28
SECTION 3.02. Selection of Securities To Be Redeemed...........28
SECTION 3.03. Notice of Redemption.............................28
SECTION 3.04. Effect of Notice of Redemption...................30
SECTION 3.05. Deposit of Redemption Price......................30
SECTION 3.06. Securities Redeemed in Part......................30
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities............................30
SECTION 4.02. SEC Reports......................................31
SECTION 4.03. Limitation on Debt of the Company and its
Subsidiaries...................................31
SECTION 4.04. Limitation on Other Senior Subordinated
Debt and Secured Debt............................33
SECTION 4.05. Limitation on Restricted Payments................34
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock...............................36
SECTION 4.07. Limitation on Transactions with Affiliates.......41
SECTION 4.08. Change of Control................................43
SECTION 4.09. Limitation on Other Business Activities..........45
SECTION 4.10. Limitation on Restrictions on Distributions
from Subsidiaries...............................45
SECTION 4.11. Limitation on Issuances of Guarantees of Debt....46
SECTION 4.12. Compliance Certificate...........................47
SECTION 4.13. Further Instruments and Acts.....................47
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets..............47
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default................................48
SECTION 6.02. Acceleration.....................................51
SECTION 6.03. Other Remedies...................................51
SECTION 6.04. Waiver of Past Defaults..........................51
SECTION 6.05. Control by Majority..............................52
SECTION 6.06. Limitation on Suits..............................52
SECTION 6.07. Rights of Holders To Receive Payment.............52
SECTION 6.08. Collection Suit by Trustee.......................53
SECTION 6.09. Trustee May File Proofs of Claim.................53
SECTION 6.10. Priorities.......................................53
SECTION 6.11. Undertaking for Costs............................53
SECTION 6.12. Waiver of Stay or Extension Laws.................54
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee................................54
SECTION 7.02. Rights of Trustee................................55
SECTION 7.03. Individual Rights of Trustee.....................56
SECTION 7.04. Trustee's Disclaimer.............................56
SECTION 7.05. Notice of Defaults...............................56
SECTION 7.06. Reports by Trustee to Holders....................57
SECTION 7.07. Compensation and Indemnity.......................57
SECTION 7.08. Replacement of Trustee...........................58
SECTION 7.09. Successor Trustee by Merger......................58
SECTION 7.10. Eligibility; Disqualification....................59
SECTION 7.11. Preferential Collection of Claims
Against Company................................59
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance.....................................59
SECTION 8.02. Conditions to Defeasance.........................60
SECTION 8.03. Application of Trust Money.......................62
SECTION 8.04. Repayment to Company.............................62
SECTION 8.05. Indemnity for Government Obligations.............62
SECTION 8.06. Reinstatement....................................62
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders.......................63
SECTION 9.02. With Consent of Holders..........................64
SECTION 9.03. Compliance with Trust Indenture Act..............65
SECTION 9.04. Revocation and Effect of Consents and Waivers....65
SECTION 9.05. Notation on or Exchange of Securities............66
SECTION 9.06. Trustee To Sign Amendments.......................66
SECTION 9.07. Payment for Consent..............................66
ARTICLE X
Subsidiary Guarantees
SECTION 10.01. Subsidiary Guarantees............................67
SECTION 10.02. Guaranty Absolute................................68
SECTION 10.03. Limitation on Liability..........................69
SECTION 10.04. Waivers..........................................69
SECTION 10.05. Waiver of Subrogation and Contribution...........70
SECTION 10.06. No Waiver; Cumulative Remedies...................70
SECTION 10.07. Successors and Assigns...........................71
SECTION 10.08. Severability.....................................71
ARTICLE XI
Subordination
SECTION 11.01. Agreement To Subordinate........................71
SECTION 11.02. Liquidation, Dissolution, Bankruptcy............71
SECTION 11.03. Default on Senior Debt..........................72
SECTION 11.04. Acceleration of Payment of Securities...........73
SECTION 11.05. When Distribution Must Be Paid Over.............73
SECTION 11.06. Subrogation.....................................73
SECTION 11.07. Relative Rights.................................73
SECTION 11.08. Subordination May Not Be Impaired by Company....73
SECTION 11.09. Rights of Trustee and Paying Agent..............73
SECTION 11.10. Distribution or Notice to Representative........74
SECTION 11.11. Article XI Not To Prevent Events of
Default or Limit Right To Accelerate...........74
SECTION 11.12. Trust Moneys Not Subordinated...................74
SECTION 11.13. Trustee Entitled To Rely........................74
SECTION 11.14. Trustee To Effectuate Subordination.............75
SECTION 11.15. Trustee Not Fiduciary for Holders of
Senior Debt...................................75
SECTION 11.16. Reliance by Holders of Senior Debt on
Subordination Provisions.......................75
ARTICLE XII
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls....................76
SECTION 12.02. Notices.........................................76
SECTION 12.03. Communication by Holders with Other Holders.....77
SECTION 12.04. Certificate and Opinion as to
Conditions Precedent..........................77
SECTION 12.05. Statements Required in Certificate or Opinion...77
SECTION 12.06. When Securities Disregarded.....................78
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar....78
SECTION 12.08. Legal Holidays..................................78
SECTION 12.09. Governing Law...................................78
SECTION 12.10. No Recourse Against Others......................78
SECTION 12.11. Successors......................................78
SECTION 12.12. Multiple Originals..............................79
SECTION 12.13. Table of Contents; Headings.....................79
Rule 144A / Regulation S Appendix
Exhibit A -- Form of Initial Note
Exhibit B -- Form of Exchange Note
Exhibit C -- Form of Subsidiary Supplemental Indenture
INDENTURE, dated as of February 11, 1998, between PX ESCROW
CORP., a Delaware corporation ("PX Escrow"), and THE BANK OF NEW YORK, a
New York banking corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Accreted Value" as of any date (the "Specified Date") means,
with respect to each $1,000 Principal Amount at Maturity of Securities:
(i) if the Specified Date is one of the following dates
(each a "Semi-Annual Accrual Date"), the amount set forth opposite
such date below:
Semi-Annual
Accrual Date Accreted Value
------------ --------------
February 11, 1998 $ 688.38
August 1, 1998 719.63
February 1, 1999 754.26
August 1, 1999 790.56
February 1, 2000 828.61
August 1, 2000 868.48
February 1, 2001 910.28
August 1, 2001 954.08
February 1, 2002 $1,000.00
(ii) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the sum of (A) the Accreted Value for the Semi-Annual
Accrual Date immediately preceding the Specified Date and (B) an
amount equal to the product of (i) the Accreted Value for the
immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding SemiAnnual Accrual Date and (ii)
a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180 (or, if the Semi-Annual Accrual Date immediately
preceding the Specified Date is February 11, 1998, the denominator of
which is 170; and
(iii) if the Specified Date occurs after February 1,
2002, $1,000.00.
Whenever the redemption price or Put Amount is paid in connection with the
redemption, purchase or repurchase of a portion of a Security, the Accreted
Value of such Security is reduced by the Accreted Value of the portion of
the Security so redeemed, purchased or repurchased.
"Affiliate" of any specified Person means (i) any other Person
which, directly or indirectly, is in control of, is controlled by or is
under common control with such specified Person or (ii) any other Person
who is a director or officer (A) of such specified Person, (B) of any
subsidiary of such specified Person or (C) of any Person described in
clause (i) above. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of
the management and policies of such Person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Premium" means, with respect to a Security at any
time, the greater of (i) 1.0% of the Accreted Value of such Security at
such time and (ii) the excess of (A) the present value at such time of the
Principal Amount at Maturity plus any required interest payments due on
such Security, computed using a discount rate equal to the Treasury Rate
plus 100 basis points, over (B) the Accreted Value of such Security at such
time.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions)
of shares of Capital Stock of a Subsidiary of the Company (other than
directors' qualifying shares and other than Capital Stock of a Non-Recourse
Subsidiary), property or other assets (each referred to for the purposes of
this definition as a "disposition") by the Company or any of its
Subsidiaries (other than a Non-Recourse Subsidiary) (including any
disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Subsidiary of the Company to the Company
or by the Company or a Subsidiary of the Company to a Wholly Owned Recourse
Subsidiary, (ii) a disposition of property or assets by the Company or its
Subsidiaries at fair market value in the ordinary course of business, (iii)
a disposition by the Company or its Subsidiaries of obsolete assets or
inventory in the ordinary course of business, (iv) a disposition subject to
or permitted by Section 4.05, (v) an issuance of employee stock options and
(vi) a disposition by the Company or any of its Subsidiaries in which the
Company or its Subsidiaries receive as consideration Capital Stock of (or
similar interests in) a Person engaged in, or assets that will be used in,
the businesses of Panavision and its Wholly Owned Recourse Subsidiaries, or
additionally, in the case of a disposition by a Subsidiary that is not a
Wholly Owned Recourse Subsidiary, the business of such Subsidiary, existing
on the Issue Date or in businesses reasonably related thereto, as
determined by the Board of Directors of the Company, the determination of
which shall be conclusive and evidenced by a resolution of the Board of
Directors of the Company.
"Assumption" means the assumption by Panavision of the
obligations of PX Escrow under this Indenture, the Securities, the
Registration Agreement, the Purchase Agreement and the Escrow Agreement
pursuant to the terms of the Escrow Agreement.
"Average Life" means, with respect to any Debt, the quotient
obtained by dividing (i) the sum of the products of (a) the number of years
from the date of the transaction or event giving rise to the need to
calculate the Average Life of such Debt to the date, or dates, of each
successive scheduled principal payment of such Debt multiplied by (b) the
amount of each such principal payment by (ii) the sum of all such principal
payments.
"Bank Debt" means any and all amounts payable by the Company or
any of its Subsidiaries under or in respect of the Credit Agreement or any
Refinancing thereof, or any other agreements with lenders party to the
foregoing, including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to the Company), fees, charges, expenses,
reimbursement obligations, Guarantees and all other amounts payable
thereunder or in respect thereof; provided, however, that nothing in this
definition shall permit the Company or any of its Subsidiaries to Issue any
Debt that is not permitted pursuant to Section 4.03.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any committee thereof duly authorized
to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" of a Person means any obligation
which is required to be classified and accounted for as a capital lease on
the face of a balance sheet of such Person prepared in accordance with
GAAP; the amount of such obligation shall be the capitalized amount
thereof, determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests (including partnership interests), rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into or exchangeable for such
equity.
"Change of Control" means the occurrence of any of the
following events on or after the Issue Date:
(i) any "Person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total voting power of the Voting
Stock of the Company; provided, however, that the Permitted Holders
"beneficially own" (as so defined), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting
Stock of the Company than such other Person and do not have the right
or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the
Company (for the purposes of this clause (i), such other Person shall
be deemed to beneficially own any Voting Stock of a specified
corporation held by a parent corporation, if such other Person
"beneficially owns" (as so defined), directly or indirectly, more
than 35% of the voting power of the Voting Stock of such parent
corporation and the Permitted Holders "beneficially own" (as so
defined), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority
of the Board of Directors of such parent corporation); or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election
by the shareholders of the Company was approved by a vote of 66-2/3%
of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the
Company then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means (i) prior to the Effective Date, PX Escrow, and
(ii) from and after the Effective Date, Panavision until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated EBITDA Coverage Ratio" means, for any period, the
ratio of (i) the aggregate amount of EBITDA for such period to (ii)
Consolidated Interest Expense for such period; provided, however, that:
(1) if Panavision or any Subsidiary of Panavision has Issued
any Debt since the beginning of such period that remains outstanding
or if the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an Issuance of Debt, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Debt as
if such Debt had been Issued on the first day of such period and the
discharge of any other Debt Refinanced or otherwise discharged with
the proceeds of such new Debt as if such discharge had occurred on
the first day of such period;
(2) if since the beginning of such period Panavision or any
Subsidiary of Panavision shall have made any Asset Disposition,
EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period, or increased
by an amount equal to the EBITDA (if negative), directly attributable
thereto for such period and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Debt of Panavision or
any Subsidiary of Panavision Refinanced or otherwise discharged with
respect to Panavision and its continuing Subsidiaries in connection
with such Asset Disposition for such period (or if the Capital Stock
of any Subsidiary of Panavision is sold, the Consolidated Interest
Expense for such period directly attributable to the Debt of such
Subsidiary to the extent Panavision and its continuing Subsidiaries
are no longer liable for such Debt after such sale); and
(3) if since the beginning of such period Panavision or any
Subsidiary of Panavision (by merger or otherwise) shall have made an
Investment in any Subsidiary of Panavision (or any Person which
becomes a Subsidiary of Panavision) or an acquisition of assets which
constitute all or substantially all of an operating unit of a
business, including any Investment or acquisition of assets occurring
in connection with a transaction causing a calculation to be made
hereunder, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto, as if such
Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, an Investment in any Person, an Asset
Disposition, the amount of income or earnings relating thereto, or the
amount of Consolidated Interest Expense associated with any Debt, the pro
forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company. If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest
on such Debt shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period.
"Consolidated Interest Expense" means, for any period, the sum
of (a) the interest expense of Panavision and its consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) for such period as determined in
accordance with GAAP consistently applied, plus (b) Preferred Stock
dividends in respect of Preferred Stock of Panavision or any Subsidiary of
Panavision (other than a Non-Recourse Subsidiary) held by Persons other
than Panavision or a Wholly Owned Recourse Subsidiary, plus (c) the cash
contributions to an employee stock ownership plan of Panavision and its
Subsidiaries (other than Non-Recourse Subsidiaries) to the extent such
contributions are used by an employee stock ownership plan to pay interest.
"Consolidated Net Income" means, for any period, the
consolidated net income (or loss) of Panavision and its consolidated
Subsidiaries for such period as determined in accordance with GAAP,
adjusted to the extent included in calculating such net income (or loss),
by excluding
(i) all extraordinary gains or losses;
(ii) the portion of net income (or loss) of Panavision and its
consolidated Subsidiaries attributable to minority interests in
unconsolidated Persons except to the extent that, in the case of net
income, cash dividends or distributions have actually been received
by Panavision or one of its consolidated Subsidiaries (subject, in
the case of a dividend or distribution received by a Subsidiary of
Panavision, to the limitations contained in clause (v) below) and, in
the case of net loss, Panavision or any Subsidiary of Panavision has
actually contributed, lent or transferred cash to such unconsolidated
Person;
(iii) net income (or loss) of any other Person attributable to
any period prior to the date of combination of such other Person with
Panavision or any of its Subsidiaries on a "pooling of interests"
basis;
(iv) net gains or losses in respect of dispositions of assets
by Panavision or any of its Subsidiaries (including pursuant to a
sale-and-leaseback arrangement) other than in the ordinary course of
business;
(v) the net income of any Subsidiary of Panavision to the
extent that the declaration of dividends or distributions by that
Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulations applicable to that Subsidiary or its
shareholders;
(vi) any net income or loss of any Non-Recourse Subsidiary,
except that Panavision's equity in the net income of any such
Non-Recourse Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Non-Recourse Subsidiary during such period to
Panavision as a dividend or other distribution; and
(vii) the cumulative effect of a change in accounting
principles;
provided, however, that in using Consolidated Net Income for purposes of
calculating the Consolidated EBITDA Coverage Ratio at any time, net income
of a Subsidiary of the type described in clause (v) of this definition
shall not be excluded. Notwithstanding the foregoing, for the purposes of
Section 4.05 only, Consolidated Net Income shall be calculated after giving
effect on a pro forma basis to, (a) to the extent not already included in
the calculation of consolidated net income of Panavision in accordance with
GAAP, interest expense on the Securities, amortization of deferred
financing charges on the Securities and interest income on Escrowed
Property accruing from the Issue Date to but excluding the Effective Date
as if Panavision had issued the Securities on the Issue Date and (b) to the
extent Transaction Charges have been charged to Consolidated Net Income in
the fiscal quarter during which such Transaction Charges were incurred, the
Transaction Charges as if they had not been charged to Consolidated Net
Income in the fiscal quarter in which such Transaction Charges were
incurred but instead had been capitalized on the consolidated balance sheet
of Panavision in connection with the Transactions and subsequently
amortized over a 40-year period.
"Consolidated Net Worth" of any Person means, at any date, all
amounts which would, in conformity with GAAP, be included under
shareholders' equity on a consolidated balance sheet of such Person at such
date, less any amounts attributable to Redeemable Stock or Exchangeable
Stock.
"Credit Agreement" means the credit facilities to be provided
to the Company pursuant to a Commitment Letter dated January 23, 1998 from
The Chase Manhattan Bank, as such facilities may be amended, supplemented,
waived and otherwise modified or Refinanced from time to time.
"Debt" of any Person means, on any date of determination,
without duplication,
(i) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable, including, in each case,
any premium on such indebtedness to the extent such premium has
become due and payable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under
any title retention agreement (but excluding trade accounts payable
and other accrued current liabilities arising in the ordinary course
of business);
(iv) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations
described in (i) through (iii) above) entered into in the ordinary
course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following
payment on the letter of credit);
(v) the amount of all obligations of such Person with
respect to the redemption, repayment (including liquidation
preference) or other repurchase of, in the case of a Subsidiary of
the Company, any Preferred Stock and, in the case of any other
Person, any Redeemable Stock (but excluding in each case any accrued
dividends);
(vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons and all dividends of other Persons
for the payment of which, in either case, such Person is responsible
or liable, directly or indirectly, as obligor, guarantor or
otherwise, including Guarantees of such obligations and dividends;
and
(vii) all obligations of the type referred to in clauses
(i) through (vi) of other Persons secured by any Lien on any property
or asset of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the
obligation so secured.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"Designated Senior Debt" means, as of any date of
determination, (i) the Bank Debt and (ii) any other Senior Debt of the
Company; provided that for purposes of this clause (ii) the Senior Debt of
the Company Issued in any single transaction shall not be Designated Senior
Debt unless the Senior Debt Issued in such transaction (including any
commitments to lend), at the time of Issuance, had an aggregate principal
amount outstanding (including any commitments to lend) exceeding
$25,000,000 and is specifically designated in the instrument evidencing
such Senior Debt as "Designated Senior Debt."
"EBITDA" means, for any period, the Consolidated Net Income for
such period, plus the following to the extent included in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization expense, (v) all
other noncash charges (excluding any noncash charge to the extent that it
requires an accrual of or a reserve for cash disbursements for any future
period), (vi) Transaction Charges and (vii) foreign currency gains or
losses.
"Effective Date" means the effective date of the Assumption.
"Escrow Agent" means the Escrow Agent from time to time under
the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement dated as of
February 11, 1998, between the Company and The Bank of New York, as escrow
agent thereunder, as amended from time to time.
"Escrowed Property" has the meaning ascribed thereto in the
Escrow Agreement.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchange Notes" means the 9 5/8% Senior Subordinated Discount
Exchange Notes Due 2006 of the Company, if and when issued pursuant to a
Registered Exchange Offer for Initial Notes.
"Exchangeable Stock" means any Capital Stock of a Person which
by its terms or otherwise is required to be exchanged or converted or is
exchangeable or convertible at the option of the holder into another
security (other than Capital Stock of such Person which is neither
Exchangeable Stock nor Redeemable Stock).
"Existing Credit Agreement" means the Credit Agreement, dated
as of June 5, 1997, among Panavision, the subsidiary guarantors and lenders
signatory thereto and The Chase Manhattan Bank, as administrative agent, as
in effect on the Issue Date.
"GAAP" means generally accepted accounting principles in the
United States, as in effect from time to time, except that for purposes of
calculating the Consolidated EBITDA Coverage Ratio, it shall mean generally
accepted accounting principles in the United States as in effect on the
Issue Date.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such
other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise)
or (ii) entered into for purposes of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Holder" or "Securityholder" means the Person in whose name
a Security is registered on the Registrar's books.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Initial Notes" means the 9 5/8% Senior Subordinated Discount
Notes Due 2006 of the Company.
"Investment" in any Person means any loan or advance to, any
net payment on a Guarantee of, any acquisition of Capital Stock, equity
interest, obligation or other security of, or capital contribution or other
investment in, such Person. Investments shall exclude advances to customers
and suppliers in the ordinary course of business. The term "Invest" has a
corresponding meaning. For purposes of the definitions of "Non-Recourse
Subsidiary" and "Restricted Payment" and for purposes of Section 4.05, (i)
"Investment" shall include a designation after the Issue Date of a
Subsidiary as a Non-Recourse Subsidiary, and such Investment shall be
valued at an amount equal to the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net
assets of such Subsidiary at the time that such Subsidiary is designated a
Non-Recourse Subsidiary; and (ii) any property transferred to or from a
Non-Recourse Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the
Board of Directors of the Company, and if such property so transferred
(including in a series of related transactions) has a fair market value, as
so determined by the Board of Directors, in excess of $10,000,000, such
determination shall be confirmed by an independent appraiser.
"Issue" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Debt or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary of another
Person (whether by merger, consolidation, acquisition or otherwise) shall
be deemed to be issued by such Subsidiary at the time it becomes a
Subsidiary of such other Person.
"Issue Date" means the date of original issue of the
Initial Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York
or in the state where the principal office of the Trustee is located.
"Lien" means any mortgage, pledge, security interest,
conditional sale or other title retention agreement or other similar lien.
"Mafco Holdings" means Mafco Holdings Inc., a Delaware
corporation, and its successors.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Debt or other obligations relating to such properties or assets or received
in any other noncash form) therefrom, in each case net of (i) all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes
required or estimated in good faith to be required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Debt which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must
by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from or in
connection with such Asset Disposition and (iii) all distributions and
other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition;
provided, however, that in connection with an Asset Disposition to a
Subsidiary of the Company (other than a Non-Recourse Subsidiary), Net
Available Cash will be deemed to be a percentage of Net Available Cash (as
calculated above) equal to (A) 100% minus (B) the Company's percentage
ownership in such Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes
paid or estimated in good faith to be payable as a result thereof.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
common stock of such corporation; provided, however, that Non-Convertible
Capital Stock shall not include any Redeemable Stock or Exchangeable Stock.
"Non-Recourse Debt" means Debt or that portion of Debt (i) as
to which neither the Company nor its Subsidiaries (other than a
Non-Recourse Subsidiary) (A) provide credit support (including any
undertaking, agreement or instrument which would constitute Debt), (B) is
directly or indirectly liable or (C) constitute the lender and (ii) no
default with respect to which (including any rights which the holders
thereof may have to take enforcement action against the assets of a
Non-Recourse Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Debt of the Company or its Subsidiaries (other than
Non-Recourse Subsidiaries) to declare a default on such other Debt or cause
the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"Non-Recourse Subsidiary" means a Subsidiary of the Company (i)
which has been designated as such by the Company, (ii) which has no Debt
other than Non-Recourse Debt and (iii) which is in the same line of
business as Panavision and its Wholly Owned Recourse Subsidiaries existing
on the Issue Date or in businesses reasonably related thereto.
"Obligations" means (a) the full and punctual payment of
Principal of and interest, if any, on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities
and (b) the full and punctual performance of all other obligations of the
Company under this Indenture and the Securities.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, an Assistant Treasurer or the Secretary or
an Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, Vice Chairman, the President or a Vice President
(regardless of Vice Presidential designation), and by the Treasurer, an
Assistant Treasurer, Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the Officers signing an Officers'
Certificate given pursuant to Section 4.12 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. Such counsel may be an
employee of or counsel to the Company (or its Parent or one of its
Subsidiaries) or the Trustee.
"Panavision" means Panavision Inc., a Delaware corporation, and
its successors.
"Parent" means any Person which acquires or owns directly or
indirectly 80% or more of the voting power of the Voting Stock of the
Company.
"Permitted Affiliate" means any individual that is a director
or officer of Panavision, of Parent, of a Subsidiary of Panavision or of an
Unrestricted Affiliate; provided, however, that such individual is not also
a director or officer of Mafco Holdings or any Person that controls Mafco
Holdings.
"Permitted Holders" means Ronald O. Perelman (or in the event
of his incompetence or death, his estate, heirs, executor, administrator,
committee or other personal representative (collectively, "heirs")) or any
Person controlled, directly or indirectly, by Ronald O. Perelman or his
heirs.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class
of such Person.
"Principal" of a Security as of any date means the Accreted
Value of the Security as of such date plus, in the case of any redemption
or an offer to repurchase Securities pursuant to Section 4.06 or 4.08, the
premium, if any, payable on the Security which is due or overdue or is to
become due on such date.
"Principal Amount at Maturity" of a Security means the amount
specified as such on the face of such Security.
"Private Exchange Notes" means the 9 5/8% Senior Subordinated
Discount Exchange Notes Due 2006 of the Company, if and when issued
pursuant to a Private Exchange for Initial Notes.
"Put Amount" as of any date means, with respect to each $1,000
Principal Amount at Maturity of Securities, 101% of the Accreted Value
thereof as of the date of repurchase.
"PX Holding" means PX Holding Corporation, a Delaware
corporation, and its successors.
"PX Merger" means PX Merger Corporation, a Delaware
corporation, and its successors.
"Recapitalization Agreement" means the Agreement of
Recapitalization and Merger, dated as of December 18, 1997, by and among PX
Holding, PX Merger and Panavision, as amended from time to time.
"Redeemable Stock" means, with respect to any Person, Capital
Stock of such Person that by its terms or otherwise is required to be
redeemed on or prior to the first anniversary of the Stated Maturity of the
Securities or is redeemable at the option of the holder thereof at any time
on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not
constitute Redeemable Stock but for provisions thereof giving holders
thereof the right to require such Person to purchase or redeem such Capital
Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Redeemable Stock if (x) the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not
more favorable to the holders of such Capital Stock than the terms
applicable to the Securities in Sections 4.06 and 4.08, as determined in
good faith by the Board of Directors of the Company, the determination of
which shall be evidenced by a resolution of such Board of Directors, and
(y) any such requirement only becomes operative after compliance with such
Sections, including the purchase of any Securities tendered pursuant
thereto.
"Refinance" means, in respect of any Debt, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to
Issue Debt in exchange or replacement for, such Debt. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Costs" means, with respect to any Debt being
Refinanced, any premium actually paid thereon and reasonable costs and
expenses, including underwriting discounts, in connection with such
Refinancing; provided, that if any Debt Issued in connection with such a
Refinancing is Issued at a discount, Refinancing Costs shall be an amount
equal to the accreted value (as of the Stated Maturity of the Debt being
Refinanced) of the portion of such Debt used to pay such premium, costs and
expenses.
"Representative" means the trustee, agent or representative (if
any) for an issue of Senior Debt.
"Restricted Payment" means, as to any Person making a
Restricted Payment,
(i) any dividend or any distribution on or in respect of the
Capital Stock of such Person (including any payment in connection
with any merger or consolidation involving such Person) or to the
holders of the Capital Stock of such Person (except dividends or
distributions payable solely in the NonConvertible Capital Stock of
such Person or in options, warrants or other rights to purchase the
Non-Convertible Capital Stock of such Person);
(ii) any purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or of any
direct or indirect parent of the Company;
(iii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment, of any
Subordinated Obligation (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of
acquisition);
(iv) any Investment in any Affiliate of the Company other than
(x) a Subsidiary of the Company, (y) an Affiliate of the Company
which will become a Subsidiary of the Company as a result of any such
Investment and (z) an Unrestricted Affiliate; or
(v) any Investment in a Non-Recourse Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means Debt that is secured by a Lien.
"Securities" means the Initial Notes, the Exchange Notes and
the Private Exchange Notes, treated as a single class of securities.
"Securities Act" means the Securities Act of 1933.
"Semi-Annual Accrual Date" has the meaning set forth in the
definition of Accreted Value.
"Senior Debt" means, with respect to any Person, the following
obligations, whether outstanding on the Issue Date or thereafter created,
incurred or assumed, and whether at any time owing actually or contingent:
(i) all obligations of such Person consisting of
the Bank Debt;
(ii) all obligations of such Person consisting of the
principal of and premium (if any) and accrued and unpaid interest
(including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to such Person), and all
fees, expenses and other amounts in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable;
(iii) all Capital Lease Obligations of such Person;
(iv) all obligations of such Person (A) for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (B) under interest rate
swaps, caps, collars, options and similar arrangements and foreign
currency hedges entered into in respect of any obligations described
in clauses (i), (ii) and (iii) or (C) Issued or assumed as the
deferred purchase price of property and all conditional sale
obligations of such Person and all obligations of such Person under
any title retention agreement;
(v) all obligations of other Persons of the type referred
to in clauses (ii), (iii) and (iv) and all dividends of other persons
for the payment of which, in either case, such Person is responsible
or liable as obligor, guarantor or otherwise, including by means of
any agreement which has the economic effect of a Guarantee; and
(vi) all obligations of such Person consisting of
Refinancings of any obligation described in clauses (i), (ii), (iii),
(iv) or (v);
unless, in the case of any particular obligation, in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are not superior in right
of payment to the Securities, if such Person is the Company, or to the
Subsidiary Guarantee of such Person, if such Person is a Subsidiary of the
Company. However, Senior Debt of such Person will not include (1) any
obligation of such Person to the Company or to any Subsidiary of the
Company, (2) any liability for Federal, state, local or other taxes owed or
owing by such Person, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any indebtedness,
Guarantee or obligation of such Person that is subordinate or junior in any
respect to any other indebtedness, Guarantee or obligation of such Person,
(5) that portion of any Debt which at the time of Issuance is issued in
violation of this Indenture; provided, however, that in the case of this
clause (5), (A) any Debt Issued to any person who had no actual knowledge
that the Issuance of such Debt was not permitted under this Indenture and
who received on the date of Issuance thereof a certificate from an officer
of the Company or a Subsidiary of the Company to the effect that the
Issuance of such Debt would not violate the Indenture shall constitute
Senior Debt and (B) any Debt arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business shall constitute Senior Debt
provided that such Debt would normally be extinguished within three
Business Days of Issuance or (6) the Initial Notes, the Exchange Notes or
the Private Exchange Notes.
"Senior Subordinated Debt" means the Securities and any other
indebtedness, Guarantee or obligation of the Company that specifically
provides that such indebtedness, Guarantee or obligation is to rank pari
passu in right of payment with the Securities and is not subordinated in
right of payment by its terms to any indebtedness, Guarantee or obligation
of the Company which is not Senior Debt of the Company.
"Significant Subsidiary" means (i) any Subsidiary (other than a
Non- Recourse Subsidiary) of the Company which at the time of determination
either (A) had assets which, as of the date of the Company's most recent
quarterly consolidated balance sheet, constituted at least 5% of the
Company's total assets on a consolidated basis as of such date, in each
case determined in accordance with GAAP, or (B) had revenues for the
12-month period ending on the date of the Company's most recent quarterly
consolidated statement of income which constituted at least 5% of the
Company's total revenues on a consolidated basis for such period, or (ii)
any Subsidiary of the Company (other than a Non-Recourse Subsidiary) which,
if merged with all Defaulting Subsidiaries (as defined below) of the
Company, would at the time of determination either (A) have had assets
which, as of the date of the Company's most recent quarterly consolidated
balance sheet, would have constituted at least 10% of the Company's total
assets on a consolidated basis as of such date or (B) have had revenues for
the 12-month period ending on the date of the Company's most recent
quarterly consolidated statement of income which would have constituted at
least 10% of the Company's total revenues on a consolidated basis for such
period (each such determination being made in accordance with GAAP).
"Defaulting Subsidiary" means any Subsidiary of the Company (other than a
Non-Recourse Subsidiary) with respect to which an event described under
Section 6.01(6), 6.01(7), 6.01(8) or 6.01(9) has occurred and is
continuing.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency).
"Stockholders Agreement" means the Voting and Stockholders
Agreement, dated as of December 18, 1997, by and among Panavision, Mafco
Holdings and Warburg Pincus Capital Company, L.P., as amended from time to
time.
"Subordinated Obligation" means any Debt of the Company
(whether outstanding on the date hereof or hereafter Issued) which is
subordinate or junior in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which
more than 50% of the total voting power of shares of Capital Stock or other
interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned, directly or indirectly,
by (i) such Person, (ii) such Person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
"Tax Sharing Agreement" means any tax allocation agreement
between the Company or any of its Subsidiaries with the Company or any
direct or indirect shareholder of the Company with respect to consolidated
or combined tax returns including the Company or any of its Subsidiaries
but only to the extent that amounts payable from time to time by the
Company or any such Subsidiary under any such agreement do not exceed the
corresponding tax payments that the Company or such Subsidiary would have
been required to make to any relevant taxing authority had the Company or
such Subsidiary not joined in such consolidated or combined returns, but
instead had filed returns including only the Company or its Subsidiaries
(provided that any such agreement may provide that, if the Company or any
such Subsidiary ceases to be a member of the affiliated group of
corporations of which Mafco Holdings is the common parent for purposes of
filing a consolidated federal income tax return (such cessation, a
"Deconsolidation Event"), then the Company or such Subsidiary shall
indemnify such direct or indirect shareholder with respect to any federal,
state or local income, franchise or other tax liability (including any
related interest, additions or penalties) imposed on such shareholder as
the result of an audit or other adjustment with respect to any period prior
to such Deconsolidation Event that is attributable to the Company, such
Subsidiary or any predecessor business thereof (computed as if the Company,
such Subsidiary or such predecessor business, as the case may be, were a
stand-alone entity that filed separate tax returns as an independent
corporation), but only to the extent that any such tax liability exceeds
any liability for taxes recorded on the books of the Company or such
Subsidiary with respect to any such period).
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or
any agency thereof, in each case, maturing within 360 days of the date of
acquisition thereof, (ii) investments in time deposit accounts,
certificates of deposit and money market deposits maturing within 180 days
of the date of acquisition thereof issued by a bank or trust company
(including the Trustee) which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States of America having capital, surplus and undivided profits
aggregating in excess of $250,000,000 and whose debt is rated "A" (or such
similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by any registered broker
dealer or mutual fund distributor, (iii) repurchase obligations with a term
of not more than 30 days for underlying securities of the types described
in clause (i) above entered into with a nationally recognized
broker-dealer, (iv) investments in commercial paper, maturing not more than
90 days after the date of acquisition, issued by a corporation (other than
an Affiliate or Subsidiary of the Company) organized and in existence under
the laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which any
investment therein is made of "P-2" (or higher) according to Moody's
Investors Service, Inc. or "A-2" (or higher) according to Standard and
Poor's Corporation and (v) securities with maturities of six months or less
from the date of acquisition backed by standby or direct pay letters of
credit issued by any bank satisfying the requirements of clause (ii) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Issue Date.
"Transaction Charges" means nonrecurring charges related to or
arising out of the Transactions.
"Transactions" means the transactions contemplated by the
Recapitalization Agreement, the Stockholders Agreement and the Escrow
Agreement.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two Business
Days prior to the date fixed for repayment or, in the case of defeasance,
prior to the date of deposit (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most
nearly equal to the then remaining average life to Stated Maturity of the
Securities; provided, however, that if the average life to Stated Maturity
of the Securities is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury
Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the
average life to Stated Maturity of the Securities is less than one year,
the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial
Code as in effect from time to time.
"Unrestricted Affiliate" means a Person (other than a
Subsidiary of the Company) controlled (as defined in the definition of an
"Affiliate") by the Company, in which no Affiliate of the Company (other
than (x) a Wholly Owned Recourse Subsidiary of the Company, (y) a Permitted
Affiliate and (z) another Unrestricted Affiliate) has an Investment.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Recourse Subsidiary" means a Subsidiary of the
Company (other than a Non-Recourse Subsidiary) all the Capital Stock of
which (other than directors' qualifying shares) is owned by (i) the
Company, (ii) the Company and one or more Wholly Owned Recourse
Subsidiaries or (iii) one or more Wholly Owned Recourse Subsidiaries.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Agent Members"................................ 2.12
"Appendix"..................................... 2.01
"Bankruptcy Law"............................... 6.01
"covenant defeasance option"................... 8.01(b)
"CUSIP"........................................ 2.11
"Custodian".................................... 6.01
"Default Amount"............................... 6.02
"DTC".......................................... 4.10
"Event of Default"............................. 6.01
"Exempt Transaction"........................... 4.07(b)
"Global Security".............................. App.
"Guaranteed Obligations"....................... 10.01
"Guaranty"..................................... 10.01
"indemnitee"................................... 7.07
"Initial Payment Blockage Notice".............. 11.03
"legal defeasance option"...................... 8.01(b)
"Notice of Default"............................ 6.01
"Offer"........................................ 4.06(c)
"Offer Amount"................................. 4.06(d)(2)
"Offer Period"................................. 4.06(d)(2)
"pay the Securities"........................... 11.03
"Paying Agent"................................. 2.03
"Payment Blockage Notice"...................... 11.03
"Payment Blockage Period"...................... 11.03
"Private Exchange"............................. App.
"Purchase Agreement"........................... App.
"Purchase Date"................................ 4.06(d)(1)
"Registrar".................................... 2.03
"Registered Exchange Offer".................... App.
"Registration Agreement"....................... App.
"reporting date"............................... 4.02
"Shelf Registration Statement"................. App.
"Subsidiary Guarantee"......................... 10.01
"Subsidiary Guarantor"......................... 10.01
Term Defined in Section
"Subsidiary Supplemental Indenture"............ 4.11(a)
"Successor Person"............................. 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP and all accounting
calculations will be determined in accordance with such principles;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured debt shall not be deemed to be subordinate
or junior to secured debt merely by virtue of its nature as unsecured
debt;
(7) the principal amount of any noninterest bearing or
other discount security at any date of Issuance shall be the
principal amount thereof that would be shown on a balance sheet of
the issuer dated such date prepared in accordance with GAAP and
accretion of principal on such security shall be deemed to be the
Issuance of Debt; provided, however, that the accretion of principal
on such security shall not be deemed to be the Issuance of Debt if
the issuer elects, at the time of original Issuance of such security,
to treat such accretion as if, on such date of original Issuance,
there were an additional Issuance of Debt in an aggregate principal
amount equal to the excess of the principal amount at maturity of
such security over the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in
accordance with GAAP (except to the extent otherwise provided in
Section 4.03(c)(2)), and, unless repaid or redeemed, the amount of
such additional Issuance of Debt shall be treated as being
outstanding for all purposes under this Indenture until such security
is paid in full;
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater; and
(9) whenever in this Indenture or the Securities it is
provided that the Accreted Value, the Put Amount or the Principal
Amount at Maturity with respect to a Security shall be paid, such
provision shall be deemed to require (whether or not so expressly
stated) the simultaneous payment of any accrued and unpaid interest
to the date of payment on such Security payable pursuant to paragraph
1 of the Securities.
ARTICLE II
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Notes, the Private Exchange Notes and the Exchange Notes are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in the Appendix and
Exhibits A and B are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee shall authenticate and deliver (i) Initial Notes
for original issue in an aggregate Principal Amount at Maturity of
$217,903,000 and (ii) Exchange Notes or Private Exchange Notes for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Agreement or otherwise, in exchange for a like
Principal Amount at Maturity of Initial Notes, in each case upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order
shall specify the amount of the Securities to be authenticated, the date on
which the original issue of Securities is to be authenticated and, if such
order is being delivered other than on the Issue Date, whether the
Securities are to be Initial Notes, Exchange Notes or Private Exchange
Notes. The aggregate Principal Amount at Maturity of Securities outstanding
at any time may not exceed the amount specified in clause (i) of this
paragraph except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent.
The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any of its domestically
incorporated Wholly Owned Recourse Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. On or prior
to each due date of the Principal and interest on any Security, the Company
shall deposit with the Paying Agent a sum sufficient to pay such Principal
and interest when so becoming due. The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of Principal of or interest
on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to
the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing at least five Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender
of a Security for registration of transfer and in accordance with the
provisions of the Appendix. When a Security is presented to the Registrar
or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section
8-401(1) of the Uniform Commercial Code and the Appendix are met. When
Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal Principal Amount at Maturity of Securities of
other denominations, the Registrar shall make the exchange as requested if
the same requirements are met. To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. The Company may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant
to this Section. The Company shall not be required to make and the
Registrar need not register transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part,
the portion thereof not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed or 15 days before
an interest payment date.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of Principal of and interest, if any, on such Security
and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that
the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security if
the requirements of Section 8-405 of the Uniform Commercial Code are met
and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
("Outstanding") at any time are all Securities authenticated and delivered
by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not Outstanding. A
Security does not cease to be Outstanding because the Company or an
Affiliate of the Company holds the Security.
If a Security is paid or replaced pursuant to Section 2.07, it
ceases to be Outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all Principal and interest, if any, payable on that date
with respect to the Securities (or portions thereof) to be redeemed or
maturing, as the case may be, and the Paying Agent is not prohibited from
paying such money to the Securityholders on that date pursuant to the terms
of this Indenture, then on and after that date such Securities (or portions
thereof) cease to be Outstanding, the Accreted Value of such Securities
ceases to increase and interest, if any, on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for
temporary Securities upon surrender of such temporary Securities at the
office or agency of the Company, without charge to the Holder.
SECTION 2.10. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, exchange or payment. The Trustee and no
one else shall cancel Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver such canceled Securities to
the Company upon the Company's written request. The Company may not issue
new Securities to replace Securities it has redeemed, paid or delivered to
the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the
persons who are Securityholders on a subsequent special record date. The
Company shall fix or cause to be fixed any such special record date and
payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Securityholder a notice that states the special
record date, the payment date and the amount of defaulted interest to be
paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness of such numbers either
as printed on the Securities or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers
printed on the Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities or is required
to redeem Securities pursuant to paragraph 6 of the Securities, it shall
notify the Trustee in writing of the redemption date, the paragraph of the
Securities pursuant to which the redemption will occur, and the Principal
Amount at Maturity of Securities to be redeemed. If the Company is required
to redeem the Securities pursuant to paragraph 6 of the Securities the
Company shall also so notify the Escrow Agent concurrently with its
notification to the Trustee.
In the case of a redemption pursuant to paragraph 5 of the
Securities, the Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the
Trustee consents to a shorter period. In the case of a redemption pursuant
to paragraph 6 of the Securities, the Company shall give such notices to
the Trustee and the Escrow Agent provided for in this Section promptly
after the occurrence of the event triggering the requirement to redeem the
Securities. Any notice delivered pursuant to paragraph 5 of the Securities
shall be accompanied by an Officers' Certificate to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption
for determining the Holders to whom notice of redemption will be sent
pursuant to Section 3.03 shall be selected by the Company and given to the
Trustee, which record date shall be not less than 15 days after the date of
notice to the Trustee unless the Trustee consents to a shorter period.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee in its discretion
shall select the Securities to be redeemed either on a pro rata basis or by
lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate. The Trustee shall make the selection from Outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the Principal Amount at Maturity of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of Principal Amount at Maturity of
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. In the case of a redemption
pursuant to paragraph 5 of the Securities, at least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of
Securities to be redeemed. In the case of a redemption pursuant to
paragraph 6 of the Securities, the Company shall mail a notice of
redemption by first-class mail to each Holder of Securities on the date it
delivers the notice to the Trustee pursuant to Section 3.01.
Any notice delivered pursuant to this Section 3.03 shall
identify the Securities to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(e) if fewer than all the Outstanding Securities
are to be redeemed, the identification of the particular
Securities to be redeemed as well as the aggregate Principal
Amount at Maturity of Securities to be redeemed and if any
Security is being redeemed in part, the portion of the
Principal Amount at Maturity of such Security to be redeemed
and that after the redemption date and upon surrender of such
Security a new Security or Securities will be issued having a
Principal Amount at Maturity equal to the Principal Amount at
Maturity of the Security surrendered less the Principal Amount
at Maturity of the portion of the Security redeemed;
(f) that, unless the Company defaults in making
such redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture,
the Accreted Value on Securities (or portion thereof) called
for redemption ceases to increase and interest, if any, thereon
ceases to accrue on and after the redemption date;
(g) the paragraph of the Securities pursuant to
which the Securities called for redemption are being redeemed;
(h) the CUSIP number printed on the Securities
being redeemed; and
(i) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required
by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the
notice. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice, plus accrued interest, if
any, to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on the related interest
payment date). Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if
the Company or a Subsidiary is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder (at the Company's expense) a new
Security having a Principal Amount at Maturity equal to the Principal
Amount at Maturity of the Security surrendered less the Principal Amount at
Maturity of the portion of the Security so redeemed.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly
pay the Principal of and interest, if any, on the Securities on the dates
and in the manner provided in the Securities and in this Indenture.
Principal and interest shall be considered paid on the date due if on such
date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all Principal and interest then due and
the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Securityholders on that date pursuant to the terms
of this Indenture. The Company shall pay interest on overdue Principal at
the rate specified therefor in the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may
not be required to be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, from and after the date (the "reporting
date") of effectiveness of an Exchange Offer Registration Statement (as
defined in the Registration Agreement), the Company shall file or cause to
be filed with the SEC and provide the Trustee and Holders with the
information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe)
specified in Sections 13 and 15(d) of the Exchange Act. Prior to the
reporting date, the Company shall provide the Trustee and Holders with
information with respect to Panavision that is substantially similar to
that required to be provided to such Persons after the reporting date. The
Company also shall comply with the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Debt of the Company and its
Subsidiaries. (a)Prior to the Effective Date, the Company shall not
Issue any Debt, except the following:
(1) the Securities; and
(2) Debt of the Company that is not secured by a Lien on any
assets, property or Capital Stock owned by the Company or any of its
Subsidiaries, the proceeds of which Debt are used solely for deposit
(or the purchase of U.S. Government Obligations to be deposited) with
the Escrow Agent in an amount not to exceed the amount necessary,
together with the net proceeds to the Company of the Issuance of the
Securities, to enable the Company to make the Initial Deposit (as
defined in the Escrow Agreement).
(b) From and after the Effective Date, the Company shall not,
and shall not permit any Subsidiary of the Company to, Issue, directly or
indirectly, any Debt; provided, however, that the Company and its
Subsidiaries will be permitted to Issue Debt if, at the time of such
Issuance, the Consolidated EBITDA Coverage Ratio for the period of the most
recently completed four consecutive fiscal quarters ending at least 45 days
prior to the date such Debt is Issued exceeds the ratio of 2.0 to 1.0.
(c) Notwithstanding the foregoing, from and after the Effective
Date the Company and its Subsidiaries may Issue the following Debt:
(1) Debt Issued pursuant to the Credit Agreement, any
Refinancing thereof or any other credit agreement, indenture or other
agreement, in an aggregate principal amount not to exceed $350
million outstanding at any one time;
(2) the Securities and Debt Issued by the Company in exchange
for, or the proceeds of which are used to Refinance, any Debt
permitted by this clause (2); provided, however, that in the case of
any Debt (other than the Exchange Notes and the Private Exchange
Notes) Issued in connection with a Refinancing, (x) the principal
amount or, in the case of Debt Issued at a discount, the accreted
value of the Debt so Issued shall, as of the Stated Maturity of the
Debt being Refinanced, not exceed the sum of (i) the principal amount
or, if the Debt being Refinanced was Issued at a discount, the
accreted value of the Debt being Refinanced as of the Stated Maturity
of the Debt being Refinanced, and (ii) any Refinancing Costs
associated with such Refinancing, (y) the Debt so Issued shall not
provide for the payment of principal or interest in cash prior to
February 1, 2002, shall not have a Stated Maturity prior to the
Stated Maturity of the Securities and shall not, at the time such
Debt is Issued, have an Average Life that is less than the Average
Life of the Debt being Refinanced and (z) the Debt so Issued shall
consist of Senior Subordinated Debt or Subordinated Obligations;
(3) Debt (in addition to Debt described in clauses (1) and (2)
above) Issued for working capital and general corporate purposes in
an aggregate principal amount at the time of such Issue which, when
taken together with the aggregate principal amount then outstanding
of all other Debt Issued pursuant to this clause (3), shall not
exceed the sum of (i) 50% of the book value of the inventory of the
Company and its consolidated Subsidiaries and (ii) 80% of the book
value of the accounts receivable of the Company and its consolidated
Subsidiaries, in each case as determined in accordance with GAAP;
(4) Debt of the Company Issued to and held by a Wholly Owned
Recourse Subsidiary and Debt of a Subsidiary of the Company Issued to
and held by the Company or a Wholly Owned Recourse Subsidiary;
provided, however, that any subsequent Issuance or transfer of any
Capital Stock that results in any such Wholly Owned Recourse
Subsidiary ceasing to be a Wholly Owned Recourse Subsidiary or any
subsequent transfer of such Debt (other than to the Company or a
Wholly Owned Recourse Subsidiary) shall be deemed, in each case, to
constitute the Issuance of such Debt by the Company or of such Debt
by such Subsidiary;
(5) Debt (other than Debt described in clause (1), (2), (3) or
(4) above) of Panavision or any of its Subsidiaries outstanding on
the Issue Date and Debt Issued to Refinance any Debt (other than the
Existing Credit Agreement) permitted by this clause (5), by clause
(6) below or by Section 4.03(b); provided, however, that in the case
of a Refinancing, the principal amount of the Debt so Issued shall
not exceed the principal amount of the Debt being Refinanced plus any
Refinancing Costs associated with such Refinancing; and provided
further, however, that to the extent such Refinancing Debt is used
directly or indirectly to Refinance Debt of a Subsidiary described in
clause (6) below, the portion of such Refinancing Debt so used shall
be Issued only by such Subsidiary or any Subsidiary of such
Subsidiary;
(6) Debt of a Subsidiary of the Company Issued and outstanding
on or prior to the date on which such Subsidiary was acquired by the
Company (other than Debt Issued as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions
pursuant to which such Subsidiary became a Subsidiary of the Company
or was acquired by the Company);
(7) Non-Recourse Debt of a Non-Recourse Subsidiary; provided,
however, that if any such Debt thereafter ceases to be Non-Recourse
Debt of a Non-Recourse Subsidiary, then such event shall be deemed
for the purposes of this Section 4.03 to constitute the Issuance of
such Debt by the issuer thereof; and
(8) Debt (in addition to Debt Issued pursuant to clauses (1)
through (7) above and Section 4.03(b)) in an aggregate principal
amount outstanding at any time not to exceed $50 million.
(d) The foregoing shall not prohibit the Issuance of Redeemable
Stock of Panavision contemplated by the Stockholders Agreement, provided
that such Redeemable Stock is redeemed by Panavision in connection with the
Transactions.
(e) To the extent the Company or any Subsidiary of the Company
Guarantees any Debt of the Company or of a Subsidiary of the Company, such
Guarantee and such Debt will be deemed to be the same indebtedness and only
the amount of the Debt will be deemed to be outstanding. If the Company or
a Subsidiary of the Company Guarantees any Debt of a Person that,
subsequent to the Issuance of such Guarantee, becomes a Subsidiary, such
Guarantee and the Debt so Guaranteed shall be deemed to be the same
indebtedness, which shall be deemed to have been Issued when the Guarantee
was Issued and shall be deemed to be permitted to the extent the Guarantee
was permitted when Issued.
SECTION 4.04. Limitation on Other Senior Subordinated Debt and
Secured Debt. (a)The Company shall not Issue, directly or indirectly, any
Debt which is subordinate or junior in ranking in any respect to Senior
Debt of the Company unless such Debt is Senior Subordinated Debt or is
expressly subordinated in right of payment to the Securities.
(b) The Company will not issue any Secured Debt that is not
Senior Debt of the Company unless contemporaneously therewith effective
provision is made to secure the Securities equally and ratably with (or
prior to) such Secured Debt with a Lien on the same assets securing such
Secured Debt for so long as such Secured Debt is secured by such Lien.
SECTION 4.05. Limitation on Restricted Payments. (a) Prior to
the Effective Date, the Company shall not make any Restricted Payment
except to the extent necessary to consummate the Transactions.
(b) From and after the Effective Date, the Company shall not,
and shall not permit any of its Subsidiaries, directly or indirectly, to
make any Restricted Payment if, at the time of the making of such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom); or
(2) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum
of:
(i) 50% of Consolidated Net Income (or, if such aggregate
Consolidated Net Income is a deficit, minus 100% of such
deficit) accrued during the period (treated as one accounting
period) from January 1, 1998, to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of
such Restricted Payment;
(ii) the aggregate Net Cash Proceeds from sales of
Capital Stock of Panavision (other than Redeemable Stock or
Exchangeable Stock) or cash capital contributions made to
Panavision on or after the Issue Date (exclusive of any Net
Cash Proceeds or cash capital contributions received in
connection with the Transactions, if any) (other than a sale to
or a contribution by a Subsidiary of Panavision or any employee
stock ownership plan established by Panavision or a Subsidiary
of Panavision for the benefit of its employees);
(iii) the amount by which Debt of Panavision is reduced
on Panavision's consolidated balance sheet on or after the
Issue Date upon any conversion or exchange of Debt of
Panavision into Capital Stock of Panavision which is not
Redeemable Stock or Exchangeable Stock;
(iv) the aggregate Net Cash Proceeds received by
Panavision from the Issue or sale of its Capital Stock (other
than Redeemable Stock or Exchangeable Stock) to an employee
stock ownership plan subsequent to the Issue Date; provided,
however, that if such employee stock ownership plan incurs any
Debt, such aggregate amount of Net Cash Proceeds shall be
limited to an amount equal to any increase in the Consolidated
Net Worth of Panavision resulting from principal repayments
made by such employee stock ownership plan with respect to Debt
incurred by it to finance the purchase of such Capital Stock;
and
(v) to the extent that an Investment made by Panavision
or a Subsidiary subsequent to the Issue Date has theretofore
been included in the calculation of the amount of Restricted
Payments, the aggregate cash repayments to Panavision or a
Subsidiary of such Investment to the extent not included in
Consolidated Net Income; provided, however, that any such cash
repayment shall be excluded from the amount of aggregate cash
repayments described in this clause (v) to the extent that such
cash is attributable to the net proceeds of the Issuance of
Non-Recourse Debt by a Non-Recourse Subsidiary and has been or
is subsequently used to make a dividend or distribution
pursuant to Section 4.05(c)(ix).
(c) Section 4.05(b) shall not prohibit the following (none of
which shall be included in the calculation of the amount of Restricted
Payments, except to the extent expressly provided in clause (vi) below):
(i) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Capital Stock or
Subordinated Obligations of the Company made by exchange for, or out
of the proceeds of the substantially concurrent Issue or sale of,
Capital Stock of the Company (other than Redeemable Stock or
Exchangeable Stock and other than Capital Stock issued or sold to a
Subsidiary or an employee stock ownership plan) or of a cash capital
contribution; provided, however, that the Net Cash Proceeds from such
sale shall be excluded from clauses (ii) and (iv) of Section
4.05(b)(2);
(ii) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated Obligations
of the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations;
(iii) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated Obligations
from Net Available Cash to the extent permitted by Section 4.06;
(iv) any loan to a Permitted Affiliate entered into in
the ordinary course of business; provided, however, that such
Permitted Affiliate holds, directly or indirectly, no more than 10%
of the outstanding Capital Stock of the Company;
(v) dividends or distributions made by a Subsidiary of
the Company to the Company or a Subsidiary of the Company and, if a
Subsidiary of the Company is not wholly owned, to its other
stockholders pro rata to the extent they are not Affiliates of the
Company (other than (x) a Subsidiary of the Company, (y) an
Unrestricted Affiliate and (z) a Permitted Affiliate);
(vi) dividends paid within 60 days after the date of
declaration thereof, or Restricted Payments made within 60 days after
the making of a binding commitment in respect thereof, if at such
date of declaration or of such commitment such dividend or other
Restricted Payment would have complied with this Section; provided,
however, that at the time of payment of such dividend or the making
of such Restricted Payment, no other Default shall have occurred and
be continuing (or would result therefrom); provided further, however,
that such dividend or other Restricted Payment shall be included in
the calculation of the amount of Restricted Payments;
(vii) purchases, redemptions, defeasances or acquisitions
of Non-Recourse Debt by a Non-Recourse Subsidiary;
(viii)dividends and distributions in respect of
Redeemable Stock Issued by the Company or in respect of Preferred
Stock Issued by any Subsidiary of the Company, in each case to the
extent such Issuance is permitted by Section 4.03;
(ix) so long as no Default has occurred and is continuing
or would result from such transaction, dividends or distributions
made by the Company to the extent attributable to the net proceeds of
the Issuance of Non- Recourse Debt by Non-Recourse Subsidiaries;
(x) Restricted Payments necessary to consummate the
Transactions or which are repaid in connection with the Transactions;
and
(xi) so long as no Default shall have occurred and be
continuing, amounts paid to Parent, to the extent necessary to enable
Parent to pay actual expenses, other than those paid to Affiliates of
the Company, incidental to being a publicly reporting, but
non-operating, company.
(d) The Company or any Subsidiary of the Company may take
actions to make a Restricted Payment in anticipation of the occurrence of
any of the events described in Sections 4.05(b) or 4.05(c); provided,
however, that the making of such Restricted Payment shall be conditioned
upon the occurrence of such event.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary
Stock. (a) Prior to the Effective Date, the Company shall not make any
Asset Disposition except to the extent necessary to consummate the
Transactions.
(b) From and after the Effective Date, the Company shall not,
and shall not permit any Subsidiary of the Company (other than a
Non-Recourse Subsidiary) to, make any Asset Disposition unless:
(i) the Company or such Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the fair
market value, as determined in good faith by the Board of Directors
of the Company, the determination of which shall be conclusive and
evidenced by a resolution of the Board of Directors of the Company
(including as to the value of all non-cash consideration), of the
Capital Stock and assets subject to such Asset Disposition;
(ii) at least 75% of the consideration consists of cash,
cash equivalents, readily marketable securities which the Company
intends, in good faith, to liquidate promptly after such Asset
Disposition or the assumption of liabilities (including, in the case
of the sale of the Capital Stock of a Subsidiary of the Company,
liabilities of the Company or such Subsidiary) (provided, however,
that in respect of an Asset Disposition, more than 25% of the
consideration may consist of consideration other than cash, cash
equivalents, such readily marketable securities or such assumed
liabilities if (x) such Asset Disposition is approved by a majority
of those members of the Board of Directors of the Company having no
personal stake in such Asset Disposition and (y) if such Asset
Disposition involves aggregate consideration in excess of $10,000,000
(with the value of any non-cash consideration being determined by a
majority of those members of the Board of Directors of the Company
having no personal stake in such Asset Disposition), such Asset
Disposition has been determined, in the written opinion of a
nationally recognized investment banking firm, to be fair from a
financial point of view to the Company or such Subsidiary, as the
case may be); and
(iii) an amount equal to 100% of the Net Available Cash
from such Asset Disposition is applied by the Company or such
Subsidiary, as
the case may be:
(A) first, to the extent the Company is required by
the terms of any Senior Debt of the Company or Debt of a
Subsidiary to prepay, repay or purchase Senior Debt of the
Company or Debt of a Wholly Owned Recourse Subsidiary or
additionally, in the case of an Asset Disposition by a
Subsidiary that is not a Wholly Owned Recourse Subsidiary, Debt
of such Subsidiary (in each case other than Debt owed to the
Company or an Affiliate of the Company) in accordance with the
terms of such Debt;
(B) second, to the extent of the balance of such
Net Available Cash after application in accordance with clause
(A), at the Company's election, to either (1) the prepayment,
repayment or repurchase of Senior Debt of the Company or Debt
of a Wholly Owned Recourse Subsidiary or, additionally in the
case of an Asset Disposition by a Subsidiary that is not a
Wholly Owned Recourse Subsidiary, Debt of such Subsidiary (in
each case other than Debt owed to the Company or an Affiliate
of the Company) which the Company is not required by the terms
thereof to prepay, repay or repurchase (whether or not the
related loan commitment is permanently reduced in connection
therewith), or (2) the investment by the Company or any Wholly
Owned Recourse Subsidiary (or, additionally in the case of an
Asset Disposition by a Subsidiary that is not a Wholly Owned
Recourse Subsidiary, the investment by such Subsidiary) in
assets to replace the assets that were the subject of such
Asset Disposition or in assets that (as determined by the Board
of Directors of the Company, the determination of which shall
be conclusive and evidenced by a resolution of such Board of
Directors) will be used in the businesses of Panavision and its
Wholly Owned Recourse Subsidiaries (or, additionally in the
case of an Asset Disposition by a Subsidiary that is not a
Wholly Owned Recourse Subsidiary, the businesses of such
Subsidiary) existing on the Issue Date or in businesses
reasonably related thereto, in all cases, within the later of
one year from the date of such Asset Disposition or the receipt
of such Net Available Cash; and
(C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A)
and (B), to make an offer to purchase Securities and other
Senior Subordinated Debt designated by the Company pursuant to
and subject to the conditions of Section 4.06(c);
provided, however, that in connection with an offer pursuant to clause (C)
above, if the principal amount and premium of such Securities and such
Senior Subordinated Debt, together with accrued and unpaid interest
tendered for acceptance pursuant to such offer exceeds the balance of Net
Available Cash, then the Company will accept for purchase the Securities
and such Senior Subordinated Debt of each such tendering holder on a pro
rata basis in accordance with the principal amount so tendered.
Notwithstanding the foregoing provisions of this Section
4.06(b), the Company and the Subsidiaries shall not be required to apply
any Net Available Cash in accordance with this Section 4.06(b) except to
the extent that the aggregate Net Available Cash from all Asset
Dispositions which is not applied in accordance with this Section 4.06(b)
exceeds $10,000,000. Pending application of Net Available Cash pursuant to
this Section 4.06(b), such Net Available Cash shall be (i) invested in
Temporary Cash Investments or (ii) used to make an optional prepayment
under any revolving credit facility constituting Senior Debt of the Company
or Debt of a Wholly Owned Recourse Subsidiary (or, additionally in the case
of a Subsidiary that is not a Wholly Owned Recourse Subsidiary, Debt of
such Subsidiary), whether or not the related loan commitment is permanently
reduced in connection therewith.
(c) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 4.06(b)(iii)(C), the Company
will be required to purchase Securities and Senior Subordinated Debt
designated by the Company tendered pursuant to an offer by the Company for
the Securities and such Senior Subordinated Debt (the "Offer") at a
purchase price of 100% of their Accreted Value or principal amount, as
applicable, without premium, plus accrued interest to the Purchase Date (or
in respect of other Senior Subordinated Debt such lesser price, if any, as
may be provided for by the terms of such Senior Subordinated Debt) in
accordance with the procedures (including prorationing in the event of
oversubscription) set forth in Section 4.06(d), provided that the
procedures for making an offer to holders of other Senior Subordinated Debt
will be as provided for by the terms of such Senior Subordinated Debt. If
(x) the aggregate purchase price of Securities and Senior Subordinated Debt
tendered pursuant to the Offer is less than the Net Available Cash allotted
to the purchase of the Securities and Senior Subordinated Debt, (y) the
Company shall not be obligated to make an Offer pursuant to the last
sentence of this paragraph or (z) the Company shall be unable to purchase
Securities from Holders thereof in an Offer because of the provisions of
applicable law or of the Company's or its Subsidiaries' loan agreements,
indentures or other contracts governing Senior Debt of the Company or Debt
of Subsidiaries (in which case the Company need not make an Offer), the
Company shall apply the remaining Net Available Cash to (i) invest in
assets to replace the assets that were the subject of the Asset Disposition
or in assets that (as determined by the Board of Directors of the Company,
the determination of which shall be conclusive and evidenced by a
resolution of such Board of Directors) will be used in the businesses of
Panavision and its Wholly Owned Recourse Subsidiaries (or, additionally in
the case of an Asset Disposition by a Subsidiary that is not a Wholly Owned
Recourse Subsidiary, the business of such Subsidiary) existing on the Issue
Date or in businesses reasonably related thereto or (ii) in the case of
clause (x) or (y), prepay, repay or repurchase Debt of the Company or Debt
of a Wholly Owned Recourse Subsidiary or, additionally in the case of an
Asset Disposition by a Subsidiary that is not a Wholly Owned Recourse
Subsidiary, Debt of such Subsidiary which the Company or such Wholly Owned
Recourse Subsidiary or Subsidiary is not required by the terms thereof to
prepay, repay, repurchase or redeem (in each case other than Debt owed to
the Company or an Affiliate of the Company), whether or not the related
loan commitment is permanently reduced in connection therewith. The Company
shall not be required to make an Offer for Securities and Senior
Subordinated Debt pursuant to this Section if the Net Available Cash
available therefor (after application of the proceeds as provided in clause
(A) and clause (B) of Section 4.06(b)(iii)) are less than $10,000,000 for
any particular Asset Disposition (which lesser amounts shall not be carried
forward for purposes of determining whether an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
(d)(1) Promptly, and in any event within five days after the
last date by which the Company must have applied Net Available Cash
pursuant to Section 4.06(b)(iii)(B), the Company shall be obligated
to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have
his Securities purchased by the Company either in whole or in part
(subject to prorationing as hereinafter described in the event the
Offer is oversubscribed) in integral multiples of $1,000 of Principal
Amount at Maturity, at the applicable purchase price. The notice
shall specify a purchase date not less than 30 days nor more than 60
days after the date of such notice (the "Purchase Date") and shall
contain information concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (i) the most
recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current
Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding
successor reports), and (ii) if material, appropriate pro forma
financial information) and all instructions and materials necessary
to tender Securities pursuant to the Offer, together with the
information contained in clause (2).
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the
amount of the Offer (the "Offer Amount"), (ii) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which such
Offer is being made and (iii) the compliance of such allocation with
the provisions of Section 4.06(b). On such date, the Company shall
also irrevocably deposit with the Trustee or with a paying agent (or,
if the Company is acting as its own paying agent, segregate and hold
in trust) in immediately available funds an amount equal to the Offer
Amount to be held for payment in accordance with the provisions of
this Section. The amount so deposited, at the option of, and pursuant
to the specific written direction of, the Company, may be invested in
Temporary Cash Investments the maturity date of which is not later
than the Purchase Date. The Company shall be entitled to any interest
or dividends accrued, earned or paid on such Temporary Cash
Investments. Upon the expiration of the period for which the Offer
remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancellation the Securities or portions thereof which
have been properly tendered to and are to be accepted by the Company.
The Trustee shall, on the Purchase Date, mail or deliver payment to
each tendering Holder in the amount of the purchase price. In the
event that the aggregate purchase price of the Securities and Senior
Subordinated Debt delivered by the Company to the Trustee is less
than the Offer Amount, the Trustee shall deliver the excess to the
Company promptly after the expiration of the Offer Period.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly
completed, to the Company at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders will be
entitled to withdraw their election if the Trustee or the Company
receives not later than three Business Days prior to the Purchase
Date, a facsimile transmission or letter setting forth the name of
the Holder, the Principal Amount at Maturity of the Security which
was delivered for purchase by the Holder and a statement that such
Holder is withdrawing his election to have such Security purchased.
If at the expiration of the Offer Period the purchase price for the
aggregate Principal Amount at Maturity of Securities surrendered by
Holders (and other Senior Subordinated Debt) exceeds the Offer
Amount, the Company shall select the Securities (and other Senior
Subordinated Debt) to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities having a Principal Amount at Maturity of $1,000, or
integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be Issued new Securities
equal in Principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company will also deliver
an Officers' Certificate stating that such Securities are to be
accepted by the Company pursuant to and in accordance with the terms
of this Section. A Security shall be deemed to have been accepted for
purchase at the time the Trustee, directly or through an agent, mails
or delivers payment therefor to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of
Securities pursuant to this Section. To the extent that the provisions of
any securities laws or regulations conflict with provisions of this
Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates. (a)
Prior to the Effective Date, the Company shall not conduct any business or
enter into any transaction or series of similar transactions (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company or any legal or beneficial owner
of 10% or more of the voting power of the Voting Stock of the Company or
with an Affiliate of any such owner other than to the extent necessary to
consummate the Transactions.
(b) From and after the Effective Date, the Company shall not,
and shall not permit any of its Subsidiaries (other than a Non-Recourse
Subsidiary) to, conduct any business or enter into any transaction or
series of similar transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any
Affiliate of the Company or any legal or beneficial owner of 10% or more of
the voting power of the Voting Stock of the Company or with an Affiliate of
any such owner unless:
(i) the terms of such business, transaction or series of
transactions are (A) set forth in writing and (B) at least as
favorable to the Company or such Subsidiary as terms that would be
obtainable at the time for a comparable transaction or series of
similar transactions in arm's-length dealings with an unrelated third
Person; and
(ii) to the extent that such business, transaction or
series of transactions is known by the Board of Directors of the
Company or of such Subsidiary to involve an Affiliate of the Company
or a legal or beneficial owner of 10% or more of the voting power of
the Voting Stock of the Company or an Affiliate of such owner, then:
(A) with respect to a transaction or series of
related transactions, other than any purchase or sale of
inventory, renting of property or rendering of services in the
ordinary course of business (an "Exempt Transaction"),
involving aggregate payments or other consideration in excess
of $5,000,000, such transaction or series of related
transactions has been approved (and the value of any noncash
consideration has been determined) by a majority of those
members of the Board of Directors of the Company having no
personal stake in such business, transaction or series of
transactions; and
(B) with respect to a transaction or series of
related transactions, other than any Exempt Transaction,
involving aggregate payments or other consideration in excess
of $10,000,000 (with the value of any noncash consideration
being determined by a majority of those members of the Board of
Directors of the Company having no personal stake in such
business, transaction or series of transactions), such
transaction or series of related transactions has been
determined, in the written opinion of a nationally recognized
investment banking firm to be fair, from a financial point of
view, to the Company or such Subsidiary.
(c) The provisions of Section 4.07(b) shall not prohibit:
(i) any Restricted Payment permitted to be paid
pursuant to Section 4.05;
(ii) any transaction between the Company and any of its
Subsidiaries; provided, however, that no portion of any minority
interest in any such Subsidiary is owned by (x) any Affiliate (other
than the Company, a Wholly Owned Recourse Subsidiary of the Company,
a Permitted Affiliate or an Unrestricted Affiliate) of the Company or
(y) any legal or beneficial owner of 10% or more of the voting power
of the Voting Stock of the Company or any Affiliate of such owner
(other than the Company, any Wholly Owned Recourse Subsidiary of the
Company or an Unrestricted Affiliate);
(iii) any transaction between Subsidiaries of the
Company; provided, however, that no portion of any minority interest
in any such Subsidiary is owned by (x) any Affiliate (other than the
Company, a Wholly Owned Recourse Subsidiary of the Company, a
Permitted Affiliate or an Unrestricted Affiliate) of the Company or
(y) any legal or beneficial owner of 10% or more of the voting power
of the Voting Stock of the Company or any Affiliate of such owner
(other than the Company, any Wholly Owned Recourse Subsidiary of the
Company or an Unrestricted Affiliate);
(iv) any transaction between the Company or a Subsidiary
of the Company and its own employee stock ownership plan;
(v) any transaction with a Permitted Affiliate entered
into in the ordinary course of business (including compensation or
employee benefit arrangements with any such officer or director);
provided, however, that such Permitted Affiliate holds, directly or
indirectly, no more than 10% of the outstanding Capital Stock of the
Company;
(vi) any business or transaction with an Unrestricted
Affiliate;
(vii) any transaction pursuant to which Mafco Holdings
will provide the Company and Panavision and its Subsidiaries at their
request and at the cost to Mafco Holdings with certain allocated
services to be purchased from third party providers, such as legal
and accounting services, insurance coverage and other services;
(viii) any transaction contemplated by a Tax Sharing
Agreement; and
(ix) the Transactions.
SECTION 4.08. Change of Control. (a) Upon a Change of Control,
each Holder shall have the right to require the Company to repurchase all
or any part of such Holder's Securities at a repurchase price in cash equal
to their Put Amount as of the date of repurchase, plus accrued and unpaid
interest, if any, to the date of repurchase in accordance with the terms
contemplated in Section 4.08(b). Prior to the mailing of the notice to
Holders provided for in Section 4.08(b) but in any event within 30 days
following any Change of Control, if the terms of any then outstanding Bank
Debt prohibit the purchase of the Securities, the Company covenants to (i)
repay in full all Bank Debt or to offer to repay in full all Bank Debt and
to repay the Bank Debt of each lender who has accepted such offer or (ii)
obtain the requisite consent under the Bank Debt to permit the repurchase
of the Securities as provided for in Section 4.08(b). The Company shall
first comply with the covenant in the preceding sentence before it shall be
required to purchase Securities pursuant to this Section 4.08.
(b) Within 45 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to repurchase all or any part of
such Holder's Securities at a repurchase price in cash equal to their
Put Amount as of the date of repurchase plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control;
(3) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with
this Section, that a Holder must follow in order to have its
Securities repurchased.
(c) Holders electing to have a Security repurchased will be
required to surrender the Security, with an appropriate form duly
completed, to the Company at the address specified in the notice at least
three Business Days prior to the repurchase date. Holders will be entitled
to withdraw their election if the Trustee or the Company receives not later
than three Business Days prior to the repurchase date, a facsimile
transmission or letter setting forth the name of the Holder, the Principal
Amount at Maturity of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have
such Security purchased.
(d) On the repurchase date, all Securities repurchased by the
Company under this Section shall be delivered to the Trustee for
cancellation, and the Company shall pay the repurchase price to the Holders
entitled thereto. Upon surrender of a Security that is repurchased under
this Section in part, the Company shall execute and the Trustee shall
authenticate for the Holder thereof (at the Company's expense) a new
Security having a Principal Amount at Maturity equal to the Principal
Amount at Maturity of the Security surrendered less the portion of the
Principal Amount at Maturity of the Security repurchased.
(e) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of
Securities pursuant to this Section. To the extent that the provisions of
any securities laws or regulations conflict with provisions of this
Section, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Section by virtue thereof.
SECTION 4.09. Limitation on Other Business Activities.
Prior to the Effective Date, the Company shall not engage in any business
operations other than those in connection with the Issuance of the
Securities and the Transactions.
SECTION 4.10. Limitation on Restrictions on Distributions from
Subsidiaries. From and after the Effective Date, the Company shall not, and
shall not permit any Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Debt owed to the Company,
(ii) make any loans or advances to the Company or (iii) transfer any of its
property or assets to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(2) any encumbrance or restriction with respect to a Subsidiary
pursuant to an agreement relating to any Debt Issued by such
Subsidiary on or prior to the date on which such Subsidiary was
acquired by the Company (other than Debt Issued as consideration in,
or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or
was acquired by the Company) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of any Debt (other than the Existing Credit
Agreement) Issued pursuant to an agreement referred to in clause (1)
or (2) above or this clause (3) or contained in any amendment to an
agreement referred to in clause (1) or (2) above or this clause (3);
provided, however, that any such encumbrance or restriction with
respect to any Subsidiary is no less favorable to the Securityholders
than the least favorable of the encumbrances and restrictions with
respect to such Subsidiary contained in the agreements referred to in
clause (1) or (2) above, as determined in good faith by the Board of
Directors of the Company, the determination of which shall be
evidenced by a resolution of such Board of Directors;
(4) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease;
(5) restrictions contained in security agreements securing Debt
of the Company or a Subsidiary of the Company, to the extent such
restrictions restrict the transfer of the collateral covered by such
security agreements or, upon default, restrict the payment of
dividends or distributions on Capital Stock, and restrictions
contained in agreements relating to a disposition of property or
Capital Stock of a Subsidiary, to the extent such restrictions
restrict the transfer of the property or Capital Stock subject to
such agreements; and
(6) any encumbrance or restriction relating to a
Non-Recourse Subsidiary.
SECTION 4.11. Limitation on Issuances of Guarantees of Debt.
(a) From and after the Effective Date, if any Subsidiary of the Company
Guarantees any Debt of the Company other than Senior Debt of the Company,
the Company shall cause such Subsidiary to execute and deliver to the
Trustee a supplemental indenture, substantially in the form of Exhibit C (a
"Subsidiary Supplemental Indenture"), pursuant to which such Subsidiary
shall provide a Subsidiary Guarantee as set forth in Article X.
(b) From and after the Effective Date, if the Company
Guarantees any Debt of a Subsidiary of the Company pursuant to a Guarantee
which does not constitute Senior Debt of the Company, the Company shall
cause such Subsidiary to execute and deliver to the Trustee a Subsidiary
Supplemental Indenture, pursuant to which such Subsidiary shall provide a
Subsidiary Guarantee as set forth in Article X.
(c) Any Subsidiary Guarantee provided by a Subsidiary pursuant
to clause (a) or (b) above shall automatically be released, without any
action required on the part of the Trustee or any Holder, if either (i) the
Guarantee referred to in such clause which gave rise to the requirement for
such Subsidiary Guarantee is released, (ii) all of the Capital Stock or all
or substantially all of the assets of such Subsidiary is sold or otherwise
disposed of to a Person other than the Company or a Subsidiary of the
Company or (iii) this Indenture is discharged or defeased. At the request
of the Company, the Trustee shall execute and deliver an instrument
evidencing such release.
(d) From and after the date a Subsidiary provides a Subsidiary
Guarantee pursuant to clause (a) or (b) above until the date such
Subsidiary Guarantee is released pursuant to clause (c) above, the Company
shall not permit such Subsidiary to (x) Issue, directly or indirectly, any
Debt which is subordinated in right of payment to Senior Debt of such
Subsidiary unless such Debt is either (i) expressly pari passu in right of
payment with such Subsidiary Guarantee and not subordinated in right of
payment by its terms to any Debt of such Subsidiary which is not Senior
Debt or (ii) is expressly subordinated in right of payment to such
Subsidiary Guarantee or (y) Issue any Secured Debt that is not Senior Debt
of such Subsidiary unless contemporaneously therewith effective provision
is made to secure such Subsidiary Guarantee equally and ratably with (or
prior to) such Secured Debt with a Lien on the same assets securing such
Secured Debt for so long as such Secured Debt is secured by such Lien.
SECTION 4.12. Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default by the Company and whether or
not the signers know of any Default that occurred during such period. If
they do, the certificate shall describe the Default, its status and what
action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA Section 314(a)(4). The Trustee shall have no
responsibility or obligation to monitor the Company's compliance with its
obligations set forth in Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.08(a),
(b), (c), (d) (only with respect to the Company's obligation to pay the
purchase price to the Holders entitled thereto) and (e), 4.09, 4.10 and
4.11 or whether a Change of Control has occurred.
SECTION 4.13. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE V
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets.
(a) The Company shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to, any
Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Person") shall be a Person organized and existing under
the laws of the United States of America, any State thereof or the
District of Columbia and such Successor Person (if not the Company)
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Securities and this
Indenture;
(ii) immediately after giving effect to such transaction
(and treating any Debt which becomes an obligation of the Successor
Person or any of its Subsidiaries as a result of such transaction as
having been Issued by such Successor Person or such Subsidiary at the
time of such transaction), no Default shall have occurred and be
continuing;
(iii) except in the case of the Transactions, immediately
after giving effect to such transaction, the Successor Person shall
have a Consolidated Net Worth in an amount which is not less than the
Consolidated Net Worth of the Company immediately prior to such
transaction; and
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Indenture;
provided that this Section 5.01 shall not prohibit a Wholly Owned Recourse
Subsidiary from consolidating with or merging with or into, or conveying,
transferring or leasing all or substantially all its assets to, the Company
from and after the Effective Date.
(b) The Successor Person shall be the successor Company and
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities.
(c) Upon the execution and delivery by Panavision to the
Trustee of a supplemental indenture substantially in the form of Exhibit A
to the Escrow Agreement, pursuant to which Panavision assumes the
predecessor Company's obligations under the Indenture and the Securities,
Panavision shall be the successor Company under this Indenture and the
Securities and shall succeed to, and be substituted for, and may exercise
every right and power of, the predecessor Company hereunder and thereunder
and the predecessor Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default"
occurs if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such payment
shall be prohibited by Article XI, and such default continues for a period
of 30 days;
(2) the Company (i) defaults in the payment of the Principal of
any Security when the same becomes due and payable at its Stated Maturity,
upon redemption, upon declaration or otherwise, whether or not such payment
shall be prohibited by Article XI, or (ii) fails to redeem or purchase
Securities when required pursuant to this Indenture or the Securities,
whether or not such redemption or purchase shall be prohibited by Article
XI;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08 (other than a failure to purchase Securities), 4.09,
4.10 or 4.11 and such failure continues for 30 days after the notice
specified below;
(5) the Company fails to comply with any of its agreements in
the Securities or this Indenture or the Escrow Agreement (other than those
referred to in (1), (2), (3) or (4) above) and such failure continues for
60 days after the notice specified below;
(6) Debt of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default, the total
principal amount of the portion of such Debt that is unpaid or accelerated
exceeds $10,000,000 or its foreign currency equivalent and such default
continues for 10 days after the notice specified below;
(7) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company
or any Significant Subsidiary;or any similar relief is granted under any
foreign laws and the order or decree remains unstayed and in effect for 60
days;
(9) any judgment or decree for the payment of money in excess
of $10,000,000 (or its foreign currency equivalent) is entered against the
Company or any Significant Subsidiary and is not discharged and either (A)
an enforcement proceeding has been commenced by any creditor upon such
judgment or decree or (B) there is a period of 60 days following the entry
of such judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed and, in the case of (B),
such default continues for 10 days after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and
effect (other than in accordance with the terms of this Indenture) or a
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means title 11 of the United States
Code, or any similar Federal or state law for the relief of debtors. The
term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (4), (5), (6) or (9)(B) is not an Event
of Default until the Trustee or the Holders of at least 25% in Principal
Amount at Maturity of the Outstanding Securities notify the Company of the
Default and the Company does not cure such Default within the time
specified after receipt of such Notice. Such Notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice and the lapse of
time would become an Event of Default under clause (4), (5), (6) or (9)(B),
its status and what action the Company is taking or proposes to take with
respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company and
to the Representative of Bank Debt, or the Holders of at least 25% in
Principal Amount at Maturity of the Securities by notice to the Company and
the Trustee and to the Representative of Bank Debt, may declare the
Accreted Value of and accrued interest (if any) on all the Securities as of
the date of such declaration (collectively, the "Default Amount") to be due
and payable immediately. If an Event of Default specified in Section
6.01(7) or (8) with respect to the Company occurs, the Default Amount on
all the Securities as of the date of such Event of Default shall ipso facto
become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a
majority in Principal Amount at Maturity of the Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events
of Default have been cured or waived except nonpayment of Principal or
interest that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of Principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in Principal Amount at Maturity of the Securities by notice to the
Trustee and the Company may waive an existing Default and its consequences
except (i) a Default in the payment of the Principal of or interest on a
Security, (ii) a Default arising from the failure to redeem or purchase any
Security when required pursuant to this Indenture or (iii) a Default in
respect of a provision that under Section 9.02 cannot be amended without
the consent of each Securityholder affected. When a Default is waived, it
is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
Principal Amount at Maturity of the Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee under
this Indenture. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or, subject to Section 7.01, that
the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all
losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right
to receive payment of principal or interest when due, no Securityholder may
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in Principal Amount at Maturity
of the Outstanding Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in Principal Amount at Maturity
of the Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of Principal of and interest, if any, on the
Securities held by such Holder, on or after the respective due dates
expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default in payment of interest or Principal specified in Section 6.01(1) or
(2) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of Principal and interest, if any, remaining unpaid (together with
interest on such unpaid interest to the extent lawful) and the amounts
provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may, but shall have no obligation to, file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, its creditors or its property and,
unless prohibited by law or applicable regulations, may, but shall have no
obligation to, vote on behalf of the Holders in any election of a trustee
in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and its
counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any
money or property pursuant to this Article VI, it shall pay out the money
or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Debt to the extent required by
Article XI;
THIRD: to Holders of Securities for amounts due and unpaid
thereon for Principal and interest, if any, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for Principal and interest, if any,
respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days
before such record date, the Company shall mail to each Securityholder and
the Trustee a notice that states the record date, the payment date (which
shall be not less than one Business Day following the record date) and
amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
for the enforcement of the payment of the Principal of, or interest (if
any) on, any Security on or after the respective due dates expressed in
such Security or a suit by Holders of more than 10% in Principal Amount at
Maturity of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and shall
not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture or are
contemplated to be performed by the Trustee in the Escrow Agreement
and no implied covenants or obligations shall be read into this
Indenture or the Escrow Agreement against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such opinions or
certificates which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(g) Every provision of this Indenture relating in any way to
the Trustee or its conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of each
paragraph of this Section and Section 7.02 (unless expressly not
applicable) and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
and shall be protected in acting or refraining from acting on any document
believed by it to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the Securities shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its affiliates with
the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the Securities or of the proceeds from the Securities, and
it shall not be responsible for any statement in this Indenture or in any
document Issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default within 90 days after it occurs
and, if the Escrowed Property has not yet been released, shall mail to the
Escrow Agent notice of the Default within one Business Day after the
Trustee has knowledge of such Default. Except in the case of a Default in
payment of Principal of or interest, if any, on any Security, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers
in good faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA at the times
and in the manner provided pursuant thereto. To the extent that any such
report is required by the TIA with respect to any 12-month period, such
report shall cover the 12-month period ending each December 31 and shall be
transmitted by the next succeeding each March 31. The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if
any) on which the Securities are listed. The Company agrees to notify
promptly the Trustee whenever the Securities become listed on any stock
exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay
to the Trustee from time to time such compensation as shall be agreed to in
writing from time to time by the Company and the Trustee for its services.
The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee and each
of the Trustee's agents, officers, directors, employees and stockholders
(each an "indemnitee") against any and all loss, liability, damage, claim
or expense (including attorneys' fees and expenses) incurred by each
indemnitee in connection with the acceptance or administration of this
trust and the performance of its duties hereunder. Each indemnitee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim
and any or all indemnitees may have separate counsel and the Company shall
pay the fees and expenses of any such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by any indemnitee through its own wilful misconduct, negligence or
bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held
in trust to pay Principal of and interest, if any, on particular
Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(7) or
(8) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in
Principal Amount at Maturity of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company, is removed
by Holders of a majority in Principal Amount at Maturity of the Securities
and they do not promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.
If a successor Trustee does not accept appointment within 60
days after the retiring Trustee tenders its resignation or is removed, the
retiring Trustee, the Company or the Holders of a majority in Principal
Amount at Maturity of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and
deliver such Securities so authenticated; and in case at that time any of
the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all Outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation
or (ii) all Outstanding Securities have become due and payable, whether at
maturity or as a result of the giving of a notice of redemption pursuant to
Article III hereof or otherwise, and the Company irrevocably deposits with
the Trustee funds sufficient to pay when due all Outstanding Securities,
including interest thereon to such due date, if any (other than Securities
replaced pursuant to Section 2.07), and if in either case the Company pays
all other sums payable hereunder by the Company, then this Indenture shall,
subject to Sections 8.01(c) and 8.06, cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as to the satisfaction of all conditions to such
satisfaction and discharge of this Indenture and at the cost and expense of
the Company.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Company at
any time may terminate (i) all its obligations under the Securities and
this Indenture and all obligations of the Subsidiary Guarantors under
Article X ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
5.01(a)(iii) and the Subsidiary Guarantors' obligations under Article X and
the operation of Section 6.01(4), 6.01(6), 6.01(7) (with respect to
Significant Subsidiaries only), 6.01(8) (with respect to Significant
Subsidiaries only), 6.01(9) and 6.01(10) ("covenant defeasance option").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified
in Section 6.01(4), 6.01(6), 6.01(7) (with respect to Significant
Subsidiaries only), 6.01(8) (with respect to Significant Subsidiaries
only), 6.01(9) and 6.01(10) or because of the failure of the Company to
comply with clause (iii) of Section 5.01 or because of a Subsidiary
Guarantor's failure to comply with Article X.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08,
8.04, 8.05 and 8.06 shall survive until the Securities have been paid in
full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05
shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option
only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of Principal and
interest, if any, on the Securities to maturity or redemption, as the
case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when due
and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such
times and in such amounts as will be sufficient to pay Principal and
interest, if any, when due on all the Securities to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article
XI;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating
that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of
this Indenture there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Securityholders will
not recognize income, gain or loss for Federal income tax purposes as
a result of such defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Securityholders will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
Securities as contemplated by this Article VIII have been complied
with.
Notwithstanding the foregoing provisions of this Section, the
conditions set forth in the foregoing paragraphs (2), (3), (4), (5), (6)
and (7) need not be satisfied so long as, at the time the Company makes the
deposit described in paragraph (1), (i) no Default under Section 6.01(1),
6.01(2), 6.01(7) or 6.01(8) has occurred and is continuing on the date of
such deposit and after giving effect thereto and (ii) either (x) a notice
of redemption has been mailed pursuant to Section 3.03 providing for
redemption of all the Securities not more than 60 days after such mailing
and the provisions of Section 3.01 with respect to such redemption shall
have been complied with or (y) the Stated Maturity of the Securities will
occur within 60 days. If the conditions in the preceding sentence are
satisfied, the Company shall be deemed to have exercised its covenant
defeasance option.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future
date in accordance with Article III.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article VIII. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of Principal of and interest,
if any, on the Securities. Money and securities so held in trust are not
subject to Article XI.
SECTION 8.04. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any
excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held
by them for the payment of Principal or interest, if any, that remains
unclaimed for two years, and, thereafter, Securityholders entitled to the
money must look to the Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against deposited U.S. Government
Obligations or the Principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article VIII by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article VIII
until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with this Article
VIII; provided, however, that, if the Company has made any payment of
interest, if any, on or Principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. The Company, any
Subsidiary Guarantor and the Trustee, as applicable, may amend this
Indenture, the Securities and any Subsidiary Guarantee without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are Issued in registered form for purposes
of Section 163(f) of the Code or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of
the Code;
(4) to add Guarantees (including Subsidiary Guarantees) with
respect to the Securities or to secure the Securities;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(6) to provide for issuance of the Exchange Notes or Private
Exchange Notes, which will have terms substantially identical in all
material respects to the Initial Notes (except that the transfer
restrictions contained in the Initial Notes will be modified or
eliminated, as appropriate), and which will be treated together with
any Outstanding Initial Notes, as a single issue of securities;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA or to otherwise comply with the TIA;
(8) to make any change in Article XI that would limit or
terminate the benefits available to any holder of Senior Debt of the
Company or any Subsidiary Guarantor (or Representatives therefor); or
(9) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article XI of any holder of Senior Debt
of the Company or any Subsidiary Guarantor then outstanding unless the
holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.02. With Consent of Holders. The Company, any
Subsidiary Guarantor and the Trustee, as applicable, may amend this
Indenture, the Securities and any Subsidiary Guarantees without notice to
any Securityholder but with the written consent of the Holders of at least
a majority in Principal Amount at Maturity of the Outstanding Securities.
However, without the consent of each Securityholder affected, an amendment
may not:
(1) reduce the Principal Amount at Maturity of Securities whose
Holders must consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the Principal of or extend the Stated Maturity of
any Security or reduce the Accreted Value, Put Amount or Default
Amount of any Security;
(4) reduce the premium or amount payable upon the redemption of
any Security or change the time at which any Security may be redeemed
in accordance with Article III;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any change in Article XI that adversely affects the
rights of any such Securityholder under Article XI;
(7) make any change in Section 4.08 relating to the date by
which the Company must purchase, or in the obligation of the Company
to purchase, tendered shares, the definition of Change of Control,
Section 6.04 or 6.07 or the second sentence of this Section;
(8) make any change to paragraph 6 of the Securities; or
(9) except pursuant to Section 4.11(c) or Article VIII, release
any Subsidiary Guarantor from its obligation under its Subsidiary
Guarantee, or change any Subsidiary Guarantee in any manner that
adversely affects the rights of any Securityholder under such
Subsidiary Guarantee in any material respect.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article XI of any holder of Senior Debt
of the Company or any Subsidiary Guarantor then outstanding unless the
holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents and
Waivers. Any amendment to this Indenture or the Securities shall become
effective in accordance with its terms when executed and delivered by the
Company and the Trustee provided that the Company has received the
requisite consents prior thereto. The Company shall not be obligated to
execute any such amendment regardless of whether such consents have been
received. Any waiver shall become effective when the requisite consents
have been received or such later time as the Company may elect by notice to
the Trustee. A consent to an amendment or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent or waiver is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation prior to the time that the
Company receives the requisite number of consents to such proposed
amendment or waiver. After an amendment or waiver becomes effective, it
shall bind every Securityholder. A consent to any amendment or waiver
hereunder by any Holder given in connection with a tender of such Holder's
Securities shall not be rendered invalid by such tender.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give
their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is
fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Securityholders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall Issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to Issue a new Security shall
not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article IX if the amendment
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may but need not sign it. In signing
such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company, any
Affiliate of the Company nor any Subsidiary shall, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest, fee
or otherwise, to any Holder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Indenture or the
Securities unless such consideration is offered to be paid or agreed to be
paid to all Holders which so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver
or amendment.
ARTICLE X
Subsidiary Guarantees
SECTION 10.01. Subsidiary Guarantees. The Obligations of
the Company under the Securities and the Indenture shall be jointly and
severally Guaranteed pursuant to this Article X by any Subsidiary (a
"Subsidiary Guarantor") which is required to execute and deliver a
Subsidiary Supplemental Indenture pursuant to Section 4.11. Subject to the
provisions of this Article X, any such Subsidiary Guarantor, as primary
obligor and not merely as surety, shall, jointly and severally, irrevocably
and unconditionally guarantee the punctual payment when due, whether at
Stated Maturity, by acceleration or otherwise, of all Obligations of the
Company under the Securities and this Indenture whether for Principal of or
interest (if any) on the Securities, expenses, indemnification or otherwise
(all such Obligations guaranteed hereby by such Subsidiary Guarantor being
the "Guaranteed Obligations"). The guaranty of any Subsidiary Guarantor
under this Article X is herein referred to as this "Subsidiary Guarantee".
Each Subsidiary Guarantor agrees to pay, in addition to the
amount stated above, any and all expenses (including reasonable counsel
fees and expenses) incurred by the Trustee or the Holders in enforcing any
rights under this Article X.
Without limiting the generality of the foregoing, this
Subsidiary Guarantee guarantees, jointly and severally, to the extent
provided herein, the payment of all amounts which constitute part of the
Guaranteed Obligations and would be owed by the Company under this
Indenture or the Securities but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving the Company.
Each Subsidiary Guarantor agrees, and each Securityholder by
accepting a Security agrees, that the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee under this Article X shall be
subordinated in right of payment to the prior payment of all Senior Debt of
such Subsidiary Guarantor on the same basis and to the same extent that the
Securities are subordinated in right of payment to the prior payment of
Senior Debt of the Company and that such subordination is for the benefit
of and enforceable by the holders of Senior Debt of such Subsidiary
Guarantor. For the purpose of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by any
Subsidiary Guarantor only at such times as they may receive and/or retain
payments in respect of the Securities pursuant to this Indenture, including
Article XI hereof. In the event that the Trustee or any Holder shall have
received any Subsidiary Guarantor payment that is prohibited by the
foregoing sentence, such Subsidiary Guarantor payment shall be paid over
and delivered to the holders of the Senior Debt of such Subsidiary
Guarantor remaining unpaid, to the extent necessary to pay in full all
Senior Debt of such Subsidiary Guarantor.
SECTION 10.02. Guaranty Absolute. This Subsidiary Guarantee is
irrevocable, absolute, present and unconditional. Each Subsidiary Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of this Indenture, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Trustee or the Holders
with respect thereto. Each Subsidiary Guarantor further agrees that its
Subsidiary Guarantee herein constitutes a Guarantee of payment, performance
and compliance (and not a Guarantee of collection). The obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee herein are independent
of the Guaranteed Obligations, and a separate action or actions may be
brought and prosecuted against any Subsidiary Guarantor to enforce its
Subsidiary Guarantee, irrespective of whether any action is brought against
the Company or any other guarantor or whether the Company or any other
guarantor is joined in any such action or actions. The liability of each
Subsidiary Guarantor under its Subsidiary Guarantee herein shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of this Indenture or
the Securities with respect to the Company or any agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from this
Indenture, including any increase in the Guaranteed Obligations resulting
from the extension of additional credit to the Company or otherwise;
(c) the failure to give notice to such Subsidiary Guarantor of
the occurrence of a Default under the provisions of this Indenture or the
Securities;
(d) any taking, exchange, release or nonperfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(e) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale
or other disposition of any collateral or any other assets of the Company;
(f) any failure, omission, delay by or inability on the part of
the Trustee or the Holders to assert or exercise any right, power or remedy
conferred on the Trustee or the Holders in this Indenture or the
Securities;
(g) any change in the corporate structure, or termination,
dissolution, consolidation or merger of the Company or any guarantor
(including any other Subsidiary Guarantor) with or into any other entity,
the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all the assets of the Company or any
guarantor (including any other Subsidiary Guarantor), the marshaling of the
assets and liabilities of the Company or any guarantor, the receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors, or readjustment
of, or other similar proceedings affecting the Company or any guarantor
(including any other Subsidiary Guarantor), or any of the assets of any of
them;
(h) the assignment of any right, title or interest of the
Trustee or any Holder in this Indenture or the Securities to any other
Person; or
(i) any other event or circumstance (including any statute of
limitations), whether foreseen or unforeseen and whether similar or
dissimilar to any of the foregoing, that might otherwise constitute a
defense available to, or a discharge of, the Company or a guarantor
(including any other Subsidiary Guarantor), other than payment in full of
the Guaranteed Obligations; it being the intent of such Subsidiary
Guarantor that its obligations hereunder shall not be discharged except by
payment of all amounts owing pursuant to this Indenture or the Securities
and except as otherwise provided in Section 4.11(c).
This Subsidiary Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time any payment or performance
with respect to any of the Guaranteed Obligations is rescinded or must
otherwise be returned by the Trustee, any Holder or any other Person upon
the insolvency, bankruptcy or reorganization of the Company or otherwise,
all as though such payment or performance had not been made or occurred.
Except as expressly set forth in Sections 4.11(c), 8.01(b) and 10.03, the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee
herein shall not be subject to reduction, termination or other impairment
by any set-off, recoupment, counterclaim or defense or for any other
reason.
SECTION 10.03. Limitation on Liability. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum, aggregate
amount of the Guaranteed Obligations Guaranteed by any Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby Guaranteed without
rendering this Indenture, as it relates to such Subsidiary Guarantor,
voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors
generally.
SECTION 10.04. Waivers. Each Subsidiary Guarantor hereby
irrevocably waives, to the extent permitted by applicable law:
(a) promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this
Subsidiary Guarantee;
(b) any requirement that the Trustee, any Holder or any other
Person protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against the Company or any
other Person or any collateral, or obtain any relief pursuant to this
Indenture or pursue any other available remedy;
(c) all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Indenture or the
Securities;
(d) any defense arising by reason of any claim or defense based
upon an election of remedies by the Trustee or any Holder which in any
manner impairs, reduces, releases or otherwise adversely affects its
subrogation, contribution or reimbursement rights or other rights to
proceed against the Company or any other Person or any collateral; and
(e) any duty on the part of the Trustee or any Holder to
disclose to such Subsidiary Guarantor any matter, fact or thing relating to
the business, operation or condition of the Company and its assets now
known or hereafter known by the Trustee or such Holder.
SECTION 10.05. Waiver of Subrogation and Contribution. Until
this Indenture has been discharged, each Subsidiary Guarantor hereby
irrevocably waives any claim or other right which it may now or hereafter
acquire against the Company or any guarantor (including any other
Subsidiary Guarantor) that arise from the existence, payment, performance
or enforcement of such Subsidiary Guarantor's obligations under its
Subsidiary Guarantee herein, including any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Trustee or any Holder against the
Company or any guarantor or any collateral which the Trustee or any Holder
now has or hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including the
right to take or receive from the Company, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment or security
on account of such claim or other rights. If any amount shall be paid to
such Subsidiary Guarantor in violation of the preceding sentence and the
Guaranteed Obligations shall not have been paid in full, such amount shall
be deemed to have been paid to such Subsidiary Guarantor for the benefit
of, and held in trust for the benefit of, the Trustee, and the Holders, and
shall forthwith be paid to the Trustee for the benefit of the Holders to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Subsidiary
Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waivers set forth in this Section 10.05 are knowingly made in contemplation
of such benefits.
SECTION 10.06. No Waiver; Cumulative Remedies. No failure on
the part of the Trustee or any Holder to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law. The Trustee and the Holders shall have all the rights and
remedies granted in this Indenture and available at law or in equity, and
these same rights and remedies may be pursued separately, successively or
concurrently against the Company or any Subsidiary Guarantor, or any
collateral.
SECTION 10.07. Successors and Assigns. Until its Subsidiary
Guarantee is released pursuant to Section 4.11(c), this Article X shall be
binding upon each Subsidiary Guarantor and its successors and assigns and
shall enure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by
any Holder or the Trustee, the rights and privileges conferred upon that
party in this Indenture and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
SECTION 10.08. Severability. Any provision of this Article X
which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non- authorization, without invalidating
the remaining provisions hereof or affecting the validity, enforceability
or legality of such provision in any other jurisdiction.
ARTICLE XI
Subordination
SECTION 11.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the
indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article XI, to
the prior payment of all Senior Debt of the Company and that the
subordination is for the benefit of and enforceable by the holders of
Senior Debt of the Company. The Securities shall in all respects rank pari
passu with all other Senior Subordinated Debt of the Company and only
indebtedness of the Company which is Senior Debt shall rank senior to the
Securities in accordance with the provisions set forth herein. All
provisions of this Article XI shall be subject to Section 11.12.
SECTION 11.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a
total or partial liquidation or a total or partial dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property:
(1) holders of Senior Debt of the Company shall be entitled to
receive payment in full of such Senior Debt before Securityholders
shall be entitled to receive any payment or distribution of Principal
of, or premium, if any, or interest on the Securities; and
(2) until the Senior Debt of the Company is paid in full, any
payment or distribution to which Securityholders would be entitled
but for this Article XI shall be made to holders of such Senior Debt
as their interests may appear, except that, so long as the
Securityholders are not in the same or higher class of creditors in
such liquidation, dissolution or proceeding as the holders of the
such Senior Debt, Securityholders may receive shares of stock and any
debt securities that are subordinated to such Senior Debt to at least
the same extent as the Securities.
SECTION 11.03. Default on Senior Debt. The Company may not pay
the principal of, premium, if any, or interest on, the Securities or make
any deposit pursuant to Section 8.01 and may not repurchase, redeem or
otherwise retire any Securities (collectively, "pay the Securities") if (i)
any Senior Debt of the Company is not paid when due or (ii) any other
default on Senior Debt of the Company occurs and the maturity of such
Senior Debt is accelerated in accordance with its terms unless, in either
case, (x) the default has been cured or waived and any such acceleration
has been rescinded or (y) such Senior Debt has been paid in full. During
the continuance of any default (other than a default described in clause
(i) or (ii) of the preceding sentence) with respect to any Designated
Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required
to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities for a period (a "Payment
Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice (a "Payment Blockage Notice") of such default
from the Representative of such Designated Senior Debt specifying an
election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated (i) by written
notice to the Trustee and the Company from the Representative which gave
such Payment Blockage Notice, (ii) by repayment in full of such Designated
Senior Debt or (iii) because the default specified in such Payment Blockage
Notice is no longer continuing). Notwithstanding the provisions described
in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section), unless the holders of
such Designated Senior Debt or the Representative of such holders shall
have accelerated the maturity of such Designated Senior Debt, the Company
may resume payments (including any missed payments) on the Securities after
the termination of such Payment Blockage Period. Not more than one Payment
Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Debt during such period; provided, however, that if any Payment Blockage
Notice within such 360-day period is given by or on behalf of any holders
of any Designated Senior Debt (other than Bank Debt) (the "Initial Payment
Blockage Notice"), the Representative of the Bank Debt may give another
Payment Blockage Notice within such period; provided further, however, that
in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any
consecutive 360 day period.
SECTION 11.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of the
Designated Senior Debt (or their Representatives) of the acceleration.
SECTION 11.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article XI
should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Debt of the
Company and pay it over to them as their interests may appear.
SECTION 11.06. Subrogation. After all Senior Debt of the
Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Debt to receive distributions applicable to such Senior Debt. A
distribution made under this Article XI to holders of Senior Debt of the
Company which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company its
Senior Debt.
SECTION 11.07. Relative Rights. This Article XI defines
the relative rights of Securityholders and holders of Senior Debt of the
Company. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to
pay Principal of, premium, if any, and interest on the Securities in
accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of
holders of such Senior Debt of the Company to receive distributions
otherwise payable to Securityholders.
SECTION 11.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Debt of the Company to enforce the
subordination of the indebtedness evidenced by the Securities shall be
impaired by any act or failure to act by the Company or by its failure to
comply with this Indenture.
SECTION 11.09. Rights of Trustee and Paying Agent. The Company
shall give prompt written notice to the Trustee of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee
in respect of the Securities. Notwithstanding Section 11.03, the Trustee or
Paying Agent may continue to make payments on the Securities and shall not
be charged with knowledge of the existence of facts that would prohibit the
making of any such payments unless, not less than one Business Day prior to
the date of such payment, a Trust Officer of the Trustee receives actual
written notice satisfactory to it that payments may not be made under this
Article XI. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of the Company may give the
notice; provided, however, that, if an issue of Senior Debt of the Company
has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were
not Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set
forth in this Article XI with respect to any Senior Debt of the Company
which may at any time be held by it, to the same extent as any other holder
of such Senior Debt; and nothing in Article VII shall deprive the Trustee
of any of its rights as such holder. Nothing in this Article XI shall apply
to claims of, or payments to, the Trustee under or pursuant to Section
7.07.
SECTION 11.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Company, the distribution may be made and the notice
given to their Representative (if any).
SECTION 11.11. Article XI Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article XI shall not be
construed as preventing the occurrence of a Default. Nothing in this
Article XI shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 11.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the
proceeds of U.S. Government Obligations held in trust under Article VIII by
the Trustee for the payment of Principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior Debt of the
Company or subject to the restrictions set forth in this Article XI, and
none of the Securityholders shall be obligated to pay over any such amount
to the Company or any holder of Senior Debt of the Company or any other
creditor of the Company.
SECTION 11.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XI, the Trustee and the
Securityholders shall be entitled to rely (i) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature
referred to in Section 11.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Securityholders or (iii) upon the
Representatives for the holders of Senior Debt of the Company for the
purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Debt of the Company and other
indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XI. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any
Person as a holder of Senior Debt of the Company to participate in any
payment or distribution pursuant to this Article XI, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of such Senior Debt held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under
this Article XI, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by
the Trustee pursuant to this Article XI.
SECTION 11.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and
the holders of Senior Debt of the Company as provided in this Article XI
and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 11.15. Trustee Not Fiduciary for Holders of Senior
Debt. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of the Company and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Securityholders or
the Company or any other Person, money or assets to which any holders of
such Senior Debt shall be entitled by virtue of this Article XI or
otherwise. With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article XI and no implied
covenants or obligations with respect to holders of such Senior Debt shall
be read into this Indenture against the Trustee.
SECTION 11.16. Reliance by Holders of Senior Debt on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of
any Senior Debt of the Company, whether such Senior Debt was created or
acquired before or after the issuance of the Securities, to acquire and
continue to hold, or to continue to hold, such Senior Debt and such holder
of Senior Debt of the Company shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
ARTICLE XII
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision
which is required to be included in this Indenture by the TIA, the required
provision shall control.
SECTION 12.02. Notices. Any notice or communication shall
be in writing and delivered in Person or mailed by first-class mail
addressed as follows:
if to the Company prior to the Effective Date:
PX Escrow Corp.
35 East 62nd Street
New York, New York 10021
Attention: General Counsel
Telephone: (212) 572-5170
Facsimile: (212) 572-5056
if to the Company from and after the Effective Date
or the Subsidiary Guarantors:
Panavision, Inc.
6219 De Soto Avenue
Woodland Hills, California 91367
Attention: Chief Financial Officer
Telephone: (818) 316-2208
Facsimile: (818) 316-1110
if to the Trustee:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-5084
Facsimile: (212) 815-5915
The Company, a Subsidiary Guarantor or the Trustee by notice to
the other parties hereto may designate additional or different addresses
for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
sent by first-class mail to the Securityholder at the Securityholder's
address as it appears on the registration books of the Registrar and shall
be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed to a Securityholder
in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with;
provided, however, that, in the case of such application or request as to
which the furnishing of such documents, certificates or opinions is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion
need be furnished.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture (other than the Officer's
Certificate required by Section 4.12) shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
SECTION 12.06. When Securities Disregarded. In determining
whether the Holders of the required Principal Amount of Maturity of
Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company
shall be disregarded and deemed not to be Outstanding, except that, for the
purpose of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which a Trust
Officer of the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities Outstanding at the time shall be
considered in any such determination.
SECTION 12.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting
of Securityholders. The Registrar and the Paying Agent may make reasonable
rules for their functions.
SECTION 12.08. Legal Holidays. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest (if any) shall accrue for the intervening
period. If a regular record date is a Legal Holiday, the record date shall
not be affected.
SECTION 12.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the
State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 12.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company, the Subsidiary Guarantors
or the Trustee shall not have any liability for any obligations of the
Company, the Subsidiary Guarantors or the Trustee under the Securities or
this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the Issue of the Securities.
SECTION 12.11. Successors. All agreements of the Company
in this Indenture and the Securities shall bind its successors. All
agreements of each of the Subsidiary Guarantors and the Trustee in this
Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. One signed
copy is enough to prove this Indenture.
SECTION 12.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are
not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
PX ESCROW CORP.
By: /s/ Glenn P. Dickes
---------------------------------
Name: Glenn P. Dickes
Title: Vice President and Secretary
THE BANK OF NEW YORK, as Trustee
By: /s/ Vivian Georges
---------------------------------
Name: Vivian Georges
Title: Assistant Vice President
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES
AND EXCHANGE NOTES
1. Definitions
1.1 Definitions. Capitalized terms used herein but not defined in
this Appendix have the meanings ascribed thereto in the Indenture. For the
purposes of this Appendix the following terms shall have the meanings
indicated below:
"Depositary" means The Depository Trust Company, its
nominees and their respective successors.
"Initial Purchasers" means Credit Suisse First Boston
Corporation and Schroder & Co. Inc.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Notes held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Notes.
"Purchase Agreement" means the Purchase Agreement, dated
February 6, 1998, among the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" an offer by the Company, pursuant
to the Registration Agreement or otherwise, to certain Holders of Initial
Notes, to issue and deliver to such Holders, in exchange for the Initial
Notes, a like aggregate principal amount of Exchange Notes registered under
the Securities Act.
"Registration Agreement" means the Registration Agreement,
dated February 6, 1998, among the Company and the Initial Purchasers.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depositary), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company, in connection with the offer and sale of Initial
Notes or Private Exchange Notes, pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions.
Defined in
Term Section:
"Agent Members"...................................................2.1(b)
"Global Security".................................................2.1(a)
"Regulation S"....................................................2.1(a)
"Rule 144A".......................................................2.1(a)
Unless otherwise specified, all Section references used herein shall refer
to Sections of this Appendix.
2. The Securities
2.1 Form and Dating. The Initial Notes are being offered and sold by
the Company pursuant to the Purchase Agreement.
(a) Global Securities. Initial Notes offered and sold to a QIB
in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each
case as provided in the Purchase Agreement, shall be issued initially in
the form of one or more permanent global Securities in definitive, fully
registered form without interest coupons with the global securities legend
and restricted securities legend set forth in Exhibit A to the Indenture
(each, a "Global Security"), which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Trustee, at
its New York office, as custodian for the Depositary (or with such other
custodian as the Depositary may direct), and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only
to a Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more
Global Securities that (a) shall be registered in the name of the
Depositary for such Global Security or Global Securities or the nominee of
such Depositary and (b) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions or held by the
Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary or by the Trustee as
the custodian of the Depositary or under such Global Security, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a
beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section
2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of
certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver the
Securities in accordance with Section 2.02 of the Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures
of the Depositary therefor. A transferor of a beneficial interest in
a Global Security shall deliver to the Registrar a written order
given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to
credited with a beneficial interest in the Global Security. The
Registrar shall, in accordance with such instructions instruct the
Depositary to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to
debit the account of the Person making the transfer the beneficial
interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of
this Appendix or Section 2.09 of the Indenture, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures
as are substantially consistent with the provisions of this Section
2.3 (including the certification requirements set forth on the
reverse of the Initial Notes intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such
other procedures as may from time to time be adopted by the Company.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Security certificate evidencing the Global Securities
(and all Securities issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) AND ANY GUARANTY THEREOF
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") AND THIS SECURITY MAY NOT BE REOFFERED, RESOLD, PLEDGED,
ENCUMBERED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A AND REGULATION S THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) THIS SECURITY MAY BE REOFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (i) INSIDE THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (v) TO THE ISSUER OR ANY OF ITS
SUBSIDIARIES, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, in
the case of any Transfer Restricted Security that is represented by a
Global Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a certificated
Security that does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer Restricted Security,
if the Holder certifies in writing to the Registrar that its request
for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the
Security).
(iii) After a transfer of any Initial Notes or Private Exchange
Notes during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes or Private Exchange
Notes, as the case may be, all requirements pertaining to legends on
such Initial Notes or such Private Exchange Notes will cease to
apply, but the requirements requiring such Initial Notes or such
Private Exchange Notes issued to certain Holders be issued in global
form will continue to apply, and Initial Notes or Private Exchange
Notes in global form without legends will be available to the
transferee of the Holder of such Initial Notes or Private Exchange
Notes upon exchange of such transferring Holder's Initial Notes or
Private Exchange Notes or directions to transfer such Holder's
interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such
Initial Notes are offered Exchange Notes in exchange for their
Initial Notes, all requirements pertaining to such Initial Notes that
Initial Notes issued to certain Holders be issued in global form will
continue to apply and Initial Notes in global form with the
restricted securities legend set forth in Exhibit A to the Indenture
will be available to Holders of such Initial Notes that do not
exchange their Initial Notes, and Exchange Notes in global form will
be available to Holders that exchange such Initial Notes in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to
the Initial Notes pursuant to which Holders of such Initial Notes are
offered Private Exchange Notes in exchange for their Initial Notes,
all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will still apply,
and Private Exchange Notes in global form with the Restricted
Securities Legend set forth in Exhibit A to the Indenture will be
available to Holders that exchange such Initial Notes in such Private
Exchange.
(c) Cancellation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depositary for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is
then the Securities Custodian for such Global Security) with respect to
such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(d) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary)
of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or
upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised
only through the Depositary subject to the applicable rules and
procedures of the Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary
with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including
any transfers between or among Depositary participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount
of such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of
New York, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Notes of authorized denominations.
Any portion of a Global Security transferred pursuant to this Section shall
be executed, authenticated and delivered only in denominations of $1,000
and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any certificated Initial Note delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(d), bear the restricted securities legend set forth
in Exhibit A to the Indenture.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under
this Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without interest coupons.
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT.
FOR PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $688.38 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $321.62, IN EACH CASE PER $1,000
PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY. FOR PURPOSES OF SECTION 1275
OF THE CODE, THE ISSUE DATE OF THIS SECURITY IS FEBRUARY 11, 1998. FOR
PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD TO MATURITY (COMPOUNDED
SEMI-ANNUALLY) IS 9 5/8%. IN ADDITION, THERE MAY BE CONTINGENT INTEREST
PAYABLE ON THIS SECURITY.
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
"THIS SECURITY (OR ITS PREDECESSOR) AND ANY GUARANTY THEREOF
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND THIS
SECURITY MAY NOT BE REOFFERED, RESOLD, PLEDGED, ENCUMBERED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A AND REGULATION S
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) THIS SECURITY MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (iv) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (v) TO THE ISSUER OR ANY OF ITS
SUBSIDIARIES, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE."
No. CUSIP
PX ESCROW CORP.
95/8% Senior Subordinated Discount Note Due 2006
Principal Amount at Maturity $______________
PX Escrow Corp., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum of Dollars on February 1,
2006.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: PX ESCROW CORP.
by___________________________
Vice President
__________________________
Assistant Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by_____________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL NOTE]
PX ESCROW CORP.
95/8% Senior Subordinated Discount Note Due 2006
1. Interest
(a) PX Escrow Corp., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay to the registered
holder of this Security interest on the Accreted Value of this Security at
a rate of 9 5/8% per annum commencing August 1, 2002. The Accreted Value of
this Security will increase in the manner provided in the Indenture.
Interest on this Security shall accrue from and including the most recent
date to which interest has been paid, or if no interest has been paid, from
and including February 1, 2002 through but excluding the date on which
interest is paid. Interest shall be payable semiannually in arrears on each
February 1 and August 1, commencing August 1, 2002. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
(b) In the event that (1) by the 45th day following the
Effective Date (or if such day is not a Business Day, the first Business
Day thereafter), a registration statement has not been filed with the
Securities and Exchange Commission with respect to the proposed Registered
Exchange Offer or the resale of the Initial Notes, then, the Company
promises to pay interest on this Security from and including the 45th day
following the Effective Date until but excluding the earlier of (i) the
date such registration statement is filed and (ii) the 180th day following
the Effective Date (or if such day is not a Business Day, the first
Business Day thereafter), or (2) by the 180th day following the Effective
Date (or if such day is not a Business Day, the first Business Day
thereafter) neither (i) a Registered Exchange Offer is consummated nor (ii)
a Shelf Registration Statement with respect to the resale of the Initial
Notes is declared effective, the Company promises to pay interest on this
Security from and including the 180th day following the Effective Date (or
if such day is not a Business Day, the first Business Day thereafter) until
but excluding the earlier of (i) the consummation of the Registered
Exchange Offer, (ii) the effective date of such Shelf Registration
Statement and (iii) the date that the Initial Notes become freely
tradeable, without registration under the Securities Act, in each case
payable in cash semiannually in arrears on February 1 and August 1
commencing August 1, 1998, at a rate per annum equal to 0.50% of the
Accreted Value of this Security as of the Semi-Annual Accrual Date or
interest payment date, as the case may be, immediately preceding the date
on which such interest is payable. Such interest will be computed on the
basis of a 360-day year of twelve 30-day months.
(c) In the case of a default in payment of principal of the
Notes upon acceleration, redemption or purchase, the overdue principal
shall bear interest at the rate of 10 5/8% per annum, from the date such
amount is due until it is paid in full. The Company shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
Interest on any overdue principal or installments of interest shall be
payable on demand.
2. Method of Payment
The Company will pay interest, if any, referred to in paragraph
1 above (except defaulted interest) on the Securities to the Persons who
are registered holders of Securities (including Exchange Notes and Private
Exchange Notes issued in respect of Initial Notes pursuant to the
Registered Exchange Offer or the Private Exchange, as the case may be) at
the close of business on the January 15 or July 15 next preceding the
applicable interest payment date even if Securities are canceled after such
record date and on or before such interest payment date. Holders must
surrender Securities to a Paying Agent to collect Principal payments. The
Company will pay Principal in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
However, the Company may pay Principal and interest by check payable in
such money; provided, that all payments with respect to Global Securities
the holders of which have given wire transfer instructions to the Company,
will be required to be made by wire transfer of immediately available funds
to the accounts specified by the holders thereof.
3. Paying Agent and Registrar
Initially, The Bank of New York ("Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Recourse Subsidiaries may act as
Paying Agent, Registrar, co-registrar or transfer agent.
4. Indenture
The Company issued the Securities under an Indenture dated as
of February 11, 1998 ("Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the
Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company limited to $217,903,000 aggregate Principal Amount at Maturity
(subject to Section 2.07 of the Indenture). This Security is one of the
Initial Notes referred to in the Indenture. The Securities include the
Initial Notes and any Exchange Notes and Private Exchange Notes issued in
exchange for the Initial Notes pursuant to the Indenture. The Initial
Notes, the Exchange Notes and Private Exchange Notes are treated as a
single class of securities under the Indenture. The Indenture imposes
certain limitations on, among other things, the issuance of debt and
redeemable stock by the Company, the issuance of debt and preferred stock
by its Subsidiaries, the payment of dividends and other distributions on,
and acquisitions or retirements of, the Company's Capital Stock, the sale
or transfer of assets and Subsidiary stock and transactions with
Affiliates. In addition, the Indenture limits the ability of the Company
and its Subsidiaries to restrict distributions and dividends from such
Subsidiaries.
5. Optional Redemption
Except as set forth below, the Securities may not be redeemed
by the Company prior to February 1, 2002. On and after such date, the
Company may redeem the Securities in whole at any time or in part from time
to time at the redemption prices listed below (expressed as percentages of
Accreted Value as of the redemption date) for the periods indicated plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of holders of record on the relevant record date to receive interest
due, if any, on the relevant interest payment date):
if redeemed during the 12-month period commencing on February 1,
Period Redemption Price
2002.......................... 104.813%
2003.......................... 103.208%
2004.......................... 101.604%
2005.......................... 100.000%
The Securities may be redeemed at the option of the Company at
any time as a whole before February 1, 2002, at a redemption price equal to
the sum of (i) the Accreted Value thereof at the date of redemption, plus
(ii) accrued and unpaid interest, if any, to the date of redemption, plus
(iii) the Applicable Premium at the date of redemption.
Until February 1, 2001, the Company may redeem with, and to the
extent the Company actually receives, the net proceeds of a Public Equity
Offering of the Company or Parent the Securities in part from time to time
at redemption price equal to 109 5/8% of the Accreted Value as of the
redemption date plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due, if any, on the relevant interest payment date);
provided, however, that at least $141,637,000 aggregate Principal Amount at
Maturity of the Securities must remain outstanding after each such
redemption. A "Public Equity Offering" means an underwritten public
offering of common stock of the Company or Parent pursuant to an effective
registration statement under the Securities Act.
6. Mandatory Redemption
In the event that (i) the Assumption is not consummated on or
prior to June 30, 1998 or (ii) PX Holding elects to abandon the
Transactions or the Recapitalization Agreement and the Stockholders
Agreement are terminated, in any case, on or prior to June 30, 1998, for
any reason, the Company shall redeem all the Securities at a redemption
price in cash equal to the Accreted Value thereof at the redemption date on
(a) July 22, 1998, in the event that the Assumption is not consummated on
or prior to June 30, 1998, or (b) the 20th day (or if such day is not a
Business Day, the next following Business Day) following the abandonment of
the Transactions or the termination of the Recapitalization Agreement and
the Stockholders Agreement, in the event of such abandonment or
termination.
7. Notice of Redemption
Notice of redemption pursuant to paragraph 5 will be mailed at
least 30 days but not more than 60 days before the redemption date, and
notice of redemption pursuant to paragraph 6 will be mailed promptly after
the occurrence of the event triggering such redemption, in each case to
each Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 Principal Amount at Maturity
may be redeemed in part but only in whole multiples of $1,000 Principal
Amount at Maturity. If money sufficient to pay the redemption price of all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and
certain other conditions are satisfied, on and after such redemption date
Accreted Value ceases to increase, and interest, if any, ceases to accrue,
on such Securities (or such portions thereof) called for redemption.
8. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to the Put Amount of
the Securities to be repurchased plus accrued and unpaid interest, if any,
to the date of repurchase, in each case as provided in, and subject to the
terms of, the Indenture.
9. Subsidiary Guarantees
Under certain circumstances, the payment of Principal of and
interest, if any, on the Securities and other Obligations of the Company
under the Securities and the Indenture will be unconditionally and jointly
and severally guaranteed by the Subsidiary Guarantors, if any, pursuant to,
and subject to the terms of, Section 4.11 and Article X of the Indenture.
10. Subordination
The Securities are subordinated to Senior Debt of the Company,
as defined in the Indenture. To the extent provided in the Indenture,
Senior Debt of the Company must be paid before the Securities may be paid.
The Company agrees, and each Securityholder by accepting a Security agrees,
to the subordination provisions contained in the Indenture and authorizes
the Trustee to give it effect and appoints the Trustee as attorney-in-fact
for such purpose.
11. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of Principal Amount at Maturity of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and
to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed
in part, the portion of the Security not to be redeemed) or any Securities
for a period of 15 days before a selection of Securities to be redeemed.
12. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. Unclaimed Money
If money for the payment of Principal or interest, if any,
remains unclaimed for two years, the Trustee or Paying Agent shall pay the
money back to the Company at its request unless an abandoned property law
designates another person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.
14. Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of Principal and interest, if any, on the
Securities to redemption or maturity, as the case may be.
15. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, any Subsidiary Guarantee or the Securities may be amended
with the written consent of the Holders of at least a majority in Principal
Amount at Maturity outstanding of the Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of
the Holders of a majority in Principal Amount at Maturity outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, any Subsidiary
Guarantor and the Trustee, as applicable, may amend the Indenture, any
Subsidiary Guarantee or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article V of the Indenture, or
to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to provide for the
issuance of the Exchange Notes or Private Exchange Notes, or to comply with
any request of the SEC in connection with qualifying the Indenture under
the Act or to otherwise comply with the Act, to make any change in Article
XI that would limit or terminate the benefits available to any holder of
Senior Debt of the Company or any Subsidiary Guarantor under Article XI (or
Representatives therefor), or to make any change that does not adversely
affect the rights of any Securityholder. A consent to any amendment or
waiver of any provision in the Indenture or in the Securities by any Holder
given in connection with a tender of such Holder's Securities shall not be
rendered invalid by such tender.
16. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment
of Principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 or paragraph 6 of the Securities, upon declaration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company to comply with other agreements in
the Indenture or the Securities or the Escrow Agreement, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other Debt
of the Company or any Significant Subsidiary if the total principal amount
on the portion of such Debt that is accelerated (or so unpaid) exceeds
$10,000,000 and continues for 10 days after the required notice to the
Company; (v) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary; (vi) certain judgments or decrees
for the payment of money in excess of $10,000,000; and (vii) a Subsidiary
Guarantee ceasing to be in full force and effect (other than in accordance
with the Indenture) or denial or disaffirmation by a Subsidiary Guarantor
of its obligations under its Subsidiary Guarantee. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
Principal Amount at Maturity of the Securities may declare the Default
Amount of all the Securities to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result
in the Default Amount of the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in
Principal Amount at Maturity of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in
payment of Principal or interest) if it determines that withholding notice
is in their interest.
17. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have
if it were not Trustee.
18. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company, the Subsidiary Guarantors or the Trustee shall not have any
liability for any obligations of the Company, the Subsidiary Guarantors or
the Trustee under the Securities or the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Securities.
19. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate
of authentication on the other side of this Security.
20. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN
ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture
which has in it the text of this Security in larger type. Requests may be
made, prior to the Effective Date, to: PX Escrow Corp., 35 East 62nd
Street, New York, New York 10021, Attention: Secretary; and from and after
the Effective Date, to: Panavision Inc., 6219 De Soto Avenue, Woodland
Hills, California 91367, Attention: Secretary.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent
to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
- ------------------------------------------------------------------------------
Date:______________ Your Signature:____________________
- ------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144 (k) under the Securities Act after the later of the date of
original issuance of such Securities and the last date, if any, on which
such Securities are owned by the Company or any Affiliate of the Company,
the undersigned confirms that such Securities are being transferred in
accordance with its terms:
CHECK ONE BOX BELOW
_
(1) |_| to the Company; or
_
(2) |_| pursuant to an effective registration statement under
the Securities Act of 1933; or
_
(3) |_| inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act
of 1933) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on
Rule 144A, in each case pursuant to and in compliance
with Rule 144A under the Securities Act of 1933; or
_
(4) |_| outside the United States in an offshore transaction
within the meaning of Regulation S under the Securities
Act in compliance with Rule 904 under the Securities Act
of 1933; or
_
(5) |_| pursuant to another available exemption from
registration provided by Rule 144 under the Securities
Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof;
provided, however, that if box (4) or (5) is checked, the Trustee may
require, prior to registering any such transfer of the Securities,
such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of
1933, such as the exemption provided by Rule 144 under such Act.
---------------------------------
Signature
Signature Guarantee:
- -------------------------- ---------------------------------
Signature must be guaranteed Signature
- ------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided
by Rule 144A.
Dated: __________________ _________________________________
NOTICE: To be executed by an
executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount
Decrease in Increase in at Maturity of Signature of
Principal Principal this Global Authorized
Amount Amount Security Officer
at Maturity at Maturity Following such of Trustee
Date of of this of this Decrease or or Securities
Exchange Global Security Global Security Inrease Custodian
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT.
FOR PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $688.38 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $321.62, IN EACH CASE PER $1,000
PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY. FOR PURPOSES OF SECTION 1275
OF THE CODE, THE ISSUE DATE OF THIS SECURITY IS FEBRUARY 11, 1998. FOR
PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD TO MATURITY (COMPOUNDED
SEMI-ANNUALLY) IS 9 5/8%. IN ADDITION, THERE MAY BE CONTINGENT INTEREST
PAYABLE ON THIS SECURITY.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]1/
- ------------------
1/ Bracketed language is the Global Security Legend to be included
only in the Global Securities.
No. CUSIP
[*/]
PX ESCROW CORP.
95/8% Senior Subordinated Discount Exchange Note Due 2006
Principal Amount at Maturity $________________
PX Escrow Corp., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum
of Dollars on February 1, 2006.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: PX ESCROW CORP.
by_____________________
Vice President
_____________________
Assistant Secretary
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of the
Securities referred to
in the Indenture.
by__________________________
Authorized Signatory
- ---------------------------
*/ [If the Security is a Private Exchange Note, add the Restricted
Securities Legend from Exhibit A and replace the Assignment Form included
in this Exhibit B with the Assignment Form included in such Exhibit A.]
[FORM OF REVERSE SIDE OF EXCHANGE NOTE
AND PRIVATE EXCHANGE NOTE]
PX ESCROW CORP.
9 5/8% Senior Subordinated Discount Exchange Note Due 2006
1. Interest
PX Escrow Corp., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay to the registered
holder of this Security interest on the Accreted Value of this Security at
a rate of 9 5/8% per annum commencing August 1, 2002 (without duplication of
the interest that accrued on the Initial Note in exchange for which this
Security was issued). The Accreted Value of this Security will increase in
the manner provided in the Indenture. Interest on this Security shall
accrue from and including the most recent date to which interest has been
paid on the Initial Notes, the Exchange Notes or the Private Exchange
Notes, as the case may be, or if no interest has been paid, from and
including February 1, 2002 through but excluding the date on which interest
is paid. Interest shall be payable semiannually in arrears on each February
1 and August 1 and at stated maturity, commencing August 1, 2002. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
Except as provided above, there will be no periodic payments of interest.
In the case of a default in payment of principal of the Notes
upon acceleration, redemption or purchase, the overdue principal shall bear
interest at the rate of 10 5/8% per annum, from the date such amount is due
until it is paid in full. The Company shall pay interest on overdue
installments of interest at the same rate to the extent lawful. Interest on
any overdue principal or installments of interest shall be payable on
demand.
2. Method of Payment
The Company will pay interest, if any, referred to in paragraph
1 above (except defaulted interest) on the Securities to the Persons who
are registered holders of Securities at the close of business on the
January 15 or July 15 next preceding the applicable interest payment date
even if Securities are canceled after such record date and on or before
such interest payment date. The Company will pay interest referred to in
paragraph 1 of the Initial Notes (except defaulted interest) on the Initial
Notes in exchange for which the Exchange Notes or Private Exchange Notes
were issued to the Persons who, at the close of business on the January 15
or the July 15 next preceding the applicable interest payment date, are
registered holders of such Initial Notes, if such record date occurs prior
to such exchange, or registered holders of the Exchange Notes or Private
Exchange Notes, if such record date occurs on or after the date of such
exchange, even if such Initial Notes, Exchange Notes or Private Exchange
Notes are canceled after the record date and on or before such interest
payment date. Holders must surrender Securities to a Paying Agent to
collect Principal payments. The Company will pay Principal in money of the
United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay Principal and
interest by check payable in such money; provided, that all payments with
respect to Global Securities the holders of which have given wire transfer
instructions to the Company, will be required to be made by wire transfer
of immediately available funds to the accounts specified by the holders
thereof.
3. Paying Agent and Registrar
Initially, The Bank of New York ("Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Recourse Subsidiaries may act as
Paying Agent, Registrar, co-registrar or transfer agent.
4. Indenture
The Company issued the Securities under an Indenture dated as
of February 11, 1998 ("Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the
Act for a statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $217,903,000 aggregate Principal Amount at Maturity (subject to
Section 2.07 of the Indenture). This Security is one of the Exchange Notes
or Private Exchange Notes referred to in the Indenture. The Securities
include the Initial Notes, and any Exchange Notes and Private Exchange
Notes issued in exchange for the Initial Notes pursuant to the Indenture.
The Initial Notes, the Exchange Notes and Private Exchange Notes are
treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on, among other things, the issuance of debt
and redeemable stock by the Company, the issuance of debt and preferred
stock by the Company and its Subsidiaries, the payment of dividends and
other distributions on, and acquisitions or retirements of, the Company's
Capital Stock, the sale or transfer of assets and Subsidiary stock and
transactions with Affiliates. In addition, the Indenture limits the ability
of the Company and its Subsidiaries to restrict distributions and dividends
from such Subsidiaries.
5. Optional Redemption
Except as set forth below, the Securities may not be
redeemed by the Company prior to February 1, 2002. On and after such date,
the Company may redeem the Securities in whole at any time or in part from
time to time at the redemption prices listed below (expressed as
percentages of Accreted Value as of the redemption date) for the periods
indicated plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due, if any, on the relevant interest payment date):
if redeemed during the 12-month period commencing on February 1,
Period Redemption Price
2002......................... 104.813%
2003......................... 103.208%
2004......................... 101.604%
2005......................... 100.000%
The Securities may be redeemed at the option of the Company at
any time as a whole before February 1, 2002, at a redemption price equal to
the sum of (i) the Accreted Value thereof at the date of redemption, plus
(ii) accrued and unpaid interest, if any, to the date of redemption, plus
(iii) the Applicable Premium at the date of redemption.
Until February 1, 2001, the Company may redeem with, and to the
extent the Company actually receives, the net proceeds of a Public Equity
Offering of the Company or Parent the Securities in part from time to time
at redemption price equal to 109 5/8% of the Accreted Value as of the
redemption date plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due, if any, on the relevant interest payment date);
provided, however, that at least $141,637,000 aggregate Principal Amount at
Maturity of the Securities must remain outstanding after each such
redemption. A "Public Equity Offering" means an underwritten public
offering of common stock of the Company or Parent pursuant to an effective
registration statement under the Securities Act.
6. Mandatory Redemption
In the event that (i) the Assumption is not consummated on or
prior to June 30, 1998 or (ii) PX Holding elects to abandon the
Transactions or the Recapitalization Agreement and the Stockholders
Agreement are terminated, in any case, on or prior to June 30, 1998, for
any reason, the Company shall redeem all the Securities at a redemption
price in cash equal to the Accreted Value thereof at the redemption date on
(a) July 22, 1998, in the event that the Assumption is not consummated on
or prior to June 30, 1998, or (b) the 20th day (or if such day is not a
Business Day, the next following Business Day) following the abandonment of
the Transactions or the termination of the Recapitalization Agreement and
the Stockholders Agreement, in the event of such abandonment or
termination.
7. Notice of Redemption
Notice of redemption pursuant to paragraph 5 will be mailed at
least 30 days but not more than 60 days before the redemption date, and
notice of redemption pursuant to paragraph 6 will be mailed promptly after
the occurrence of the event triggering such redemption, in each case to
each Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 Principal Amount at Maturity
may be redeemed in part but only in whole multiples of $1,000 Principal
Amount at Maturity. If money sufficient to pay the redemption price of all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and
certain other conditions are satisfied, on and after such redemption date
Accreted Value ceases to increase, and interest, if any, ceases to accrue,
on such Securities (or such portions thereof) called for redemption.
8. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the
Securities of such Holder at a repurchase price equal to the Put Amount of
the Securities to be repurchased plus accrued and unpaid interest, if any,
to the date of repurchase, in each case as provided in, and subject to the
terms of, the Indenture.
9. Subsidiary Guarantees
Under certain circumstances, the payment of Principal of and
interest, if any, on the Securities and other Obligations of the Company
under the Securities and the Indenture will be unconditionally and jointly
and severally guaranteed by the Subsidiary Guarantors, if any, pursuant to,
and subject to the terms of, Section 4.11 and Article X of the Indenture.
10. Subordination
The Securities are subordinated to Senior Debt of the Company,
as defined in the Indenture. To the extent provided in the Indenture,
Senior Debt of the Company must be paid before the Securities may be paid.
The Company agrees, and each Securityholder by accepting a Security agrees,
to the subordination provisions contained in the Indenture and authorizes
the Trustee to give it effect and appoints the Trustee as attorney-in-fact
for such purpose.
11. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of Principal Amount at Maturity of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and
to pay any taxes and fees required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed
in part, the portion of the Security not to be redeemed) or any Securities
for a period of 15 days before a selection of Securities to be redeemed.
12. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. Unclaimed Money
If money for the payment of Principal or interest, if any,
remains unclaimed for two years, the Trustee or Paying Agent shall pay the
money back to the Company at its request unless an abandoned property law
designates another person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee for payment.
14. Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of Principal and interest, if any, on the
Securities to redemption or maturity, as the case may be.
15. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture, any Subsidiary Guarantee or the Securities may be amended
with the written consent of the Holders of at least a majority in Principal
Amount at Maturity outstanding of the Securities and (ii) any default or
noncompliance with any provision may be waived with the written consent of
the Holders of a majority in Principal Amount at Maturity outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, any Subsidiary
Guarantor and the Trustee, as applicable, may amend the Indenture, any
Subsidiary Guarantee or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article V of the Indenture, or
to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to provide for the
issuance of the Exchange Notes or Private Exchange Notes, or to comply with
any request of the SEC in connection with qualifying the Indenture under
the Act or to otherwise comply with the Act, to make any change in Article
XI that would limit or terminate the benefits available to any holder of
Senior Debt of the Company or any Subsidiary Guarantor under Article XI (or
Representatives therefor), or to make any change that does not adversely
affect the rights of any Securityholder. A consent to any amendment or
waiver of any provision in the Indenture or in the Securities by any Holder
given in connection with a tender of such Holder's Securities shall not be
rendered invalid by such tender.
16. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment
of Principal on the Securities at maturity, upon redemption pursuant to
paragraph 5 or paragraph 6 of the Securities, upon declaration or
otherwise, or failure by the Company to redeem or purchase Securities when
required; (iii) failure by the Company to comply with other agreements in
the Indenture or the Securities or the Escrow Agreement, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other Debt
of the Company or any Significant Subsidiary if the total principal amount
on the portion of such Debt that is accelerated (or so unpaid) exceeds
$10,000,000 and continues for 10 days after the required notice to the
Company; (v) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary; (vi) certain judgments or decrees
for the payment of money in excess of $10,000,000; and (vii) a Subsidiary
Guarantee ceasing to be in full force and effect (other than in accordance
with the Indenture) or denial or disaffirmation by a Subsidiary Guarantor
of its obligations under its Subsidiary Guarantee. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
Principal Amount at Maturity of the Securities may declare the Default
Amount of all the Securities to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result
in the Default Amount of the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in
Principal Amount of Maturity of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in
payment of Principal or interest) if it determines that withholding notice
is in their interest.
17. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have
if it were not Trustee.
18. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company, the Subsidiary Guarantors or the Trustee shall not have any
liability for any obligations of the Company, the Subsidiary Guarantors or
the Trustee under the Securities or the Indenture or for any claim based
on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Securities.
19. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate
of authentication on the other side of this Security.
20. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN
ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as
printed on the Securities or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture
which has in it the text of this Security in larger type. Requests may be
made, prior to the Effective Date, to: PX Escrow Corp., 35 East 62nd
Street, New York, New York 10021, Attention: Secretary; and from and after
the Effective Date, to: Panavision Inc., 6219 De Soto Avenue, Woodland
Hills, California 91367, Attention: Secretary.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may substitute
another to act for him.
- ----------------------------------------------------------------------------
Date: ________________ Your Signature:_________________________________
(Sign exactly as your name
appears on the other side
of this Security.)
- ----------------------------------------------------------------------------
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
<TABLE>
<CAPTION>
Amount of Amount of
Decrease in Increase in Princial Amount Signature of
Principal Principal at Maturity of Authorized
Amount Amount this Global Officer of
at Maturity at Maturity Security Trustee or
Date of of this of this Following such Securities
Exchange Global Security Global Security Decrease or Increase Custodian
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the Principal Amount
at Maturity:
$
Date:________________ Your Signature:_______________________
(Sign exactly as your name appears
on the other side of the Security)
Your Signature:_______________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:________________________________________________________
(Signature must be guaranteed)
EXHIBIT C
[FORM OF SUBSIDIARY SUPPLEMENTAL INDENTURE]
SUBSIDIARY SUPPLEMENTAL INDENTURE, dated as of ___________,
between ________________, a _____________ (the "Guarantor"), and The Bank
of New York, as trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H :
WHEREAS, PX Escrow Corp., a Delaware corporation ("PX Escrow")
and the Trustee heretofore executed and delivered the Indenture, dated as
of February 11, 1998 (as heretofore amended and supplemented, the
"Indenture"), providing for the issuance of the 95/8% Senior Subordinated
Discount Notes Due 2006 (the "Securities") (capitalized terms used herein
but not otherwise defined have the meanings ascribed thereto in the
Indenture);
WHEREAS, pursuant to a Supplemental Indenture dated as of
______________, Panavision Inc., a Delaware corporation, assumed all of PX
Escrow's obligations under the Indenture and the securities and became the
successor Company thereunder;
WHEREAS, pursuant to Section 4.11 of the Indenture, the Company
is required to cause the Guarantor to execute and deliver to the Trustee
this Subsidiary Supplemental Indenture pursuant to which the Subsidiary
Guarantor shall provide a Guarantee as set forth in Article X of the
Indenture;
WHEREAS, Section 9.01(4) of the Indenture provides that the
Company and the Trustee may amend the Indenture and the Securities without
notice to or consent of any Holders of the Securities to add Subsidiary
Guarantees; and
WHEREAS, this Supplemental Indenture has been duly authorized
by all necessary corporate action on the part of the Guarantor.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor and the Trustee mutually covenant and agree for
the equal and ratable benefit of the Holders as follows:
ARTICLE I
Agreement to Guarantee
Section 1.1. Agreement to Guarantee. The Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors,
irrevocably and unconditionally, to guarantee the punctual payment when
due, whether at Stated Maturity, by acceleration or otherwise, of all
Obligations of the Company under the Securities and the Indenture on the
terms and subject to the conditions set forth in Article X of the
Indenture, which guarantee shall be subordinated in right of payment to
Senior Debt of the Guarantor in the manner provided in such Article X and
shall be subject to automatic release in accordance with the provisions of
Section 4.11(c) of the Indenture.
Section 1.2. Trustee's Acceptance. The Trustee hereby accepts
this Supplemental Indenture and agrees to perform the same under terms and
conditions set forth in the Indenture.
ARTICLE II
Miscellaneous
Section 2.1. Effect of Supplemental Indenture. Upon the
execution and delivery of this Supplemental Indenture by the Guarantor and
the Trustee, the Indenture shall be supplemented in accordance herewith,
and this Supplemental Indenture shall form a part of the Indenture for all
purposes, and every Holder of Securities heretofore or hereafter
authenticated and delivered under the Indenture shall be bound thereby.
Section 2.2. Indenture Remains in Full Force and Effect.
Except as supplemented hereby, all provisions in the Indenture shall remain
in full force and effect.
Section 2.3. Indenture and Supplemental Indenture Construed
Together. This Supplemental Indenture is an indenture supplemental to and
implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.
Section 2.4. Confirmation and Preservation of Indenture. The
Indenture as supplemented by this Supplemental Indenture is in all respects
confirmed and preserved.
Section 2.5. Conflict with Trust Indenture Act. If any provision
of this Supplemental Indenture limits, qualifies or conflicts with any
provision of the TIA that is required under the TIA to be part of and
govern any provision of this Supplemental Indenture, the provision of the
TIA shall control. If any provision of this Supplemental Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded,
the provision of the TIA shall be deemed to apply to the Indenture as so
modified or to be excluded by this Supplemental Indenture, as the case may
be.
Section 2.6. Severability. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 2.7. Benefits of Supplemental Indenture. Nothing in this
Supplemental Indenture or the Securities, express or implied, shall give to
any Person, other than the parties hereto and thereto and their successors
hereunder and thereunder and the Holders of the Securities, any benefit of
any legal or equitable right, remedy or claim under the Indenture, this
Supplemental Indenture or the Securities.
Section 2.8. Successors. All agreements of the Guarantor in this
Supplemental Indenture shall bind its successors except as provided in the
Indenture. All agreements of the Trustee in this Supplemental Indenture
shall bind its successors.
Section 2.9. Certain Duties and Responsibilities of the Trustee.
In entering into this Supplemental Indenture, the Trustee shall be entitled
to the benefit of every provision of the Indenture and the Securities
relating to the conduct or affecting the liability or affording protection
to the Trustee, whether or not elsewhere herein so provided.
Section 2.10. Governing Law. This Supplemental Indenture shall
be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of
law to the extent that the application of the laws of another jurisdiction
would be required thereby.
Section 2.11. Multiple Originals. The parties may sign any
number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Supplemental Indenture.
Section 2.12. Headings. The Article and Section headings herein
are have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the
terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first written
above.
[GUARANTOR]
By: ______________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: ______________________
Name:
Title:
Exhibit 4.2
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE, dated as of June 4, 1998, among
Panavision Inc., a Delaware corporation ("Panavision"), PX Escrow Corp., a
Delaware corporation ("PX Escrow"), and The Bank of New York, as trustee
under the Indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS, PX Escrow and the Trustee heretofore executed and
delivered the Indenture, dated as of February 11, 1998 (as heretofore
amended and supplemented, the "Indenture"), providing for the issuance of
the 95/8% Senior Subordinated Discount Notes Due 2006 (the "Securities")
(capitalized terms used herein but not otherwise defined have the meanings
ascribed thereto in the Indenture);
WHEREAS, Section 5.01(c) of the Indenture provides that upon the
execution and delivery by Panavision to the Trustee of this Supplemental
Indenture, Panavision shall be the successor Company under the Indenture
and the Securities and shall succeed to, and be substituted for, and may
exercise every right and power of, the predecessor Company under the
Indenture and the Securities and the predecessor Company shall be
discharged from all obligations and covenants under the Indenture and the
Securities;
WHEREAS, Section 9.01(2) of the Indenture provides that the
Company and the Trustee may amend the Indenture and the Securities without
notice to or consent of any Holders of the Securities in order to comply
with Article V of the Indenture; and
WHEREAS, this Supplemental Indenture has been duly authorized by
all necessary corporate action on the part of each of Panavision and PX
Escrow.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, Panavision, PX Escrow and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders as follows:
ARTICLE I
Assumption by Successor Company
Section 1.1. Assumption of the Securities. Panavision hereby
expressly assumes and agrees promptly to pay, perform and discharge when
due each and every debt, obligation, covenant and agreement incurred, made
or to be paid, performed or discharged by PX Escrow under the Indenture and
the Securities. Panavision hereby agrees to be bound by all the terms,
provisions and conditions of the Indenture and the Securities and that it
shall be the successor Company and shall succeed to, and be substituted
for, and may exercise every right and power of, PX Escrow Corp., as the
predecessor Company, under the Indenture and the Securities.
Section 1.2. Discharge of PX Escrow. PX Escrow is hereby
expressly discharged from all debts, obligations, covenants and agreements
under the Indenture and the Securities.
Section 1.3. Trustee's Acceptance. The Trustee hereby accepts
this Supplemental Indenture and agrees to perform the same under the terms
and conditions set forth in the Indenture.
ARTICLE II
Miscellaneous
Section 2.1. Effect of Supplemental Indenture. Upon the
execution and delivery of this Supplemental Indenture by Panavision, PX
Escrow and the Trustee, the Indenture shall be supplemented in accordance
herewith, and this Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered under the Indenture shall be bound
thereby.
Section 2.2. Indenture Remains in Full Force and Effect.
Except as supplemented hereby, all provisions in the Indenture shall remain
in full force and effect.
Section 2.3. Indenture and Supplemental Indenture Construed
Together. This Supplemental Indenture is an indenture supplemental to and
in implementation of the Indenture, and the Indenture and this Supplemental
Indenture shall henceforth be read and construed together.
Section 2.4. Confirmation and Preservation of Indenture. The
Indenture as supplemented by this Supplemental Indenture is in all respects
confirmed and preserved.
Section 2.5. Conflict with Trust Indenture Act. If any
provision of this Supplemental Indenture limits, qualifies or conflicts
with any provision of the TIA that is required under the TIA to be part of
and govern any provision of this Supplemental Indenture, the provision of
the TIA shall control. If any provision of this Supplemental Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the provision of the TIA shall be deemed to apply to the
Indenture as so modified or to be excluded by this Supplemental Indenture,
as the case may be.
Section 2.6. Severability. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 2.7. Benefits of Supplemental Indenture. Nothing in
this Supplemental Indenture or the Securities, express or implied, shall
give to any Person, other than the parties hereto and thereto and their
successors hereunder and thereunder and the Holders of the Securities, any
benefit of any legal or equitable right, remedy or claim under the
Indenture, this Supplemental Indenture or the Securities.
Section 2.8. Successors. All agreements of Panavision in this
Supplemental Indenture shall bind its successors. All agreements of the
Trustee in this Supplemental Indenture shall bind its successors.
Section 2.9. Certain Duties and Responsibilities of the
Trustee. In entering into this Supplemental Indenture, the Trustee shall
be entitled to the benefit of every provision of the Indenture and the
Securities relating to the conduct or affecting the liability or affording
protection to the Trustee, whether or not elsewhere herein so provided.
Section 2.10. Governing Law. This Supplemental Indenture
shall be governed by, and construed in accordance with, the laws of the
State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
Section 2.11. Multiple Originals. The parties may sign any
number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Supplemental Indenture.
Section 2.12. Headings. The Article and Section headings
herein are have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first written
above.
PANAVISION INC.
By: /s/ Jeffrey J. Marketta
--------------------------------
Name: Jeffrey J. Marcketta
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
PX ESCROW CORP.
By: /s/ Glenn P. Dickes
--------------------------------
Name: Glenn P. Dickes
Title: Vice President and Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Robert A. Massimillo
--------------------------------
Name: Robert A. Massimillo
Title: Assistant Vice President
Exhibit 4.3
==============================================================================
$340,000,000
CREDIT AGREEMENT
AMONG
PANAVISION INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CHASE SECURITIES INC.,
AS ADVISOR AND ARRANGER,
CREDIT SUISSE FIRST BOSTON,
AS DOCUMENTATION AGENT
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF MAY 28, 1998
==============================================================================
TABLE OF CONTENTS
Page
SECTION I. DEFINITIONS.................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 26
SECTION II. AMOUNT AND TERMS OF COMMITMENTS............................... 27
2.1 Term Loan Commitments........................................... 27
2.2 Procedure for Term Loan Borrowing............................... 27
2.3 Repayment of Term Loans......................................... 27
2.4 Revolving Credit Commitments.................................... 29
2.5 Procedure for Revolving Credit Borrowing........................ 29
2.6 Repayment of Loans; Evidence of Debt............................ 29
2.7 Fees, etc. ..................................................... 30
2.8 Termination or Reduction of Revolving Credit Commitments........ 31
2.9 Optional Prepayments............................................ 31
2.10 Mandatory Prepayments and Commitment Reductions................ 32
2.11 Conversion and Continuation Options............................ 33
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches...... 33
2.13 Interest Rates and Payment Dates............................... 34
2.14 Computation of Interest and Fees............................... 34
2.15 Inability to Determine Interest Rate........................... 35
2.16 Pro Rata Treatment and Payments................................ 35
2.17 Requirements of Law............................................ 38
2.18 Taxes.......................................................... 39
2.19 Indemnity...................................................... 41
2.20 Illegality..................................................... 41
2.21 Change of Lending Office....................................... 42
2.22 Replacement of Lenders under Certain Circumstances............. 42
SECTION III. LETTERS OF CREDIT............................................ 42
3.1 L/C Commitment.................................................. 42
3.2 Procedure for Issuance of Letter of Credit...................... 43
3.3 Commissions, Fees and Other Charges............................. 43
3.4 L/C Participations.............................................. 44
3.5 Reimbursement Obligation of the Borrower........................ 44
3.6 Obligations Absolute............................................ 45
3.7 Letter of Credit Payments....................................... 45
3.8 Applications.................................................... 46
SECTION IV. REPRESENTATIONS AND WARRANTIES................................ 46
4.1 Financial Condition............................................. 46
4.2 No Change....................................................... 47
4.3 Corporate Existence; Compliance with Law........................ 47
4.4 Corporate or Partnership Power; Authorization; Enforceable
Obligations................................................. 47
4.5 No Legal Bar.................................................... 47
4.6 No Material Litigation.......................................... 48
4.7 No Default...................................................... 48
4.8 Ownership of Property; Liens.................................... 48
4.9 Intellectual Property........................................... 48
4.10 Taxes.......................................................... 48
4.11 Federal Regulations............................................ 48
4.12 Labor Matters.................................................. 49
4.13 ERISA.......................................................... 49
4.14 Investment Company Act; Other Regulations...................... 50
4.15 Subsidiaries................................................... 50
4.16 Use of Proceeds................................................ 50
4.17 Environmental Matters.......................................... 50
4.18 Accuracy of Information, etc................................... 51
4.19 Security Documents............................................. 52
4.20 Solvency....................................................... 52
4.21 Senior Indebtedness............................................ 52
4.22 Year 2000..................................................... 53
5.1 Conditions to Initial Extension of Credit....................... 53
5.2 Conditions to Each Extension of Credit.......................... 56
SECTION VI. AFFIRMATIVE COVENANTS......................................... 57
6.1 Financial Statements............................................ 57
6.2 Certificates; Other Information................................. 57
6.3 Payment of Obligations.......................................... 58
6.4 Conduct of Business and Maintenance of Existence, etc. ......... 59
6.5 Maintenance of Property; Insurance.............................. 59
6.6 Inspection of Property; Books and Records; Discussions.......... 59
6.7 Notices......................................................... 59
6.8 Environmental Laws.............................................. 60
6.9 Additional Collateral, etc...................................... 61
SECTION VII. NEGATIVE COVENANTS........................................... 62
7.1 Financial Condition Covenants................................... 63
7.2 Limitation on Indebtedness...................................... 63
7.3 Limitation on Liens............................................. 64
7.4 Limitation on Fundamental Changes............................... 66
7.5 Limitation on Sale of Assets.................................... 67
7.6 Limitation on Dividends......................................... 67
7.7 Limitation on Capital Expenditures.............................. 68
7.8 Limitation on Investments, Loans and Advances................... 68
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. .......................................... 69
7.10 Limitation on Transactions with Affiliates..................... 70
7.11 Limitation on Sales and Leasebacks............................. 70
7.12 Limitation on Changes in Fiscal Periods........................ 70
7.13 Limitation on Negative Pledge Clauses.......................... 70
7.14 Limitation on Restrictions on Subsidiary Distributions......... 70
7.15 Limitation on Lines of Business................................ 71
7.16 Limitation on Changes to Certificate of Incorporation.......... 71
SECTION VIII. EVENTS OF DEFAULT........................................... 71
SECTION IX. THE ADMINISTRATIVE AGENT...................................... 74
9.1 Appointment..................................................... 74
9.2 Delegation of Duties............................................ 74
9.3 Exculpatory Provisions.......................................... 74
9.4 Reliance by Administrative Agent................................ 75
9.5 Notice of Default............................................... 75
9.6 Non-Reliance on Administrative Agent and Other Lenders.......... 76
9.7 Indemnification................................................. 76
9.8 Administrative Agent in Its Individual Capacity................. 77
9.9 Successor Administrative Agent.................................. 77
9.10 Authorization to Release Liens................................. 77
9.11 The Arranger................................................... 77
9.12 The Documentation Agent........................................ 77
SECTION X. MISCELLANEOUS.................................................. 78
10.1 Amendments and Waivers......................................... 78
10.2 Notices........................................................ 79
10.3 No Waiver; Cumulative Remedies................................. 80
10.4 Survival of Representations and Warranties..................... 80
10.5 Payment of Expenses............................................ 80
10.6 Successors and Assigns; Participations and Assignments......... 81
10.7 Adjustments; Set-off........................................... 84
10.8 Counterparts................................................... 85
10.9 Severability................................................... 85
10.10 Integration................................................... 85
10.11 GOVERNING LAW................................................. 85
10.12 Submission To Jurisdiction; Waivers........................... 85
10.13 Acknowledgements.............................................. 86
10.14 WAIVERS OF JURY TRIAL......................................... 86
10.15 Confidentiality............................................... 86
10.16 Releases of Collateral Security and Guarantee Obligations..... 87
10.17 Releases...................................................... 87
10.18 Effectiveness of Agreement.................................... 87
SCHEDULES:
1.1A Commitments
1.1B Consolidated EBITDA
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
G Form of Prepayment Option Notice
H Form of Exemption Certificate
I Form of U.K. Pledge Agreement
J Form of New Zealand Pledge Agreement
CREDIT AGREEMENT, dated as of May 28, 1998, among PANAVISION
INC., a Delaware corporation (the "Borrower") the several banks and other
financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), CHASE SECURITIES INC., as advisor and arranger
(in such capacity, the "Arranger"), CREDIT SUISSE FIRST BOSTON, as
documentation agent (the "Documentation Agent"), and THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, Mafco Holdings Inc. (the "Equity Investor") intends to
acquire, through PX Holding Corporation, a Delaware corporation
("Holdings"), approximately 72% of the outstanding shares of capital stock
of the Borrower in connection with the recapitalization (the
"Recapitalization") of the Borrower and in accordance with the terms and
conditions of the Recapitalization Agreement (as defined herein);
WHEREAS, Holdings has established PX Merger Corporation solely
to consummate the Recapitalization through the merger of PX Merger
Corporation with and into the Borrower, with the Borrower as the surviving
corporation;
WHEREAS, to consummate the Recapitalization and related
transactions: (a) the Equity Investor will make capital contributions to
Holdings as common equity in an aggregate cash amount of approximately
$154,400,000, (b) the Borrower will require senior secured credit
facilities in an aggregate amount of $340,000,000 and (c) PX Escrow Corp.,
a Delaware corporation ("PX Escrow"), and a wholly owned subsidiary of
Holdings, issued, and in connection with the Recapitalization the Borrower
will assume, all obligations in respect to the PX Escrow Notes (as defined
below);
WHEREAS, to finance the Recapitalization and the working
capital needs of the Borrower and its subsidiaries, the Lenders are willing
to make senior secured credit facilities available to the Borrower upon and
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION I. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the Alternate Base Rate.
"Accepting Lenders": as defined in Section 2.16(d).
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"Aggregate Exposure": with respect to any Lender, an amount
equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Credit Commitment or, if the
Revolving Credit Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit.
"Aggregate Exposure Percentage" with respect to any Lender, the
ratio (expressed as a percentage) of such Lender's Aggregate Exposure
to the Aggregate Exposure of all Lenders.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Administrative Agent as its prime or base
rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by
the Administrative Agent in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit
of major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business
Day) by the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Alternate Base Eurodollar
Rate Loans Loans
Revolving Credit Loans 1.25% 2.25%
Tranche A Term Loans 1.25% 2.25%
Tranche B Term Loans 1.50% 2.50%
provided that on and after the first Adjustment Date (as defined
below) occurring after the Closing Date, the Applicable Margin with
respect to Revolving Credit Loans, Tranche A Term Loans and Tranche B
Term Loans will be determined as follows:
<TABLE>
<CAPTION>
Applicable Margin Applicable Margin
for Eurodollar Loans for ABR Loans
-------------------------------- --------------------------------
Consolidated Revolving Tranche A Tranche B Revolving Tranche A Tranche B
Total Leverage Credit Term Term Credit Term Term
Ratio Loans Loans Loans Loans Loans Loans
- ----------------- ---------- --------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
> 5.50 to 1.00 2.25% 2.25% 2.50% 1.25% 1.25% 1.50%
< 5.50 to 1.00 2.00% 2.00% 2.25% 1.00% 1.00% 1.25%
but > 5.00 to
1.00
< 5.00 to 1.00 1.75% 1.75% 2.00% 0.75% 0.75% 1.00%
but > 4.50 to
1.00
< 4.50 to 1.00 1.50% 1.50% 2.00% 0.50% 0.50% 1.00%
but > 4.00 to
1.00
> 4.00 to 1.00 1.25% 1.25% 2.00% 0.25% 0.25% 1.00%
</TABLE>
Changes in the Applicable Margin with respect to Revolving Credit
Loans, Tranche A Term Loans and Tranche B Term Loans resulting from
changes in the Consolidated Total Leverage Ratio shall become
effective on the date (the "Adjustment Date") on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (but
in any event not later than the 50th day after the end of each of the
first three quarterly periods of each fiscal year or the 105th day
after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to
this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such
financial statements are delivered, the Consolidated Total Leverage
Ratio as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be
greater than 5.50 to 1.00. In addition, at all times while an Event
of Default shall have occurred and be continuing, the Consolidated
Total Leverage Ratio shall for the purposes of this definition be
deemed to be greater than 5.50 to 1.00. Each determination of the
Consolidated Total Leverage Ratio pursuant to this definition shall
be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by
the relevant financial statements.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender
to open a Letter of Credit.
"Approved Fund": means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in
commercial loans and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a) or (b) of Section 7.5).
"Assignee": as defined in Section 10.6(c).
"Assignment and Acceptance": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment over (b) such Lender's
Revolving Extensions of Credit.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Budget": as defined in Section 6.2(c).
"Business": as defined in Section 4.17(b).
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required
by law to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, all amounts (whether
paid in cash or accrued as liabilities, including all obligations in
respect of Capital Leases), that would in accordance with GAAP, be
set forth as "capital expenditures" on the consolidated statement of
cash flows of the Borrower and its Subsidiaries for such period.
"Capital Lease": any lease of property (real, personal or
mixed) which in accordance with GAAP is or should be capitalized on
the lessee's balance sheet.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities
of one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or any commercial bank satisfying the requirements of clause
(b) of this definition having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard & Poor's Ratings Services or any
successor ("S&P") or P-2 by Moody's Investors Service, Inc. or any
successor ("Moody's"), (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States or by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, or (g)
shares of money market mutual or similar funds sponsored by any
registered broker dealer or mutual fund distributor.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by
a member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. ss. 327.4 (or
any successor provision) to the FDIC (or any successor) for the
FDIC's (or such successor's) insuring time deposits at offices of
such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect
of new non-personal time deposits in Dollars having a maturity of 30
days or more.
"Change of Control": (a) the Permitted Holders shall cease to
have "beneficial ownership" (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of
the total voting power of all classes of Voting Stock of the Borrower
then outstanding (determined on a fully diluted basis), (b) the board
of the directors of Borrower shall cease to consist of a majority of
Continuing Directors, or (c) there shall occur any "Change of
Control" (as defined in the Senior Subordinated Note Indenture).
"Chase": The Chase Manhattan Bank.
"Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date shall be
no later than June 30, 1998.
"Code": the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment and the Revolving
Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commitment Letter": the Commitment Letter dated as of January
23, 1998 among the Equity Investor, Chase and CSI.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, Section 414(m) or (o) of
the Code.
"Compliance Certificate": a certificate duly executed on behalf
of the Borrower by a Responsible Officer substantially in the form of
Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated January 1998 and furnished to the
Lenders.
"Consolidated EBITDA": for any period, for the Borrower and its
Subsidiaries, the sum of the following (without duplication): (a)
Consolidated Net Income for such period (calculated after eliminating
extraordinary gains and losses and unusual items) plus (b) income and
other taxes (to the extent deducted in determining Consolidated Net
Income) for such period plus (c) depreciation and amortization and
other non-cash charges (to the extent deducted in determining
Consolidated Net Income) for such period plus (d) the aggregate
amount of Consolidated Interest Expense for such period minus (e) the
aggregate amount of interest income for such period plus (f) the
aggregate amount of up-front or one-time fees or expenses payable in
respect of Rate Hedging Agreements during such period (to the extent
deducted in determining Consolidated Net Income for such period) plus
(g) the amount of unrealized foreign exchange losses (net of any
gains) (or minus the amount of unrealized foreign exchange gains (net
of any losses)) plus (h) Transaction Charges (to the extent deducted
in determining Consolidated Net Income) plus (i) the items set forth
on Schedule 1.1B with respect to the 1998 second fiscal quarter of
the Borrower. For purposes of this definition, Consolidated EBITDA
for the fiscal quarters ended June 30, 1997, September 30, 1997 and
December 31, 1997 shall be $14,805,000, $21,663,000 and $18,497,000,
respectively.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any fiscal period of the
Borrower, the amount which, in conformity with GAAP, would be set
forth opposite the caption "interest expense" (or any like caption)
on a consolidated statement of earnings of the Borrower and its
Subsidiaries for such fiscal period; provided that the calculation of
Consolidated Interest Expense shall exclude (x) any non-cash interest
expense in respect of any Indebtedness permitted under Section 7.2
and (y) the commitment fees paid on the Closing Date to the Lenders
pursuant to Section 2.7 and to the Administrative Agent pursuant to
the Fee Letter.
"Consolidated Net Income": for any fiscal period of the
Borrower, the amount which, in conformity with GAAP, would be set
forth opposite the caption "net income" (or any like caption) or "net
loss" (or any like caption), as the case may be, on a consolidated
statement of earnings of the Borrower and its Subsidiaries for such
fiscal period.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at
such date, determined on a consolidated basis in accordance with
GAAP; provided that Indebtedness of the types described in clause (j)
of the definition of the term Indebtedness shall not be included for
the purpose of calculating Consolidated Total Debt.
"Consolidated Total Leverage Ratio": as at any date, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for the four full consecutive fiscal quarters most recently ended.
"Consolidated Working Capital": at any date, for the Borrower
and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP): (a) the sum of inventory plus
accounts receivable minus (b) the sum of accounts payable plus
accrued expenses at such date.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Recapitalization and the
other transactions contemplated hereby, and each other director, if,
in each case, such other director's nomination for election to the
board of directors of the Borrower is recommended by at least 66-2/3%
of the then Continuing Directors or such other director receives the
vote of the Permitted Holders in his or her election by the
shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of
any material security issued by such Person or of any material
agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its material Property is bound.
"Cross Default": of any Person, (a) default in the payment of
any amount when due (whether at maturity or by acceleration) on any
of its Indebtedness (other than any such default in respect of the
Loans, the Notes or the Reimbursement Obligations) or in the payment
of any matured Guarantee Obligation in respect of any Indebtedness of
any other Person (except for any such payments on account of any such
Indebtedness and Guarantee Obligations in an aggregate principal
amount at any one time outstanding of up to $5,000,000) or (b)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness (except for any such
Indebtedness and Guarantee Obligations in an aggregate principal
amount at any one time outstanding of up to $5,000,000) or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, with the giving
of notice if required, such Indebtedness (except for any such
Indebtedness in an aggregate principal amount at any one time
outstanding of up to $5,000,000) to become due or to be required to
be redeemed or repurchased prior to its stated maturity.
"CSI": Chase Securities Inc.
"Debt Service": for any period, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication
in accordance with GAAP), the sum of the following: (a) all regularly
scheduled payments of principal of Indebtedness (including, without
limitation, the principal component of any payments in respect of
Capital Leases) made during such period plus (b) all Consolidated
Interest Expense for such period.
"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Documentation Agent": as defined in the preamble
hereto.
"Dollars" and "$": dollars in lawful currency of the
United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.
"ECF Percentage": 75%; provided that with respect to each
fiscal year of the Borrower ending on or after December 31, 1998, the
ECF Percentage shall be reduced to 50% if the Consolidated Total
Leverage Ratio for the period of four consecutive fiscal quarters
ending on the last day of such fiscal year is not greater than 4.50
to 1.00.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or
may at any time hereafter be in effect.
"Equity Investor": as defined in the recitals hereto.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Escrow Agreement": the Escrow Agreement between PX Escrow and
The Bank of New York, as escrow agent, dated as of February 11, 1998,
as amended, supplemented or otherwise modified from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect
on such day (including, without limitation, basic, supplemental,
marginal and emergency reserves under any regulations of the Board or
other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member
bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow Jones Markets
service as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Dow Jones Markets service (or
otherwise on such service), the "Eurodollar Base Rate" for purposes
of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00
A.M., New York City time, two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where its
eurodollar and foreign currency and exchange operations are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the
Borrower:
(a) Consolidated EBITDA for such period; minus
(b) the sum (without duplication) of:
(i) the aggregate amount of Debt Service for
such period; plus
(ii) taxes payable in cash in respect of such period;
plus
(iii) Capital Expenditures made during such
period (other than (x) any such Capital
Expenditures to the extent financed with
the proceeds of Indebtedness incurred
pursuant to Section 7.2(f) during such
period and (y) any Capital Expenditures of
the types described in Sections 7.7(b) and
7.7(c) made during such period); plus
----
(iv) any increase (or minus any decrease) in
Consolidated Working Capital from the beginning of
such period to the end of such period; plus
(v) an amount equal to the aggregate gain on any Asset
Sale or Recovery Event by the Borrower or its
Subsidiaries during such period; plus
(vi) an amount equal to the aggregate gain on any event
which would be a Recovery Event by the Borrower or
its Subsidiaries during such period but for the
parenthetical clause in the definition thereof;
plus
(vii) an amount equal to the aggregate gain on any
Disposition of Property by the Borrower or
its Subsidiaries during such period pursuant
to Section 7.5(a)(i); plus
(viii) the aggregate amount of prepayments made
under Sections 2.9 (to the extent, in the
case of Revolving Credit Loans, of any
corresponding reduction in the Revolving
Credit Commitments) and 2.10(a) during such
period; plus
(c) the sum of:
(i) the aggregate amount of Net Cash Proceeds
received by the Borrower or its Subsidiaries
from any Asset Sale or Recovery Event during
such period to the extent such Net Cash Proceeds
are not applied to the prepayment of Loans
and/or the reduction of the Revolving Credit
Commitments during such period; plus
----
(ii) an amount equal to the aggregate loss on any Asset
Sale or Recovery Event by the Borrower or its
Subsidiaries during such period; plus
(iii) an amount equal to the aggregate loss on any
event which would be a Recovery Event by the
Borrower or its Subsidiaries during such
period but for the parenthetical clause in
the definition thereof; plus
(iv) an amount equal to the aggregate loss on any
Disposition of Property by the Borrower or its
Subsidiaries during such period pursuant to Section
7.5(a)(i).
"Excess Cash Flow Application Date": as defined in
Section 2.10(b).
"Exchange Act": the Securities Exchange Act of 1934,
as amended.
"Exchange Offer": the exchange offer in respect of the Senior
Subordinated Notes permitted by the definition thereof.
"Existing Credit Agreement": the Credit Agreement dated as of
June 5, 1997 among the Borrower, the subsidiary guarantors named
therein, the lenders party thereto and Chase, as administrative agent
for such lenders.
"Facility": each of (a) the Tranche A Term Loan Commitments and
the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility") and
(c) the Revolving Credit Commitments and the extensions of credit
made thereunder (the "Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Fee Letter": the Fee Letter dated January 23, 1998 among the
Equity Investor, CSI and Chase.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Fully Satisfied": with respect to:
(a) the Payment Obligations as of any date, that, on or
before such date, (i) the principal of and interest accrued to
such date on such Payment Obligations shall have been paid in
full in cash (other than the Undrawn L/C Obligations), (ii) all
Undrawn L/C Obligations shall have been Fully Secured, (iii)
all fees, expenses and other amounts then due and payable which
constitute Payment Obligations (other than the Undrawn L/C
Obligations) shall have been paid in full in cash and (iv) the
Commitments shall have expired or irrevocably been terminated;
and
(b) the Obligations (and the Borrower Obligations (as
defined in the Guarantee and Collateral Agreement)) as of any
date, that, on or before such date, (i) the Payment Obligations
shall have been Fully Satisfied (as provided in clause (a)
above) and (ii) all Rate Hedging Agreements with any of the
Lenders or their Affiliates shall have been terminated or all
obligations thereunder (other than for fees, expenses and
indemnities) shall have been cash collateralized and all fees,
expenses and indemnity payments then due and payable thereunder
shall have been paid in full in cash.
"Fully Secured": with respect to any Undrawn L/C Obligations as
of any date, that, on or before such date, such Undrawn L/C
Obligations shall have been secured by the grant to the Issuing
Lender by the Borrower of a first priority, perfected security
interest in, and Lien on, (a) cash or Cash Equivalents in an amount
at least equal to the excess, if any, of the amount of such Undrawn
L/C Obligations over the amount of the Total Revolving Credit
Commitments on such date or (b) other collateral security which is
acceptable to the Issuing Lender and the Required Lenders.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower
and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles
in effect on the date hereof and consistent with those used in the
preparation of the most recent audited financial statements delivered
pursuant to Section 4.1(b).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, any securities exchange, self-regulatory organization or
the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase Property,
securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall
be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.
"Holdings": as defined in the recitals hereto.
"Indebtedness": of a Person, (a) indebtedness of such Person
for borrowed money whether short-term or long-term and whether
secured or unsecured, (b) indebtedness of such Person for the
deferred purchase price of services or property, which purchase price
(i) is due twelve months or more from the date of incurrence of the
obligation in respect thereof or (ii) customarily or actually is
evidenced by a note or other written instrument (including, without
limitation, any such indebtedness which is non-recourse to the credit
of such Person but is secured by assets of such Person), (c)
obligations of such Person under Capital Leases, (d) obligations of
such Person arising under acceptance facilities, (e) the undrawn face
amount of, and unpaid reimbursement obligations in respect of, all
letters of credit issued for the account of such Person, (f) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (g) all obligations of such Person upon
which interest charges are customarily paid, (h) all obligations of
such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (even though
the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property), (i) obligations of such Person to purchase, redeem,
retire, defease or otherwise acquire for value any Capital Stock of
such Person (with redeemable preferred capital stock being valued at
the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends), (j) all executory obligations of
such Person in respect of interest rate agreements and foreign
exchange and other financial hedge contracts (including, without
limitation, equity hedge contracts), (k) all Indebtedness of the
types referred to in clauses (a) through (j) above for which such
Person is obligated under a Guarantee Obligation and (l) renewals,
extensions, refundings, deferrals, restructurings, amendments and
modifications of any such indebtedness, obligation or guarantee.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or
in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding and the final maturity date of such Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any Eurodollar
Loan having an Interest Period longer than three months, each day
which is three months after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Loan (other
than any Revolving Credit Loan that is an ABR Loan), the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the
case may be, with respect to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days prior
to the last day of the then current Interest Period with respect
thereto; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Scheduled Revolving Credit Termination Date or
beyond the date final payment is due on the Tranche A Term
Loans or Tranche B Term Loans, as the case may be,
shall end on the Scheduled Revolving Credit Termination Date
or such due date, as applicable; and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business
Day of a calendar month.
"Issuing Lender": Chase, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $20,000,000.
"L/C Fee Payment Date": the last day of each March,
June, September and December and the last day of the Revolving
Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the Undrawn L/C Obligations and (b) the aggregate amount of
drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Applications and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of
the Term Loans or the Total Revolving Extensions of Credit, as the
case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of more than 50% of the Total
Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a) the
Recapitalization, (b) the business, assets, property, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole, (c) the validity or enforceability of
this Agreement or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or
thereunder or (d) the ability of the Borrower to perform any of its
obligations under this Agreement.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products
or any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan (other than a welfare plan as
defined in Section 3(1) of ERISA) which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Net Proceeds Event,
the gross proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but only as and when
received) of such Net Proceeds Event, net of (i) attorneys' fees,
accountants' fees, investment banking fees, underwriting discounts
and commissions and other customary fees and expenses actually
incurred in connection therewith, (ii) the amount of liabilities
(other than intercompany liabilities or liabilities owing to any
Affiliate of such Person), if any, which are required to be repaid at
the time or as a result of any Net Proceeds Event out of the proceeds
thereof and (iii) taxes paid or reasonably estimated to be payable as
a result thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements).
"Net Proceeds Event":
(i) the issuance by the Borrower or any of its
Subsidiaries of any Capital Stock (excluding (x)
any Capital Stock issued under any compensatory
stock option plan of the Borrower or any of its
Subsidiaries in the ordinary course of business the
Net Cash Proceeds of which shall not exceed
$5,000,000 in the aggregate during the term of this
Agreement and (y) any Capital Stock issued by any
Subsidiary of the Borrower to the Borrower or any
other Subsidiary of the Borrower);
(ii) the incurrence by the Borrower or any of its
Subsidiaries of any Indebtedness for borrowed money
(excluding Indebtedness incurred in accordance with
Section 7.2);
(iii) any Asset Sale; and
(iv) any Recovery Event.
"New Zealand Pledge Agreement": the Share Charge Agreement
dated as of the date hereof pursuant to which the Borrower grants to
the Administrative Agent for the benefit of the Lenders a security
interest in shares of capital stock of Panavision NZ, substantially
in the form of Exhibit J, as the same may be amended, supplemented or
otherwise modified from time to time.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(d).
"Notes": the collective reference to any promissory
note evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing
after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Rate Hedging Agreements,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Rate
Hedging Agreement entered into with any Lender or any affiliate of
any Lender or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.
"Panavision Canada Holdings": Panavision Canada Holdings Inc.,
a Canada corporation.
"Panavision NZ": Panavision NZ Limited, a New Zealand limited
company.
"Participant": as defined in Section 10.6(b).
"Payment Obligations": (a) all principal, interest, fees,
charges, expenses, attorneys' fees and disbursements, indemnities,
reimbursement obligations and any other amounts payable by any Person
under any Loan Document (including, without limitation, the L/C
Obligations and interest accruing at the then applicable rate
provided for herein after the maturity of the Loans to the extent any
Loans are then outstanding and interest accruing at the then
applicable rate provided for herein after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding relating to the Borrower whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding) and (b) any amount in respect of any of the foregoing
that the Administrative Agent or any Lender, in its sole discretion,
may elect to pay or advance under this Agreement on behalf of such
Person after the occurrence and during the continuance of a Default
or an Event of Default.
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower
and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Holders": Ronald O. Perelman (or, in the event of
his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Potential Withdrawal Liability" shall have the meaning
assigned to such term in Section 5.8.
"Prepayment Amount": as defined in Section 2.16(d).
"Prepayment Date": as defined in Section 2.16(d).
"Prepayment Option Notice": as defined in Section
2.16(d).
"Pro Forma Balance Sheet": as defined in Section
4.1(a).
"Properties": as defined in Section 4.17(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Purchase Agreement": the Purchase Agreement dated February 6,
1998 among PX Escrow and Credit Suisse First Boston and Schroder &
Co. Inc., as amended, supplemented or otherwise modified from time to
time.
"PX Escrow": as defined in the recitals hereto.
"PX Escrow Notes": the 95/8% Senior Subordinated Discount Notes
due 2006 issued by PX Escrow pursuant to the Senior Subordinated Note
Indenture.
"Rate Hedging Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option,
interest rate cap or other interest rate hedge arrangement, foreign
exchange contract or any other agreement or arrangement designed to
provide protection against fluctuations in interest rates or currency
exchange rates to or under which the Borrower or any of its
Subsidiaries is a party or a beneficiary on the date hereof or
becomes a party or a beneficiary after the date hereof.
"Recapitalization": as defined in the recitals
hereto.
"Recapitalization Agreement": the Agreement of Recapitalization
and Merger among Holdings, PX Merger Corporation and the Borrower
dated as of December 18, 1997, as amended by that certain Letter
Agreement dated as of February 6, 1998 between the Borrower and the
Equity Investor, as further amended, supplemented or otherwise
modified from time to time.
"Recapitalization Documentation": collectively, the
Recapitalization Agreement, the Stockholders Agreement and all
schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented or
otherwise modified from time to time.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation
proceeding relating to any asset (other than inventory) of the
Borrower or any of its Subsidiaries (excluding to the extent, and
only to the extent, that within 180 days of receipt by the Borrower
or any of its Subsidiaries of cash proceeds in respect of any such
property or casualty insurance claim or condemnation proceeding, such
Person commences and thereafter diligently pursues the repair or
replacement of the Property affected by such event).
"Register": as defined in Section 10.6(d).
"Registration Agreement": the Registration Agreement dated as
of February 6, 1998 among PX Escrow, Credit Suisse First Boston and
Schroder & Co. Inc., as amended, supplemented or otherwise modified
from time to time.
"Regulation G": Regulation G of the Board as in
effect from time to time.
"Regulation U": Regulation U of the Board as in
effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts
drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under regulations promulgated under Title IV
of ERISA.
"Required Lenders": the holders of more than 50% of (a) until
the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans and (ii) the
Total Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the Total Revolving Extensions of
Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material Property or to which such Person or any of its
material Property is subject.
"Responsible Officer": any officer at the level of vice
president or higher of the Borrower, but in any event, with respect
to financial matters, the chief financial officer, chief accounting
officer, treasurer or controller of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender, if any, to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or
face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1A or in the Assignment and Acceptance pursuant to which such
Revolving Credit Lender became a party hereto, as the same may be
changed from time to time pursuant to the terms hereof. The original
amount of the Total Revolving Credit Commitments is $100,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Scheduled Revolving Credit
Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section
2.4(a).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the Total Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding and (b) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding.
"Scheduled Revolving Credit Termination Date": the date which
is the sixth anniversary of the Closing Date.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Government Authority).
"Security Documents": the collective reference to the Guarantee
and Collateral Agreement, the U.K. Pledge Agreement, the New Zealand
Pledge Agreement and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party
under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture dated as of
February 11, 1998 between PX Escrow and The Bank of New York, as
trustee, providing for the issuance of the Senior Subordinated Notes,
together with all instruments and other agreements entered into by
the Borrower or any of its Subsidiaries in connection therewith, as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 7.9.
"Senior Subordinated Notes": (i) the PX Escrow Notes originally
issued by PX Escrow pursuant to the Senior Subordinated Note
Indenture and assumed by the Borrower on the Closing Date, (ii) the
9 5/8% Senior Subordinated Discount Exchange Notes due 2006 of the
Borrower and the 9 5/8% Senior Private Exchange Notes due 2006 of the
Borrower, in each case, issuable pursuant to the Senior Subordinated
Note Indenture, with terms identical in all material respects to
those initially issued and exchanged therefor, or (iii) any
refinancing of such senior subordinated notes of the Borrower on
terms and conditions which either (A) (i) extend the maturity or
reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon
and are otherwise no less favorable to the Lenders (including without
limitation the subordination provisions thereof) and (ii) do not
involve the payment of a consent fee or (B) are otherwise reasonably
satisfactory to the Required Lenders.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured,
(c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.
"Specified Foreign Subsidiary": Panavision Canada Holdings,
Panavision NZ and Panavision Europe Limited.
"Stockholders Agreement": the Voting and Stockholders
Agreement, dated as of December 18, 1997, by and among Warburg,
Pincus Capital Company, L.P., the Borrower and the Equity Investor,
as amended, supplemented or otherwise modified from time to time.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Foreign Subsidiary.
"Tax Sharing Agreement": any tax allocation agreement between
the Borrower or any of its Subsidiaries with the Borrower or any
direct or indirect shareholder of the Borrower with respect to
consolidated or combined tax returns including the Borrower or any of
its Subsidiaries but only to the extent that amounts payable from
time to time by the Borrower or any such Subsidiary under any such
agreement do not exceed the corresponding tax payments that the
Borrower or such Subsidiary would have been required to make to any
relevant taxing authority had the Borrower or such Subsidiary not
joined in such consolidated or combined returns, but instead had
filed returns including only the Borrower or its Subsidiaries
(provided that any such agreement may provide that, if the Borrower
or any such Subsidiary ceases to be a member of the affiliated group
of corporations of which the Equity Investor is the common parent for
purposes of filing a consolidated federal income tax return (such
cessation, a "Deconsolidation Event"), then the Borrower or such
Subsidiary shall indemnify such direct or indirect shareholder with
respect to any federal, state or local income, franchise or other tax
liability (including any related interest, additions or penalties)
imposed on such shareholder as the result of an audit or other
adjustment with respect to any period prior to such Deconsolidation
Event that is attributable to the Borrower, such Subsidiary or any
predecessor business thereof (computed as if the Borrower, such
Subsidiary or such predecessor business, as the case may be, were a
stand-alone entity that filed separate tax returns as an independent
corporation), but only to the extent that any such tax liability
exceeds any liability for taxes recorded on the books of the Borrower
or such Subsidiary with respect to any such period).
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans and the Tranche B Term Loans.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders at such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche A Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A or in the Assignment and
Acceptance pursuant to which such Tranche A Term Loan Lender become a
party hereto. The original aggregate amount of the Tranche A Term
Loan Commitments is $90,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A
Term Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan
Lender at any time, the percentage which such Lender's Tranche A Term
Loan Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage
which the aggregate principal amount of such Lender's Tranche A Term
Loans then outstanding constitutes of the aggregate principal amount
of the Tranche A Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to Tranche B Term Loan
Lender, the obligation of such Lender, if any, to make a Tranche B
Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth under the heading "Tranche B Term Loan
Commitment" opposite such Lender's name on Schedule 1.1A or in the
Assignment and Acceptance pursuant to which such Tranche B Term Loan
Lender become a party hereto. The original aggregate amount of the
Tranche B Term Loan Commitments is $150,000,000.
"Tranche B Term Loan Lender": each Lender which has a Tranche B
Term Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time,
the percentage which such Lender's Tranche B Term Loan Commitment
then constitutes of the aggregate Tranche B Term Loan Commitments
(or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Tranche B Term Loans then
outstanding constitutes of the aggregate principal amount of the
Tranche B Term Loans then outstanding).
"Transaction Charges": nonrecurring charges related to or
arising out of the transactions contemplated by the Recapitalization
Agreement, the Stockholders Agreement and the Escrow Agreement.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a ABR Loan or
a Eurodollar Loan.
"U.K. Pledge Agreement": the Share Charge Agreement dated as of
the date hereof pursuant to which Panavision International L.P.
grants to the Administrative Agent for the benefit of the Lenders a
security interest in shares of Panavision Europe Limited,
substantially in the form of Exhibit I, as the same may be amended,
supplemented or otherwise modified from time to time.
"Undrawn L/C Obligations" the portion, if any, of the Payment
Obligations constituting the contingent obligation of the Borrower to
reimburse the Issuing Lender in respect of the then undrawn and
unexpired portions of the Letters of Credit issued by the Issuing
Lender pursuant to Section 3.1.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to
time.
"United States": the United States of America.
"Voting Stock": as to any Person, Capital Stock of such Person
of the class or classes pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect the
board of directors, managers or trustees of such Person (irrespective
of whether or not at the time Capital Stock of any other class or
classes shall have or might have voting power by reason of the
happening of any contingency).
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law and in the case of Panavision Canada Holdings,
shares and/or options for shares issued (or to be issued) to its
directors, officers or employees for up to 15% of the Capital Stock
of Panavision Canada Holdings) is owned by such Person directly
and/or through other Wholly Owned Subsidiaries (it being understood
that, in the case of Panavision Canada Holdings, the issuance of such
shares and/or options contemplated above shall not preclude it from
being treated as a Wholly Owned Subsidiary of the Borrower for
purposes of the Loan Documents).
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate
or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined
in Section 1.1 and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION II. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term
loan (a "Tranche A Term Loan") to the Borrower on the Closing Date in an
amount not to exceed the amount of the Tranche A Term Loan Commitment of
such Lender and (b) each Tranche B Term Loan Lender severally agrees to
make a term loan (a "Tranche B Term Loan") to the Borrower on the Closing
Date in an amount not to exceed the amount of the Tranche B Term Loan
Commitment of such Lender. The Term Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 2.11.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, on the
anticipated Closing Date) requesting that the Term Loan Lenders make the
Term Loans on the Closing Date and specifying the amount to be borrowed.
The Term Loans made on the Closing Date shall initially be ABR Loans. Upon
receipt of such notice the Administrative Agent shall promptly notify each
Term Loan Lender thereof. Not later than 12:00 Noon, New York City time, on
the Closing Date each Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan or Term Loans to be made by such
Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the Administrative Agent by the
Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of
each Tranche A Term Loan Lender shall mature in 20 consecutive quarterly
installments, commencing on June 30, 1999, each of which shall be in an
amount equal to such Lender's Tranche A Term Loan Percentage multiplied by
the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 1999 $1,250,000
September 30, 1999 1,250,000
December 31, 1999 1,250,000
March 31, 2000 1,250,000
June 30, 2000 2,500,000
September 30, 2000 2,500,000
December 31, 2000 2,500,000
March 31, 2001 2,500,000
June 30, 2001 5,000,000
September 30, 2001 5,000,000
December 31, 2001 5,000,000
March 31, 2002 5,000,000
June 30, 2002 6,250,000
September 30, 2002 6,250,000
December 31, 2002 6,250,000
March 31, 2003 6,250,000
June 30, 2003 7,500,000
September 30, 2003 7,500,000
December 31, 2003 7,500,000
March 31, 2004 7,500,000
(b) The Tranche B Term Loan of each Tranche B Term Loan Lender
shall mature in 24 consecutive quarterly installments, commencing on June
30, 1999, each of which shall be in an amount equal to such Lender's
Tranche B Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 1999 $250,000
September 30, 1999 250,000
December 31, 1999 250,000
March 31, 2000 250,000
June 30, 2000 250,000
September 30, 2000 250,000
December 31, 2000 250,000
March 31, 2001 250,000
June 30, 2001 250,000
September 30, 2001 250,000
December 31, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 31, 2002 250,000
March 31, 2003 250,000
June 30, 2003 5,250,000
September 30, 2003 5,250,000
December 31, 2003 5,250,000
March 31, 2004 5,250,000
June 30, 2004 31,250,000
September 30, 2004 31,250,000
December 31, 2004 31,250,000
March 31, 2005 31,250,000
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such
Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may
use the Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans
may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with
Sections 2.5 and 2.11, provided that no Revolving Credit Loan shall be made
as a Eurodollar Loan after the day that is one month prior to the Scheduled
Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Scheduled Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date (or prior to 12:00 Noon, New York City time, on the Closing
Date in the case of Revolving Credit Loans to be made on such date), in the
case of ABR Loans), specifying (i) the amount and Type of Revolving Credit
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of Eurodollar Loans, the length of the initial Interest Period
therefor. The Revolving Credit Loans made on the Closing Date shall
initially be ABR Loans. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$500,000 or a whole multiple of $100,000 in excess thereof (or, if the then
aggregate Available Revolving Credit Commitments are less than $500,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or
a whole multiple of $100,000 in excess thereof. Upon receipt of any such
notice from the Borrower, the Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent in like funds as received by the Administrative Agent.
2.6 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender on the Scheduled Revolving
Credit Termination Date (or such earlier date on which the Loans become due
and payable pursuant to Section 8) and (ii) the principal amount of each
Term Loan of such Term Loan Lender in installments according to the
amortization schedule set forth in Section 2.3 (or on such earlier date on
which the Loans become due and payable pursuant to Section 8). The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in Section
2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.6(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain the
Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest)
the Loans made to such Borrower by such Lender in accordance with the terms
of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver
to such Lender a promissory note of the Borrower evidencing any Term Loans
or Revolving Credit Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit F-1 or F-2, respectively,
with appropriate insertions as to date and principal amount.
2.7 Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the
last day of the Revolving Credit Commitment Period, computed at the
Commitment Fee Rate on the average daily amount of the Available
Revolving Credit Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Scheduled Revolving Credit
Termination Date, commencing on the first of such dates to occur after the
date hereof.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender (other than Chase) a fee for the period from and
including March 1, 1998 to the Closing Date, computed at the rate of 1/2 of
1% per annum on the average daily amount of the Commitment of such Lender
during the period for which payment is made, payable in arrears on the
earlier of the Closing Date or the date of the termination of the
Commitments in accordance with the terms hereof.
(c) The Borrower agrees to pay to the Arranger and the
Administrative Agent the fees in the amounts and on the dates set forth in
the Fee
Letter.
2.8 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate
the Revolving Credit Commitments or, from time to time, to reduce
the amount of the Revolving Credit Commitments; provided that no
such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the Total
Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000,
or a whole multiple thereof, and shall reduce permanently the Revolving
Credit Commitments then in effect. Any termination of the Revolving Credit
Commitments pursuant to this Section 2.8 shall be accompanied by prepayment
in full (together with accrued interest thereon to such date) by the
Borrower of any Loans then outstanding and payment of any other amounts
necessary to cause the Payment Obligations with respect to the Loans and
the L/C Obligations to be Fully Satisfied. Any prepayment required pursuant
to this Section 2.8 or otherwise shall be applied, first, to the Revolving
Credit Loans then outstanding, second, to the reimbursement of all
outstanding Reimbursement Obligations, and, third, to cause the then
outstanding Undrawn L/C Obligations to be Fully Secured.
2.9 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at
least three Business Days prior thereto in the case of Eurodollar Loans and
at least one Business Day prior thereto in the case of ABR Loans, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or ABR Loans; provided that (i) if a
Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.19 and (ii) if a prepayment of Term Loans is to
be made, Section 2.16(d) shall apply. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If
any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans which are ABR Loans) accrued interest to
such date on the amount prepaid. Partial prepayments of Term Loans shall be
in an aggregate principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof. Partial prepayments of Revolving Credit Loans
shall be in an aggregate principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof.
2.10 Mandatory Prepayments and Commitment Reductions. (a) If on
any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Net Proceeds Event, such Net Cash Proceeds shall be
applied on such date toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section
2.10(c); provided that in the case of any Asset Sale or Recovery Event,
such prepayment of the Term Loans need not be made and such Revolving
Credit Commitments need not be reduced pursuant to this Section
2.10(a) until the Borrower or any of its Subsidiaries shall have
received at least $5,000,000 in Net Cash Proceeds in the aggregate
from Asset Sales or Recovery Events, at which time, such $5,000,000 in Net
Cash Proceeds from any Asset Sales or Recovery Events and all further Net
Cash Proceeds from any Asset Sales or Recovery Events shall be promptly
applied to the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.10(c).
(b) If, for any fiscal year of the Borrower commencing with the
fiscal year ending December 31, 1998, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply
the ECF Percentage of such Excess Cash Flow toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set
forth in Section 2.10(c). Each such prepayment and commitment reduction
shall be made on a date (an "Excess Cash Flow Application Date") no later
than five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 6.1(a), for the fiscal
year with respect to which such prepayment is made, are required to be
delivered to the Lenders and (ii) the date such financial statements are
actually delivered.
(c) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.10 shall be applied,
first, to the prepayment of the Tranche A Term Loans and Tranche B
Term Loans ratably and, second, to reduce permanently the Revolving
Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving
Credit Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount
of Revolving Credit Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding
Letters of Credit and/or deposit an amount in cash in a cash collateral
account established with the Administrative Agent for the benefit of the
Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to Section 2.10 shall be made,
first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of
the Loans under Section 2.10 (except in the case of Revolving Credit Loans
that are ABR Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
(d) If, as a result of the making of any payment required to be
made pursuant to this Section 2.10, the Borrower would incur costs pursuant
to Section 2.19, the Borrower may deposit the amount of such payment with
the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account, until the end of the applicable Interest Period at
which time such payment shall be made. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Lenders, a security interest
in all amounts from time to time on deposit in such cash collateral account
and expressly waives all rights (which rights the Borrower hereby
acknowledges and agrees are vested exclusively in the Administrative Agent)
to exercise dominion or control over any such amounts.
2.11 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, provided that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period with respect
thereto. The Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify
the length of the initial Interest Period therefor), provided that no ABR
Loan under a particular Facility may be converted into a Eurodollar Loan
(i) when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility. Upon receipt of
any such notice, the Administrative Agent shall promptly notify each
relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurodollar Loan under a
particular Facility may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the
Majority Facility Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such continuations or (ii) after
the date that is one month prior to the final scheduled termination or
maturity date of such Facility, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph
or if such continuation is not permitted pursuant to the preceding proviso
such Loans shall be automatically converted to ABR Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $100,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.13 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan
or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all of the aggregate
principal unpaid amount of the Loans and Reimbursement Obligations shall
bear interest at a rate per annum which is equal to (x) in the case of the
Loans, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this Section 2.13 plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to ABR Loans under the
Revolving Credit Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment
fee or other amount payable hereunder shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum equal to the rate applicable to ABR
Loans under the relevant Facility plus 2% (or, in the case of any such
other amounts that do not relate to a particular Facility, the Alternate
Base Rate plus 3.5%), in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of
this Section 2.13 shall be payable from time to time on demand.
2.14 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the relevant Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the Alternate
Base Rate or the Eurocurrency Reserve Requirements shall become effective
as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the absence
of manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used
by the Administrative Agent in determining any interest rate pursuant to
Sections 2.13(a) or 2.13(b).
2.15 Inability to Determine Interest Rate. If prior
to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility
that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the relevant Lenders at least two Business Days prior
to the commencement of any such Interest Period. Unless the Borrower shall
have notified the Administrative Agent promptly upon receipt of such
telecopy or telephonic notice that it wishes to rescind or modify its
request regarding (i) proposed Loans that the Borrower has requested be
made as Eurodollar Loans, (ii) a Eurodollar Loan that will result from the
requested conversion of all or part of ABR Loans into Eurodollar Loans or
(iii) the continuation of a Eurodollar Loan as such for an additional
Interest Period, then (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made
as ABR Loans, (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans
under the relevant Facility shall be converted, on the last day of the then
current Interest Period, to ABR Loans. Until such notice has been withdrawn
by the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have
the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Tranche A Term
Loan Percentages, Tranche B Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders.
(b) Each optional prepayment of Term Loans pursuant to Section
2.9 shall be made pro rata according to the respective outstanding
principal amounts of the Tranche A Term Loans then held by the Tranche A
Term Loan Lenders and the respective outstanding principal amounts of the
Tranche B Term Loans then held by the Tranche B Term Loan Lenders (except
as otherwise provided in Section 2.16(d)). Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Tranche A Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the Tranche A Term Loans then held by the
Tranche A Term Loan Lenders, and each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Tranche B
Term Loans shall be made pro rata according to the respective outstanding
principal amounts of the Tranche B Term Loans then held by the Tranche B
Term Loan Lenders (except as otherwise provided in Section 2.16(d)). Except
as otherwise provided in the following sentence, the amount of each principal
prepayment of the Term Loans shall be applied to reduce the then remaining
installments of the Tranche A Term Loans and Tranche B Term Loans, as the
case may be, pro rata based upon the then remaining principal amount
thereof. If any optional prepayment of Term Loans is made pursuant to
Section 2.9 at any time other than on a scheduled installment date in
respect of the Term Loans, the amount of each principal prepayment of the
Term Loans shall be applied to reduce the next originally scheduled
installment (unless previously prepaid) of the Tranche A Term Loans and the
Tranche B Term Loans, as the case may be, pro rata based upon the then
remaining principal amount thereof, and, if any such prepayment amount
remains after the payment in full (after giving effect to Section 2.16(d))
of the next originally scheduled installment of the Tranche A Term Loans
and the Tranche B Term Loans, any such remaining amount shall be applied in
the manner set forth in the preceding sentence. Amounts prepaid on account
of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of
the Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.9,
2.10 or 2.16, so long as any Tranche A Term Loans are outstanding, each
Tranche B Term Loan Lender may, at its option, decline up to 100% of the
portion of any optional prepayment or mandatory payment applicable to the
Tranche B Term Loans of such Lender; accordingly, with respect to the
amount of any optional prepayment described in Section 2.9 or mandatory
prepayment described in Section 2.10 that is allocated to Tranche B Term
Loans (such amount, the "Prepayment Amount"), at any time when Tranche A
Term Loans remain outstanding, the Borrower will, (i) in the case of any
optional prepayment which the Borrower wishes to make, not later than three
Business Days prior to the date on which the Borrower wishes to make such
optional prepayment, and (ii) in the case of any mandatory prepayment
required to be made pursuant to Section 2.10, in lieu of applying such
amount to the prepayment of Tranche B Term Loans as provided in paragraph
Section 2.10(c), on the date specified in Section 2.10 for such prepayment,
give the Administrative Agent telephonic notice (promptly confirmed in
writing) requesting that the Administrative Agent prepare and provide to
each Tranche B Term Loan Lender a notice (each, a "Prepayment Option
Notice") as described below. Within two Business Days after receiving such
notice from the Borrower, the Administrative Agent will send to each
Tranche B Term Loan Lender a Prepayment Option Notice, which shall be in
the form of Exhibit G, and shall include an offer by the Borrower to prepay
on the date (each a "Prepayment Date") that is two Business Days after the
date of the Prepayment Option Notice, the relevant Term Loans of such
Lender by an amount equal to the portion of the Prepayment Amount indicated
in such Lender's Prepayment Option Notice as being applicable to such
Lender's Tranche B Term Loans. On the Prepayment Date, (i) the Borrower
shall pay to the Administrative Agent the aggregate amount necessary to
prepay that portion of the outstanding relevant Term Loans in respect of
which Tranche B Term Loan Lenders have accepted prepayment as described
above (such Lenders, the "Accepting Lenders"), and such amount shall be applied
to reduce the Prepayment Amount with respect to each Accepting Lender, and (ii)
the Borrower shall pay to the Administrative Agent an amount equal to the
portion of the Prepayment Amount not accepted by the Accepting Lenders, and such
amount shall be applied to the prepayment of the Tranche A Term Loans. Each
Tranche B Term Loan Lender that does not return to the Administrative Agent
a correctly completed Prepayment Option Notice in accordance with the terms
thereof and of this Section 2.16(d) shall receive 100% of the Prepayment
Amount allocated to such Tranche B Term Loan Lender on the Prepayment Date.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to 1:00 P.M., New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Payment
Office, in Dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurodollar Loan becomes due and payable
on a day other than a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event
such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes
such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.16(f) shall be conclusive
in the absence of manifest error. If such Lender's share of such borrowing
is not made available to the Administrative Agent by such Lender within
three Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans under the relevant Facility, within three
Business Days after demand from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the
Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available
to the Lenders their respective pro rata shares of a corresponding amount.
If such payment is not made to the Administrative Agent by the Borrower
within three Business Days of such required date, the Administrative Agent
shall be entitled to recover, on demand, from each Lender to which any
amount which was made available pursuant to the preceding sentence, such
amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against the
Borrower.
2.17 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof shall:
(i subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.18 and changes in the rate of tax on the
overall net income of such Lender);
(ii impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included
in the determination of the Eurodollar Rate hereunder; or
(iii impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount
receivable as reasonably determined by such Lender. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.17, it
shall promptly notify the Borrower (with a copy to the Administrative
Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations to lend hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that
the Borrower shall not be required to compensate a Lender pursuant to this
paragraph for any amounts incurred more than six months prior to the date
that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided further that, if the circumstances
giving rise to such claim have a retroactive effect, then such six-month
period shall be extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable pursuant
to this Section 2.17 submitted by any Lender to the Borrower (with a copy
to the Administrative Agent) shall contain supporting calculations and an
explanation in connection therewith and shall be conclusive in the absence
of manifest error. The obligations of the Borrower pursuant to this Section
2.17 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.18 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document).
If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") or Other Taxes are required
to be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender
with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of
this Section, (ii) that are United States withholding taxes imposed on
amounts payable to such Lender at the time the Lender becomes a party to
this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.18(a),
or (iii) that are imposed as a result of an event occurring after the Lender
becomes a Lender other than a change in law or regulation or the
introduction of any law or regulation or a change in interpretation or
administration of any law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send
to the Administrative Agent for the account of the Administrative Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this Section 2.18 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States (or any
jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S.
Lender") shall deliver to the Borrower and the Administrative Agent (or, in
the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest" a statement substantially in the form of Exhibit H and a Form
W-8, or any subsequent versions thereof or successors thereto properly
completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date
it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly
notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by the U.S. taxing authorities
for such purpose). Notwithstanding any other provision of this Section
2.18(d), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.18(d) that such Non-U.S. Lender is not legally
able to deliver.
(e) A Lender that is entitled to an exemption from or reduction
of non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed
by applicable law or reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate;
provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender's reasonable judgment such
completion, execution or submission would not materially prejudice the
legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund
in respect of Non- Excluded Taxes or Other Taxes paid by the Borrower,
which in the good faith judgment of such Lender is allocable to such
payment, it shall promptly pay such refund, together with any other amounts
paid by the Borrower in connection with such refunded Non-Excluded Taxes or
Other Taxes, to the Borrower, net of all out-of-pocket expenses of such
Lender incurred in obtaining such refund, provided, however, that the
Borrower agrees to promptly return such refund to the Administrative Agent
or the applicable Lender, as the case may be, if it receives notice from
the Administrative Agent or applicable Lender that such Administrative
Agent or Lender is required to pay such refund.
2.19 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender
may sustain or incur in its reemployment of funds obtained in connection
with the making or maintaining of, or converting to, Eurodollar Loans, as a
consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of
this Agreement, (b) default by the Borrower in making any prepayment of
Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. Calculation of all amounts payable to
a Lender under this Section 2.19 shall be made as though such Lender had
actually funded its relevant Eurodollar Loan through the purchase of a
Eurodollar deposit bearing interest at the Eurodollar Rate in an amount
equal to the amount of such Eurodollar Loan, having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States; provided that each Lender may fund each of its
Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
Section 2.19. A certificate as to any amounts payable pursuant to this
Section 2.19 submitted to the Borrower by any Lender shall be conclusive in
the absence of manifest error. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
such Lender shall promptly notify the Administrative Agent and Borrower
thereof, (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert ABR Loans to
Eurodollar Loans shall forthwith be cancelled and (c) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period
as required by law. If any such conversion of a Eurodollar Loan occurs on a
day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.19.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17 or
2.18(a) with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and provided, further, that nothing in
this Section 2.21 shall affect or postpone any of the obligations of any
Borrower or the rights of any Lender pursuant to Section 2.17 or 2.18(a).
2.22 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.17 or 2.18 or (b)
defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred
and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under Section 2.21 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 2.17 or 2.18, (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender
on or prior to the date of replacement, (v) the Borrower shall be liable to
such replaced Lender under Section 2.19 if any Eurodollar Loan owing to
such replaced Lender shall be purchased other than on the last day of the
Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to
the Administrative Agent, (vii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 10.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.17 or 2.18, as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights which the Borrower, the Administrative Agent or any other Lender
shall have against the replaced Lender.
SECTION III. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on
any Business Day during the Revolving Credit Commitment Period in such form
as may be approved from time to time by the Issuing Lender; provided that
the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the
date which is five Business Days prior to the Scheduled Revolving Credit
Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above),
and provided, further, that the Undrawn L/C Obligations in respect of each
Letter of Credit which expires after the last day of the Revolving Credit
Commitment Period shall be Fully Secured from and after such day.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with,
or cause the Issuing Lender or any L/C Participant to exceed any limits
imposed by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of
Credit by delivering to the Issuing Lender at its address for notices
specified herein an Application therefor, completed to the satisfaction of
the Issuing Lender, and such other certificates, documents and other papers
and information as the Issuing Lender may reasonably request. Upon receipt
of any Application, the Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to
it in connection therewith in accordance with its customary procedures and
shall promptly issue the Letter of Credit requested thereby (but in no
event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrower will
pay a commission on the face amount of all outstanding Letters of Credit at
a per annum rate equal to the Applicable Margin then in effect with respect
to Eurodollar Loans under the Revolving Credit Facility, shared ratably
among the Revolving Credit Lenders and payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 1/4
of 1% per annum of the undrawn and unexpired amount of the Letter of
Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, negotiating, effecting payment under, amending or
otherwise administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce
the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from the Issuing Lender, on the terms and conditions
hereinafter stated, for such L/C Participant's own account and risk an
undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Issuing Lender's obligations and rights under each Letter
of Credit issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing
Lender's address for notices specified herein an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or
any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate during the period
from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 3.4(a) is
not made available to the Issuing Lender by such L/C Participant within
three Business Days after the date such payment is due, the Issuing Lender
shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans under the Revolving Credit Facility. A
certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the
event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall
return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing
Lender notifies the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by the Issuing Lender for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment.
Each such payment shall be made to the Issuing Lender at its address for
notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all
amounts remaining unpaid by the Borrower under this Section from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in Section 2.13(c);
provided that if the Issuing Lender does not notify the Borrower as
provided for above earlier than 11:00 A.M. (New York City time) on the date
such draft is paid, then for such day (and until the next Business Day) all
amounts remaining unpaid in respect of such notice shall bear interest at
the rate set forth in Section 2.13(b). Each drawing under any Letter of
Credit shall (unless an event of the type described in clause (i) or (ii)
of Section 8(f) shall have occurred and be continuing with respect to the
Borrower, in which case the procedures specified in Section 3.4 for funding
by L/C Participants shall apply) constitute a request by the Borrower to
the Administrative Agent for a borrowing pursuant to Section 2.5 of ABR
Loans in the amount of such drawing. The Borrowing Date with respect to
such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender,
any beneficiary of a Letter of Credit or any other Person. The Borrower
also agrees with the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section
3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of the Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall
not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Issuing Lender. The Borrower agrees that any
action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with
the standards or care specified in the Uniform Commercial Code of the State
of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of
the Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each
Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at December 31, 1997 (including the notes thereto) (the
"Pro Forma Balance Sheet"), copies of which have heretofore been furnished
to each Lender, has been prepared giving effect (as if such events had
occurred on such date) to (i) the consummation of the Recapitalization,
(ii) the Loans to be made and the Senior Subordinated Notes to be assumed
on the Closing Date and the use of proceeds thereof and (iii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to
the Borrower as of the date of delivery thereof, and presents fairly on a
pro forma basis the estimated financial position of Borrower and its
consolidated Subsidiaries as at December 31, 1997, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as
at December 31, 1996 and December 31, 1997 and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, certified without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst
& Young LLP, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations
and its consolidated cash flows for the respective fiscal years then ended.
The unaudited consolidated balance sheet of the Borrower as at March 31,
1998, and the related unaudited consolidated statements of income and cash
flows for the three-month period ended on such date, present fairly the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for
the three-month period then ended (subject to normal year-end audit
adjustments and to the absence of footnotes). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed in the notes thereto). The Borrower
and its Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases
or unusual forward or long-term commitments, including, without limitation,
any interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most
recent financial statements referred to in this paragraph (b) (or in the
notes thereto) or permitted to be incurred under this Agreement. During the
period from December 31, 1997 to and including the date of this Agreement
there has been no Disposition by the Borrower of any material part of its
business or Property, except for the Recapitalization and as permitted by
Section 7.5.
4.2 No Change. Since December 31, 1997 there has been no
development or event which has had or would be reasonably likely to have a
Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each Loan Party
and each Specified Foreign Subsidiary (a) is a corporation or partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization (except no representation is made as to
the good standing of any Subsidiary organized under the laws of a
jurisdiction in which there is no concept of good standing), (b) has the
corporate or partnership power and authority, and the legal right, to own
and operate its Property, to lease the Property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly
qualified to do business and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification except to the extent
that the failure to so qualify would not, in the aggregate, be reasonably
likely to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect.
4.4 Corporate or Partnership Power; Authorization; Enforceable
Obligations. Each Loan Party has the corporate or partnership power and
authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of the Borrower,
to borrow hereunder. Each Loan Party has taken all necessary corporate
or partnership action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the borrowings on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the Recapitalization and the
borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of this Agreement or any of the Loan Documents, except
(i) consents, authorizations, filings and notices described in Schedule
4.4, which consents, authorizations, filings and notices have been obtained
or made and are in full force and effect, (ii) the filings referred to in
Section 4.19 and (iii) those which, in the aggregate, would not be
reasonably likely to have a Material Adverse Effect if not obtained or
made. Each Loan Document has been duly executed and delivered on behalf of
each Loan Party party thereto. This Agreement constitutes, and each other
Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such
Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will
not violate any material Requirement of Law or any Contractual Obligation
of the Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
material properties or revenues pursuant to any Requirement of Law or any
such Contractual Obligation (other than the Liens created by the Security
Documents).
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened by or against the Borrower
or any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which would be
reasonably likely to have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which would be reasonably likely to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien
except as permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted that is
material to the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its Subsidiaries
taken as a whole. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property that
is material to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for
any such claim. The use of such Intellectual Property by the Borrower and
its Subsidiaries does not infringe on the rights of any Person, except to
the extent of any infringements which would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect.
4.10 Taxes. The Borrower and each of its Subsidiaries has filed
or caused to be filed all Federal, state and other material tax returns
which are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of
its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be); no tax Lien has been filed.
4.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of the Board. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation
U.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the
aggregate) would be reasonably likely to have a Material Adverse Effect.
Hours worked by and payment made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) would be reasonably likely to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) would be reasonably likely to have a
Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. No Reportable Event has occurred during the
immediately preceding six-year period with respect to any Plan that resulted
or would be reasonably likely to result in any unpaid liability, and each Plan
(other than any Multiemployer Plan or any multiemployer health or welfare plan)
has complied and has been administered in all material respects with the
applicable provisions of ERISA and the Code, except as such Reportable Event or
such failure to comply or be so administered would not reasonably be likely to
have a Material Adverse Effect. The amount by which the present value of all
accrued benefits under each Single Employer Plan maintained by the Borrower
or any of its Subsidiaries or any Commonly Controlled Entity (based on
those assumptions used to fund the Plans), as of the last annual valuation
date applicable thereto, exceeds the value of the assets of each such Plan
allocable to such benefits, in the aggregate for all such Plans as to which
such present value of benefits exceeds the value of its assets (the
"Unfunded Pension Amount"), is less than $60,000,000, when aggregated with
the Potential Withdrawal Liability. Neither the Borrower nor any of its
Subsidiaries nor any Commonly Controlled Entity has during the immediately
preceding six-year period had a complete or partial withdrawal from any
Multiemployer Plan that resulted or would be reasonably likely to result in
any unpaid withdrawal liability under Section 4201 of ERISA that would be
reasonably likely to have a Material Adverse Effect, and the withdrawal
liability under Section 4201 of ERISA to which the Borrower or any of its
Subsidiaries or any Commonly Controlled Entity would become subject under
ERISA if the Borrower or any of its Subsidiaries or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans
as of the most recent valuation date applicable thereto (the "Potential
Withdrawal Liability") is not in excess of $60,000,000, when aggregated
with the Unfunded Pension Amount. Neither the Borrower nor any of its
Subsidiaries nor any Commonly Controlled Entity has received notice that
any Multiemployer Plan is in Reorganization or Insolvent where such
Reorganization or Insolvency has resulted, or would be reasonably likely to
result in an unpaid liability that would be reasonably likely to have a
Material Adverse Effect nor, to the best knowledge of the Borrower or any
of its Subsidiaries, is any such Reorganization or Insolvency reasonably
likely to occur. The obligations of the Borrower and each of its
Subsidiaries and each Commonly Controlled Entity for post retirement
benefits to be provided to their current and former employees under Plans
which are welfare benefits plans (as defined in Section 3(l) of ERISA) are
not reasonably likely to have a Material Adverse Effect, when aggregated
with their obligations with respect to the Unfunded Pension Amount and the
Potential Withdrawal Liability.
4.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of
Law (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.
4.15 Subsidiaries. (a) Schedule 4.15 sets forth as of the
Closing Date the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital
Stock owned by any Loan Party.
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted under compensatory stock option plans and other than directors'
qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except under the Loan Documents.
4.16 Use of Proceeds. The proceeds of the Loans shall be used
to finance a portion of the Recapitalization, to repay amounts outstanding
under the Existing Credit Agreement and to pay fees and expenses related to
the foregoing. The proceeds of the Revolving Credit Loans shall be used to
finance the working capital and general corporate needs of the Borrower and
its Subsidiaries in the ordinary course of business.
4.17 Environmental Matters. Except as individually or in the
aggregate would not be reasonably likely to result in a Material Adverse
Effect:
(a) The facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern
in amounts or concentrations or under circumstances which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law.
(b) The Properties and all operations at the Properties are in
material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated
by the Borrower or any of its Subsidiaries (the "Business"). Neither the
Borrower nor any of its Subsidiaries has assumed any liability of any other
Person under Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does the Borrower have knowledge or reason
to believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could give rise to liability under, any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under
any Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business.
(f) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under Environmental
Laws.
4.18 Accuracy of Information, etc. No information, schedule,
exhibit or report or other document furnished by or on behalf of the
Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or pursuant to
the terms of this Agreement, as such information, schedule, exhibit or
report or other document has been amended, supplemented or superseded by
any other information, schedule, exhibit or report or other document later
delivered to the same parties receiving such information, schedule, exhibit
or report or other document, contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the
statements contained therein, in light of the circumstances when made, not
materially misleading; provided that in the case of information, schedules,
exhibits or reports or other documents made, delivered or prepared by
Persons other than the Borrower, its Subsidiaries and their agents, such
representation and warranty is subject to the qualification that it is true
and correct only to the knowledge of the Borrower and its Subsidiaries. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made,
it being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein by a material
amount. As of the date hereof, the representations and warranties contained
in the Recapitalization Documentation are true and correct in all material
respects. There is no fact known to any Loan Party on the date of the
Agreement that would be reasonably likely to have a Material Adverse Effect
that has not been expressly disclosed herein, in the other Loan Documents,
in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Stock and stock powers related
thereto duly executed in blank by the relevant pledgor are delivered to the
Administrative Agent, and in the case of the other Collateral described in
the Guarantee and Collateral Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.19(a) and
such other filings as are specified in Schedule 3 to the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute
a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any
other Person (except, in the case of Collateral other than Pledged Stock,
Liens permitted by Section 7.3).
(b) Upon execution and delivery thereof by the parties thereto,
the U.K. Pledge Agreement shall be effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in not less than 65% of the Capital Stock of
Panavision Europe Limited and, when the actions specified in the U.K.
Pledge Agreement have been completed, security interests granted pursuant
thereto shall constitute a perfected first lien on, and security interest
in, all right, title and interest of the pledgor party thereto in such
Capital Stock.
(c) Upon execution and delivery thereof by the parties thereto,
the New Zealand Pledge Agreement shall be effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable security interest in not less than 65% of the
Capital Stock of Panavision NZ and, when the actions specified in the New
Zealand Pledge Agreement have been completed, security interests granted
pursuant thereto shall constitute a perfected first lien on, and security
interest in, all right, title and interest of the pledgor party thereto in
such Capital Stock.
4.20 Solvency. The Borrower is, and after giving effect to the
Recapitalization and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be Solvent on a
consolidated and unconsolidated basis.
4.21 Senior Indebtedness. The Obligations in respect of the
Loan Documents constitute "Senior Debt" of the Borrower under and as
defined in the Senior Subordinated Note Indenture. The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute "Senior Debt" of such Subsidiary Guarantor under and as defined
in the Senior Subordinated Note Indenture.
4.22 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of the Borrower's (i) computer
systems and (ii) equipment containing embedded microchips and the testing
of all such systems and equipment, as so reprogrammed, will be completed in
all material respects by June 30, 1999. The cost to the Borrower of such
reprogramming and testing is not reasonably likely to result in an Event of
Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Borrower and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower to conduct
its business without any development or event which would be reasonably likely
to have a Material Adverse Effect.
SECTION V. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of
each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making
of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
Borrower and each Subsidiary Guarantor, (iii) for the account of each
relevant Lender, Notes conforming to the requirements hereof and
executed and delivered by a duly authorized officer of the Borrower,
(iv) the U.K. Pledge Agreement, executed and delivered by a duly
authorized officer of each party thereto and (v) the New Zealand
Pledge Agreement, executed and delivered by a duly authorized officer
of each party thereto.
(b) Recapitalization, etc. (i) The following transactions shall
have been consummated, in each case on terms and conditions
reasonably satisfactory:
(x) the Recapitalization shall have been
consummated for an aggregate purchase price not exceeding
$654,600,000 (excluding fees and expenses incurred in
connection therewith);
(y) Holdings shall have received at least
$154,400,000 in cash from the proceeds of common stock
issued by Holdings to the Equity Investor, and such
proceeds shall have been contributed to the Borrower in
exchange for common stock issued by the Borrower; and
(z) (i) PX Escrow shall have issued the PX Escrow
Notes, and (ii) the Escrowed Property (as defined in the
Escrow Agreement) and PX Escrow's right, title and
interest to, and obligations under, the Senior
Subordinated Note Indenture, the Senior Subordinated
Notes, the Registration Agreement, the Purchase Agreement
and the Escrow Agreement shall have been assumed by the
Borrower; and
(ii) no material provision of the Recapitalization
Documentation shall have been waived, amended, supplemented or
otherwise modified in any material respect.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the Borrower for the 1996 and
1997 fiscal years and (iii) unaudited interim consolidated financial
statements of the Borrower for each fiscal quarterly period ended
subsequent to the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available to the Borrower, and such
financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower and its Subsidiaries, as
reflected in the financial statements or projections contained in the
Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary or reasonably
advisable in connection with the Recapitalization, the continuing
operations of the Borrower and its Subsidiaries and the financings
and other transactions contemplated hereby shall have been obtained
and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the Recapitalization or the financing
contemplated hereby.
(e) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative
Agent), with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of the Recapitalization
Documentation and such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without
limitation, a copy of the Senior Subordinated Note Indenture and any
other debt instrument, security agreement or other material contract
to which the Loan Parties may be a party.
(f) Termination of Existing Credit Facility. The Administrative
Agent shall have received evidence satisfactory to the Administrative
Agent that the Existing Credit Agreement (and related security
documents) shall be simultaneously terminated, all amounts thereunder
shall be simultaneously paid in full and arrangements satisfactory to
the Administrative Agent shall have been made for the termination of
Liens and security interests granted in connection therewith
(including without limitation the existing U.K. pledge agreement).
(g) Fees. The Lenders, Arranger and the Administrative Agent
shall have received all fees required to be paid, and all expenses
for which invoices have been presented, on or before the Closing
Date.
(h) Business Plan. The Lenders shall have received
a financial model for fiscal years 1998-2005.
(i) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency opinion from an independent
valuation firm satisfactory to the Administrative Agent which shall
document the solvency of the Borrower on a consolidated basis after
giving effect to the Recapitalization and other transactions
contemplated hereby.
(j) Lien Searches. The Lenders shall have received the results
of a recent lien search in each of the jurisdictions where assets of
the Loan Parties are located, and such search shall reveal no liens
on any of the assets of the Borrower or its Subsidiaries except for
liens permitted by Sections 7.3 or 10.1(d) or discharged on or prior
to the Closing Date pursuant to documentation reasonably satisfactory
to the Administrative Agent.
(k) Environmental Due Diligence. The Lenders shall be
reasonably satisfied with the environmental condition of the real
property owned or leased by the Borrower and its Subsidiaries.
(l) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(m) Legal Opinions. The Lenders shall have received
the following executed legal opinions:
(i) the legal opinion (including as to matters of
intellectual property) of Paul, Weiss, Rifkind, Wharton &
Garrison, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E;
(ii) the legal opinion of local counsel in each of
the United Kingdom, New Zealand and Canada.
Each such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Lenders may
reasonably require.
(n) Pledged Stock; Stock Power. The Administrative Agent shall
have received the certificates representing the shares of Capital
Stock pledged pursuant to the Guarantee and Collateral Agreement, the
U.K. Pledge Agreement and the New Zealand Pledge Agreement, together
with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof, evidence
that the articles of association of Panavision Europe Limited have
been amended as required by the U.K. Pledge Agreement, and evidence
that all existing Liens over the shares in Panavision Europe Limited
have been released.
(o) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create in favor of the Administrative Agent, for the benefit
of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect
to Liens expressly permitted by Section 7.3), shall be in proper form
for filing, registration or recordation.
(p) Insurance. The Lenders shall have received insurance
certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.
(q) Working Capital Requirements. The Lenders shall be
reasonably satisfied with the sufficiency of amounts available under
the Revolving Credit Facility to meet the ongoing working capital
needs of the Borrower and its Subsidiaries following the
Recapitalization and the consummation of the other transactions
contemplated hereby.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on
any date (including, without limitation, its initial extension of credit)
is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and
as of such date as if made on and as of such date, except to the
extent that such representations and warranties relate to a
particular date, in which case such representations and warranties
shall be true and correct in all material respects on and as of such
date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION VI. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or the Payment Obligations are not Fully Satisfied, the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender,
through the Administrative Agent:
(a) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments).
All such financial statements shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender,
through the Administrative Agent, or, in the case of clause (g), to the
relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by
the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal
quarter or fiscal year of the Borrower, as the case may be, and (y)
in the case of quarterly or annual financial statements, to the
extent not previously disclosed to the Administrative Agent, a
Schedule setting forth each Patent, Trademark and Copyright that has
been registered or for which an application for registration has been
filed with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, since the date of the
most recent Schedule delivered pursuant to this clause (y) (or, in
the case of the first such Schedule so delivered, since the Closing
Date);
(c) as soon as available, and in any event no later than 60
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income) (collectively,
the "Budget"), which Budget shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Budget is
based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Budget is
incorrect or misleading in any material respect;
(d) within 60 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter;
(e) as soon as reasonably practicable, copies of substantially
final drafts of any proposed amendment, supplement, waiver or other
modification with respect to the Senior Subordinated Note Indenture;
(f) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity
securities and within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the SEC; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be,
all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves with respect thereto to the extent, if any,
required by GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be. Notwithstanding anything to the contrary
in the foregoing sentence, the Borrower shall not be in default under this
Section 6.3 unless the aggregate amount of non-contested Indebtedness or
obligations which the Borrower and its Subsidiaries have so failed to pay,
discharge or satisfy before they become delinquent and which remain delinquent
at the time of determination is more than $5,000,000 in the aggregate.
6.4 Conduct of Business and Maintenance of Existence, etc. (a)
(i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of
its business, except, in each case, as otherwise permitted by Sections 7.4
and 7.5 and except, in the case of clause (ii) above, to the extent that
failure to do so would not be reasonably likely to have a Material Adverse
Effect; and (b) comply with all Contractual Obligations and Requirements of
Law except to the extent that failure to comply therewith would not, in the
aggregate, be reasonably likely to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all property
useful and necessary in its business in good working order and condition,
except where the failure to do so would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect and (b) maintain with
financially sound and reputable insurance companies insurance on such of
its property and against such liabilities in at least such amounts and
against at least such risks as are customarily insured against in the same
general area by companies engaged in the same or a similar business and
furnish to the Administrative Agent, upon written request, and to each
Lender which makes a written request through the Administrative Agent,
reasonable information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. (a)
Keep proper books of accounts and records in which entries in conformity in
all material respects with all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities and
which shall permit the preparation of financial statements in conformity
with GAAP and (b) permit representatives of any Lender to visit and inspect
any of its properties as such Lender may request through the Administrative
Agent and (during such visit or inspection, or otherwise upon request
through the Administrative Agent) examine and make abstracts from any of
its books and records it may reasonably request at any reasonable time and
as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower
and its Subsidiaries with officers and employees of the Borrower and its
Subsidiaries and with its independent certified public accountants.
6.7 Notices. Promptly give notice to each Lender, through the
Administrative Agent of:
(a) the occurrence of any Default or Event of
Default;
(b) any default or event of default by the Borrower or any of
its Subsidiaries under any Contractual Obligation of the Borrower or
any of its Subsidiaries or the institution of, or the occurrence of
any material adverse change in the status or likely result of, any
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any
Governmental Authority or any other Person which, in any of the
foregoing cases, would be reasonably likely to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought, which in any of the foregoing cases would be
reasonably likely to have a Material Adverse Effect;
(d) any of the following events, as soon as practicable, and in
any event, within 30 days after the Borrower knows or has reason to
know thereof:
(i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan; or
(ii) the institution of proceedings or the taking or
expected taking of any other action by PBGC or the Borrower or
any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Single Employer or Multiemployer
Plan and with respect to a Multiemployer Plan, the
Reorganization or Insolvency of such Plan;
if such Reportable Event, termination, withdrawal or partial
withdrawal (and, in the case of any Multiemployer Plan, its
Reorganization or Insolvency) would be reasonably likely to result in
liability to the Borrower and its Subsidiaries, in the aggregate, in
excess of $60,000,000; and
(e) any development or event which has had or would be
reasonably likely to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all
tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities
regarding Environmental Laws, except (i) to the extent that the failure to
perform any of the obligations contained in this Section 6.8(b) would not
be reasonably likely to have a Material Adverse Effect or (ii) to the
extent that such obligations are being contested in good faith by
appropriate proceedings and the pendency of such proceedings would not be
reasonably likely to have a Material Adverse Effect.
6.9 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than a Foreign Subsidiary) (other than (x) any real
property or any Property described in paragraph (b), (c) or (d) below and (y)
any Property subject to a Lien expressly permitted by Section 7.3(g)) as to
which the Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order
to grant to the Administrative Agent, for the benefit of the Lenders, a
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such Property,
including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $5,000,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any such real property owned by a Foreign Subsidiary or subject
to a Lien expressly permitted by Section 7.3(g)), promptly (i) execute and
deliver a first priority mortgage in form and substance satisfactory to and
in favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering
such real property in an amount at least equal to the purchase price of
such real estate (or such other amount as shall be reasonably specified by
the Administrative Agent) as well as a current ALTA survey thereof,
together with a surveyor's certificate and (y) any consents or estoppels
reasonably deemed necessary or advisable by the Administrative Agent in
connection with such mortgage or deed of trust, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be a Foreign Subsidiary) or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary
which is owned by the Borrower or any of its Subsidiaries, (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the Borrower or such Subsidiary, as the case may
be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the
Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such
new Subsidiary, including, without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new first-tier Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Domestic Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable in order
to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by the Borrower or any of its Domestic
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the Borrower
or such Subsidiary, as the case may be, and take such other action as may
be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory
to the Administrative Agent.
(e) If any amount in excess of $5,000,000 payable under or in
connection with any of the Collateral shall be or become evidenced by an
Instrument or Chattel Paper (in each case as defined in the Guarantee and
Collateral Agreement), such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to the Guarantee and Collateral Agreement.
SECTION VII. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or the Payment Obligations have not been Fully Satisfied,
the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the
Consolidated Total Leverage Ratio as at the last day of any fiscal quarter
which day shall occur during the following periods to exceed the following
respective ratios:
Consolidated Total
Period Leverage Ratio
June 30, 1998 to March 31, 1999 7.00 to 1.00
April 1, 1999 to September 30, 1999 6.75 to 1.00
October 1, 1999 to September 30, 2000 6.50 to 1.00
October 1, 2000 to June 30, 2001 6.00 to 1.00
July 1, 2001 to June 30, 2002 5.50 to 1.00
July 1, 2002 and thereafter 5.00 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower to be less than 2.50 to 1.00; provided that (i) for the purposes
of determining the ratio described above for the fiscal quarter of the Borrower
ending September 30, 1998 (the first date for which such ratio shall be
calculated hereunder), Consolidated Interest Expense shall be an amount equal
to the Consolidated Interest Expense for the fiscal quarter ending September
30, 1998 multiplied by 4, (ii) for purposes of determining the ratio described
above for the fiscal quarter of the Borrower ending December 31, 1998,
Consolidated Interest Expense shall be an amount equal to the sum of
Consolidated Interest Expense for the fiscal quarters ending September 30,
1998 and December 31, 1998 multiplied by two and (iii) for purposes of
determining the ratio described above for the fiscal quarter of the
Borrower ending March 31, 1999, Consolidated Interest Expense shall be an
amount equal to the sum of Consolidated Interest Expense for the fiscal
quarters ending September 30, 1998, December 31, 1998 and March 31, 1999
multiplied by 4/3.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any
Loan Document;
(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of
any Subsidiary Guarantor to the Borrower or any other Subsidiary,
(iii) of any Foreign Subsidiary to the Borrower, any Subsidiary
Guarantor or any Specified Foreign Subsidiary in an aggregate
principal amount at any time outstanding not to exceed (I)
$15,000,000 less (II) the amount of any investment permitted under
Section 7.8(g)(iii) that is not Indebtedness and only to the extent
such investment has not been repaid in cash to the Borrower, any
Subsidiary Guarantor or any Specified Foreign Subsidiary (whichever
such Person made such investment) and (iv) of any Foreign Subsidiary
to any other Foreign Subsidiary (other than any Specified Foreign
Subsidiary);
(c) Indebtedness in respect of Rate Hedging Agreements entered
into for non-speculative purposes;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof);
(e) (i) Indebtedness of the Borrower in respect of Senior
Subordinated Notes the gross proceeds of which did not exceed
$150,000,000 and (ii) Guarantee Obligations of any Subsidiary
Guarantor in respect of such Indebtedness; provided that such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated
Notes;
(f) additional Indebtedness of the Borrower or any of its
Subsidiaries (including, without limitation, Capital Leases and
Indebtedness secured by Liens permitted by Section 7.3(g)) in an
aggregate principal amount (for the Borrower and all Subsidiaries)
not to exceed $10,000,000 at any one time outstanding;
(g) Guarantee Obligations of any Subsidiary of the Borrower in
respect of Indebtedness of the Borrower or any Wholly Owned
Subsidiary Guarantor to the extent such Indebtedness is not
prohibited by this Agreement;
(h) Guarantee Obligations of the Borrower in respect of
Indebtedness of any Wholly Owned Subsidiary Guarantor to the extent
such Indebtedness is not prohibited by this Agreement; and
(i) Indebtedness of a Person which becomes a Subsidiary after
the date hereof, provided that (i) such Indebtedness existed at the
time such Person became a Subsidiary and was not incurred in
anticipation thereof, (ii) immediately after giving effect to the
acquisition of such Person, no Default or Event of Default shall have
occurred and be continuing and (iii) the aggregate principal amount
of such Indebtedness does not exceed $7,500,000.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred and statutory or contractual bankers' Liens on
monies held in bank accounts in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not substantial in amount and
which do not in any case materially detract from the value of the
Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional Property after
the Closing Date (other than a substitution of like property) and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(f) to finance the
acquisition (by purchase, construction or otherwise) of fixed or
capital assets, provided that (i) such Liens shall be created
substantially simultaneously with such acquisition of such fixed or
capital assets or such Liens existed on such Property before the time
of its acquisition and were not created in anticipation thereof, (ii)
such Liens do not at any time encumber any Property other than the
Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security
Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course
of its business and covering only the assets so leased;
(j) attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings, provided that the
same are discharged, or that execution or enforcement thereof is
stayed pending appeal, within 30 days or (in the case of any
execution or enforcement pending appeal) such lesser time during
which such appeal may be taken;
(k) possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of investments of the
type permitted in Section 7.8(b); provided that such Liens (i) attach
only to such investments and (ii) secure only obligations incurred in
the ordinary course and arising in connection with the acquisition or
disposition of such investments and not any obligation in connection
with margin financing;
(l) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness of such
Subsidiary permitted by Section 7.2(i); provided that (i) such Liens
and Indebtedness existed at the time such Person became a Subsidiary
and was not created in anticipation thereof, (ii) any such Lien is
not spread to cover any other property or assets of such Person after
the time such Person becomes a Subsidiary, (iii) the amount of the
Indebtedness secured thereby is not increased and (iv) immediately
after giving effect to the incurrence of such Lien, no Default or
Event of Default shall have occurred and be continuing;
(m) Liens in the nature of counterpart deposits or pledges of
cash deposits of any Foreign Subsidiary to secure Indebtedness of any
Foreign Subsidiary, which Indebtedness is permitted pursuant to
Section 7.2, provided that the amount of any such deposit does not
exceed the amount of the Indebtedness it secures;
(n) Liens in the nature of options in respect of up to 15% of
the Capital Stock of Panavision Canada Holdings held by its
directors, officers or employees; and
(o) any extension, renewal or replacement of the foregoing,
provided that the Liens permitted by this paragraph shall not extend
to or cover any additional Indebtedness or Property (other than a
substitution of like Property).
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving
corporation);
(b) any Foreign Subsidiary (other than Panavision Europe
Limited, Panavision NZ and Panavision Canada Holdings) may be merged
or consolidated with or into any other Foreign Subsidiary;
(c) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Wholly Owned Subsidiary Guarantor and, in the event such
Subsidiary shall so Dispose of all of its assets, such Subsidiary
may liquidate, wind up or dissolve;
(d) the Recapitalization;
(e) any Foreign Subsidiary (other than Panavision Europe
Limited, Panavision NZ and Panavision Canada Holdings) may Dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to
any other Foreign Subsidiary and, in the event such Foreign
Subsidiary shall so Dispose of all of its assets, such Foreign
Subsidiary may liquidate, wind up or dissolve; and
(f) any Foreign Subsidiary that does not have any assets or
Property may liquidate, wind up or dissolve.
7.5 Limitation on Sale of Assets. Dispose of any of its
Property or business (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock (other than director's qualifying shares) to any Person (in
each case other than the Borrower or any Wholly Owned Subsidiary
Guarantor), except:
(a) (i) the Disposition of Property which has become
uneconomic, obsolete or worn out in the ordinary course of business,
(ii) the Disposition of inventory in the ordinary course of business
and (iii) the Disposition of other Property in the ordinary course of
business for fair market value;
(b) Dispositions permitted by Sections 7.3, 7.4 or 7.6; and
(c) the Disposition of other assets having a fair market value
not to exceed $5,000,000 in the aggregate, provided that the
requirements of Section 2.10(a) are complied with in connection
therewith.
Any Collateral which is sold, transferred or otherwise conveyed pursuant to
this Section 7.5 to a Person other than the Borrower and its Subsidiaries
shall, upon the consummation of such sale in accordance with the terms of
this Agreement and the other Loan Documents, be released from the Liens
granted pursuant to the Security Documents and each Lender hereby
authorizes and instructs the Administrative Agent to take such action as
the Borrower reasonably may request to evidence such release.
7.6 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital
Stock of the Borrower or any Subsidiary or any warrants or options to
purchase any such Capital Stock, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Borrower
or any Subsidiary (collectively, "Restricted Payments"), except that (i)
any Subsidiary may make Restricted Payments to the Borrower or any Wholly
Owned Subsidiary Guarantor or (ii) Panavision Canada Holdings may make
Restricted Payments to repurchase its stock options or repurchase its
outstanding shares from time to time, up to but not exceeding $3,000,000 in
the aggregate.
7.7 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure, except (a) Capital Expenditures of the Borrower
and its Subsidiaries in the ordinary course of business not exceeding
$50,000,000 per fiscal year for the 1998-2000 fiscal years of the Borrower
and $52,000,000 in each fiscal year of the Borrower thereafter; provided
that (i) up to $15,000,000 of any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over
for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall
be deemed made, first, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (i) above and, second, in respect of
amounts permitted for such fiscal year as provided above; (b) Capital
Expenditures made with the proceeds of any event which would be a Recovery
Event but for the second parenthetical clause in the definition thereof;
(c) Capital Expenditures made in connection with a new facility to be
leased by Panavision Europe Limited located at Bristol Road, Greenford,
Middlesex UB6 ONN, United Kingdom with the proceeds of the Disposition of
facilities owned by Panavision Europe Limited located at Wycombe Road,
Wembley, Middlesex HAO 1QD, United Kingdom and Wycombe Road, Wembley,
Middlesex HAO 1QN, United Kingdom; (d) Capital Expenditures made with
Excess Cash Flow not required to be applied to the prepayment of the Term
Loans and/or the reduction of the Revolving Credit Commitments pursuant to
Section 2.10(b); and (e) Capital Expenditures made with the proceeds of any
Dispositions of Property by the Borrower or its Subsidiaries pursuant to
Section 7.5(a)(i).
7.8 Limitation on Investments, Loans and Advances.
Make any advance, loan, extension of credit (by way of guaranty or otherwise)
or capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting all or a material part of a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary
course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees, directors and officers of
the Borrower or its Subsidiaries in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $1,500,000 at any one time outstanding;
(e) the Recapitalization;
(f) investments made by the Borrower or any of its Subsidiaries
with the proceeds of any Recovery Event or any event which would be a
Recovery Event but for the parenthetical clause in the definition
thereof;
(g) (i) any Subsidiary may make investments in the Borrower (by
way of capital contribution loan, or otherwise), (ii) the Borrower
and any Subsidiary may make investments in, or create, any Subsidiary
Guarantor (by way of capital contribution, loan or otherwise),
provided that, in any such case, the requirements of Section 6.9 are
satisfied, (iii) the Borrower, any Subsidiary Guarantor, or any
Specified Foreign Subsidiary may make investments in, or create, any
Foreign Subsidiary (by way of capital contribution, loan or
otherwise), provided that (x) the requirements of Section 6.9 are
satisfied and (y) the aggregate amount of all investments in such
Foreign Subsidiaries that are not Indebtedness and that have not been
repaid in cash to the Borrower, any Subsidiary Guarantor or any
Specified Foreign Subsidiary (whichever such Person made such
investment) shall not exceed (I) $15,000,000 less (II) the aggregate
principal amount of any Indebtedness of any Foreign Subsidiary at any
such time outstanding in accordance with Section 7.2(b)(iii) and (iv)
any Foreign Subsidiary (other than any Specified Foreign Subsidiary)
may make investments in, or create, any Foreign Subsidiary (by way of
capital contribution, loan or otherwise);
(h) investments by the Borrower and its Subsidiaries in the
ordinary course of business in accounts, contract rights and chattel
paper (as defined in the Uniform Commercial Code), put and call
foreign exchange options and foreign exchange forwards and futures to
the extent necessary to hedge foreign exchange exposures and notes
receivable, and in Rate Hedging Agreements;
(i) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers or in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising out of the ordinary course of
business; provided that the Borrower and its Subsidiaries have paid
no new consideration (other than the forgiveness of Indebtedness or
other obligations) therefor; and
(j) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom (including,
without limitation, compliance with Section 7.15), other investments
in Persons not to exceed $7,500,000 in the aggregate at any time
(such investments to be measured by their fair market value at the
time of the investment).
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with
respect to the Senior Subordinated Notes (other than scheduled interest
payments required to be made in cash or pursuant to the Exchange Offer or
any refinancing of the Senior Subordinated Notes contemplated by the
definition thereof), (b) amend, modify, waive or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to,
any of the terms of the Senior Subordinated Notes (other than any such
amendment, modification, waiver or other change which (i) would extend the
maturity or reduce the amount of any payment of principal thereof or which
would reduce the rate or extend the date for payment of interest thereon
and are otherwise no less favorable to the Lenders (including without
limitation the subordination provisions thereof) and (ii) does not involve
the payment of a consent fee) or (c) designate any Indebtedness as
"Designated Senior Debt" for the purposes of the Senior Subordinated Note
Indenture.
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction
is otherwise permitted under this Agreement, in the ordinary course of
business of the Borrower or such Subsidiary, as the case may be, and upon
fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided,
however, that this Section 7.10 shall not apply to (i) any transaction
contemplated by a Tax Sharing Agreement entered into on or after the date
on which the Borrower becomes a member of the affiliated group of
corporations of which the Equity Investor is the common parent for purposes
of filing a consolidated federal income tax return and (ii) the
transactions contemplated by the Recapitalization Agreement, the
Stockholders Agreement and the Escrow Agreement (as in effect on the date
hereof and as amended, supplemented or otherwise modified from time to time
in a manner that is not materially adverse to the Lenders).
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or
any Subsidiary of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of the Borrower or
such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods.
Permit the fiscal year of the Borrower to end on a day other than December 31
or change the Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits
the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property, assets or
revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the
Guarantee and Collateral Agreement, other than (a) this Agreement and the
other Loan Documents, (b) the Senior Subordinated Note Indenture and (c)
any agreements governing any purchase money Liens or Capital Leases
otherwise permitted hereby (in which case, any prohibition or limitation
shall only be effective against the assets financed thereby); provided that
any of the Borrower and its Subsidiaries may enter into any such agreement
to the extent that such agreement is in connection with a Lien permitted by
Section 7.3 or a sale of assets permitted by Section 7.5 and any such
prohibitions or limitations apply only to the Property encumbered by such
Lien or subject to such sale.
7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of the Borrower
to (a) pay dividends or make any other distributions in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to,
the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to the Borrower or any other Subsidiary of the Borrower or (c)
transfer any of its assets to the Borrower or any other Subsidiary of the
Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents or the
Senior Subordinated Note Indenture, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary or (iii) any restrictions with respect
to the Borrower or any of its Subsidiaries imposed pursuant to an agreement
which has been entered into in connection with a Lien permitted by Section
7.3 or a sale of assets permitted by Section 7.5 and any such prohibitions
or limitations apply only to the Property encumbered by such Lien or
subject to such sale.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are reasonably related thereto.
7.16 Limitation on Changes to Certificate of Incorporation.
Amend its certificate of incorporation in any manner materially adverse to
the Lenders without the prior written consent of the Required Lenders.
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within three days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or
deemed made; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 6.4(a) (with respect to the Borrower only), Section VII or
Section 5.6 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for
a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall Cross
Default; or
(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity of the
Borrower shall, or in the reasonable opinion of the Required Lenders
is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist, with respect
to a Plan; provided that, in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events
or conditions, if any, would be reasonably likely to have a Material
Adverse Effect; or
(h) (i) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not covered by insurance) of $5,000,000 or
more or (ii) any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and in the case of either
clause (i) or (ii), there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or
(i) Any of the Security Documents shall cease, for any reason
(other than any act on the part of the Administrative Agent or any
Lender), to be in full force and effect, or any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall
cease, for any reason (other than any act on the part of the
Administrative Agent or any Lender), to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than any act
on the part of the Administrative Agent or any Lender), to be in full
force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or
(k) Any Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof
shall cease, for any reason, to be validly subordinated to the
Obligations in respect of the Loan Documents or the obligations of
the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated
Note Indenture, or any Loan Party, any Affiliate of any Loan Party,
the trustee in respect of the Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately
become due and payable. With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under
such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower hereunder and
under the other Loan Documents then due and payable shall have been paid in
full, the balance, if any, in such cash collateral account shall be
returned to the Borrower (or such other Person as may be lawfully entitled
thereto).
SECTION IX. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action
on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or
any other Loan Document (except to the extent that any of the foregoing are
found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made by any Loan Party or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document
or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or the Loan Parties), independent accountants and
other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or,
if so specified by this Agreement, all Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received
notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties
to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and
made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which
may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their respective Aggregate Exposure Percentages
in effect on the date on which indemnification is sought under this Section
9.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Aggregate Exposure Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or
in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements which are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Administrative Agent in Its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as though
the Administrative Agent was not the Administrative Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, the Administrative Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall (unless an Event of Default under
Section 8(a) or Section 8(f) with respect to the Borrower shall have
occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the
part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is
the subject of a Disposition which is permitted by this Agreement or which
has been consented to in accordance with Section 10.1.
9.11 The Arranger. The Arranger, in its capacity as
such, shall have no duties or responsibilities, and shall incur no liability,
under this Agreement and the other Loan Documents.
9.12 The Documentation Agent. The Documentation Agent, in its
capacity as such, shall have no duties or responsibilities, and shall incur
no liability, under this Agreement and the other Loan Documents.
SECTION X. MISCELLANEOUS
10.1 Amendments and Waivers. (a) Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or (with the written consent of the Required
Lenders) the Administrative Agent and each Loan Party party to the relevant
Loan Document may, from time to time, (i) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (ii) waive, on such terms and conditions as the
Required Lenders, or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, extend the scheduled date of any amortization payment
in respect of any Term Loan, reduce the stated rate of any interest, fee or
letter of credit commission payable hereunder or extend the scheduled date
of any payment thereof, or increase the amount or extend the expiration
date of any Lender's Revolving Credit Commitment, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or
waive any provision of this Section 10.1 or reduce any percentage specified
in the definition of Required Lenders or Required Prepayment Lenders,
consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Loan Documents, release
all or substantially all of the Collateral or release all, or such number
of the Subsidiary Guarantors as represent substantially all of the credit
support for the Obligations provided by the Subsidiary Guarantors at such
time, from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) reduce the
percentage specified in the definition of Majority Facility Lenders without
the written consent of all Lenders under each affected Facility; (iv)
change the allocation of payments among the Tranche A Term Loans, the
Tranche B Term Loans and the Revolving Credit Facility, as applicable,
specified in Sections 2.10(c) or 2.16(b) without the consent of the
Required Prepayment Lenders; (v) amend, modify or waive any provision of
Section 9 without the written consent of the Administrative Agent; (vi)
amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the
Loan Parties, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent
thereon.
(b) To the extent that the execution, delivery or performance
of any Loan Document constitutes a Default or an Event of Default under
(and as defined in) the Existing Credit Agreement, each Lender hereunder
which is a party to the Existing Credit Agreement hereby waives such
Default or Event of Default.
(c) To the extent that the existence or performance of any
Basic Document (as defined in the Existing Credit Agreement) constitutes a
Default or an Event of Default hereunder, each Lender hereunder hereby waives
such Default or Event of Default; provided that the Existing Credit Agreement
is terminated in the manner and at the time contemplated by Section 5.1(f).
(d) Each Lender hereby agrees that any Security Document under
(and as defined in) the Existing Credit Agreement, and any financing
statement or similar filing on account thereof, which remains in effect
after the date hereof shall be deemed not to constitute a "Lien" for
purposes of this Agreement; provided that such Security Documents are
terminated in the manner and at the time contemplated by Section 5.1(f) and
the Borrower shall use best efforts to terminate or cause to be terminated
such filings upon the termination of the Existing Credit Agreement.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the case of the
Borrower and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower: Panavision Inc.
6219 DeSoto Avenue
Woodland Hills, CA 91367
Attention: Chief Financial Officer
Telecopy: 818-316-1110
Telephone: 818-316-1000
The Administrative Agent: The Chase Manhattan Bank,
Loan & Agency Services
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Rana Kahn
Telecopy: 212-552-5700
Telephone: 212-552-7463
with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Tracey Navin
Telecopy: 212-270-4164
Telephone: 212-270-8916
with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Eva Huston
Telecopy: 212-270-4164
Telephone: 212-270-2307
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents
and in any document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Arranger for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of
counsel to the Administrative Agent but not including any fees and
disbursements of counsel to the Lenders, (b) to pay or reimburse each
Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of
counsel to each Lender and of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Documentation Agent and the
Administrative Agent and their respective officers, directors, employees,
affiliates, and agents (each, an "indemnitee") harmless from and against
any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the other Loan
Documents, including, without limitation, any of the foregoing relating to
the use of proceeds of the Loans and other extensions of credit hereunder
or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses
of legal counsel in connection with claims, actions or proceedings by any
indemnitee against the Borrower hereunder (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"); provided that the
Borrower shall have no obligation hereunder to any indemnitee with respect
to (i) indemnified liabilities to the extent such indemnified liabilities
are found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such
indemnitee, (ii) legal proceedings commenced against any such indemnified
person by any security holder or creditor (other than the Borrower, its
Subsidiaries and its Affiliates) thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity
as such, (iii) legal proceedings commenced against any Lender or any
Issuing Lender (in their respective capacities as such) by any other Lender
or by the Administrative Agent (provided that for purposes of this clause
(iii) only, each of such other Lender, Issuing Lender and the
Administrative Agent shall be entitled to indemnity hereunder to the extent
that such legal proceedings have been commenced by it to enforce the
provisions of the Loan Documents) or (iv) amounts of the types referred to
in clauses (a) through (c) above except as provided therein. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waive and agree to cause its Subsidiaries to so waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
indemnitee. The agreements in this Section shall survive repayment of the
Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) Except as otherwise provided in Section 10.18, this Agreement shall be
binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under
this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Loan for all
purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or
any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the Loans or any fees payable hereunder, or postpone
the date of the final maturity of the Loans, in each case to the extent
subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement
to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement; provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
Section 10.7(a) as fully as if it were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of
Sections 2.17, 2.18 and 2.19 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.18, such Participant shall
have complied with the requirements of said Section and provided, further,
that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and with written notice to the Administrative Agent, at any
time and from time to time assign to any Lender or any affiliate or
Approved Fund thereof or, with the consent of the Borrower, the
Administrative Agent and the Issuing Lender (which, in each case, shall not
be unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an "Assignee") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance (an
"Assignment and Acceptance"), substantially in the form of Exhibit D, executed
by such Assignee, such Assignor, and the Administrative Agent (and, where the
consent of the Borrower is required pursuant to the foregoing provisions,
by the Borrower) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment
to an Assignee (other than any Lender or any affiliate or Approved Fund
thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests
under this Agreement), unless otherwise agreed by the Borrower and the
Administrative Agent. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment and/or Loans as set
forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the
Borrower shall not be required for any assignment which occurs at any time
when any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time and any Notes
evidencing such Loans. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent
and the Lenders shall treat each Person whose name is recorded in the
Register as the owner of the Loan and any Note evidencing such Loan
recorded therein for all purposes of this Agreement. Any assignment of any
Loan whether or not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register (and
each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only
upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee and the old
Notes shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate or Approved Fund thereof or a
Person under common management with such Lender, by the Borrower and the
Administrative Agent) together with payment to the Administrative Agent of
a registration and processing fee of $3,500 (except that no such registration
and processing fee shall be payable in the case of an Assignee which is
already a Lender or is an affiliate or Approved Fund of a Lender), the
Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower. On or
prior to such effective date, the Borrower, at its own expense, upon
request, shall execute and deliver to the Administrative Agent (in exchange
for the Revolving Credit Note and/or Term Notes, as the case may be, of the
assigning Lender) a new Revolving Credit Note and/or Term Notes, as the
case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment and/or applicable Term Loans, as the case may
be, assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Revolving Credit Commitment
and/or Term Loans, as the case may be, upon request, a new Revolving Credit
Note and/or Term Notes, as the case may be, to the order of the assigning
Lender in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such
new Notes shall be dated the Closing Date and shall otherwise be in the
form of the Note replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of
Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Loan or Note to any Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such
other Lender's Loans or the Reimbursement Obligations owing to such other
Lender, or interest thereon, such Benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each
such other Lender's Loan and/or of the Reimbursement Obligations owing to
each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon both the occurrence of an Event of Default and
acceleration of the obligations owing in connection with this Agreement,
each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, to set off and appropriate and apply
against any indebtedness, whether matured or unmatured, of the Borrower to
such or any other Lender, any amount owing from such Lender to the Borrower
at, or at any time after, the happening of both of the above mentioned
events, and such right of set-off may be exercised by such Lender against
the Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receivers, custodian or execution,
judgment or attachment creditor of the Borrower, or against anyone else
claiming through or against the Borrower or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receivers, or
execution, judgment or attachment creditor, notwithstanding the fact that
such right of set-off shall not have been exercised by such Lender prior to
the making, filing or issuance, or service upon such Lender of, or of
notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance
of execution, subpoena, order or warrant. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender; provided that the failure to give such
notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof and supersede any
and all other oral or written agreements heretofore made (including,
without limitation, the Commitment Letter and the Fee Letter (except as
expressly provided for therein)), and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of
the United States for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 10.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.12 any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all Confidential Information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any Lender, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
which agrees to comply with the provisions of this Section, (c) to the
employees, directors, agents, attorneys, accountants and other professional
advisors of such Lender or its affiliates, (d) upon the request or demand
of any Governmental Authority having jurisdiction over the Administrative
Agent or such Lender, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) which has been publicly
disclosed other than in breach of this Section 10.15, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued
with respect to such Lender, (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document or (j) to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty
agrees to be bound by the provisions of this Section 10.15); provided that,
if reasonably requested by the Borrower, the Administrative Agent and the
Lenders shall make commercially reasonable efforts to determine, and inform
the Borrower of, the Persons who received such Confidential Information. As
used herein, the term "Confidential Information" means all information
contained in materials relating to the Borrower and its Subsidiaries
provided to the Administrative Agent or any Lender by any Loan Party or its
representatives or agents other than (x) information which is at the time
so provided or thereafter becomes generally available to the public other
than as a result of a disclosure by the Administrative Agent or one or more
Lenders, (y) information which was available to the Administrative Agent or
any Lender prior to its disclosure to the Lenders by the Borrower, its
representatives or agents and (z) information which becomes available to
the Administrative Agent or any one or more Lenders from a source other
than the Borrower, its representatives or agents.
10.16 Releases of Collateral Security and Guarantee
Obligations. Notwithstanding anything to the contrary contained herein or
in the Guarantee and Collateral Agreement, upon request of the Borrower,
the Administrative Agent shall (without any notice to or vote or consent of
any Lender) take action having the effect of releasing any Collateral
and/or guarantee obligations provided for in the Guarantee and Collateral
Agreement to the extent necessary to permit the consummation of any transactions
not prohibited hereunder, by the relevant Person in accordance with the
provisions of this Agreement and the other Loan Documents.
10.17 Releases. At such time as the Payment Obligations have
been Fully Satisfied, the Collateral shall be released from the Liens
created by the Security Documents and the Security Documents and all
obligations (other than those expressly stated to survive such termination)
of the Administrative Agent, the Borrower or any Subsidiary thereunder
shall terminate, all without delivery of any instrument or performance of
any act by any party, and all rights to the Collateral shall revert to the
Borrower and Subsidiaries. At the request and sole expense of the Borrower
or any Subsidiary following any such termination, the Administrative Agent
shall deliver to the Borrower or such Subsidiary any Collateral held by the
Administrative Agent thereunder and execute and deliver to the Borrower or
such Subsidiary such documents as the Borrower or Subsidiary shall
reasonably request to evidence such termination.
10.18 Effectiveness of Agreement. Notwithstanding the execution
and delivery of this Agreement by the Borrower, the Administrative Agent
and each Lender, during the period from the date of this Agreement to but
not including the Closing Date, the provisions of this Agreement shall be
of no force and effect with respect to the Borrower and the Borrower shall
have no liability or obligation whatsoever to the Administrative Agent or
any Lender under this Agreement or any other Loan Document. On the Closing
Date (without any action by or notice to any party), this Agreement shall
become and thereafter remain effective and binding upon the parties hereto
in accordance with its terms. In the event that (i) the Recapitalization
does not occur on or prior to June 30, 1998 or (ii) the Recapitalization is
abandoned or the Recapitalization Agreement is terminated, in each case, on
or prior to June 30, 1998, this Agreement shall be deemed null and void on
June 30, 1998 or such earlier date, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
PANAVISION INC.
By: /s/ Jeffrey J. Marcketta
-----------------------------------
Name: Jeffrey J. Marcketta
Title: Executive Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ Tracey Narvin Ewing
-----------------------------------
Name: Tracey Navin Ewing
Title: Vice President
Exhibit 4.4
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of June 4, 1998, between
Panavision Inc., a Delaware corporation ("Panavision"), and PX Escrow
Corp., a Delaware corporation ("PX Escrow").
W I T N E S E T H:
WHEREAS, PX Escrow and The Bank of New York, as trustee (the
"Trustee") executed and delivered the Indenture, dated as of February 11,
1998 (as heretofore amended and supplemented, the "Indenture"), providing
for the issuance of the 9 5/8% Senior Subordinated Discount Notes Due 2006
(the "Securities");
WHEREAS, concurrently herewith, Panavision is executing and
delivering to the Trustee, pursuant to Section 5.01(c) of the Indenture, a
Supplemental Indenture, dated as of the date hereof, pursuant to which
Panavision is assuming PX Escrow's obligations under the Indenture and the
Securities;
WHEREAS, PX Escrow is a party to each of (i) the Purchase
Agreement, dated February 6, 1998 (the "Purchase Agreement"), among PX
Escrow and Credit Suisse First Boston Corporation and Schroder & Co. Inc.
(collectively, the "Initial Purchasers"), (ii) the Registration Agreement,
dated February 6, 1998 (the "Registration Agreement"), among PX Escrow and
the Initial Purchasers and (iii) the Escrow Agreement, dated as of February
11, 1998 (the "Escrow Agreement" and, together with the Purchase Agreement
and Registration Agreement, the "Assigned Agreements"), between PX Escrow
and The Bank of New York, as escrow agent;
WHEREAS, PX Escrow, pursuant to this Assumption Agreement,
desires to assign all of its right, title and interest to, and liabilities
and obligations under, the Assigned Agreements to Panavision and Panavision
desires to assume all of PX Escrow's right, title and interest thereto and
liabilities and obligations thereunder; and
WHEREAS, this Assumption Agreement has been duly authorized by
all necessary corporate action on the part of each of Panavision and PX
Escrow.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, Panavision and PX Escrow mutually covenant and agree:
ARTICLE I
Assignment and Assumption
Section 1.1. Assignment. PX Escrow hereby grants, assigns,
conveys, sets over and delivers to Panavision and its successors and
assigns all of its right, title and interest to, and liabilities and
obligations under, the Assigned Agreements, to have and hold unto
Panavision and its successors and assigns forever.
Section 1.2. Assumption. In consideration of the assignment
made herein to Panavision, Panavision hereby agrees to assume, pay, perform
and observe all covenants, agreements, liabilities and obligations of PX
Escrow under the Assigned Agreements. As provided in each of the Assigned
Agreements, PX Escrow shall be released and discharged from and shall not
be responsible to any person for the discharge or performance of any duty
or obligation pursuant to or in connection with the Assigned Agreements and
Panavision shall be substituted in lieu of PX Escrow as a party to each of
the Assigned Agreements.
Section 1.3. Further Assurances. Each of PX Escrow and
Panavision shall execute such additional documents and instruments and take
such further action as may be reasonably required or desirable to carry out
the provisions hereof.
ARTICLE II
Miscellaneous
Section 2.1. Severability. In case any provision in this
Assumption Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 2.2. Governing Law. This Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction
would be required thereby.
Section 2.3. Multiple Originals. The parties may sign any
number of copies of this Assumption Agreement. Each signed copy shall be
an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Assumption Agreement.
Section 2.4. Headings. The Article and Section headings herein
are have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the
terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Assumption Agreement to be duly executed as of the date first written
above.
PANAVISION INC.
By: /s/ Jeffrey J. Marcketta
-------------------------------
Name: Jeffrey J. Marcketta
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
PX ESCROW CORP.
By: /s/ Glenn P. Dickes
--------------------------------
Name: Glenn P. Dickes
Title: Vice President and
Secretary
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: James R. Conroy
(212) 572-5980
PANAVISION STOCKHOLDERS APPROVE MAFCO HOLDINGS MERGER
PROPOSAL; RECAPITALIZATION OF PANAVISION CONSUMMATED
(New York, New York and Woodland Hills , California, June 4,
1998)-- The stockholders of Panavision Inc. (NYSE: PVI) today approved the
merger of a subsidiary of Mafco Holdings Inc. into Panavision. The merger
and related recapitalization of Panavision were completed immediately
thereafter. As a result of the recapitalization, Panavision has
approximately 8.0 million shares of common stock outstanding, of which
Mafco Holdings owns approximately 5.8 million, or about 72%. Prior to the
recapitalization, Panavision had about 19.0 million shares outstanding.
Under the terms of the transaction, Panavision stockholders
could elect either to retain their shares or exchange them for cash.
Stockholders who elected to exchange their shares for cash will receive, as
a result of proration, approximately $25.72 in cash and .0475 of a share in
recapitalized Panavision for each Panavision share formerly held. Funds for
the Panavision recapitalization totaled approximately $600 million.
Panavision Inc. is a leading designer and manufacturer of
high-precision film camera systems, comprising cameras, lenses and
accessories for the motion picture and television industries. Panavision
systems are rented through its domestic and international owned and
operated facilities and agent network.
Mafco Holdings Inc. is a diversified private holding company.
Among the operating companies in which it owns a controlling interest are
Revlon, Inc., Consolidated Cigar Corporation and California Federal Bank.
