UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 01-12429
AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1304369
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
106 West 14th Street
Kansas City, Missouri 64105-1977
(Address of principal executive offices) (Zip Code)
(816)221-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No ________
Title of Each Class of Common Stock Outstanding at June 30, 1994
Common Stock, 66 2/3 cents par value 5,295,130
Class B Stock, 66 2/3 cents par value 11,157,000
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
PERIODS (13 WEEKS) ENDED JUNE 30, 1994, JULY 1, 1993
AND YEAR (52 WEEKS) ENDED MARCH 31, 1994
INDEX
Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED STATEMENTS OF OPERATIONS 3
CONSOLIDATED BALANCE SHEETS 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 15
SIGNATURES 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT 4(a) - FIRST AMENDED AND RESTATED LOAN
AGREEMENT DATED JUNE 14, 1994 AMONG
AMERICAN MULTI-CINEMA, INC., AS THE BORROWER
AND AMC ENTERTAINMENT INC., AS THE GUARANTOR,
AND THE BANK OF NOVA SCOTIA AND BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION 18
EXHIBIT 4(b) - SIGNIFICANT SUBSIDIARY GUARANTY
FROM THE UNDERSIGNED SUBSIDIARIES OF
AMERICAN MULTI-CINEMA, INC., TO THE BANK OF NOVA
SCOTIA, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION AND VARIOUS OTHER COMMERCIAL BANKING
INSTITUTIONS, AS THE BANKS, THE BANK OF NOVA SCOTIA,
AS AGENT AND BANK OF AMERICAN NATIONAL TRUST AND
SAVINGS ASSOCIATION AS CO-ARRANGER 81
EXHIBIT 11 - STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS 90
NO REPORTS ON FORM 8-K WERE FILED OR REQUIRED
TO BE FILED FOR THE THIRTEEN WEEKS ENDED
JUNE 30, 1994
2
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<CAPTION>
(Unaudited)
Thirteen Fifty-two
Weeks Ended Weeks Ended
6/30/94 7/1/93 3/31/94
<S> <C> <C> <C>
Revenues
Admissions $ 84,880 $ 93,726 $389,454
Concessions 38,929 42,085 176,274
Other 4,672 4,808 21,725
Total revenues 128,481 140,619 587,453
Expenses
Film rentals 40,284 48,182 197,461
Concession merchandise 6,518 6,640 26,349
Other 54,633 55,320 225,367
Total cost of operations 101,435 110,142 449,177
Depreciation and amortization 8,360 9,824 38,048
General and administrative expenses 9,620 8,315 39,492
Total expenses 119,415 128,281 526,717
Operating income 9,066 12,338 60,736
Other expense (income)
Interest expense
Corporate borrowings 6,165 6,748 25,699
Capitalized leases 2,795 2,738 10,676
Investment income (2,563) (596) (1,156)
Minority interest - (1,599) (1,599)
Loss (gain) on disposition of assets (2) 57 (296)
Earnings before income taxes 2,671 4,990 27,412
Income tax provision 1,100 1,900 12,100
Net earnings 1,571 3,090 15,312
Preferred dividends 1,750 - 538
Net earnings (loss) for common shares $ (179) $ 3,090 $ 14,774
Earnings (loss) per share $ (.01)$ .19 $ .89
Weighted average number of shares outstanding 16,442 16,289 16,521
</TABLE>
See Notes to Consolidated Financial Statements
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
ASSETS
<CAPTION>
(Unaudited)
6/30/94 7/1/93 3/31/94
<S> <C> <C> <C>
Current assets:
Cash and equivalents $ 20,595 $ 30,387 $ 32,319
Investments 133,099 2,094 119,150
Receivables, net of allowance for doubtful
accounts of $1,060 at June 30, 1994, $1,270
at March 31, 1994 and $598 at July 1, 1993 9,305 7,002 9,197
Other current assets 11,815 9,047 11,575
Total current assets 174,814 48,530 172,241
Property, net 253,081 274,527 252,861
Intangible assets, net 48,851 41,941 49,403
Other long-term assets 24,335 26,711 26,771
Total assets $501,081 $391,709 $501,276
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,646 $ 27,838 $ 28,706
Accrued expenses and other liabilities 46,995 43,932 48,053
Estimated IRS settlement 3,146 3,146 3,146
Current maturities of borrowings and
capital lease obligations 2,271 13,001 2,168
Total current liabilities 81,058 87,917 82,073
Corporate borrowings 200,132 200,149 200,115
Capital lease obligations 66,631 64,110 65,905
Other long-term liabilities 23,135 18,272 22,779
Total liabilities 370,956 370,448 370,872
Commitments and contingencies
Stockholders' equity
Cumulative Convertible Preferred stock;
4,000,000 shares issued and outstanding;
(aggregate liquidation preference
of $100,000,000) 2,667 - 2,667
Common stock; 5,295,130 shares issued and
outstanding at June 30, 1994, 5,266,830
shares at March 31, 1994 and 4,539,380 shares
at July 1, 1993 3,530 3,026 3,511
Class B stock; 11,157,000 shares issued and
outstanding at June 30, 1994 and March 31, 1994
and 11,730,000 shares at July 1, 1993 7,438 7,820 7,438
Additional paid-in capital 107,065 12,800 106,951
Retained earnings (accumulated deficit) 9,425 (2,385) 9,837
Total stockholders' equity 130,125 21,261 130,404
Total liabilities and stockholders' equity $501,081 $391,709 $501,276
See Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<CAPTION>
(Unaudited)
Thirteen Fifty-two
Weeks Ended Weeks Ended
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 6/30/94 7/1/93 3/31/94
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,571 $ 3,090 $ 15,312
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization - property 7,280 6,686 29,074
- other assets 1,080 1,209 7,075
Loss (gain) on sale of long-term assets (2) 57 (296)
Change in assets and liabilities net of
effects from acquisitions:
Receivables (108) (648) (2,843)
Other current assets (240) 1,046 (1,925)
Accounts payable (60) 4,414 5,187
Accrued expenses and other liabilities (702) 4,376 13,542
Estimated IRS settlement - (1,650) (1,650)
Other, net (744) 1,651 204
Total adjustments 6,504 17,141 48,368
Net cash provided by operating activities 8,075 20,231 63,680
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisitions (6,685) (1,489) (10,651)
Investments in short term instruments, net (13,949) 24,015 (93,041)
Proceeds from sale of other investments 9,699 - -
Purchase of partnership interest,
net of cash acquired - (8,486) (8,486)
Proceeds from disposition of property 30 - 1,270
Other, net (6,500) 244 (597)
Net cash provided by (used in) investing
activities (17,405) 14,284 (111,505)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit agreements - 30,000 30,000
Repayments under line of credit agreements - (20,000) (30,000)
Principal payments under capital leases (535) (361) (1,700)
Repayment of acquired subsidiary indebtedness - (37,000) (37,000)
Other repayments (9) (764) (1,720)
Proceeds from issuance of common stock 133 - 1,321
Proceeds from issuance of preferred stock - - 95,600
Dividends paid on preferred stock (1,983) - -
Deferred financing costs - - (354)
Net cash provided by (used) in financing
activities (2,394) (28,125) 56,147
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (11,724) 6,390 8,322
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 32,319 23,997 23,997
CASH AND EQUIVALENTS AT END OF PERIOD $ 20,595 $ 30,387 $ 32,319
</TABLE>
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except narratives)
<CAPTION>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
(Unaudited)
Thirteen Fifty-two
Weeks Ended Weeks Ended
6/30/94 7/1/93 3/31/94
<S> <C> <C> <C>
Capital lease obligations incurred in
connection with property acquired $ 1,363 $ - $ 5,219
On May 28, 1993, a wholly-owned subsidiary of American Multi-Cinema, Inc.
( " A MC"), acquired a fifty percent partnership interest in Exhibition
Enterprises Partnership ("EEP") from TPI Entertainment, Inc. Together with the
partnership interest already owned, EEP became wholly-owned by subsidiaries of
AMC. Cash and equivalents held by EEP at May 28, 1993 totaled $9,014,000.
Liabilities assumed from the May 28, 1993 transaction follows:
Fair value of assets acquired
(including cash and equivalents) $ 70,170
Cash paid (17,500)
Liabilities assumed $ 52,670
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
(Unaudited)
Thirteen Fifty-two
Weeks Ended Weeks Ended
6/30/94 7/1/93 3/31/94
Cash paid during the period for:
Interest (net of amounts capitalized) $ 2,825 $ 3,511 $35,742
Income taxes 2,896 1,161 13,659
Income taxes resulting from IRS settlement - 1,650 1,650
Cash received during the period for:
Interest and dividend income 965 634 1,973
Income tax refunds - 106 417
See Notes to Consolidated Financial Statements
</TABLE>
<TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share amounts)
(Unaudited)
<CAPTION> Additional Retained Total
Preferred Stock Common Stock Class B Stock Paid-in Earnings Stockholders'
Shares Amount Shares Amount Shares Amount Capital (Deficit) Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, April 1, 1993 - $ - 4,539,380 $3,026 11,730,000 $7,820 $12,800 $(5,475) $ 18,171
Net earnings for the
thirteen weeks ended
July 1, 1993 - - - - - - - 3,090 3,090
Balance, July 1, 1993 - - 4,539,380 3,026 11,730,000 7,820 12,800 (2,385) 21,261
Net earnings for the
thirty-nine weeks ended
March 31, 1994 - - - - - - - 12,222 12,222
Net proceeds from sale
of Common Stock - - 154,450 103 - - 1,218 - 1,321
Net proceeds from sale
of Preferred Stock 4,000,000 2,667 - - - - 92,933 - 95,600
Conversion of
Class B Stock - - 573,000 382 (573,000) (382) - - -
Balance,
March 31, 1994 4,000,000 2,667 5,266,830 3,511 11,157,000 7,438 106,951 9,837 130,404
Net earnings for the
thirteen weeks
ended June 30, 1994 - - - - - - - 1,571 1,571
Net proceeds from sale
of Common Stock - - 28,300 19 - - 114 - 133
Dividends declared:
$1.75 Preferred
Stock - - - - - - - (1,983) (1,983)
Balance,
June 30, 1994 4,000,000 $2,667 5,295,130 $3,530 11,157,000 $7,438 $107,065 $ 9,425 $130,125
See Notes to Consolidated Financial Statements
</TABLE>
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1994
(UNAUDITED)
NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
AMC Entertainment Inc. ("AMCE"), through American Multi-Cinema, Inc.
("AMC") and its subsidiaries (collectively with AMCE, unless the context
otherwise requires, the "Company"), is principally involved in the
operation of motion picture theatres.
In the opinion of management, the accompanying consolidated financial
data contains all adjustments (which comprise only normal recurring
accruals) necessary to present fairly its financial position as of June 30,
1994 and July 1, 1993 and the results of operations and cash flows.
The interim consolidated financial data is submitted in response to the
requirements of Form 10-Q and should be read in conjunction with the notes
to the consolidated financial statements appearing in the Company's 1994
annual report.
Due to the seasonal nature of the Company's business, results for the
thirteen weeks ended June 30, 1994 are not necessarily indicative of the
results to be expected for the entire year.
Fiscal Year
The Company has a 52/53 week fiscal year ending on the Thursday closest
to the last day of March (March 30, 1995 for the current year, which
includes fifty-two weeks and March 31, 1994 for the prior year, which
included fifty-two weeks).
Earnings (Loss) Per Share
Primary earnings (loss) per share is computed based upon net earnings
(loss) for the period less preferred stock dividends divided by the sum of
the weighted average number of common shares outstanding and outstanding
stock options, when their effect is dilutive.
Presentation
Certain amounts have been reclassified from prior period consolidated
financial statements to conform with the current year presentation. Such
amounts were not material.
NOTE 2 - ACQUISITION OF EXHIBITION ENTERPRISES PARTNERSHIP
On May 28, 1993, the Company completed the acquisition of the remaining
partnership interest in Exhibition Enterprises Partnership ("EEP") for
$17,500,000 in cash. At the time of the acquisition EEP owned 60 theatres
containing 452 screens which were managed by the Company. The acquisition
also required the repayment of $37,000,000 in EEP bank indebtedness, which
was funded by borrowings under a revolving line of credit of $30,000,000
together with cash on hand. The acquisition was accounted for under the
purchase method of accounting and EEP was consolidated, for financial
reporting purposes, as a wholly-owned subsidiary.
For fiscal 1994, the Company accounted for its investment in EEP on a
consolidated basis by including EEP's revenues and expenses in the
Consolidated Statement of Operations beginning April 2, 1993. One-half of
EEP's net loss for the period April 2, 1993 through May 27, 1993
($1,599,000) has been recorded as minority interest in the Consolidated
Statement of Operations.
NOTE 3 - BORROWINGS
Loan Agreement
Effective August 10, 1992, AMC entered into a three year loan agreement
with two banks to provide a revolving line of credit of up to $40,000,000
for working capital and other general corporate purposes, which loan
agreement was amended and restated as of June 14, 1994 (the "Credit
Facility"). The Company has the option to borrow at rates based on either
the bank's base rate or LIBOR and is required to pay an annual commitment
fee based on margin ratios that could result in a rate between 1/4 and 1/2
of 1% on the unused amount of the commitment. At June 30, 1994, AMC had no
borrowings on the Credit Facility and could borrow up to $40,000,000 as
provided in the loan agreement.
The Credit Facility includes several financial covenants. The Company
is required to maintain a maximum net debt to consolidated EBITDA ratio of
4.50 to 1 and a minimum fixed charge coverage ratio of 1.40 to 1. In
addition, the Credit Facility among other things (i) generally limits the
Company's capital expenditures to $100,000,000 per year, reduced by the
amount of investments made during such year in any entity which is not a
guarantor of the Credit Facility, and (ii) generally limits investments in
entities which are not guarantors of the Credit Facility, or which do not
become wholly-owned subsidiaries of AMC as a result of the investment, to
$100,000,000 in the aggregate, plus the greater of 25% of free cash flow or
50% of consolidated net income (minus 100% of consolidated net income if
negative), as defined in the Credit Facility. As of June 30, 1994, the
Company has satisfied all financial covenants relating to the Credit
Facility.
The Credit Facility permits the Company to pay dividends as long as the
amount of dividends and other restricted payments in any four consecutive
fiscal quarters (a "Relevant Period") is less than the amount by which
consolidated EBITDA exceeds the product of 1.4 times fixed charges for the
four consecutive fiscal quarters ended immediately before the Relevant
Period, as defined in the Credit Facility. At June 30, 1994, after
deducting preferred dividends declared, the Company could pay a cash
dividend of approximately $43,800,000.
NOTE 4 - PROPERTY
A summary of property follows (in thousands):
(Unaudited)
6/30/94 7/1/93 3/31/94
Property owned:
Land $ 21,912 $ 20,239 $ 20,239
Buildings and improvements 86,326 86,330 86,177
Furniture, fixtures and equipment 159,712 166,806 160,944
Leasehold improvements 118,031 115,623 116,496
385,981 388,998 383,856
Less - accumulated depreciation
and amortization 176,544 158,290 174,229
209,437 230,708 209,627
Property leased under capitalized leases:
Buildings 69,509 66,251 68,162
Less - accumulated amortization 25,865 22,432 24,928
43,644 43,819 43,234
Net property $253,081 $274,527 $252,861
NOTE 5 - CONTINGENCIES
The Company, in the normal course of business, is party to various
legal actions. Management believes that the potential exposure, if any,
from such matters would not have a material adverse effect on the financial
condition or results of operations of the Company. The following
paragraphs summarize significant litigation and proceedings to which the
Company is a party.
Income Tax Litigation. The Company has been in litigation with the
Internal Revenue Service ("IRS") primarily concerning the Company's method,
for the years 1975 and 1978 to 1987, inclusive, of reporting, for income
tax purposes, film rental deductions in the year paid (cash method) rather
than in the year the related film was exhibited (accrual method). These
and other issues, including the determination of various credit and loss
carrybacks, and issues related to certain capital gains, the dividends
received deduction, and the understatement penalty, were the subject of two
United States Tax Court cases (Durwood, Inc. v. Commissioner of Internal
Revenue, Docket No. 3706-88 filed February 23, 1988 and Durwood, Inc. v.
Commissioner of Internal Revenue, Docket No. 3322-91 filed February 22,
1991).
Settlements have been reached with respect to all issues in each of the
tax court cases. The settlements have been approved by the Congressional
Joint Committee on Taxation as required by law. On July 26, 1994, the Tax
Court entered its decisions in each of these cases. Through June 30, 1994,
the Company has recorded provisions totaling approximately $23 million,
representing the estimated federal and state income taxes and interest
resulting from the IRS litigation. Through June 30, 1994, the Company has
made payments totaling approximately $18 million to federal and state tax
authorities associated with the tax court settlements. Management believes
that adequate amounts have been reserved with respect to these income tax
matters.
NOTE 6 -INCOME TAX
The Company records deferred income taxes in accordance with Statement
of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes" using enacted tax laws and rates for the years in which the
taxes are expected to be paid.
The Company has recorded a valuation allowance against deferred tax
assets based on the lack of sufficient evidence required under SFAS 109 to
support the realizability of the deferred assets. At June 30, 1994, the
valuation allowance amounted to approximately $22,773,000. Based on
increasing positive evidence supporting the potential realizability of the
deferred tax assets, it is possible that this valuation allowance may be
decreased in future periods. A reduction in the valuation allowance will
increase net income in the period of adjustment.
NOTE 7 - COMMITMENTS
The Company has entered into agreements to lease space for the
operation of theatres not yet fully constructed. Of the total number of
anticipated openings, leases for nine new theatres with 149 screens and
leases for the expansion of 29 screens at five existing locations have been
finalized. The scheduled completion of construction and theatre openings
are at various dates through the third quarter of fiscal 1997. The
estimated minimum rental payments that may be required under the terms of
the leases total approximately $205,000,000.
NOTE 8 - SALE OF INVESTMENT
During the first quarter of fiscal 1995, the Company sold 1,475,144
shares of TPI Enterprises, Inc. common stock for $9,614,000 resulting in a
gain of approximately $932,000 which is included in investment income.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
General
The Company's revenues are derived principally from box office
admissions and theatre concession sales. Additional revenues are derived
from other sources such as on-screen advertising and license fees from
electronic video games in theatre lobbies. The Company's principal costs
of operations are film rentals, concession merchandise and other expenses
such as advertising, payroll, occupancy costs and insurance. Set forth
below is a summary of operating revenues for the thirteen week periods
ended June 30, 1994 and July 1, 1993.
Thirteen Thirteen
Weeks Ended Weeks Ended
% of Total % of Total
6/30/94 Revenues 7/1/93 Revenues
(Dollars in thousands)
Revenues
Admissions $ 84,880 66% $ 93,726 67%
Concessions 38,929 30 42,085 30
Other 4,672 4 4,808 3
Total $128,481 100% $140,619 100%
Cost of Operations
Film rental $ 40,284 31% $ 48,182 34%
Concession merchandise 6,518 5 6,640 5
Other 54,633 43 55,320 39
Total $101,435 79% $110,142 78%
Operating Results
Total revenues for the thirteen weeks ended June 30, 1994 decreased
$12,138,000, or 8.6%. The decrease in total revenues was partially the
result of a decrease in attendance of 6.3 % which lowered admission and
concession revenues by $5,880,000 and $2,640,000, respectively. The
decrease in admission revenue was also affected by a decrease in the
average ticket price of 3.5% from the previous year, which lowered revenues
by $2,966,000. The concession revenue decrease was also due in part to a
1.2% decrease in concession revenue per patron resulting in lower revenues
of $516,000. The Company believes that the drop in concession revenue per
patron was primarily due to the recent announcement regarding the health
effects of oil utilized for popping popcorn which had a major effect on the
sale of such items in the early weeks of the current quarter. The Company
has changed the type of oil it uses and believes the sales will strengthen
to previous levels.
Cost of operations decreased $8,707,000, or 7.9%, from $110,142,000 in
the prior period to $101,435,000 currently. Film rental expense decreased
$7,898,000, or 16.4%, of which $4,547,000 was due to lower attendance and
$3,351,000 due to a decrease in the percentage of revenues paid to
distributors. Concession merchandise cost decreased $122,000, or 1.8%,
from $6,640,000 in the prior period to $6,518,000 for the thirteen weeks
ended June 30, 1994. This decrease was the result of lower attendance
which decreased expense by $498,000, which was partially offset by a .9%
increase in the percentage of revenues paid to suppliers which increased
expense $376,000. Other costs of operations decreased $687,000, or 1.2%,
from $55,320,000 in the prior period to $54,633,000 for the thirteen weeks
ended June 30, 1994.
Operating income decreased during the thirteen weeks ended June 30,
1994 by $3,272,000, or 26.5%, to $9,066,000 from $12,338,000 in the prior
period.
General and administrative expense increased $1,305,000, or 15.7% to
$9,620,000 in the current period from $8,315,000 for the thirteen weeks
ended July 1, 1993. The increase was primarily the result of additional
payroll, advertising and pension costs.
Interest expense decreased $526,000, or 5.5%, to $8,960,000 during the
thirteen weeks ended June 30, 1994. The decrease consisted of a $583,000
decrease in interest expense related to corporate borrowings partially
o f f set by $57,000 of additional interest expense associated with
capitalized leases. For the first quarter of fiscal 1994, the Company
incurred $472,000 of interest expense from borrowings on its $40,000,000
Credit Facility (the "Credit Facility") with its primary banks which was
used to retire Exhibition Enterprises Partnership ("EEP") indebtedness.
During the current period the Credit Facility has not been utilized.
Investment income increased $1,967,000 from $596,000 for the thirteen
weeks ended July 1, 1993 to $2,563,000 currently. This increase is the
result of additional interest income of $997,000 and an increase in other
investment income of $970,000. The increase in interest income is due to
additional cash and short-term investments as a result of the March 3, 1994
sale of preferred stock. The increase in investment income is due primarily
from the sale of TPI Enterprises, Inc. stock.
Income from minority interest in the amount of $1,599,000 was recorded
in the first quarter of fiscal 1994 relating to TPI Entertainment, Inc.'s
("TPIE") share of of the EEP operating loss from April 2, 1993 through May
27, 1993, prior to the Company's acquisition of TPIE's partnership interest
in EEP.
For the thirteen weeks ended June 30, 1994 the Company recorded
earnings prior to taxes of $2,671,000, a decrease of $2,319,000 compared to
earnings of $4,990,000 in the comparable period of the prior year. After
taxes, net earnings were $1,571,000 in the current period compared to
$3,090,000 for the thirteen weeks ended July 1, 1993. The net loss for
common shares was $179,000 or $.01 per share compared to earnings of
$3,090,000 or $.19 per share in the prior period which was not effected by
preferred dividends.
Liquidity, Capital Structure and Resources
On March 3, 1994, the Company sold in a public offering 4,000,000
shares of $1.75 Cumulative Convertible Preferred Stock at a purchase price
of $25 per share. The net proceeds to the Company from the sale of the
Convertible Preferred were approximately $95.6 million. The Company
intends to use such proceeds (i) to improve its domestic theatre circuit
through the construction of new theatres, the addition of screens at, or
remodeling of, existing theatres and the acquisition of existing theatres
from other circuits, (ii) to finance the construction or acquisition of
theatres in foreign markets (iii) to repurchase and retire a portion of its
debt securities pursuant to open market or privately negotiated purchases
or otherwise and (iv) for general corporate purposes. Such new theatres
and screens may be acquired pursuant to lease agreements or through
acquisition of fee ownership and may be constructed by the Company on a
stand alone basis or through partnerships or other arrangements with third
parties. The Company's intention to acquire its debt securities will
depend on many factors, including factors beyond its control such as
prevailing market prices for the debt securities, and may be subject to
limitations in the Indentures, the Credit Facility and other debt
instruments to which it is a party. The Company has made no determination
as to the amount of proceeds that will be allocated to any of the foregoing
purposes. Pending their use for the purposes set forth above, the Company
has invested the net proceeds in interest-bearing instruments and other
short-term securities.
The Company's revenues are collected in cash, principally through
box office admissions and theatre concession sales. Cash flow from
operating activities, as reflected in the Consolidated Statement of Cash
Flows, was $8,075,000 and $20,231,000 for the first quarter of fiscal 1995
and 1994, respectively. The Company has an operating "float" which
partially finances its operations and which permits the Company to maintain
a small amount of working capital capacity. This "float" exists because
admissions revenues are received in cash, while exhibition costs (primarily
film rentals) are ordinarily paid to distributors from 30 to 45 days
following receipt of box office admission revenues and the Company is only
occasionally required to make advance payments or non-refundable guarantees
of film rentals.
In addition to cash and cash equivalents and short-term investments
of $153,694,000 at June 30, 1994, the Company had available to it at such
date the total commitment amount under its $40,000,000 Credit Facility. In
connection with the acquisition of EEP on May 28, 1993, the Company
borrowed $30,000,000 under the Credit Facility, which amount was repaid
from cash flow from operations by July 28, 1993. Except for this borrowing,
the Company has not utilized the Credit Facility and does not anticipate
that it will need to do so.
The Company estimates that total capital expenditures will be
approximately $50,000,000 in fiscal 1995 (excluding property under capital
lease obligations). Such expenditures include normal maintenance capital
expenditures of approximately 1.5% of revenues and capital expenditures for
expansion of the theatre circuit. Total property acquisitions, including
those for refurbishment of existing theatres, excluding capital lease
obligations, were $6,685,000 for the thirteen weeks ended June 30, 1994.
The Company recently announced to the public that it plans to
convert substantially all of its auditoriums to digital sound. The Company
intends to sign a contract with the Sony Corporation to provide the
equipment for this conversion which may cost as much as 50 million dollars
over the next three years.
During the first quarter of fiscal 1995, the Company opened two new
theatres with 21 screens and ceased operating one theatre with six screens.
The Company has entered into agreements to lease space for the operation of
theatres not yet fully constructed. Of the total number of anticipated
openings, leases for nine new theatres with 149 screens and leases for the
expansion of 29 screens at five existing locations have been finalized.
The scheduled completion of construction and theatre openings are at
various dates through the third quarter of fiscal 1997. The estimated
minimum rental payments that may be required under the terms of the leases
total approximately $205,000,000.
The Company continually monitors the performance of its portfolio of
theatres to determine the best strategy given local and industry-wide
conditions. If an individual theatre's operating margins are
unsatisfactory, management may decide, among other options, to convert the
theatre to a "dollar house," to sell the property (or the lease rights
thereto) or to close the theatre. The closure of a theatre may be
coordinated with the opening of a new, modern AMC theatre complex where the
operating margins are expected to be superior to those of the replaced
theatre. The decision to sell or close a theatre may result in a loss when
the carrying value of the property exceeds the sales price or when a
theatre is closed with a remaining lease commitment. The loss is charged
to earnings during the period in which the decision is made.
The Indentures and the Credit Facility contain covenants that, among
other things, restrict the type and amount of debt that the Company may
incur and impose limitations on the creation of liens, a change of control,
transactions with affiliates, mergers, investments, dividends and capital
expenditures. The Company does not anticipate that these covenants will
materially impede the operation of the Company.
PART II. OTHER INFORMATION
ITEM I. LEGAL PROCEEDINGS
Scott C. Wallace, Derivatively on Behalf of Nominal Defendant AMC
Entertainment Inc. v. Stanley H. Durwood, et al., Chancery Court for New
Castle County, Delaware (Civil Action No. 12855). On January 27, 1993,
plaintiff filed a derivative action on behalf of AMCE against four of its
directors, Messrs. Stanley H. Durwood, Edward D. Durwood, Paul E. Vardeman
and Charles J. Egan, Jr. (the "Wallace litigation"). AMCE was named as a
nominal defendant. The lawsuit alleges breach of fiduciary duties of care,
loyalty and candor, mismanagement and waste of assets in connection with
the provision of film licensing, accounting and financial services by
American Associated Enterprises, a partnership beneficially owned by Mr.
Stanley H. Durwood and members of his family, to the Company, certain other
transactions with affiliates of the Company, termination payments to a
former officer of the Company and other transactions. The lawsuit seeks
unspecified money damages and equitable relief and costs, including
reasonable attorneys' fees.
James M. Bird, Derivatively on Behalf of Nominal Defendant AMC
Entertainment Inc. v. Stanley H. Durwood, et al., Chancery Court for New
Castle County, Delaware (Civil Action No. 12939). On April 16, 1993,
plaintiff filed a derivative action on behalf of AMCE against four of its
directors, Messrs. Stanley H. Durwood, Edward D. Durwood, Paul E. Vardeman
and Charles J. Egan, Jr., and one of its former directors, Mr. Phillip E.
Cohen (the "Bird litigation"). AMCE was named as a nominal defendant. The
lawsuit alleges many of the same claims that are alleged in the Wallace
litigation, as well as claims involving certain transactions with National
Cinema Supply Corporation and a fee paid by a subsidiary of the Company to
Mr. Cohen in connection with a transaction between the Company and TPI
Entertainment, Inc. The lawsuit seeks unspecified money damages and
equitable relief and costs, including reasonable attorney's fees.
On August 20, 1993, the defendants filed motions to dismiss both the
Wallace litigation and the Bird litigation. On September 10, 1993, such
defendants filed motions to stay discovery pending the court's resolution
of defendants' motions to dismiss. On November 1, 1993, the court ordered
that discovery be stayed in the Wallace litigation and the Bird litigation
pending resolution of the motions to dismiss, except for discovery
concerning the fitness of Mr. Wallace to serve as a derivative plaintiff.
For additional information relative to legal proceedings, See Note 5
of Notes to Consolidated Financial Statements.
SIGNATURES
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 thereunto duly authorized.
AMC ENTERTAINMENT INC.
Date: August 5, 1994 /s/ Peter C. Brown
Peter C. Brown
Executive Vice President,
Chief Financial Officer
and Treasurer
Date: August 5, 1994 /s/ Richard L. Obert
Richard L. Obert
Vice President and
Chief Accounting Officer
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT 4(a)
U.S. $40,000,000
FIRST AMENDED AND RESTATED
LOAN AGREEMENT,
dated as of August 10, 1992
and amended and restated as of June 14, 1994
among
AMERICAN MULTI-CINEMA, INC.
as the Borrower
and
AMC ENTERTAINMENT INC.
as the Guarantor
and
THE BANK OF NOVA SCOTIA
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as the Banks
and
THE BANK OF NOVA SCOTIA,
as the Agent
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as the Co-Arranger
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS 2
1.1 Defined Terms 2
1.2 Use of Defined Terms 23
1.3 Accounting and Financial Determinations 24
ARTICLE II
COMMITMENTS 24
2.1 Commitments 24
2.2 Total Commitment Amount 24
2.3 Fees 25
2.4 Termination 25
ARTICLE III
LOANS AND NOTES 25
3.1 Borrowing Procedure 25
3.2 Notes 26
3.3 Principal Payments and Prepayments 26
3.4 Interest 27
3.5 Post-Maturity Rates 27
3.6 Payment Dates 28
3.7 Payments, Computations, etc. 28
3.8 Proration of Payments 29
3.9 Setoff 29
3.10 Taxes 30
ARTICLE IV
BNS BASE RATE AND FIXED RATE
OPTIONS FOR THE LOANS 30
4.1 Elections 30
4.2 Fixed Rate Lending Unlawful 32
4.3 Deposits Unavailable 33
4.4 Capital Adequacy; Increased Costs, etc. 34
4.5 Funding Losses 35
ARTICLE V
CONDITIONS PRECEDENT 35
5.1 Conditions Precedent to First Borrowing
After the First Restatement Date 35
5.1.1 Resolutions, etc. 36
5.1.2 Delivery of Notes 36
5.1.3 Opinion of Counsel 36
5.1.4 Closing Fees, Expenses, etc. 37
5.1.5 Significant Subsidiary Guaranty 37
5.1.6 Satisfactory Legal Form 37
5.1.7 Compliance with Warranties, non-Default, etc. 37
5.1.8 AMCE Acknowledgement 37
5.2 All Loans 37
5.2.1 Compliance with Warranties, non-Default, etc. 38
5.2.2 Absence of Litigation, etc. 38
5.2.3 Loan Request 38
ARTICLE VI
WARRANTIES, ETC. 38
6.1 Organization, Power, Authority, etc. 38
6.2 Due Authorization 39
6.3 Validity, etc. 39
6.4 Financial Information 39
6.5 Absence of Certain Default 40
6.6 Litigation, etc. 40
6.7 Regulation U 40
6.8 Government Regulation 40
6.9 Certain Contractual Obligations or Organic Documents 40
6.10 Taxes 40
6.11 Employee Benefit Plans 41
6.12 Labor Controversies 41
6.13 Subsidiaries and Significant Subsidiaries 41
6.14 Patents, Trademarks, etc. 41
6.15 Ownership of Properties; Liens 42
6.16 Accuracy of Information 42
6.17 Senior Subordinated Notes 42
6.18 Solvency 42
ARTICLE VII
COVENANTS 43
7.1 Certain Affirmative Covenants 43
7.1.1 Financial Information, etc. 43
7.1.2 Maintenance of Existences, etc. 45
7.1.3 Foreign Qualification 45
7.1.4 Payment of Taxes, etc. 45
7.1.5 Insurance. 45
7.1.6 Notice of Default, Litigation, etc. 46
7.1.7 Performance of Loan Documents. 46
7.1.8 Books and Records. 47
7.1.9 Significant Subsidiary Guaranty. 47
7.2 Certain Negative Covenants. 47
7.2.1 Indebtedness for Borrowed Money. 47
7.2.2 Liens. 48
7.2.3 Financial Condition. 50
7.2.4 Capital Expenditures. 50
7.2.5 Take or Pay Contracts 50
7.2.6 Consolidation, Merger, etc. 50
7.2.7 Modification, etc. of Subordinated Debt. 51
7.2.8 Transactions with Affiliates. 51
7.2.9 Sale or Discount of Receivables 51
7.2.10 Restricted Payments. 51
7.2.11 Inconsistent Agreements 52
7.2.12 Investments 52
7.2.13 Guaranties 54
7.2.14 Capital Stock 55
7.2.15 Business Activities 55
7.2.16 Asset Sales 56
7.2.17 Limitation on Issuances of Guarantees of
Indebtedness 56
ARTICLE VIII
EVENTS OF DEFAULT 57
8.1 Events of Default 57
8.1.1 Non-Payment of Liabilities 57
8.1.2 Non-Performance of Certain Covenants 57
8.1.3 Certain Defaults on Other Indebtedness or Leases 57
8.1.4 Bankruptcy, Insolvency, etc. 58
8.1.5 Change in Control 58
8.1.6 Non-Performance of Other Obligations 58
8.1.7 Breach of Warranty 58
8.1.8 ERISA 59
8.1.9 Judgments 59
8.1.10 AMCE Guaranty or the Significant Subsidiary Guaranty 59
8.2 Action if Bankruptcy 60
8.3 Action if Other Event of Default 60
ARTICLE IX
THE ARRANGERS 60
9.1 Actions 60
9.2 Funding Reliance, etc. 61
9.3 Exculpation 61
9.4 Successor 62
9.5 Loans by the Arrangers 62
9.6 Credit Decisions 62
9.7 Copies, etc 63
ARTICLE X
MISCELLANEOUS 63
10.1 Waivers, Amendments, etc. 63
10.2 Notices 64
10.3 Costs and Expenses 64
10.4 Indemnification 64
10.5 Survival 65
10.6 Severability 65
10.7 Headings 66
10.8 Counterparts 66
10.9 Governing Law; Entire Agreement 66
10.10 Successors and Assigns 66
10.11 Sale and Transfers, etc., of Loans and Notes;
Participations in Loans and Notes 66
10.12 Other Transactions 68
10.13 Waiver of Jury Trial 68
10.14 Consent to Jurisdiction and Service of Process 68
Schedule 1.1 Replaced Facilities 73
SCHEDULE I Unrestricted Subsidiaries 74
EXHIBIT A Disclosure Schedule
EXHIBIT B Form of Loan Request
EXHIBIT C Form of Continuation/Conversion Notice
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Significant Subsidiary Guaranty
EXHIBIT F Form of Opinion of Counsel to the Borrower, the
Guarantor and each Significant Subsidiary
EXHIBIT G Form of Applicable Margin Determination Ratio
Certificate
EXHIBIT H Form of Note
FIRST AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDED AND RESTATED LOAN AGREEMENT, dated as of August 10,
1992 and amended and restated as of June 14, 1994 among AMERICAN MULTI-
CINEMA, INC., a Missouri corporation (the "Borrower"), AMC ENTERTAINMENT
INC., a Delaware corporation (the "Guarantor"), THE BANK OF NOVA SCOTIA, a
Canadian chartered bank acting through its Atlanta Agency ("BNS"), BANK OF
A M E RICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association ("BA", and together with BNS, the "Banks"), and THE BANK OF NOVA
SCOTIA, a Canadian chartered bank acting through its Atlanta Agency, as agent
for the Banks (in such capacity, the "Agent"), and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, a national banking association, as co-arranger
for the Banks (in such capacity, the "Co-Arranger").
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Arrangers are party to that
certain Loan Agreement, dated as of August 10, 1992 (as amended by the First
Amendment thereto, dated as of March 31, 1993, and by the Second Amendment
thereto, dated as of May 28, 1993, the "Original Loan Agreement");
WHEREAS, the Borrower is engaged directly and through various
Subsidiaries in the theatrical exhibition industry;
WHEREAS, the Borrower desires to obtain Commitments from the Banks
pursuant to which Loans, in a maximum aggregate principal amount at any one
time outstanding not to exceed $40,000,000, will be made to the Borrower from
time to time prior to the Commitment Termination Date;
WHEREAS, the Banks are willing, on the terms and conditions hereinafter
set forth (including Article V), to extend such Commitments and make such
Loans to the Borrower;
WHEREAS, the proceeds of such Loans will be used for general corporate
purposes and working capital purposes of the Borrower and Subsidiaries; and
WHEREAS, the Borrower, the Banks and the Arrangers desire that the
Original Loan Agreement be amended and restated on the terms and conditions
set forth herein to, among other things, set forth the terms and conditions
under which the Banks hereafter will extend loans and commitments to the
Borrower; it being the intention of the Borrower, the Arrangers and the Banks
that this Agreement and the execution and delivery of any substituted
promissory notes not effect a novation of the obligations of Borrower to the
Banks under the Original Loan Agreement, but merely a restatement and, where
applicable, a substitution of the terms governing and evidencing such
obligations hereafter.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. The following terms (whether
or not underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):
"Affected Bank" means a Bank that notifies the Agent under Section 4.2
or Section 4.3 that it is so affected.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls or is controlled by or under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Multiemployer Plan or Pension Plan). A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power:
(a) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent" is defined in the preamble.
"Agreement" means, at any date, this loan agreement as originally in
effect on the First Restatement Date, and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified and in
effect on such date.
"AMC Film Marketing" means AMC Film Marketing, Inc., a Missouri
corporation.
"AMC Philadelphia" means AMC Philadelphia, Inc., a Delaware corporation.
"AMCE Guaranty" means that certain guaranty, executed by the Guarantor,
substantially in the form of Exhibit G to the Original Loan Agreement (as
such may be amended, supplemented, restated or otherwise modified and in
effect from time to time).
"AMCEI" is defined in Section 7.2.6.
"Applicable Margin" means, for any Loan, the amount indicated below for
each type of Loan based upon the Applicable Margin Determination Ratio as
computed on the Applicable Margin Determination Ratio Certificate most
recently submitted pursuant to Section 7.1.1(f):
LIBO BNS
Applicable Margin Rate Rate
Determination Ratio Loans Loans
Greater than or equal to 4.00 2.00% 0.875%
Greater than or equal to 3.50
and less than 4.00 1.50% 0.375%
Greater than or equal to 3.00
and less than 3.50 1.25% 0.125%
Greater than or equal to 2.50
and less than 3.00 1.00% 0.00%
Greater than or equal to 2.00
and less than 2.50 0.875% 0.00%
Less than 2.00 0.625% 0.00%.
"Applicable Margin Determination Ratio" means, at any date, the ratio
of:
(a) Net Indebtedness of the Guarantor and its Consolidated
Subsidiaries as computed on the Applicable Margin Determination Ratio
Certificate then most recently submitted pursuant to Section 7.1.1(f);
to
(b) Consolidated EBITDA of the Guarantor and its Consolidated
Subsidiaries for the prior four Fiscal Quarters ending on the last day
of the Fiscal Quarter preceding such date as computed on the most recent
Applicable Margin Determination Ratio Certificate delivered pursuant to
Section 7.1.1(f).
"Applicable Margin Determination Ratio Certificate" means a certificate
duly executed by an Authorized Officer of the Borrower substantially in the
form of Exhibit G attached hereto, with required insertions.
"Approval" means each and every approval, consent, filing and
registration by or with any Federal, state or other regulatory authority
necessary to authorize or permit the execution, delivery or performance of
this Agreement, the Notes or any other Loan Document or for the validity or
enforceability hereof or thereof.
"Arranger" means either the Agent or the Co-Arranger, and the
"Arrangers" means both the Agent and the Co-Arranger.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Guarantor or
any of its Subsidiaries to any other Person, or any purchase or acquisition
of Capital Stock of any other Person by the Guarantor or any of its
Subsidiaries, in either case, pursuant to which such other Person shall
become a Subsidiary of the Guarantor or any of its Subsidiaries or shall be
merged with or into the Guarantor or any of its Subsidiaries or (ii) any
acquisition by the Guarantor or any of its Subsidiaries of the assets of any
Person which constitute all or substantially all of an operating unit or
business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition to any Person (including any Subsidiary that is
not a Significant Subsidiary or any Unrestricted Subsidiary) other than the
Guarantor, the Borrower or a Significant Subsidiary, in one transaction or a
series of related transactions, of (i) any Capital Stock of any Subsidiary of
the Guarantor or (ii) any other property or asset of the Guarantor or any
Subsidiary of the Guarantor other than, in each case, sales of property or
assets in the ordinary course of business.
"Assignees" is defined in Section 10.11(b).
"Authorized Officer" means, relative to any Loan Party, those of its
officers whose signatures and incumbency shall have been certified to the
Banks pursuant to Section 5.1.1.
"BA" is defined in the preamble.
"Bank" is defined in the preamble.
"Bank Parties" is defined in Section 10.4.
"BNS" is defined in the preamble.
"BNS Base Rate" means at any time the greater of (i) the rate of
interest most recently announced by BNS in Atlanta as its base rate (of which
announcements the Agent shall give notice promptly to the Banks and to the
Borrower) and (ii) the Federal Funds Rate plus 0.50%. The BNS Base Rate is
not necessarily intended to be the lowest rate of interest charged by BNS in
connection with extensions of credit. Changes in the rate of interest on any
Loan maintained as a BNS Rate Loan shall take effect simultaneously with each
change in the BNS Base Rate.
"BNS Rate Loan" is defined in Section 4.1.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans made by all Banks on any Business Day in
accordance with Section 3.1.
"Budco" means Budco Theatres, Inc., a Pennsylvania corporation.
"Business Day" means:
(a) any day which is neither a Saturday or Sunday nor a legal
holiday in the States of New York, Missouri or Georgia on which Banks
are authorized or required to be closed in New York City, Kansas City
(Mo.) or Atlanta; and
(b) relative to the date of
(i) making or continuing any portion of any Loans as, or
converting any portion of any Loans from or into Fixed Rate Loans,
(ii) making any payment or prepayment of principal of or
payment of interest on the portion of the principal amount of the
Loans being maintained as Fixed Rate Loans, and
(iii) the Borrower's giving any notice (or the number of
Business Days to elapse prior to the effectiveness thereof) in
connection with any matter referred to in clause (b)(i) or (b)(ii),
a banking business day of the Agent at, and on which dealings in Dollars
are carried on in the interbank eurodollar market of, the Agent's LIBOR
Office.
"Capital Expenditures" means, with respect to any Person for any period,
the aggregate amount of all expenditures during such period which are
required to be included in property, plant or equipment or a similar fixed
asset account on a consolidated balance sheet of such Person and its
Subsidiaries prepared in accordance with GAAP (excluding Capitalized Lease
Obligations).
"Capital Stock" means, with respect to any Person, any and all shares,
partnership interests, participations, rights in, or other equivalents
(however designated and whether voting or non-voting) of such Person's
capital stock, whether outstanding on the Effective Date or issued after such
date, and any and all rights, warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the
purposes of this Agreement, the amount of such obligation at any date shall
be the capitalized amount thereof at such date, determined in accordance with
GAAP.
"Cash Equivalents" means, at any time: (i) any evidence of Indebtedness
with a maturity of 360 days or less issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided, that the full faith and credit of the United States of
America is pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 360 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; (iii) commercial
paper with a maturity of 270 days or less issued by a corporation (other than
an Affiliate of the Borrower) organized under the laws of any state of the
United States or the District of Columbia and rated at least A-1 by Standard
& Poor's Corporation or at least P-1 by Moody's Investors Service, Inc.; and
(iv) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the
government of the United States of America or issued by any agency thereof
and backed by the full faith and credit of the government of the United
States of America, in each case maturing within one year from the date of
acquisition, provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
I n stitutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency.
"Change in Control" means:
(a) the acquisition of beneficial ownership of any shares of
Capital Stock of the Borrower by any Person other than the Guarantor;
(b) the direct or indirect sale, lease, exchange or other transfer
of all or substantially all of the assets of the Guarantor to any Person
or entity or group of Persons or entities acting in concert as a
partnership or other "group" (a "Group of Persons") with the effect that
the Durwood Interests are the beneficial owners (within the meaning of
the Exchange Act as in effect on the Effective Date) of less than 50% of
the combined voting power of the then outstanding securities of the
resulting, surviving or transferee Person or Persons ordinarily (and
apart from rights under special circumstances) having the right to vote
in the election of directors;
(c) the merger or consolidation of the Guarantor with or into
another corporation with the effect that the Durwood Interests are the
beneficial owners (within the meaning of the Exchange Act as in effect
on the Effective Date) of less than 50% of the combined voting power of
the then outstanding securities of the surviving corporation of such
merger or the corporation resulting from such consolidation ordinarily
(and apart from rights arising under special circumstances) having the
right to vote in the election of directors;
(d) the replacement of a majority of the Board of Directors of the
Guarantor, over a two-year period, from the directors who constituted
the Board of Directors of the Guarantor at the beginning of such period,
which replacement shall not have been approved by the Board of Directors
of the Guarantor (or replacement directors approved by the Board of
Directors of the Guarantor), as constituted at the beginning of such
period;
(e) a Person or Group of Persons other than the Durwood Interests
shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases, merger or consolidation or otherwise,
have become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Guarantor representing 50% or
more of the combined voting power of the then outstanding securities of
the Guarantor ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors
thereof; or
(f) the occurrence of any "Change of Control" as defined in the
Indentures.
"Co-Arranger" is defined in the preamble.
"Commitment" means, relative to any Bank, such Bank's obligation to
make Loans pursuant to Section 2.1.
"Commitment Termination Date" means the earliest of
(a) March 30, 1997;
(b) five Business Days after notice is given by the Borrower to
the Agent for purposes of designating a Commitment Termination Date
pursuant to this clause, provided that, on such designated Commitment
Termination Date, no Loans are outstanding;
(c) immediately and without further action upon the occurrence of
any Default described in Section 8.1.4 with respect to the Borrower, the
Guarantor or any Significant Subsidiary;
(d) immediately when any other Event of Default shall have
occurred and be continuing and the Loans shall be declared to be due and
payable pursuant to Section 8.3; and
(e) immediately and without further action upon the occurrence of
a Change in Control.
"Compliance Certificate" means a certificate duly executed by the chief
executive or financial Authorized Officer of the Borrower in the form of
Exhibit D attached hereto, with appropriate insertions, together with such
changes as the Required Banks may from time to time request for purposes of
monitoring the Borrower's compliance herewith.
"Consolidated EBITDA" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period increased (to the
extent deducted in determining Consolidated Net Income) by the sum of: (i)
all income taxes of such Person and its Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or non-recurring gains or losses); (ii) Consolidated
Interest Expense of such Person and its Subsidiaries for such period; (iii)
depreciation expense of such Person and its Subsidiaries for such period;
(iv) amortization expense of such Person and its Subsidiaries for such period
including, without limitation, amortization of capitalized debt issuance
costs; and (v) any other non-cash charges of such Person and its Subsidiaries
for such period (including non-cash expenses recognized in accordance with
Financial Accounting Standards Bulletin Number 106), all determined on a
consolidated basis in accordance with GAAP; provided, however, that, for
purposes of this definition, all transactions involving the acquisition of
any Person by another Person shall be accounted for on a "pooling of
interests" basis and not as a purchase.
"Consolidated EBITDA Coverage Ratio" means, with respect to any Person,
the ratio of (i) Consolidated EBITDA of such Person for the period of four
consecutive full Fiscal Quarters for which financial statements are available
that immediately precede the date of the transaction giving rise to the need
to calculate such ratio (the "Transaction Date") to (ii) the sum of (a)
Consolidated Interest Expense of such Person for such four Fiscal Quarter
period and (b) the aggregate amount of cash dividends and other distributions
declared or paid on Capital Stock (other than common stock) of such Person
and its Subsidiaries, in each case for such four full Fiscal Quarter period.
For purposes of calculating the "Consolidated EBITDA Coverage Ratio" both the
n u m erator and the denominator thereof shall be calculated, without
duplication, after giving pro forma effect for the period of such calculation
to (i) the incurrence of any Indebtedness of such Person or any of its
Subsidiaries at any time during the period (the "Reference Period") (A)
commencing on the first day of the four full Fiscal Quarter period for which
financial statements are available that precedes the Transaction Date and (B)
ending on and including the Transaction Date as if such Indebtedness had been
incurred and the proceeds therefrom had been applied on the first day of the
Reference Period; and (ii) any Asset Sales or Asset Acquisitions occurring
during the Reference Period and the application of any proceeds of any Asset
Sales or any retirement of any Indebtedness in connection with such Asset
Acquisitions, as if such Asset Sale, Asset Acquisition, application or
retirement occurred on the first day of the Reference Period. Furthermore,
in calculating the denominator (but not the numerator) of the Consolidated
EBITDA Coverage Ratio, (1) interest on Indebtedness determined on a
fluctuating basis incurred on the Transaction Date and which will continue to
be so determined thereafter shall be deemed to accrue at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; (2) if interest on any Indebtedness actually incurred on
the Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate based upon a factor of a prime
or similar rate shall be deemed to have been in effect during the Reference
Period; and (3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Rate Protection Obligations, shall be deemed
to accrue at the rate per annum after giving effect to the operation of such
agreements. If such Person or any of its Subsidiaries directly or indirectly
guarantees Indebtedness of a Person (other than another Consolidated
Subsidiary), this definition shall give effect to the incurrence (for
purposes of the denominator (but not the numerator) of the Consolidated
EBITDA Coverage Ratio) of such guaranteed Indebtedness as if such Person or
Subsidiary had directly incurred such guaranteed Indebtedness.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, (i) the sum of (a) the cash and non-cash
interest expense of such Person and its Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP consistently
applied, including, without limitation, (w) any amortization of debt
discount, (x) the net cost under Interest Rate Protection Obligations
(including any amortization of discounts), (y) the interest portion of any
deferred payment obligation and (z) all accrued interest, and (b) the
aggregate amount of the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP consistently applied less (ii) the interest income
(exclusive of deferred financing fees) of such Person and its Subsidiaries
for such period as determined on a consolidated basis in accordance with GAAP
consistently applied.
"Consolidated Net Income" means, with respect to any Person, for any
period, the consolidated net income (or loss) of such Person and its
Subsidiaries for such period as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income, by excluding, without
duplication, (i) all extraordinary gains or losses (net of reasonable fees
and expenses relating to the transaction giving rise thereto) of such Person
and its Subsidiaries, (ii) the portion of net income (or loss) of such Person
and its Subsidiaries allocable to minority interests in unconsolidated
Persons to the extent that cash dividends or distributions have not actually
been received by such Person or one of its Subsidiaries, (iii) any gain or
loss realized upon the termination of any employee pension benefit plan, on
an after-tax basis of such Person and its Subsidiaries, (iv) gains or losses
in respect of any Asset Sales by such Person or one of its Subsidiaries (net
of reasonable fees and expenses relating to the transaction giving rise
thereto), on an after-tax basis, and (v) the net income of any Subsidiary of
such Person to the extent that the declaration of dividends or the making of
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 (other than any Loan Document), instrument, judgment, decree,
order, statute, law, rule or governmental regulations applicable to that
Subsidiary or its stockholders; provided, that for purposes of calculating
"Consolidated Net Income" for purposes of Section 7.2.12(vi), there shall be
excluded net income (or loss) of any Person combined with such Person or one
of its Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of determination.
"Consolidated Subsidiary" of any Person means, at any time, every
Subsidiary which is included as a consolidated subsidiary of such Person in
the financial statements contained in the then most recent annual or periodic
report filed by such Person with the SEC on Form 10-K, 10-Q or 8-K pursuant
to the Exchange Act, as then in effect (or any comparable forms or under
similar Federal statutes then in force), and in the most recent financial
statements of such Person furnished to the stockholders of such Person and
certified by the independent certified public accountants of such Person.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by any Authorized Officer of the
Borrower substantially in the form of Exhibit C attached hereto.
"Contractual Obligation" means, relative to any Person, any provision of
any security issued by such Person or of any Instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Credit Exposure" is defined in Section 10.11(a).
"Currency Hedging Obligations" means the obligations of any Person
p u rsuant to an arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Date of the Original Loan Agreement" means August 10, 1992.
"Default" means any Event of Default or any condition or event which,
after notice or lapse of time or both, would constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Exhibit A, as it may be amended, supplemented, or otherwise modified from
time to time by the Borrower with the consent of the Required Banks.
"Dollar" and the sign "$" mean lawful money of the United States of
America.
"Domestic Office" means, relative to the Agent or any Person, the office
of such Person designated as such below its signature hereto or such other
office of such Person (or any successor or assign of such Person) within the
United States of America as may be designated from time to time by notice
from such Person to each other Person party hereto.
"Durwood Interests" means Stanley H. Durwood, his spouse and any of his
lineal descendants and their respective spouses (collectively the "Durwood
Family") and (i) any Affiliate of any member of the Durwood Family and (ii)
any trust solely for the benefit of one or more members of the Durwood Family
(whether or not any member of the Durwood Family is a trustee of such trust)
(provided that any trust for the benefit of one or more members of the
Durwood Family may also be for the benefit of one or more charitable
organizations).
"Effective Date" means the date the Original Loan Agreement first became
effective.
"Equipment Notes" means installment purchase obligations evidenced by a
note, bond, debenture or other evidence of Indebtedness issued or entered
into in connection with the acquisition of fixtures, furniture or equipment
by the Guarantor or a Subsidiary of the Guarantor in the ordinary course of
business and used or useable by the Guarantor and its Subsidiaries in the
business of the Guarantor and its Subsidiaries and required to be classified
and accounted for as indebtedness in accordance with GAAP.
"ERISA" is defined in Section 6.11.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Federal Funds Rate" means, for any day, a fluctuating interest rate per
annum equal to
(a) 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 for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"First Restatement Date" means June 14, 1994, the date as of which this
Agreement has become effective.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of 52/53 weeks ending on the Thursday
closest to March 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g. the "1994 Fiscal Year") refer to the Fiscal Year
ending on the Thursday closest to March 31 occurring during such calendar
year.
"Fixed Charge Coverage Ratio" as of any date means the ratio of
(i) C o n solidated EBITDA of the Guarantor and its Consolidated
Subsidiaries for the four most recent Fiscal Quarters ended on such date (if
such date is the last day of a Fiscal Quarter) or prior to such date (if such
date is not on last day of a Fiscal Quarter)
to
(ii) Fixed Charges for such period.
"Fixed Charges" for any period means the sum of (i) Consolidated
Interest Expense for such period, plus (ii) the current portion of
Indebtedness with an original maturity exceeding one year (other than
Indebtedness under the Loan Documents) as of the last day of the Fiscal
Quarter then most recently ended prior to the date of determination, plus
(iii) dividends on preferred or common stock paid or accrued by the Guarantor
during such period, plus (iv) amounts paid by the Guarantor or the Borrower
in respect of optional repurchases and redemptions of Subordinated Debt,
preferred stock and common stock during such period (provided that, unless
and until a Default shall have occurred and be continuing, redemptions or
r e p urchases of up to $40,000,000 in aggregate principal amount of
Subordinated Debt shall be excluded from this clause (iv)), plus (v)
additional amounts (without duplication) paid during such period with respect
to Capitalized Lease Obligations. For purposes of calculating the Fixed
Charge Coverage Ratio, clauses (i), (iii), (iv) and (v) of the immediately
preceding sentence shall be calculated for the four most recent consecutive
Fiscal Quarters ended prior to the time of calculation.
"Fixed Rate Loan" is defined in Section 4.1.
"Free Cash Flow" as of any date means (i) Consolidated EBITDA, minus
(ii) Consolidated Interest Expense, minus (iii) all Capital Expenditures and
Investments (excluding any Guaranty) (net of cash dividends and other
payments received by the Borrower, the Guarantor or any Subsidiary from any
Investment), minus (iv) all taxes paid in cash, in each case, from July 2,
1992 to the date of determination.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System (or any successor).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States of America, which are
applicable as of the date of determination.
"Group of Persons" is defined in the definition of "Change in Control".
"Guarantor" is defined in the preamble.
"Guaranty" means any agreement, undertaking or arrangement by which any
Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to, or otherwise to invest in, a debtor,
or otherwise to assure a creditor against loss) the debt, obligation or other
liability of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of the
obligor's obligation under any guaranty shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or maximum
outstanding principal amount, if larger) of the debt, obligation or other
liability thereby guaranteed.
"hereof", "hereto", "hereunder" and similar terms refer to this
Agreement and not to any particular Section or provision of this Agreement.
"Impermissible Qualification" means, relative to the opinion by
independent public accountants as to any financial statement of the Guarantor
or the Borrower, any qualification or exception to such opinion:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial information; or
(c) which relates to the treatment or classification of any item
in such financial statement and which, as a condition to its removal,
would require an adjustment to such item the effect of which would be to
cause a default of any obligations under Section 7.2.3.
"including" means including without limiting the generality of any
description preceding such term.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all obligations for borrowed money, (ii) all obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii) all Capitalized
Lease Obligations and Equipment Notes, (iv) all obligations under or in
respect of Currency Hedging Obligations and Interest Rate Protection
Obligations of such Person, (v) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement, (vi) all obligations issued
or contracted for as payment in consideration of the purchase by such Person
of the stock or substantially all the assets of another Person or a merger or
consolidation, (vii) all obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transactions,
(viii) all obligations of the type referred to in clauses (i) through (vii)
of other Persons and all dividends of other Persons for the payment of which,
in either case, such Person is directly or indirectly responsible or liable
as obligor, guarantor or otherwise, and (ix) all obligations of the type
referred to in clauses (i) through (viii) of other Persons which are secured
by any Lien on any property or asset of such Person, the amount of such
obligation being deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured; provided, however, that
" I n debtedness" shall not include any Non-Recourse Indebtedness, any
obligations under any operating leases, trade accounts payable arising in the
ordinary course of business and trade letters of credit issued in support of
trade accounts payable arising in the ordinary course of business.
"Indemnified Liabilities" is defined in Section 10.4.
"Indentures" means the indentures under which the Senior Subordinated
Notes have been issued.
"Instrument" means any document or writing (whether by formal agreement,
letter or otherwise) under which any obligation is evidenced, assumed or
undertaken, or any right to any Lien is granted or perfected.
"Interest Period" means, relative to any Fixed Rate Loan, the period
which shall begin on (and include) the date on which such Fixed Rate Loan is
made or continued as, or converted into, a Fixed Rate Loan pursuant to
Section 4.1, and, unless the final maturity of such Fixed Rate Loan is
accelerated, shall end on (but exclude) the day which numerically corresponds
to such date one, two, three or six months thereafter, in either case as the
Borrower may select in its relevant notice pursuant to Section 4.1; provided,
however, that:
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than four different dates;
(b) absent such selection, the Borrower shall be deemed to have
selected an Interest Period of one month or 30 days, as the case may be;
provided, that if another duration shall be required in order to comply with
clause (a), such Loan shall be a BNS Rate Loan for such duration;
(c) if there exists no numerically corresponding day in such month,
such Interest Period shall end on the last Business Day of such month;
(d) if such Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the Business Day next
following such numerically corresponding day (unless such next following
Business Day is the first Business Day of a calendar month, in which case
such Interest Period shall end on the preceding Business Day); and
(e) no Interest Period shall end later than March 30, 1997.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers
of cash or other property to others or payments for property or services for
the account or use of others, or otherwise), or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, any other Person.
"Liabilities" means all monetary obligations of the Borrower and the
Guarantor under this Agreement, the Notes and each other Loan Document.
"LIBO Rate" means, relative to each Interest Period applicable to any
Fixed Rate Loans comprising all or any part of any Borrowing, conversion or
continuation, the rate per annum determined by the Agent at which dollar
deposits in immediately available funds are offered to the Agent's LIBOR
Office two Business Days prior to the beginning of such Interest Period by
prime banks in the interbank eurodollar market as at or about the relevant
local time of such LIBOR Office, for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
equal to the amount of the Fixed Rate Loan to be outstanding during such
Interest Period. "Relevant local time" shall mean 11:00 a.m., local time, in
London, England, when the LIBOR Office selected by the Agent to determine the
LIBO Rate is located in Europe, or 10:00 a.m., Nassau, Bahamas time, when
such LIBOR Office is located in North America.
"LIBO Rate (Reserve Adjusted)" means, relative to any portion of a Loan
to be made, continued or maintained as, or converted into, a Fixed Rate Loan
for any Interest Period, a rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) 1 - LIBOR Reserve Percentage.
The Agent shall determine the LIBO Rate (Reserve Adjusted) for each Interest
Period, applicable to Fixed Rate Loans comprising all or part of any
Borrowing, conversion or continuation and promptly notify the Borrower
thereof (which determination shall, in the absence of demonstrable error, be
conclusive on the Borrower) and, if requested by the Borrower, deliver a
statement showing the computation used by the Agent in determining any such
rate.
"LIBOR Office" means, relative to any Bank, the office of such Bank
designated as such below its signature hereto or such other domestic or
foreign office or offices of such Bank (as designated from time to time by
notice from such Bank to the Borrower and the Agent).
"LIBOR Reserve Percentage" means, relative to each Interest Period, a
percentage (expressed as a decimal) equal to the daily average during such
Interest Period of the percentages in effect on each day of such Interest
P e riod, as prescribed by the F.R.S. Board, for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to Regulation
D or any other applicable regulation of the F.R.S. Board which prescribes
reserve requirements applicable to "Eurocurrency Liabilities" as presently
defined in Regulation D as applicable to any Bank or any participant of such
Bank with respect to such participation.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. A Person shall be deemed to own subject to a Lien any property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to Indebtedness of such Person. The right of a
distributor to the return of its film held by a Person under a film licensing
agreement is not a Lien as used herein. Unless an operating lease is
intended as security, reservation of title thereunder by the lessor and the
interest of the lessee therein are not Liens as used herein.
"Loan Document" means this Agreement and each Instrument from time to
time executed and delivered to either Arranger or any Bank pursuant hereto,
whether or not mentioned herein, including the Notes, the Significant
Subsidiary Guaranty, the AMCE Guaranty and any guarantee delivered to the
Agent pursuant to Section 7.2.17.
"Loan Party" means the Borrower, the Guarantor, each Significant
Subsidiary and any other party (other than either Arranger or a Bank) that
executes and delivers a Loan Document.
"Loan Request" means for a particular Loan a loan request respecting
such Loan and certificate duly executed by any Authorized Officer of the
Borrower substantially in the form of Exhibit B attached hereto.
"Loans" is defined in Section 2.1.
"Materially Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a materially
a d verse effect, on a consolidated basis for the Guarantor and its
Subsidiaries taken as a whole, in accordance with GAAP (i) on the financial
condition, operations, properties or business or (ii) on the ability of the
Borrower or any other Loan Party to perform any of its payment or other
material obligations under this Agreement or any Loan Document.
"Maturity" means, relative to any Loan, the date on which such Loan is
stated to be due and payable, in whole or in part (in accordance with the
Note evidencing such Loan, this Agreement or otherwise), or such earlier date
when such Loan (or any portion thereof) shall be or become due and payable,
in whole or in part, in accordance with the terms of this Agreement, whether
by required prepayment, declaration or otherwise.
"Multiemployer Plan" means a pension plan described in ERISA section
4001(a)(3) to which the Borrower, the Guarantor or any Subsidiary is, or
within the six years preceding the date of this Agreement has been, obligated
to contribute.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations with respect to
Indebtedness are financed or sold with recourse to the Guarantor or any of
its Subsidiaries) net of: (i) brokerage commissions and other reasonable
fees and expenses (including reasonable fees and expenses of counsel and
investment bankers) related to such Asset Sale; (ii) provisions for all taxes
payable as a result of such Asset Sale; (iii) payments made to retire
Indebtedness secured by the current assets subject to such Asset Sale to the
extent required pursuant to the terms of such Indebtedness; (iv) amounts
required to be paid to any Person (other than the Guarantor or any Subsidiary
of the Guarantor) having a beneficial interest in the assets subject to the
Asset Sale; and (v) appropriate amounts to be provided by the Guarantor or
any of its Subsidiaries, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Guarantor or any of its Subsidiaries, as the case may be, after such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Net Indebtedness" means, with respect to Guarantor at any time, (i) the
o u t s tanding principal amount of Indebtedness of Guarantor and its
Consolidated Subsidiaries (determined on a consolidated basis) as of such
time, minus (ii) cash and Cash Equivalents of the Guarantor and its
Consolidated Subsidiaries (determined on a consolidated basis) at such time.
"Net Indebtedness to Consolidated EBITDA Ratio" means, as of any date,
the ratio of
(i) Net Indebtedness of the Guarantor and its Consolidated Subsidiaries
as of such date
to
(ii) Consolidated EBITDA for the Guarantor and its Consolidated
Subsidiaries for the four most recent Fiscal Quarters ended on such date (if
such date is the last day of a Fiscal Quarter) or prior to such date (if such
date is not the last day of a Fiscal Quarter).
"Non-AMC Subsidiary" means a Subsidiary of the Guarantor which is not
the Borrower or a Subsidiary of the Borrower.
"Non-Guarantor" means a Person that is not, before and after giving
effect to any Capital Expenditure or Investment made in or on behalf of such
Person, a Significant Subsidiary.
"Non-Recourse Indebtedness" means Indebtedness as to which (i) neither
the Guarantor nor any of its Subsidiaries (other than the relevant
Unrestricted Subsidiary or another Unrestricted Subsidiary) (1) provides
credit support (including any undertaking, agreement or instrument which
would constitute Indebtedness), (2) is directly or indirectly liable or (3)
constitutes the lender (in each case, other than pursuant to and in
compliance with Section 7.2.12) and (ii) no default with respect to such
Indebtedness (including any rights which the holders thereof may have to take
enforcement action against the relevant Unrestricted Subsidiary or its
assets) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Borrower or its Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Note" means the promissory notes of Borrower delivered to BNS and BA in
connection with the Original Loan Agreement and any other promissory note of
the Borrower substantially in the form of Exhibit H attached hereto (as such
promissory note may be amended, endorsed, or otherwise modified from time to
time) and all other promissory notes accepted from time to time in
substitution, replacement, or renewal therefor.
"Ongoing Indebtedness" means the Indebtedness described in Item 9 of
Exhibit A.
"Organic Document" means, relative to any corporation, its certificate
of incorporation, its by-laws and all shareholder agreements, voting trusts
and similar arrangements applicable to any of its authorized shares of
capital stock.
"Original Loan Agreement" is defined in the first recital.
"Participant" is defined in Section 10.11(a).
"Partnership Interest Purchase Agreement" is defined in Section 7.2.13.
"PBGC" means the Pension Benefit Guaranty Corporation, a United States
corporation.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Plan), and to which the Borrower, the Guarantor or any
Subsidiary may have any liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of
ERISA at any time during the six years preceding this Agreement, or by reason
of being deemed to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Bank, the percentage set forth
opposite its signature hereto as such percentage may be adjusted hereafter.
"Permitted AMCEI Transfer" is defined in Section 7.2.6.
"Permitted Payments" is defined in Section 7.2.10.
"Person" means any natural person, corporation, firm, association,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Quarterly Payment Date" means the last day of any Fiscal Quarter or, if
such day is not a Business Day, the next succeeding Business Day.
"Registration Statement" means the Registration Statement on Form S-1
filed by the Guarantor with the SEC on June 12, 1992, as amended by Amendment
Nos. 1, 2, 3 and 4 thereto filed by the Guarantor with the SEC on July 10,
1992, July 22, 1992, July 30, 1992 and August 5, 1992, respectively, and all
further amendments thereto approved by the Arrangers.
"Regulatory Change" means, relative to any Bank, any change after the
date hereof in any (or the adoption after the Date of the Original Loan
Agreement of any new):
(a) United States Federal or state law or foreign law applicable
to such Bank; or
(b) rule, regulation, interpretation, directive or request
(whether or not having the force of law) applying to such Bank of any
court or governmental authority charged with the interpretation or
administration of any law referred to in clause (a) or of any fiscal,
monetary or other authority having jurisdiction over such Bank.
"Replaced Facilities" means those agreements described on Schedule 1.1.
"Reportable Event" is defined in Section 6.11.
"Required Banks" means, at any time, Banks having, in the aggregate, a
Percentage of 66-2/3% or more of the Total Commitment Amount.
"SEC" means the Securities and Exchange Commission (or any government
body or agency succeeding to the functions of such Commission).
"Senior Subordinated Notes" means
(i) the $100,000,000 of 11-7/8% Senior Notes due 2000 of the
Guarantor, and
(ii) the $100,000,000 of 12-5/8% Senior Subordinated Notes due
2002 of the Guarantor,
in each case, issued pursuant to the Indentures described in the Registration
Statement.
"Significant Subsidiary" means AMC Film Marketing, AMC Philadelphia, AMC
R e a l ty, Inc., a Delaware corporation, Conservco, Inc., a Missouri
corporation, Budco, AMC Canton Realty, Inc., a Delaware corporation, Concord
Cinema, Inc., a Delaware corporation, and any other wholly-owned direct or
i n direct Subsidiary of the Borrower whose assets exceed 5% of the
consolidated assets of the Guarantor and its Consolidated Subsidiaries or
whose revenues exceed 5% of the consolidated revenues of the Guarantor and
its Consolidated Subsidiaries or any other wholly-owned direct or indirect
Subsidiary of the Borrower so designated by the Borrower after the Effective
Date with the consent of the Required Banks.
"Significant Subsidiary Guaranty" means that certain guaranty, executed
by each Significant Subsidiary, substantially in the form of Exhibit E
attached hereto (as such may be amended, supplemented, restated or otherwise
modified and in effect from time to time).
"Subordinated Debt" means all unsecured Indebtedness of the Guarantor or
any Subsidiary for money borrowed which is subject to, and is only entitled
to the benefits of, terms and provisions (including acceleration, interest
rate, sinking fund, covenant, default, and subordination provisions),
satisfactory in form and substance to the Required Banks and which has terms
of payment and holders satisfactory to the Required Banks, in each case as
evidenced by their written approval thereof, including, without limiting the
foregoing, the Senior Subordinated Notes and guaranties thereof as provided
in the Indentures on the Date of the Original Loan Agreement.
"Subordination Agreement" means that certain Subordination Agreement,
dated as of the Date of the Original Loan Agreement, from the Guarantor in
favor of the Banks, as the same may be amended, supplemented or restated from
time to time hereafter.
"Subsidiary" of any Person means (i) any corporation 51% of the
outstanding shares of capital stock of which having ordinary voting power for
the election of directors is owned directly or indirectly by such Person, and
(ii) any partnership, association, joint venture or other entity in which
such Person, directly or indirectly, has more than a 50% equity interest,
and, except as otherwise indicated herein, references to Subsidiaries shall
refer to Subsidiaries of the Guarantor. Notwithstanding the foregoing, for
purposes of the Loan Documents an Unrestricted Subsidiary shall not be deemed
a Subsidiary of the Guarantor or the Borrower other than for purposes of the
definition of "Unrestricted Subsidiary," unless the Guarantor shall have
designated in writing to the Arrangers an Unrestricted Subsidiary as a
Subsidiary.
"Taxes" is defined in Section 3.10.
"Total Commitment Amount" is defined in Section 2.2.
"TPI" means TPI Enterprises, Inc., a New Jersey corporation.
"TPIE" is defined in Section 7.2.13.
"Transferee" is defined in Section 10.11(c).
"type" means, relative to the outstanding principal amount of all or any
portion of a Loan, the portion thereof, if any, being maintained as a BNS
Rate Loan or a Fixed Rate Loan.
"Unfunded Benefit Liabilities" means with respect to any Pension Plan at
any time, the amount of unfunded benefit liabilities as determined under
ERISA section 4001(a)(18).
"United States" or "U.S." means the United States of America, its 50
States and the District of Columbia.
"Unrestricted Subsidiary" means a Subsidiary of the Guarantor designated
in writing to the Arrangers (i) whose properties and assets, to the extent
they secure Indebtedness, secure only Non-Recourse Indebtedness and (ii)
which has no Indebtedness other than Non-Recourse Indebtedness.
"Welfare Plan" means a "welfare plan", as such term is defined in ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary of the Guarantor of which
100% of the outstanding Capital Stock is owned by the Guarantor or another
Wholly-Owned Subsidiary of the Guarantor.
SECTION 1.2 Use of Defined Terms. Terms for which meanings are
provided in this Agreement shall, unless otherwise defined or the context
otherwise requires, have such meanings when used in the Exhibits attached
hereto, each Loan Request, Continuation/ Conversion Notice, Compliance
Certificate, notice and other communication delivered from time to time in
connection with this Agreement or any Loan Document.
SECTION 1.3 Accounting and Financial Determinations. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined, or any accounting computation is required to be
made, for the purpose of this Agreement (including Section 7.2.3), such
determination or calculation shall, to the extent applicable and except as
otherwise specified in this Agreement, be made in accordance with GAAP as
used in, and consistently applied with, the financial statements referred to
in Section 6.4.
ARTICLE II
COMMITMENTS
SECTION 2.1 Commitments. Subject to the terms and conditions of this
Agreement (including Article V), each Bank severally and for itself alone
agrees that it will, from time to time on any Business Day occurring during
the period commencing on the First Restatement Date and continuing to (but
not including) the Commitment Termination Date, make loans (relative to each
Bank, its "Loans") to the Borrower equal to its Percentage of the aggregate
amount of the Borrowing requested from all Banks on each such Business Day;
provided, however, that no Bank shall be permitted (in the case of clause (a)
below) or required to make any Loan if, after giving effect thereto, the
aggregate principal amount of all Loans outstanding at any one time from
(a) all Banks would exceed the Total Commitment Amount; or
(b) such Bank would exceed its Percentage of the aggregate
principal amount of Loans then outstanding from all Banks.
Subject to the terms hereof, the Borrower may from time to time prior to the
Commitment Termination Date borrow, prepay, and reborrow amounts pursuant to
the Commitments.
SECTION 2.2 Total Commitment Amount. The aggregate amount (the "Total
Commitment Amount") of all Commitments on any date on or prior to the
Commitment Termination Date shall be $40,000,000, less (i) the Net Cash
Proceeds of any Asset Sales (other than (A) Asset Sales that result in Net
Cash Proceeds of less than $2,500,000, (B) Net Cash Proceeds that are
reinvested within 360 days after the related Asset Sale in activities
permitted by Section 7.2.15, (C) Net Cash Proceeds resulting from the sale by
the Borrower of 89,600 shares of preferred stock and 64,000 shares of common
stock of AmeriHealth, Inc. and (D) Net Cash Proceeds arising from the sale by
the Borrower of shares of stock of TPI) and (ii) all voluntary reductions to
such amount made by the Borrower; provided, however, that all such reductions
shall require at least three Business Days' prior notice to the Agent and be
permanent, and all partial reductions of such amount, in the case of any
voluntary reduction, shall be in minimum amounts of $1,000,000 and in
integral multiples of $1,000,000 in excess thereof. It is understood and
agreed that any Net Cash Proceeds held by Borrower pending reinvestment or
application hereunder shall be invested in Cash Equivalents while so held, to
the extent practicable.
SECTION 2.3 Fees. The Borrower agrees to pay the Agent for the account
of each Bank, for the period (including any portion thereof when its
Commitment is suspended by reason of the Borrower's inability to satisfy any
condition of Article V) commencing on the First Restatement Date and
continuing through the Commitment Termination Date, a commitment fee at the
per annum rate specified in the table below opposite the Applicable Margin
Determination Ratio computed in the Applicable Margin Determination Ratio
Certificate then most recently delivered on the daily average of the excess
of such Bank's Percentage times the Total Commitment Amount over the
outstanding principal amount of such Bank's Loans. Such commitment fees
shall be payable by the Borrower in arrears to each Bank for the period
ending on each Quarterly Payment Date, commencing with the first such day
following the First Restatement Date, and on the Commitment Termination Date.
The Agent shall promptly notify the Borrower of the amount of such commitment
fees following each Quarterly Payment Date and such fees shall be payable
within 3 days following receipt of such notice.
Applicable Margin Determination Ratio Rate
Greater than or equal to 4.00 0.500%
Greater than or equal to 2.00
and less than 4.00 0.375%
Less than 2.00 0.250%.
SECTION 2.4 Termination. The Commitments shall terminate and each Bank
shall be relieved of its obligations to make any Loan on the Commitment
Termination Date.
ARTICLE III
LOANS AND NOTES
SECTION 3.1 Borrowing Procedure. By furnishing a Loan Request to the
Agent on or before 11:00 a.m., Atlanta time, on not less than three (or on
the same day in the case of a BNS Rate Loan) nor more than five Business
Days' notice before the date of any Borrowing requested in such Loan Request,
the Borrower may from time to time request that a Borrowing be made by all
Banks in the aggregate in a minimum amount of $1,000,000 and an integral
multiple of $100,000 in excess thereof. Subject to the terms and conditions
of this Agreement, each Borrowing shall be made on the Business Day specified
in the Loan Request therefor. On such Business Day and subject to such terms
and conditions, each Bank shall provide the Agent with funds, on or before
11:00 a.m. (or 12:00 noon in the case of a BNS Rate Loan), Atlanta time, in
an amount equal to such Bank's Percentage of the requested Borrowing by
transferring same day or immediately available funds to such account as the
Agent shall specify from time to time by notice to the Banks. The proceeds
of each Borrowing shall be made available to the Borrower (albeit in the case
of a Loan by any other Bank, the Agent shall be required to make the proceeds
thereof available only to the extent received by it in same day funds from
such other Bank) by wire transfer of such proceeds to such transferees, or to
such accounts of the Borrower, as the Borrower shall have specified in the
Loan Request therefor. No Bank's obligation to make any Loan shall be
affected by any other Bank's failure to make any Loan.
SECTION 3.2 Notes. All Loans made by each Bank shall be evidenced by a
Note payable to the order of such Bank in a maximum principal amount equal to
such Bank's Percentage of the original Total Commitment Amount. The Borrower
hereby irrevocably authorizes each Bank to make (or cause to be made)
appropriate notations on the grid attached to such Bank's Note (or on a
continuation of such grid attached to any such Note and made a part thereof),
which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal of, and the interest rate (including any conversions
thereof pursuant to Section 4.2) and Interest Period applicable to, the Loans
evidenced thereby. Any such notations on any such grid (and on any such
continuation) indicating the outstanding principal amount of such Bank's
Loans shall be rebuttable presumptive evidence of the principal amount
thereof owing and unpaid, but the failure to record any such amount on such
grid (or on such continuation) shall not limit or otherwise affect the
obligations of the Borrower hereunder or under such Note to make payments of
principal of or interest on such Loans when due.
SECTION 3.3 Principal Payments and Prepayments. The Borrower will
repay the outstanding principal amount of the Notes on or before the
Commitment Termination Date. In addition, the Borrower:
(a) may make a voluntary prepayment in part in an aggregate
principal amount of not less than $1,000,000 and an integral multiple of
$100,000 in excess thereof, or in full of the outstanding principal
amount of the Notes from time to time at any time upon at least three
Business Days' prior notice (or same day notice in the case of a BNS
Rate Loan) to the Agent; and
(b) shall, on each date when any reduction in the Total Commitment
Amount shall become effective pursuant to Section 2.2, make a mandatory
prepayment of the Notes equal to the excess, if any, of the outstanding
principal amount of all Loans over the Total Commitment Amount as so
reduced.
Each prepayment of a Note made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.6. All interest
accrued on the principal amount of Notes prepaid shall be paid on the date of
such prepayment. No voluntary prepayment of principal of the Notes prior to
the Commitment Termination Date shall cause a reduction in the Total
Commitment Amount.
Each prepayment of the Notes shall, except as the Borrower may otherwise
have notified the Agent, be applied, to the extent of such prepayment, (x)
first, to the principal amount thereof being maintained as BNS Rate Loans,
and (y) second, to the principal amount thereof being maintained as Fixed
Rate Loans.
SECTION 3.4 Interest. The Borrower agrees to pay interest on the
principal amount of the Notes from time to time unpaid prior to and at
Maturity (whether by required prepayment, declaration or otherwise) at a rate
per annum:
(a) on that portion of the outstanding principal amount thereof
maintained from time to time as a BNS Rate Loan, equal to the sum of the
BNS Base Rate from time to time in effect plus the Applicable Margin per
annum, and
(b) on that portion of the outstanding principal amount thereof
maintained from time to time as one or more Fixed Rate Loans during each
applicable Interest Period, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Applicable Margin per annum.
SECTION 3.5 Post-Maturity Rates. After the Maturity of all or any
portion of the principal amount of the Loans or after any other monetary
Liabilities shall have become due, the Borrower shall pay interest (after as
well as before judgment) on the principal amount of all types of Loans so
matured or on such other monetary Liabilities, as the case may be, at a rate
per annum which is determined by increasing each of the Applicable Margins
set forth in clauses (a) and (b) of Section 3.4 by 2% per annum for Loans so
matured and, to the extent permitted by applicable law, at a rate per annum
equal to the BNS Base Rate plus 3.125% for such other monetary Liabilities.
SECTION 3.6 Payment Dates. Interest accrued on the Notes prior to
Maturity (as aforesaid) shall be payable, without duplication:
(a) on that portion of the outstanding principal amount of each
thereof maintained as a BNS Rate Loan, on the last day of each month
(or, if such day is not a Business Day, on the next succeeding Business
Day), commencing with the first such day following the date of such
Notes;
(b) on that portion of the outstanding principal amount thereof
maintained as one or more Fixed Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months for a Fixed Rate Loan, on the three month anniversary of
the first day of such Interest Period); and
(c) on that portion of the outstanding principal amount thereof
converted into a BNS Rate Loan or a Fixed Rate Loan on a day when
interest would not otherwise have been payable pursuant to clause (a) or
(b), on the date of such conversion.
Interest on the Notes shall be payable at Maturity (as aforesaid) and,
thereafter, on demand. The Agent shall give prompt notice to the Borrower of
each computation of accrued interest before the due date thereof.
SECTION 3.7 Payments, Computations, etc. All payments by the Borrower
pursuant to this Agreement, the Notes, or any other Loan Document, whether in
respect of principal or interest, shall be made by the Borrower to the Agent
for the account of the holders of Notes pro rata according to their
respective unpaid principal amounts. The payment of all fees referred to in
Section 2.3 shall be made by the Borrower to the Agent for the account of the
Banks entitled thereto pro rata according to their Percentages. All other
amounts payable to either Arranger or any Bank under this Agreement or any
other Loan Document shall be paid to the Agent for the account of the Person
entitled thereto. All such payments required to be made to the Agent shall
be made, without set-off, deduction, or counterclaim, not later than 12:00
noon, Atlanta time, on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to time by notice
to the Borrower. Funds received after that time shall be deemed to have been
received by the Agent on the next following Business Day. The Agent shall
promptly remit in same day or immediately available funds to each Bank, or
other holder of a Note notified to the Agent, its share, if any, of such
payments received by the Agent for the account of such Bank or holder. All
interest and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days. Whenever any payment to be made shall otherwise be due on a day which
is not a Business Day, such payment shall (except as otherwise required by
clause (d) of the definition of the term "Interest Period" with respect to
payments then due of principal of or interest on any Notes being maintained
as Fixed Rate Loans) be made on the next succeeding Business Day and such
extension of time shall be included in computing interest, if any, in
connection with such payment.
SECTION 3.8 Proration of Payments. If any Bank or other holder of a
Note shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff, or otherwise) on account of principal
of or interest on any Loan in excess of its pro rata share of payments then
or therewith obtained by all holders upon principal of and interest on all
Loans, such Bank or other holder shall purchase from the other Banks or
holders such participations in Loans held by them as shall be necessary to
cause such purchasing Bank or other holder to share the excess payment or
other recovery ratably with each of them; provided, however, that if all or
any portion of the excess payment or other recovery is thereafter recovered
from such purchasing holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. The
Borrower agrees that any Bank or other holder so purchasing a participation
from another Bank or holder pursuant to this Section may, to the fullest
extent permitted by law, exercise all its rights of payment (including
pursuant to Section 3.9) with respect to such participation as fully as if
such Bank or holder were the direct creditor of the Borrower in the amount of
such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Bank receives a secured claim in lieu of a setoff to which
this Section applies, such Bank shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Banks entitled under this Section to share in the benefits of
any recovery on such secured claim.
SECTION 3.9 Setoff. In addition to and not in limitation of any rights
of any Bank or other holder of any Note under applicable law, each Bank and
each other such holder shall, upon the occurrence of any Default described in
Section 8.1.4 or, with the consent of the Required Banks, upon the occurrence
of any other Event of Default, have the right to set off, appropriate and
apply to the payment of the Liabilities owing to it any and all balances,
credits, deposits, accounts, or moneys of the Borrower then maintained with
such Bank or other holder; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 3.8.
SECTION 3.10 Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
stamp, or other taxes, fees, duties, withholding or other charges of any
nature whatsoever imposed by any taxing authority, other than taxes imposed
on or measured by any Bank's net income or receipts (such non-excluded items
being hereinafter referred to as "Taxes"). In the event that any withholding
or deduction from any payment to be made by the Borrower hereunder is
required in respect of any Taxes pursuant to any applicable law, rule, or
regulation, then the Borrower will:
(i) pay to the relevant authority the full amount required to be
so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(iii) pay to the Agent for the account of the Banks or the holders
of the Notes such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Bank or the holder of each
Note, after giving effect to any credit against Taxes received by each
such Bank or holder as a result of such withholding or deduction, will
equal the full amount such Bank or such holder would have received had
no such withholding or deduction been required. Each such Bank and
holder shall determine such additional amount or amounts payable to it
(which determination shall, in the absence of demonstrable error, be
conclusive and binding on the Borrower).
Upon the request of the Borrower, each Bank and each subsequent holder of any
Note that is organized under the laws of a jurisdiction other than the United
States or any state thereof shall, prior to the due date of any payments
under the Notes, execute and deliver to the Borrower, on or about the first
scheduled payment date in each Fiscal Year, a United States Internal Revenue
Service Form 1001 or Form 4224 (or any successor form), appropriately
completed.
ARTICLE IV
BNS BASE RATE AND FIXED RATE
OPTIONS FOR THE LOANS
SECTION 4.1 Elections. The Loans comprising any Borrowing may be made
as a loan having a fluctuating rate of interest determined by reference to
the BNS Base Rate ("BNS Rate Loans") or, at the Borrower's election made in
accordance with this Section, as a loan (a "Fixed Rate Loan") having for each
particular Interest Period a fixed rate of interest determined by reference
to the LIBO Rate (Reserve Adjusted), as specified in the Loan Request for
such Loan. The Borrower may from time to time request by delivering to the
Agent a Continuation/Conversion Notice, on not less than one (or not less
than three if a Loan is to be continued as, or converted into, a Fixed Rate
Loan) nor more than five Business Days' notice:
(i) that all, or any portion in a minimum amount of $1,000,000 or
an integral multiple of $100,000 in excess thereof, of the outstanding
principal amount of any Borrowing be converted from BNS Rate Loans into
Fixed Rate Loans or, subject to Section 4.5, from Fixed Rate Loans into
BNS Rate Loans; and
(ii) on the expiration of the Interest Period applicable to any
Fixed Rate Loans, that all, or any portion in a minimum amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof, of the
outstanding principal amount of such Fixed Rate Loans be continued as
Fixed Rate Loans or be converted into BNS Rate Loans (in the absence of
the delivery of a Continuation/Conversion Notice pursuant to this
clause, the Borrower will be deemed to have requested that such Fixed
Rate Loans be converted into BNS Rate Loans);
provided, however, that:
(x) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, Fixed Rate Loans if, after
giving effect to such action, the Interest Period applicable thereto
shall extend beyond the date of any prepayment required by Section 3.3,
unless a sufficient principal amount of other Loans are being maintained
as BNS Rate Loans to permit such prepayment to be applied in full to
such BNS Rate Loans;
(y) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, a Fixed Rate Loan when any
Default has occurred and is continuing; and
(z) no portion of the outstanding principal amount of any Loans
may be made or continued as, or be converted into, BNS Rate Loans or
Fixed Rate Loans unless, after giving effect to such action, the
principal amount of Loans of each type outstanding from each Bank then
being so made, continued or converted shall be equal to such Bank's
Percentage of the outstanding principal amount of all Loans then being
so made, continued or converted.
Each Continuation/Conversion Notice requesting that all, or any portion, of
the principal amount of the Loans be continued as, or be converted into,
Fixed Rate Loans shall specify the duration of the Interest Period commencing
upon such continuation or conversion.
Each Bank may, if it so elects, fulfill its commitment to make or
continue any portion of the principal amount of a Loan as, or to convert any
portion of the principal amount of a Loan into, one or more Fixed Rate Loans
by causing a foreign branch or Affiliate of such Bank to make any such Fixed
Rate Loan; provided, however, that in such event such Fixed Rate Loan shall
be deemed to have been made by such Bank, and the obligation of the Borrower
to repay such Fixed Rate Loan shall nevertheless be to such Bank and shall be
deemed to be held by it, to the extent of such Fixed Rate Loan, for the
account of such foreign branch or Affiliate.
Whenever any Bank makes any notations pursuant to Section 3.2 on the
grid attached to its Note (or on any continuation of such grid) and whenever
such Bank converts a Loan into a BNS Rate Loan or a Fixed Rate Loan, such
Bank will make further notations on the grid attached to such Note (or on any
such continuation) reflecting the portions of the outstanding principal
amounts thereof being maintained as a BNS Rate Loan and Fixed Rate Loans.
The Borrower understands that, if it elects that any portion of the
principal amount of a Borrowing be made, continued as, or be converted into,
a Fixed Rate Loan, each Bank may (while being entitled to fund all or any
portion of such Fixed Rate Loan as it may see fit) wish to be able to fund
such Fixed Rate Loan by issuing Dollar certificates of deposit in New York
City or purchasing Dollar deposits in its LIBOR Office's interbank eurodollar
market. Accordingly, in connection with any determination to be made for
purposes of Section 4.2, 4.3, 4.4 or 4.5, it shall be conclusively assumed
that such Bank has elected to fund all Fixed Rate Loans by issuing Dollar
certificates of deposit in New York City or purchasing Dollar deposits in
such interbank eurodollar market.
SECTION 4.2 Fixed Rate Lending Unlawful. If as the result of any
Regulatory Change any Affected Bank shall determine (which determination
shall, in the absence of demonstrable error, be conclusive and binding on the
Borrower) that it is unlawful for the Affected Bank to make, continue or
maintain a Loan as, or to convert a Loan into, one or more Fixed Rate Loans,
the obligation of the Affected Bank under Section 4.1 to make, continue or
maintain any portion of the principal amount of a Loan as, or to convert such
Loan into, one or more Fixed Rate Loans shall, upon such determination (and
telephonic notice thereof confirmed in writing to the Agent and the
Borrower), forthwith terminate, and the Agent shall, by telephonic notice
confirmed in writing to the Borrower and each Bank, declare that such
obligation has so terminated, and any portion of the principal amount of a
Loan then maintained as one or more Fixed Rate Loans by the Affected Bank
shall automatically convert into a BNS Rate Loan. If circumstances
subsequently change so that the Affected Bank shall determine that it is no
longer so affected, the obligation of the Affected Bank under Section 4.1 to
make or continue Loans as, or to convert Loans into, Fixed Rate Loans shall,
upon such determination (and telephonic notice thereof confirmed in writing
to the Agent and the Borrower), forthwith be reinstated, and the Agent shall,
by notice to the Borrower and each Bank, declare that such obligation has
been so reinstated.
SECTION 4.3 Deposits Unavailable. If prior to the date on which all
or any portion of the principal amount of any Loan is to be made, continued
as, or be converted into, a Fixed Rate Loan, any Affected Bank or the Agent
shall determine for any reason whatsoever (which determination shall, in the
absence of demonstrable error, be conclusive and binding on the Borrower)
that:
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Affected Bank in its relevant
market; or
(b) by reason of circumstances affecting the Agent in its relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Fixed Rate Loans;
the Agent (after receipt of notice from the Affected Bank, in the case of
clause (a) above) shall promptly give telephonic notice of such determination
confirmed in writing to each Bank and the Borrower, and:
(i) the obligation under Section 4.1 of the Affected Bank (in the
case of clause (a) above) or all Banks (in the case of clause (b) above)
to make, continue any portion of the principal amount of a Loan as, or
to convert a Loan into, one or more Fixed Rate Loans shall, upon such
notification, forthwith terminate; and
(ii) the portion of all Loans then maintained as Fixed Rate Loans
by the Affected Bank (in the case of clause (a) above) or all Banks (in
the case of clause (b) above) shall on the expiration of the Interest
Period applicable thereto automatically convert into BNS Rate Loans.
If circumstances subsequently change so that the Agent or the Affected Bank,
as the case may be, shall no longer be so affected, the Agent shall promptly
give telephonic notice thereof confirmed in writing to the Borrower and each
of the Banks, and the obligations of the Affected Bank or all Banks, as the
case may be, under Section 4.1 to make or continue Loans as, or convert Loans
into, Fixed Rate Loans shall be reinstated, and the Agent shall, by notice to
the Borrower and each Bank, declare that such obligations have been so
reinstated.
SECTION 4.4 Capital Adequacy; Increased Costs, etc. The
Borrower further agrees to reimburse each Bank for any increase in the cost
to such Bank of making, continuing, or maintaining (or of its obligation to
make, continue, or maintain) any portion of the principal amount of any of
its Loans as, or of converting (or of its obligation to convert) any portion
of the principal amount of any of its Loans into, Fixed Rate Loans and for
any reduction in the amount of any sum receivable by such Bank hereunder in
respect of making, continuing, or maintaining any portion of the principal
amount of any of its Loans as, or converting any portion of the principal
amount of any Loans into, Fixed Rate Loans, in either case, from time to time
by reason of:
(i) to the extent not included in the calculation of the LIBO Rate
(Reserve Adjusted), the adoption or compliance with any capital
adequacy, reserve, special deposit, or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
such Bank, under or pursuant to any law, treaty, rule, regulation
(including any F.R.S. Board Regulation), or requirement in effect on the
Date of the Original Loan Agreement, or as the result of any Regulatory
Change; or
(ii) any Regulatory Change which shall subject such Bank to any
tax (other than taxes on net income or receipts), levy, impost, charge,
fee, duty, deduction, or withholding of any kind whatsoever or change
the taxation of any Loan made or maintained as a Fixed Rate Loan and the
interest thereon (other than any change which affects, and to the extent
that it affects, the taxation of net income or receipts).
In any such event, such Bank shall promptly notify the Agent and the Borrower
thereof stating the reasons therefor and the additional amount required fully
to compensate such Bank for such increased cost or reduced amount. Such
additional amounts shall be payable on demand after receipt of such notice.
A statement as to any such increased cost or reduced amount or any change
therein (including calculations thereof in reasonable detail) shall be
submitted by such Bank to the Agent and the Borrower and shall, in the
absence of demonstrable error, be conclusive and binding on the Borrower.
SECTION 4.5 Funding Losses. In the event any Bank shall incur any loss
or expense (including any loss or expense incurred by reason of the
liquidation, or reemployment of deposits or other funds acquired by such Bank
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a
Fixed Rate Loan) as a result of:
(i) payment or prepayment of the principal amount of any Fixed
Rate Loan on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Section 3.3 or otherwise;
(ii) any conversion of all or any portion of the outstanding
principal amount of any Fixed Rate Loan to a BNS Rate Loan pursuant to
Section 4.1 prior to the expiration of the Interest Period then
applicable thereto (but excluding in each case any loss or expense
resulting therefrom to the extent the Bank is reimbursed therefor by
interest payable pursuant to clause (c) of Section 3.6); or
(iii) a Loan not being made, continued as, or converted into, a
F i x e d Rate Loan in accordance with a Loan Request or the
Continuation/Conversion Notice given therefor (other than as the result
of a default by such Bank in complying with such Loan Request or such
Continuation/Conversion Notice);
then, upon the request of such Bank (with copies to the Agent), the Borrower
shall pay directly to such Bank such amount as will (in the reasonable
determination of such Bank) reimburse such Bank for such loss or expense. A
certificate as to any such loss or expense (including calculations thereof in
reasonable detail) shall be submitted by the Bank to the Agent and the
Borrower and shall, in the absence of demonstrable error, be conclusive on
the Borrower.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to First Borrowing After the First
Restatement Date. The obligation of the Banks to fund the first Borrowing
after the First Restatement Date shall be subject to the prior satisfaction
of each of the following conditions:
SECTION 5.1.1 Resolutions, etc. Each Arranger shall have received:
(a) a certificate, dated July 14, 1994, of the Secretary or an
Assistant Secretary of the Borrower as to
(1) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of
the Loan Documents to be executed by it hereunder, and
(2) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and each Loan
Document executed by it, upon which certificate each Bank may
c o n clusively rely until it shall have received a further
certificate of the Secretary or an Assistant Secretary of the
Borrower cancelling or amending such prior certificate;
(b) a certificate, dated July 14, 1994, of the Secretary or any
Assistant Secretary of the Guarantor and each Significant Subsidiary as
to
(1) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance by
such Loan Party of the Loan Documents to be executed and delivered
by it hereunder, and
(2) the incumbency and signatures of those of its officers
authorized to act with respect to such Loan Documents upon which
certificate each Bank may conclusively rely until it shall have
received a further certificate of such Loan Party cancelling or
amending such prior certificate;
(c) such other documents (certified if requested) as either
Arranger or the Required Banks may reasonably request, as soon as
practicable after the execution of this
Agreement, with respect to any Organic Document, Contractual Obligation
or Approval.
SECTION 5.1.2 Delivery of Notes. Borrower shall have delivered to the
Agent, for the account of each Bank, a Note, duly executed and delivered and
conforming to the requirements of Section 3.2.
SECTION 5.1.3 Opinion of Counsel. Each Arranger shall have received an
opinion, dated July 14, 1994, addressed to all Banks from Gage & Tucker,
counsel to the Borrower, the Guarantor and each Significant Subsidiary,
substantially in the form of Exhibit F attached hereto.
SECTION 5.1.4 Closing Fees, Expenses, etc. The Arrangers
shall have received for their own account, or for the account of each Bank,
as the case may be, all fees and expenses due and payable pursuant to the
Original Loan Agreement and Section 2.3 or Section 10.3, if then invoiced.
SECTION 5.1.5 Significant Subsidiary Guaranty. Each Arranger shall
have received a Significant Subsidiary Guaranty duly executed by each Person
that is a Significant Subsidiary as of the First Restatement Date.
SECTION 5.1.6 Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower, the Guarantor or
any Significant Subsidiary shall be satisfactory in form and substance to
each Arranger and its counsel; each Arranger and its counsel shall have
received all information, and such counterpart originals or such certified or
other copies of such materials, as such Arranger or its counsel may request;
and all legal matters incident to the transactions contemplated by this
Agreement shall be satisfactory to counsel to the Arrangers.
SECTION 5.1.7 Compliance with Warranties, non-Default, etc. The
representations and warranties set forth in Article VI shall have been true
and correct as of the date initially made, and on the date (and after giving
effect to the incurrence) of such Loan:
(a) such representations and warranties (excluding Section 6.6 and
the last sentence of Section 6.4) shall be true and correct with the
same effect as if then made;
(b) no Default shall have then occurred and be continuing; and
(c) since April 1, 1993 there shall have been no occurrence (other
than changes that are seasonal in nature) which, individually or in the
aggregate, would reasonably be expected to have a Materially Adverse
Effect.
SECTION 5.1.8 AMCE Acknowledgement. The Guarantor shall have executed
the acknowledgement of the AMCE Guaranty and the Subordination Agreement
attached hereto.
SECTION 5.2 All Loans. The obligation of the Banks to make any Loan
(including the initial Loans) shall also be subject to the satisfaction of
each of the conditions precedent set forth in Sections 5.2.1 through 5.2.3.
SECTION 5.2.1 Compliance with Warranties, non-Default, etc. The
representations and warranties set forth in Article VI shall have been true
and correct as of the date initially made, and on the date (and after giving
effect to the incurrence) of such Loan:
(a) such representations and warranties (excluding Section 6.6)
shall be true and correct with the same effect as if then made;
(b) no Default shall have then occurred and be continuing; and
(c) since April 1, 1993 there shall have been no occurrence (other
than changes that are seasonal in nature) which, individually or in the
aggregate, would reasonably be expected to have a Materially Adverse
Effect.
SECTION 5.2.2 Absence of Litigation, etc. No litigation, arbitration
or governmental investigation or proceeding shall be pending or, to the
knowledge of the Borrower, threatened against the Borrower, the Guarantor or
any Subsidiary which was not disclosed by the Borrower to the Banks pursuant
to Section 6.6 (or prior to the date of the Loans most recently made
hereunder, if any, pursuant to Section 7.1.6), and no development not so
disclosed shall have occurred in any litigation, arbitration or governmental
investigation or proceeding so disclosed, which, in either event, would
reasonably be expected to have a Materially Adverse Effect.
SECTION 5.2.3 Loan Request. The Agent shall have received
a Loan Request for such Borrowing.
ARTICLE VI
WARRANTIES, ETC.
In order to induce the Banks and the Arrangers to enter into this
Agreement and to make Loans hereunder, each of the Borrower and the
Guarantor, jointly and severally, represent and warrant to each Arranger and
each Bank as follows:
SECTION 6.1 Organization, Power, Authority, etc. Each Loan Party is a
corporation validly organized and existing and in good standing under the
laws of the state of its incorporation, is duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction where the
nature of its business makes such qualification necessary and where the
failure to so qualify would reasonably be expected to have a Materially
Adverse Effect and has full power and authority to own and hold under lease
its property and conduct its business substantially as presently conducted by
it. Each Loan Party has full power and authority to enter into and to
perform its obligations under this Agreement and each Loan Document to which
each is a party and to obtain the Loans hereunder, in the case of the
Borrower.
SECTION 6.2 Due Authorization. The execution and delivery by each Loan
Party of this Agreement and each Loan Document executed by it and the
performance by each of its respective obligations hereunder and thereunder
and the borrowings hereunder by the Borrower have been duly authorized by all
necessary corporate action, do not require any Approval, do not and will not
conflict with, result in any violation of, or constitute any default under,
any provision of any Organic Document or material Contractual Obligation
(except as disclosed in Item 1 ("Material Contractual Obligations") of
Exhibit A) of such Loan Party (or any other material Contractual Obligation)
or any present law or governmental regulation or court decree or order
applicable to either and will not result in or require the creation or
imposition of any Lien in any of their respective properties pursuant to the
provisions of any Contractual Obligation.
SECTION 6.3 Validity, etc. This Agreement is, and each Loan Document
executed by any Loan Party will on the due execution and delivery thereof be,
the legal, valid and binding obligation of such Loan Party enforceable in
accordance with its terms, subject, as to enforcement, only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws at the time in
effect affecting the enforceability of the rights of creditors generally, and
by general equitable principles which may limit the right to obtain the
remedy of specific performance of executory covenants.
SECTION 6.4 Financial Information. All balance sheets, the statements
of operations, of shareholders' equity and of cash flows and other financial
information of the Borrower and the Guarantor which have been or shall
hereafter be furnished by or on behalf of the Borrower or the Guarantor to
the Banks for the purposes of or in connection with this Agreement or any
transaction contemplated hereby pursuant to Section 7.1.1(a) or Section
7.1.1(b) (except Section 7.1.1(a)(iv)) or Section 5.1.7 of the Original Loan
Agreement (including the financial information referred to below) have been
or will be prepared in accordance with GAAP consistently applied throughout
the periods involved (except as disclosed therein) and do or will present
fairly the consolidated financial condition of the corporations covered
thereby as at the dates thereof and the results of their operations for the
periods then ended, including the consolidated balance sheet at April 1,
1993, and the consolidated statements of earnings, of operations and of
shareholders' equity, for the Fiscal Year then ended, of the Guarantor and
its Consolidated Subsidiaries. Since April 1, 1993, there has been no
o c currence (other than changes that are seasonal in nature) which,
individually or in the aggregate, would reasonably be expected to have a
Materially Adverse Effect.
SECTION 6.5 Absence of Certain Default. Neither the Borrower, the
Guarantor nor any Subsidiary is in default, except as described in Item 2
("Law, Governmental Regulation, Court Decree or Order") of Exhibit A: (a)
in the payment of (or in the performance of any material obligation
applicable to) any Indebtedness outstanding in a principal amount exceeding
$3,000,000; or (b) under any law or governmental regulation or court decree
or order which would reasonably be expected to have a Materially Adverse
Effect.
SECTION 6.6 Litigation, etc. Except as described in Item 3
("Litigation") of Exhibit A, no litigation, arbitration or governmental
investigation or proceeding against the Borrower, the Guarantor or any
Subsidiary or to which any of the properties of any thereof is subject is
pending or, to the knowledge of the Borrower, threatened which, if adversely
determined, would result in a liability in excess of $3,000,000.
SECTION 6.7 Regulation U. Neither the Borrower nor the Guarantor is
engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying margin stock,
and less than 25% of the assets of each consists of margin stock. Terms for
which meanings are provided in Regulation U of the F.R.S. Board or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.
SECTION 6.8 Government Regulation. Neither the Borrower, the Guarantor
nor any Subsidiary nor any Unrestricted Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of
1935, as amended.
SECTION 6.9 Certain Contractual Obligations or Organic Documents.
Except as described in Item 4 ("Certain Contractual Obligations or Organic
Documents") of Exhibit A, neither the Borrower, the Guarantor nor any
Subsidiary is a party or subject to any Contractual Obligation or Organic
Document which would reasonably be expected to have a Materially Adverse
Effect.
SECTION 6.10 Taxes. The Borrower, the Guarantor and all Subsidiaries
have filed all tax returns and reports required by law to have been filed by
them and have paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on their books.
SECTION 6.11 Employee Benefit Plans. Each Pension Plan complies in all
material respects with all applicable requirements of law and regulations,
and, except as set forth in Item 5 ("ERISA") of Exhibit A, no "Reportable
Event", such term being used herein with the meaning provided for it in
section 4043 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), has occurred with respect to any Pension Plan which
constitutes an Event of Default of the type described in Section 8.1.8. No
steps have been taken to terminate any Pension Plan where the Unfunded
Benefit Liabilities on the date of such termination or the date of the
institution of such steps exceed $3,000,000, and neither the Borrower, the
Guarantor nor any Subsidiary or Unrestricted Subsidiary has withdrawn or
partially withdrawn from any Multiemployer Plan or initiated steps to do so
where as a result thereof the Borrower, the Guarantor or Subsidiary or
Unrestricted Subsidiary could be required to make withdrawal liability
payments in excess of $3,000,000. No contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under section
302(f) of ERISA. Neither the Borrower, the Guarantor nor any Subsidiary or
Unrestricted Subsidiary has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of title I of ERISA, except as
listed on Item 5 of Exhibit A.
SECTION 6.12 Labor Controversies. There are no labor controversies
pending or, to the best of the Borrower's or the Guarantor's knowledge,
threatened against the Borrower, the Guarantor or any Subsidiary, which would
reasonably be expected to have a Materially Adverse Effect.
SECTION 6.13 Subsidiaries and Significant Subsidiaries. The Borrower
and the Guarantor have no Subsidiaries or Significant Subsidiaries except
t h o se identified in Item 6 ("Existing Subsidiaries and Significant
Subsidiaries") of Exhibit A or those permitted to have been acquired in
accordance with Section 7.2.6 or those created subsequent to the Date of the
Original Loan Agreement. All Unrestricted Subsidiaries existing on the First
Restatement Date are listed on Schedule I hereto.
SECTION 6.14 Patents, Trademarks, etc. Each of the Borrower and the
Guarantor owns and possesses all such patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service mark
rights and copyrights as the Borrower or the Guarantor considers necessary
for the conduct of the businesses of the Borrower, the Guarantor or
Subsidiaries as now conducted without any infringement upon rights of others
which would reasonably be expected to have a Materially Adverse Effect. There
is no individual patent or patent license used by the Borrower or the
Guarantor in the conduct of its business the loss of which would reasonably
be expected to have a Materially Adverse Effect except as may be disclosed in
Item 7 ("Material Patents and Trademarks") of the Disclosure Schedule.
SECTION 6.15 Ownership of Properties; Liens. Each of Borrower, the
Guarantor and each Subsidiary has good and marketable title to or good
leasehold interests in all of its material properties and assets, real and
personal, of any nature whatsoever, free and clear of all Liens except as
permitted pursuant to Section 7.2.2.
S E C TION 6.16 Accuracy of Information. All factual
information heretofore or contemporaneously furnished by the Borrower or the
Guarantor to either Arranger or the Banks in connection with execution and
delivery of this Agreement and the various transactions contemplated hereby,
to the best of the Borrower's and the Guarantor's knowledge, has been, and
all other such factual information hereafter furnished by the Borrower or the
Guarantor to either Arranger or the Banks will be, true and accurate in every
material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement and
not incomplete by omitting to state any material fact necessary to make such
information not misleading. All projections and pro forma financial
information contained in any materials furnished by the Borrower or the
Guarantor or any Subsidiary to the Arrangers or the Banks are based on good
faith estimates and assumptions by the management of the Borrower or the
Guarantor or the applicable Subsidiary, it being recognized by the Arrangers
and the Banks, however, that projections and statements as to future events
are not to be viewed as fact and that actual results during the period or
periods covered by any such projections or statements may differ from the
projected results and that the differences may be material.
SECTION 6.17 Senior Subordinated Notes. The Borrower's obligation to
pay the principal amount of the Loans and interest thereon and the
obligations of the Significant Subsidiaries under the Significant Subsidiary
Guaranty to guarantee such obligations of the Borrower constitute "Guarantor
Senior Indebtedness" and the obligations of the Guarantor under the AMCE
Guarantee to guarantee such obligations of the Borrower constitute "Senior
Indebtedness" of the Guarantor, as each such term is defined in the
Indentures.
SECTION 6.18 Solvency. Neither the Guarantor, the Borrower nor any of
the Significant Subsidiaries after giving effect to the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, is (i) insolvent, (ii) engaged in business for which any
property left with such entity is an unreasonably small capital, or (iii)
incurring debts beyond its ability to pay such debts as they mature. When
used herein, "insolvent" means, with respect to any Person, that such Person
has a financial condition such that the sum of such Person's debts is greater
than the value, both at fair valuation and at present fair salable value, of
such Person's property.
ARTICLE VII
COVENANTS
SECTION 7.1 Certain Affirmative Covenants. The Borrower and the
Guarantor each agrees with the Arrangers and the Banks that, until the
Commitments shall have terminated and all of the Liabilities have been paid
and performed in full, the Borrower and the Guarantor will perform the
obligations set forth in this Section 7.1.
SECTION 7.1.1 Financial Information, etc. The Borrower will
furnish, or will cause to be furnished, to each Arranger and each Bank copies
of the following financial statements, reports and information:
(a) promptly when available and in any event within 90 days after
the close of each Fiscal Year
(i) a balance sheet at the close of such Fiscal Year, and
statements of operations, of shareholders' equity and of cash flows
for such Fiscal Year, of the Guarantor and its Consolidated
Subsidiaries certified without Impermissible Qualification by
independent public accountants of recognized standing selected by
the Guarantor and reasonably acceptable to the Required Banks,
(ii) a letter report of such accountants at the close of such
Fiscal Year to the effect that they have reviewed the provisions of
this Agreement and the Compliance Certificate then being furnished
p u r s u ant to clause (a)(iii), and are not aware of any
miscalculation in such Compliance Certificate of the financial
tests contained in Section 7.2.3 or Section 7.2.4 or of any Default
hereunder continuing at the end of such Fiscal Year, except such
miscalculation or Default, if any, as may be disclosed in such
statement,
( i ii) a Compliance Certificate calculated as of the
computation date at the close of such Fiscal Year,
(iv) a projected financial statement of the Guarantor and its
Consolidated Subsidiaries for the following Fiscal Year, and
(v) the report filed by the Guarantor with the SEC on Form
10-K for such Fiscal Year;
(b) promptly when available and in any event within 45 days after
the close of each of the first three Fiscal Quarters of each Fiscal Year
(i) a balance sheet at the close of such Fiscal Quarter and
statements of operations, of shareholders' equity and of cash flows
for the period commencing at the close of the previous Fiscal Year
and ending with the close of such Fiscal Quarter, of the Guarantor
and its Consolidated Subsidiaries and of the Borrower and its
Consolidated Subsidiaries certified by the chief accounting or
financial Authorized Officer of the Borrower,
( i i ) a Compliance Certificate calculated as of the
computation date at the close of such Fiscal Quarter, and
(iii) the report filed by the Guarantor with the SEC on Form
10-Q for each such Fiscal Quarter;
(c) promptly upon receipt thereof and upon request of either
Arranger or any Bank, copies of all management letters submitted to the
B o rrower or the Guarantor by independent public accountants in
connection with each annual or interim audit made by such accountants of
the books of the Guarantor or any Subsidiary;
(d) promptly upon the incorporation or acquisition thereof,
information regarding the creation or acquisition of any new Subsidiary;
(e) promptly when available and in any event within 10 days of
publication all material filings with the SEC;
(f) within 45 days after the close of each Fiscal Quarter, an
Applicable Margin Determination Ratio Certificate; and
(g) such other information with respect to the financial
condition, business, property, assets, revenues, and operations of the
Borrower, the Guarantor and Subsidiaries as either Arranger may from
time to time reasonably request.
SECTION 7.1.2 Maintenance of Existences, etc. Except as permitted by
Sections 7.2.6 and 7.2.16, the Borrower and the Guarantor will cause to be
done at all times all things necessary to maintain and preserve the corporate
(or partnership, as the case may be) existences of the Borrower, the
Guarantor and each Subsidiary, and to comply in all material respects with
all applicable laws, rules, regulations and orders. Except as permitted by
Sections 7.2.6 and 7.2.16, the Guarantor will continue to own and hold
directly or indirectly, free and clear of all Liens (except as permitted by
Section 7.2.2), all of the outstanding shares of capital stock of each
Subsidiary which is a corporation, and all partnership interests in each
Subsidiary which is a partnership, in each case whether now owned or
hereafter acquired.
SECTION 7.1.3 Foreign Qualification. The Borrower and the Guarantor
will, and will cause each Subsidiary to, cause to be done at all times all
things necessary to be duly qualified to do business and in good standing as
a foreign corporation in each jurisdiction where the nature of its business
makes such qualification necessary and where the failure to so qualify would
reasonably be expected to have a Materially Adverse Effect, and to comply in
all material respects with all applicable laws, rules, regulations and
orders.
SECTION 7.1.4 Payment of Taxes, etc. The Borrower and the Guarantor
will, and will cause each Subsidiary to, pay and discharge, prior to becoming
delinquent, all federal, state and local taxes, assessments and other
governmental charges or levies against or on any of its property, as well as
claims of any kind which, if unpaid, might become a Lien in a material amount
upon any of its properties; provided, however, that the foregoing shall not
require the Borrower, the Guarantor or any Subsidiary to pay or discharge any
such tax, assessment, charge, levy or lien so long as it shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside
on its books adequate reserves in accordance with GAAP with respect thereto.
SECTION 7.1.5 Insurance. Except as described in Item 8 ("Insurance")
of Exhibit A, the Borrower and the Guarantor will, and will cause each
Subsidiary to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will, upon request of either
Arranger, furnish to the Arrangers at reasonable intervals a certificate of
an Authorized Officer setting forth the nature and extent of all insurance
maintained by the Borrower, the Guarantor and its Subsidiaries in accordance
with this Section.
SECTION 7.1.6 Notice of Default, Litigation, etc. The Borrower will
give prompt notice (with a description in reasonable detail) to each Bank of:
(a) the occurrence of any Default;
(b) the occurrence of any litigation, arbitration or governmental
investigation or proceeding previously not disclosed by the Borrower to
the Banks which has been instituted or, to the knowledge of the Borrower
or the Guarantor, is threatened against the Borrower or the Guarantor or
any Subsidiary or to which any of their respective properties is subject
which if adversely determined would result in a liability to the
B o rrower, the Guarantor or any Subsidiary not covered by such
B o r r ower's, Guarantor's or Subsidiary's insurers in excess of
$3,000,000;
(c) any material development which shall occur in any litigation,
arbitration or governmental investigation or proceeding previously
disclosed by the Borrower to the Banks;
(d) the occurrence of any event which would reasonably be expected
to have a Materially Adverse Effect;
(e) the occurrence of a Reportable Event under, or the institution
of steps by the Borrower or the Guarantor or any Subsidiary to
terminate, any Pension Plan, or there is a partial or complete
withdrawal (as described in ERISA section 4203 or 4205) by the Borrower,
the Guarantor or any Subsidiary from a Multiemployer Plan where as a
result the Borrower, the Guarantor or any Subsidiary could be liable for
payments of $100,000 or more; and
(f) the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Borrower, the
Guarantor or any Subsidiary furnish a bond or other security to the PBGC
or such Pension Plan.
SECTION 7.1.7 Performance of Loan Documents. The Borrower and the
Guarantor will, and will cause each Loan Party to, perform promptly and
faithfully all of its obligations under each Loan Document executed by it.
SECTION 7.1.8 Books and Records. The Borrower and the Guarantor will,
and will cause each Subsidiary to, keep books and records reflecting all of
its business affairs and transactions in accordance with GAAP and permit each
Bank or any of its representatives, at reasonable times and intervals and as
arranged through the chief financial officer or chief legal officer of the
Borrower or the Guarantor, to visit all of its offices, discuss its financial
matters with its officers and independent accountants, examine (and, at the
expense of the Borrower or the Guarantor, photocopy extracts from) any of its
books or other corporate records. The Borrower shall pay any fees of such
accountants incurred in connection with each Bank's exercise of its rights
pursuant to this Section.
SECTION 7.1.9 Significant Subsidiary Guaranty. The Borrower agrees to
promptly notify the Arrangers each time a Subsidiary becomes a Significant
Subsidiary and to cause such Significant Subsidiary to deliver to the
Arrangers a duly executed counterpart to the Significant Subsidiary Guaranty
along with an opinion of counsel and a certificate of the type required by
Section 5.1.1(b) both in form and substance acceptable to the Required Banks;
provided, however, that a Significant Subsidiary shall not have to execute a
counterpart to the Significant Subsidiary Guaranty if it has already executed
a guarantee conforming to the requirements of Section 7.2.17 and such
guarantee is then in effect. The Borrower agrees to cause each Subsidiary
which hereafter becomes a Significant Subsidiary to be a Wholly-Owned
Subsidiary of the Borrower no more than 90 days after becoming a Significant
Subsidiary, except for directors' qualifying shares.
SECTION 7.2 Certain Negative Covenants. The Borrower and the Guarantor
agree with the Arrangers and the Banks that, until the Commitments shall have
terminated and all of the Liabilities have been paid and performed in full:
SECTION 7.2.1 Indebtedness for Borrowed Money. The Borrower and the
Guarantor will not, and will not permit any Subsidiary to, incur or permit to
exist any Indebtedness, except that the Borrower or the Guarantor may, and
may permit any Subsidiary to, incur or permit to exist any or all of the
following: (i) the Loans and guaranties thereof; (ii) Subordinated Debt;
(iii) Indebtedness of Significant Subsidiaries to the Guarantor or the
Borrower or to other Subsidiaries; (iv) Indebtedness outstanding on the Date
of the Original Loan Agreement and on the First Restatement Date and listed
on Item 9 of Exhibit A and refinancings thereof, provided that such
Indebtedness is not increased as the result of any such refinancing and that
the Replaced Facilities may not be refinanced; (v) Indebtedness of the
Borrower or the Guarantor or Significant Subsidiaries secured by Liens in an
aggregate principal amount not to exceed $10,000,000 in the aggregate at any
one time outstanding; (vi) unsecured Indebtedness of the Borrower and the
Guarantor (provided, that (A) any such unsecured Indebtedness shall (x) have
material terms and conditions no more restrictive than those contained in
this Agreement and the other Loan Documents, (y) in the case of Indebtedness
of the Borrower or Indebtedness of the Guarantor which is guaranteed by the
Borrower, not have a final maturity prior to March 30, 1997 and (z) not
prohibit the granting of Liens to secure the Liabilities on the assets of the
Guarantor or any of its Subsidiaries or Unrestricted Subsidiaries and (B) if
such Indebtedness of the Guarantor is required to be subordinated to the
Indebtedness under any Senior Subordinated Note pursuant to the terms of any
Indenture or otherwise, then such Indebtedness shall be subordinated to the
prior payment in full in cash of all Indebtedness under the AMCE Guaranty in
a manner satisfactory to the Arrangers); (vii) Interest Rate Protection
Obligations relating to Indebtedness of such Person (which Indebtedness is
otherwise permitted to exist by this Section 7.2.1) to the extent the
notional principal amount of such Interest Rate Protection Obligations does
not exceed the principal amount of Indebtedness to which such Interest Rate
Obligations relate; (viii) Indebtedness resulting from Investments permitted
by Section 7.2.12; (ix) contingent Indebtedness represented by Guaranties
permitted under Section 7.2.13; (x) Capitalized Lease Obligations (to the
extent permitted under Section 7.2.15); (xi) Indebtedness of Non-AMC
Subsidiaries (provided, that if such Indebtedness is required to be
subordinated to the Indebtedness under any Senior Subordinated Note or any
guarantee thereof pursuant to the terms of any Indenture or otherwise, then
such Indebtedness shall be subordinated to the prior payment in full in cash
of all Liabilities or any guarantee thereof required to be provided by such
Subsidiary pursuant to Section 7.2.17 in a manner satisfactory to the
Arrangers); and (xii) Currency Hedging Obligations relating to arrangements
entered into with any Bank to protect the Borrower or the Guarantor from
fluctuations in currency exchange rates.
SECTION 7.2.2 Liens. The Borrower and the Guarantor will not, and will
not permit any Subsidiary to, create, incur, assume or suffer to exist any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, except that the Borrower and the Guarantor may, and may permit any
Subsidiary to, create, incur or suffer to exist any or all of the following:
(a) Liens in favor of the Banks to secure the Liabilities;
(b) Liens which were granted prior to the Date of the Original
Loan Agreement in (and only in) assets identified in Item 9 ("Ongoing
Indebtedness") and Item 10 ("Liens") of Exhibit A;
(c) Liens in (and only in) stock or assets permitted to be
a c q uired under the terms of this Agreement granted to secure
Indebtedness at the time of such acquisition (or within one year
thereof) or incurred to finance the acquisition of such stock or assets;
(d) statutory and common law banker's Liens and rights of setoff
on bank deposits;
(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty
or being contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(f) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(g) non-material Liens incurred or existing in the ordinary course
o f business, such as in connection with worker's compensation,
unemployment insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory obligations,
leases and contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or appeal
bonds;
(h) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance;
(i) Liens existing on any assets at the date of acquisition of
such assets, which assets are permitted to be acquired under the terms
of this Agreement and are acquired after the Date of the Original Loan
Agreement;
(j) Liens granted to secure Indebtedness incurred to refinance any
Indebtedness (other than Replaced Facilities) secured by Liens permitted
by clauses (b), (c) and (i) of this Section 7.2.2 (provided, that such
Indebtedness is not increased as the result of such refinancing and that
such Liens attach only to the same assets subject to Lien prior to the
refinancing);
(k) Liens granted to secure Indebtedness permitted by Section
7.2.1(v) or (xi) or in connection with Capitalized Lease Obligations
permitted under Section 7.2.1(x); and
( l ) Zoning restrictions, easements, licenses, covenants,
reservations, utility company rights, restrictions on the use of real
property or minor irregularities of title incident thereto which do not
in the aggregate materially detract from the value of the property or
assets of the Guarantor, the Borrower or the Guarantor and its
Subsidiaries taken as a whole, or materially impair the operation of
their business, taken as a whole.
SECTION 7.2.3 Financial Condition. The Borrower and the Guarantor will
not permit:
(a) the Net Indebtedness to Consolidated EBITDA Ratio to exceed
4.50:1; and
(b) the Fixed Charge Coverage Ratio to be less than 1.40:1.
SECTION 7.2.4 Capital Expenditures. The Borrower and the Guarantor
will not, and will not permit any Subsidiary to, make or commit to make any
Capital Expenditures unless such Capital Expenditure, together with all other
such Capital Expenditures made or committed to be made by the Guarantor and
its Subsidiaries in any Fiscal Year, does not exceed $100,000,000 in such
Fiscal Year; provided, however, that Capital Expenditures in an amount equal
to the lesser of (x) the amount not used in such Fiscal Year and (y)
$15,000,000 may be carried forward to the next Fiscal Year; provided,
further, however, that the aggregate amount of Investments (excluding any
Guaranty and without double counting) in Non-Guarantors made by the Borrower,
the Guarantor and the Subsidiaries during any Fiscal Year will be deemed to
be Capital Expenditures made in such Fiscal Year for the purposes of the
annual limitation on Capital Expenditures provided in this Section 7.2.4.
SECTION 7.2.5 Take or Pay Contracts. The Borrower and the Guarantor
will not, and will not permit any Subsidiary to, enter into or be a party to
any arrangement for the purchase of materials, supplies, other property or
services if such arrangement by its express terms requires that payment be
made by the Borrower or such Subsidiary regardless of whether or not such
materials, supplies, other property or services are delivered or furnished to
it.
SECTION 7.2.6 Consolidation, Merger, etc. The Borrower and the
Guarantor will not, and will not permit any Subsidiary to, consolidate with
or merge into or with any other corporation, or sell, transfer, lease or sell
and lease back or otherwise dispose of all or substantially all of its assets
to any Person, without prior written consent of the Required Banks, except:
(a) the sale or other disposition of all or substantially all of the assets
of a Significant Subsidiary to another Significant Subsidiary or to the
Borrower; (b) the merger of any Subsidiary into a Subsidiary or into the
Borrower provided that, in the latter case, the Borrower is the surviving
corporation; (c) the sale or other transfer to the Guarantor of all or
substantially all of the assets, or all of the shares of capital stock, of
AMC Entertainment International, Inc. ("AMCEI"); and (d) the merger of AMCEI
into the Guarantor (provided that the Guarantor is the surviving corporation)
or into a Wholly-Owned Subsidiary of the Guarantor. The transactions
permitted by the foregoing clauses (c) and (d) are hereinafter referred to as
a "Permitted AMCEI Transfer."
SECTION 7.2.7 Modification, etc. of Subordinated Debt. The Borrower
and the Guarantor will not amend any term or provision, including any
subordination provision, covenant, event of default or right of acceleration
or any sinking fund provision or term of required repayment or redemption
(except any amendment which extends the date or reduces the amount of any
required repayment or redemption), contained in or applicable to any
Instrument evidencing or applicable to any Subordinated Debt of the Borrower,
the Guarantor or any Significant Subsidiary.
SECTION 7.2.8 Transactions with Affiliates. Except as described in
Item 11 ("Transactions with Affiliates") of Exhibit A, the Borrower and the
Guarantor will not, and will not permit any Subsidiary to, enter into, or
cause, suffer or permit to exist any transaction, arrangement or contract
with any of its Affiliates (except for Significant Subsidiaries) which would
not be entered into by a prudent Person in the position of the Borrower, the
Guarantor or such Subsidiary, or which is on terms which are not on an arms'-
length basis.
SECTION 7.2.9 Sale or Discount of Receivables. Except as permitted by
Section 7.2.6, the Borrower and the Guarantor will not, and will not permit
any Subsidiary to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable in an aggregate amount for all such sales or discounts by
the Borrower, the Guarantor and its Subsidiaries in any Fiscal Year in excess
of $100,000.
SECTION 7.2.10 Restricted Payments. Neither the Borrower nor the
Guarantor shall (a) declare or pay any dividends on any of its Capital Stock
to its respective shareholders, (b) purchase or redeem any such stock or any
warrants, options or other rights in respect of such stock, (c) make any
other distribution to shareholders as such, (d) redeem, prepay, defease or
repurchase any Subordinated Debt or any obligations under any Capitalized
Lease Obligation or (e) set aside funds for any of the foregoing except that
any or all of the following may occur: (i) so long as no Event of Default
exists or would result therefrom, (1) the Guarantor may make optional
redemptions or repurchases of up to $40,000,000 in aggregate principal amount
of Subordinated Debt, and (2) the Guarantor and the Borrower may take the
actions described in clauses (a) through (e) above so long as the aggregate
amount expended (exclusive of the optional redemptions or repurchases
described in clause (i)(1) above) by the Guarantor and the Borrower (without
counting the amounts paid by the Borrower pursuant to clause (ii)(2) below,
but counting any such payments made by the Guarantor with the proceeds of
such payments) in respect of such actions in any period of four consecutive
Fiscal Quarters (each such period being a "Relevant Period") does not exceed
the amount by which Consolidated EBITDA exceeded the product of (x) 1.4 times
(y) Fixed Charges for the period of four consecutive Fiscal Quarters ended
immediately prior to the commencement of such Relevant Period (all of the
payments permitted in this clause (i) being the "Permitted Payments"); (ii)
the Borrower may pay to the Guarantor (1) in any six month period an amount
equal to the aggregate scheduled interest payments on the Senior Subordinated
Notes for such period and (2) an amount equal to the amount of the Permitted
Payments as to which the Guarantor (and not the Borrower) is primarily
obligated and which are then permitted to be paid by the Guarantor (provided,
that no such payments described in this clause (ii) shall be made by the
Borrower during the continuance of any default in any payment of any
principal, premium or interest due under this Agreement or at any time that a
Payment Blockage Period (as defined in the Indentures) is in effect); and
(iii) a Permitted AMCEI Transfer may occur.
SECTION 7.2.11 Inconsistent Agreements. The Borrower and the Guarantor
will not, and will not permit any Subsidiary to, enter into any agreement
containing any provision which would be violated or breached by any borrowing
by the Borrower made hereunder or by the performance by the Borrower, the
Guarantor or any Subsidiary of their respective obligations hereunder or
under any Loan Document.
SECTION 7.2.12 Investments. The Borrower and the Guarantor will not,
and will not permit any Subsidiary to, make or permit to remain outstanding
any Investment in any Person, except that the Borrower and the Guarantor may,
and may permit any Subsidiary to, make or permit to remain outstanding any or
all of the following:
(i) Investments outstanding on the Date of the Original Loan
Agreement as set forth in Item 12 ("Investments") on Exhibit A;
(ii) advances or extensions of credit on terms customary in the
industry in the form of accounts or other receivables incurred or pre-
paid film rentals, and loans and advances made in settlement of such
accounts receivable, all in the ordinary course of business on a basis
consistent with past practice;
(iii) Investments to or in any Significant Subsidiary;
(iv) any Investment in Cash Equivalents or (to the extent not
included in the definition of "Cash Equivalents") (A) readily
marketable direct obligations of the United States of America (or any
state or political subdivision thereof which is rated "A-1" or better by
Standard & Poor's Corporation), (B) certificates of time deposit or
bankers acceptances issued by one or more commercial banks, (C) dollar
deposits in financial institutions, and (D) money market funds and prime
commercial paper of any corporation (other than Guarantor or any of its
Affiliates) incorporated under the laws of the United States of America
or any State thereof or the District of Columbia rated "Prime-1" or its
equivalent by Moody's Investors Service Inc. or "A-1" or its equivalent
by Standard & Poor's Corporation, provided that, in the case of all of
the foregoing obligations, they mature within 12 months of the date of
purchase;
(v) the Guarantor or any Subsidiary may make Investments to or in
the Borrower, any Significant Subsidiary may make Investments to or in
any other Significant Subsidiary, and the Borrower may make advances to
the Guarantor for amounts representing operating expenses of the
Guarantor, incurred in the ordinary course of business;
(vi) Investments (excluding any Guaranty and without double-
counting) by the Guarantor or any Subsidiary in an amount not exceeding
in the aggregate from the Effective Date to the Commitment Termination
Date, the sum of (x) $100,000,000 plus (or minus if a negative number)
(y) the greater of (i) 25% of Free Cash Flow or (ii) 50% of Consolidated
Net Income (or 100% of Consolidated Net Income if a loss) calculated on
a cumulative basis from the Effective Date to the date of determination
plus (z) with respect to any such Investment made after the Effective
Date, an amount equal to the lesser of the return of capital with
respect to any such Investment and the initial amount of such
Investment, in either case, less the cost of disposition of such
Investment;
(vii) loans or advances to employees of the Borrower, the
Guarantor or any Subsidiary in the ordinary course of their businesses,
consistent with past practices, not to exceed $1,000,000 in aggregate
amount at any time outstanding;
(viii) so long as no Default or Event of Default has occurred and
is continuing, Investments by the Guarantor, the Borrower or any
Subsidiary of the Borrower in another Person, if (x) as a result of such
Investment (A) such other Person becomes a Wholly-Owned Subsidiary of
the Borrower or (B) such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all of its assets to,
the Borrower or a Wholly-Owned Subsidiary of the Borrower and (y) such
other Person is engaged substantially only in the business of the
Guarantor and its Subsidiaries conducted on the Effective Date or lines
of business reasonably related thereto;
(ix) refundable construction advances made with respect to the
construction of motion picture exhibition theatres in the ordinary
course of business on a basis consistent with past practice; and
(x) so long as AMCEI is a Subsidiary of the Borrower, AMCEI and
its Subsidiaries may make Investments in Subsidiaries of AMCEI.
SECTION 7.2.13 Guaranties. Except as described in Item 13
("Guaranties") of Exhibit A, neither the Borrower, the Guarantor nor any
Subsidiary will enter into any Guaranty prior to the Commitment Termination
Date, except that the Borrower, the Guarantor and any Subsidiary may enter
into any or all of the following:
(i) Guaranties relating to operating lease obligations and
Capitalized Lease Obligations on which the Borrower or any Subsidiary of
the Borrower is lessee or any Guaranty by the Guarantor or any Non-AMC
S u bsidiary of operating lease obligations on which any Non-AMC
Subsidiary is lessee;
(ii) the AMCE Guaranty and any Significant Subsidiary Guaranty;
(iii) Guaranties by the Borrower or its Subsidiaries not to exceed
$25,000,000 in aggregate amount at any time outstanding (provided that
any Guaranty by the Borrower of Indebtedness of the Guarantor shall be
subordinated to the prior payment in full in cash of the Liabilities in
form and substance satisfactory to the Arrangers);
(iv) contingent obligations arising or existing as the result of
the sale or other disposition of theaters;
(v) Guaranties by the Borrower or any Significant Subsidiary (as
of the First Restatement Date) of the Senior Subordinated Notes (all
such Guaranties to be subordinated to the claims of the Banks against
such Persons as set forth in the Indentures on the Effective Date);
(vi) Guaranties by the Borrower as set forth in (A) that certain
Partnership Interest Purchase Agreement dated May 28, 1993 (the
"Partnership Interest Purchase Agreement"), among the Borrower, certain
other parties, TPI and TPI Entertainment, Inc. ("TPIE") and (B) that
certain Mutual Release and Indemnification Agreement dated May 28, 1993
among the Company, TPI and TPIE and certain other parties;
(vii) Guaranties by the Guarantor or any Non-AMC Subsidiary if, at
the time of incurrence of the Guaranty and after giving pro forma effect
to the Indebtedness or other obligation being guaranteed thereby, the
Consolidated EBITDA Coverage Ratio is equal to or greater than 3.00:1
(provided, if the Indebtedness evidenced by any such Guaranty is
required to be subordinated to the Indebtedness under any Senior
Subordinated Note pursuant to the terms of any Indenture or otherwise,
then the Indebtedness evidenced by such Guaranty shall be subordinated
to the prior payment in full in cash of all Indebtedness under the AMCE
Guaranty in a manner satisfactory to the Arrangers); and
(viii) Guaranties listed on Item 13 of Exhibit A.
SECTION 7.2.14 Capital Stock. The Guarantor will not permit the
Borrower or any Subsidiary of the Borrower to issue any Capital Stock to any
Person other than the Guarantor or the Borrower, except for directors'
qualifying shares; provided, that, for so long as AMCEI is a Subsidiary of
the Borrower, AMCEI may have Subsidiaries without violating this Section.
SECTION 7.2.15 Business Activities. (a) The Borrower and the Guarantor
will not, and will not permit any Subsidiary to:
(i) operate its business other than in the ordinary and usual
course;
(ii) engage in any type of business except the theatrical
e x h ibition, media, communications, and entertainment industries;
specialty retailing and food service as they relate to the theatre
exhibition business; and real estate and related services related to or
necessary to support the aforementioned activities;
(iii) enter into any operating leases or Capitalized Lease
Obligations except in the ordinary course of the businesses described in
clause (ii) above; and
(iv) engage in any type of business unless at least 80% of the
Guarantor's assets (on a consolidated basis and determined in accordance
with GAAP) are used in the theatrical exhibition industry.
SECTION 7.2.16 Asset Sales. The Borrower and the Guarantor shall
not, and shall not permit any Subsidiary to, engage in any Asset Sale, other
than Asset Sales which generate Net Cash Proceeds of $25,000,000 or less and
the Net Cash Proceeds of which are invested in activities permitted by
Section 7.2.15 or which are used to permanently repay Indebtedness of the
Borrower (with application first to the Liabilities and then to Subordinated
Debt), in each case within 360 days after such Asset Sale; provided, however,
that the foregoing shall not apply to (i) sales of Investments described in
Section 7.2.12(iv), (ii) the sale by the Borrower, in one or more
transactions, of 89,600 shares of common stock and 64,000 shares of preferred
stock of AmeriHealth, Inc., and (iii) the sale by the Borrower of shares of
stock of TPI.
SECTION 7.2.17 Limitation on Issuances of Guarantees of Indebtedness.
The Borrower and the Guarantor will not permit any Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Borrower or the Guarantor unless (i) such
Subsidiary simultaneously executes and delivers to the Agent a guarantee of
t h e Liabilities (accompanied by certified resolutions, an incumbency
certificate and an opinion of counsel all in form and substance acceptable to
the Arrangers) on the same terms as the guarantee of such Indebtedness except
that (A) if the guarantee of Indebtedness is required to be subordinated to
the Indebtedness under any Senior Subordinated Note or any related guarantee
of a Senior Subordinated Note pursuant to the terms of any Indenture or
otherwise, then such guarantee of Indebtedness shall be subordinated to such
guarantee of the Liabilities in a manner satisfactory to the Arrangers and
(B) if such Indebtedness is by its terms subordinated to the Liabilities, any
such assumption, guarantee or other liability of such Subsidiary with respect
to such Indebtedness shall be subordinated to such Subsidiary's assumption,
guarantee or other liability with respect to the Liabilities to the same
extent as such Indebtedness is subordinated to the Liabilities and (ii) such
Subsidiary waives and will not in any manner whatsoever claim or take the
b e nefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Borrower, Guarantor or any other
Subsidiary as a result of any payment by such Subsidiary under such guarantee
of the Liabilities; provided, that a Subsidiary shall not have to execute a
guarantee under this Section if it has already executed a counterpart to the
Significant Subsidiary Guaranty and such Subsidiary's obligations thereunder
are then in effect.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Events of Default. The term "Event of Default" shall mean
each of the following events:
SECTION 8.1.1 Non-Payment of Liabilities. The Borrower shall default
in the payment or prepayment when due of any principal of any Note, or the
Borrower shall default (and such default shall continue unremedied for a
period of three Business Days) in the payment when due, whether at stated
maturity, by accelerations, or otherwise, of interest on any Note, of any
commitment fee or of any other Liability.
SECTION 8.1.2 Non-Performance of Certain Covenants. The Borrower or
the Guarantor shall default in the due performance and observance of any of
its obligations under Section 7.2 and such default shall continue unremedied
for 20 days after notice thereof shall have been given to the Borrower or the
Guarantor by the Agent or the holder of any Note.
SECTION 8.1.3 Certain Defaults on Other Indebtedness or Leases. Any
default shall occur under the terms applicable to any Indebtedness or
operating lease outstanding in a principal amount exceeding $3,000,000 of the
Borrower, the Guarantor or any Subsidiary representing any borrowing or
financing or arising under any other lease or material agreement, and such
default shall:
(i) consist of the failure to pay Indebtedness at the maturity
thereof; or
(ii) continue without being cured or waived (so long as such cure
or waiver did not involve any payment of principal of such Indebtedness)
for a period of time sufficient to permit acceleration of Indebtedness;
or
(iii) consist of any default under the terms applicable to any
such capital or operating lease of the Borrower, the Guarantor or any
Subsidiary with aggregate remaining lease payments exceeding $3,000,000
which results in the loss of use of the property subject to such lease
or involves a default (that is not cured or waived or if cured or waived
involved the payment of an amount in excess of $3,000,000) under the
terms applicable to any such capital or operating lease of the Borrower,
the Guarantor or Subsidiary with aggregate remaining lease payments
exceeding $10,000,000.
SECTION 8.1.4 Bankruptcy, Insolvency, etc. The Borrower, the Guarantor
or any Significant Subsidiary shall become insolvent or generally fail to
pay, or admit in writing its inability to pay, debts as they become due; or
the Borrower, the Guarantor or any Significant Subsidiary shall apply for,
consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower, the Guarantor or such
Significant Subsidiary or any property of any thereof, or make a general
assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver, sequestrator or
other custodian shall be appointed for the Borrower, the Guarantor or any
Significant Subsidiary or for a substantial part of the property of any
t h e reof and not be discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, shall be commenced in respect of the Borrower, the Guarantor or
any Significant Subsidiary, and, if such case or proceeding is not commenced
by the Borrower, the Guarantor or such Significant Subsidiary, such case or
proceeding shall be consented to or acquiesced in by the Borrower, the
Guarantor or such Significant Subsidiary or shall result in the entry of an
order for relief or shall remain for 60 days undismissed; or the Borrower,
the Guarantor or any Significant Subsidiary shall take any corporate action
to authorize, or in furtherance of, any of the foregoing.
SECTION 8.1.5 Change in Control. Any Change in Control shall occur.
SECTION 8.1.6 Non-Performance of Other Obligations. The Borrower or
the Guarantor shall default in the due performance and observance of any
other agreement contained herein or in any Loan Document, and such default
shall continue unremedied for a period of 30 days after notice thereof shall
have been given to the Borrower by the Agent or the holder of any Note.
SECTION 8.1.7 Breach of Warranty. Any warranty of the Borrower or the
Guarantor in any Loan Document or in any writing furnished after the date of
this Agreement by or on behalf of the Borrower or the Guarantor to the Banks
for the purposes of or in connection with this Agreement is or shall be
incorrect in any material respect when made, and the Borrower or the
Guarantor shall not have taken corrective measures with respect thereto
satisfactory to the Required Banks within 30 days after notice thereof to the
Borrower by the Agent or the holder of any Note.
SECTION 8.1.8 ERISA. Any of the following events shall occur:
(i) Any Pension Plan shall be terminated (or steps shall be
instituted to effect such termination), but only if such Pension Plan
has any Unfunded Benefit Liabilities at the date of such termination or
the date of the institution of such steps, as the case may be, in excess
of $3,000,000.
(ii) The Borrower, the Guarantor or any Subsidiary or Unrestricted
Subsidiary shall withdraw or partially withdraw from a Multiemployer
Plan (or shall institute steps to effect such withdrawal or partial
withdrawal), if as a result thereof the Borrower, the Guarantor or any
Subsidiary could be required to make withdrawal liability payments in
excess of $3,000,000 in the aggregate.
(iii) Any Reportable Event (other than any Reportable Event as to
which the requirement of giving notice to the PBGC within 30 days has
been waived) shall occur with respect to a Pension Plan, and there shall
exist a liability or obligation of the Borrower, the Guarantor or any
Subsidiary in excess of $3,000,000 with respect to such Reportable
Event.
(iv) A contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a lien under section 302(f) of ERISA
securing an obligation in excess of $3,000,000.
SECTION 8.1.9 Judgments. A final judgment to the extent not covered by
insurance that, with other such outstanding final judgments against the
Borrower, the Guarantor and its Subsidiaries exceeds an aggregate of
$3,000,000 shall be rendered against the Borrower or any Subsidiary or the
Guarantor and if, within 60 days after entry thereof, such judgment shall not
have been discharged or otherwise satisfied or execution thereof stayed
pending appeal, or if, within 60 days after the expiration of any such stay,
such judgment shall not have been discharged or otherwise satisfied.
SECTION 8.1.10 AMCE Guaranty or the Significant Subsidiary Guaranty.
The AMCE Guaranty or the Significant Subsidiary Guaranty shall cease to be in
full force and effect.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
S e ction 8.1.4 shall occur, the outstanding principal amount of all
outstanding Notes and all other Liabilities shall be and become immediately
due and payable, without notice or demand.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
(other than an Event of Default described in Section 8.1.4) shall occur for
any reason, whether voluntary or involuntary, and be continuing, the Agent,
upon the direction of the Required Banks shall, without notice or demand,
declare all or any portion of the outstanding principal amount of the Loans
to be due and payable and any or all other Liabilities to be due and payable,
whereupon the full unpaid amount of such Loans and any and all other
Liabilities which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand, or presentment.
ARTICLE IX
THE ARRANGERS
SECTION 9.1 Actions. Each Bank and the holder of each Note authorizes
the Agent to act on behalf of such Bank or holder under this Agreement and
any other Loan Document and, in the absence of other written instructions
from the Required Banks received from time to time by the Agent (with respect
to which the Agent agrees that it will, subject to the last two sentences of
this Section, comply in good faith except as otherwise advised by counsel),
to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. The
parties hereto acknowledge that the Co-Arranger has no responsibilities in
its capacity as an Arranger pursuant to any Loan Document. Each Bank agrees
(which agreement shall survive any termination of this Agreement) to
indemnify each Arranger, pro rata according to such Bank's Percentage, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or
asserted against such Arranger in any way relating to or arising out of this
Agreement, the Notes, and any other Loan Document, including without
l i m i t ation the reimbursement of such Arranger for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees) and the
reasonably allocated costs of in-house counsel and legal staff incurred by
such Arranger hereunder or in connection herewith or in enforcing the
Liabilities of the Borrower or the Guarantor under this Agreement or any
other Loan Document, in all cases as to which such Arranger is not reimbursed
by the Borrower or the Guarantor; provided that no Bank shall be liable for
the payment of any portion of such Liabilities, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements determined by a
court of competent jurisdiction in a final proceeding to have resulted solely
from such Arranger's gross negligence or willful misconduct. The Agent shall
not be required to take any action hereunder or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement or
any other Loan Document, unless it is indemnified to its satisfaction by the
Banks against loss, costs, liability, and expense. If any indemnity in favor
of the Agent shall become impaired, it may call for additional indemnity and
cease to do the acts indemnified against until such additional indemnity is
given.
SECTION 9.2 Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Bank by 5:00 p.m.,
Atlanta time, on the day prior to a Borrowing, that such Bank will not make
available the amount which would constitute its Percentage of such Borrowing
on the date specified therefor, the Agent may assume that such Bank has made
such amount available to the Agent and, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If such amount is
made available by such Bank to the Agent on a date after the date of such
Borrowing, such Bank shall pay to the Agent on demand interest on such amount
at the daily average Federal funds rate quoted by the Agent for the number of
days from and including the date of such Borrowing to the date on which such
amount becomes immediately available to the Agent, together with such other
compensatory amounts as may be required to be paid by such Bank to the Agent
pursuant to the Rules for Interbank Compensation of the Council on
International Banking or the Clearinghouse Compensation Committee, as the
case may be, as in effect from time to time. A statement of the Agent
submitted to any Bank with respect to any amounts owing under this paragraph
shall be conclusive, in the absence of demonstrable error. If such amount is
not in fact made available to the Agent by such Bank within three Business
Days after the date of such Borrowing, the Agent shall be entitled to recover
such amount, with interest thereon at the rate per annum then applicable to
the Loans comprising such Borrowing, within five Business Days after demand,
from the Borrower.
SECTION 9.3 Exculpation. None of the Arrangers nor any of its
directors, officers, employees, or agents shall be liable to any Bank for any
action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
willful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity, or due execution of this Agreement or any other Loan Document, nor
to make any inquiry respecting the performance by the Borrower of its
obligations hereunder or thereunder. Each Arranger shall be entitled to rely
upon advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement, or writing which they believe to be genuine and to
have been presented by a proper Person.
SECTION 9.4 Successor. Each Arranger may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Banks. If the
Co-Arranger resigns, no successor co-arranger shall be appointed. If the
Agent at any time shall resign, the Required Banks may appoint another Bank
as a successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent's
giving notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be one of the Banks or a
commercial banking institution organized under the laws of the United States
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges, and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement.
SECTION 9.5 Loans by the Arrangers. Each Arranger shall have the
same rights and powers with respect to
(i) the Loans made by it or any of its Affiliates, and
(ii) the Notes held by it or any of its Affiliates as any Bank and
may exercise the same as if it were not an Arranger.
SECTION 9.6 Credit Decisions. Each Bank acknowledges that it has,
independently of the Arrangers and each other Bank, and based on the
financial information referred to in Section 6.4 and such other documents,
information, and investigations as it has deemed appropriate, made its own
credit decision to extend its Commitment. Each Bank also acknowledges that
it will, independently of the Arrangers and each other Bank, and based on
such other documents, information, and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.
SECTION 9.7 Copies, etc. The Agent shall give prompt notice to each
Bank of each notice or request required or permitted to be given to the Agent
by the Borrower pursuant to the terms of this Agreement. The Agent will
distribute to each Bank each Instrument received for its account and copies
of all other communications received by the Agent from the Borrower for
distribution to the Banks by the Agent in accordance with the terms of this
Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this
Agreement and of each Loan Document may from time to time be amended,
modified, or waived, if such amendment, modification or waiver is in writing
and consented to by the Borrower and the Required Banks; provided, however,
that no such amendment, modification, or waiver:
( i ) which would modify any requirement hereunder that
any particular action be taken by all the Banks or by the Required
Banks, shall be effective unless consented to by each Bank;
(ii) which would modify this Section 10.1, change the definition
of "Required Banks," increase the Total Commitment Amount or the
Percentage of any Bank, reduce any fees described in Article II, or
extend the Commitment Termination Date shall be made without the consent
of each Bank;
(iii) which would amend, modify or release any Guaranty of the
Guarantor or any Significant Subsidiary shall be made without the
consent of each Bank;
(iv) which would extend the due date for, or reduce the amount of,
any payment or prepayment of principal of or interest on any Loan (or
reduce the principal amount of or rate of interest on any Loan) shall be
made without the consent of the holder of the Note evidencing such Loan;
or
(v) which would affect adversely the interests, rights or
obligations of either Arranger qua Arranger shall be made without
consent of such Arranger.
No failure or delay on the part of an Arranger, any Bank, or the holder of
any Note in exercising any power or right under this Agreement or any other
Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to
or demand on the Borrower in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by either
Arranger, any Bank, or the holder of any Note under this Agreement or any
other Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to it at its
address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given
when received; any notice, if transmitted by telex or facsimile, shall be
deemed given when transmitted (answerback confirmed in the case of telexes).
SECTION 10.3 Costs and Expenses. The Borrower agrees to pay all
reasonable expenses of each Arranger for the negotiation, preparation,
execution, and delivery of this Agreement and each other Loan Document,
including schedules and exhibits (including the allocated costs and expenses
of in-house counsel and legal staff), and any amendments, waivers, consents,
supplements, or other modifications to this Agreement or any other Loan
Document as may from time to time hereafter be required (including the
reasonable fees and expenses of counsel for either Arranger from time to time
incurred in connection therewith and the allocated costs of in house counsel
and legal staff), whether or not the transactions contemplated hereby are
consummated, and to pay all expenses of the Arrangers (including reasonable
fees and expenses of counsel to either Arranger and the allocated costs of
in-house counsel and legal staff) incurred in connection with the preparation
and review of the form of any Instrument relevant to this Agreement or any
other Loan Document and the consideration of legal questions relevant hereto
and thereto or to any restructuring or "work-out" of any Liabilities. The
Borrower also agrees to reimburse each Bank upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses and
allocated costs of in-house counsel and legal staff) incurred by such Bank in
enforcing the obligations of the Borrower, the Guarantor or any Significant
Subsidiary under this Agreement or any other Loan Document.
SECTION 10.4 Indemnification. In consideration of the execution and
delivery of this Agreement by each Bank and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Arranger and each
Bank and each of its officers, directors, employees, and agents (the "Bank
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses actually
incurred in connection therewith (irrespective of whether such Bank Party is
a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Bank Parties or any of them as a result of, or
arising out of, or relating to
(i) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan;
(ii) the entering into and performance of this Agreement and any
other Loan Document by any of the Bank Parties; or
(iii) any investigation, litigation, or proceeding related to any
acquisition or proposed acquisition by the Guarantor, the Borrower or
any Subsidiary of all or any portion of the stock or all or
substantially all the assets of any Person, whether or not such Arranger
or such Bank is party thereto,
except for any such Indemnified Liabilities arising for the account of a
particular Bank Party by reason of the relevant Bank Party's breach of this
Agreement or of any Loan Document or gross negligence or willful misconduct,
and if and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which
is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections
4.4, 4.5, 10.3, and 10.4, and the obligations of the Banks under Section 9.1,
shall in each case survive any termination of this Agreement (as long as a
claim is made within a period of one year after such termination). The
representations and warranties made by each Loan Party in this Agreement and
in each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 10.6 Severability. Any provision of this Agreement or any
other Loan Document 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
of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such Loan Document
or any provisions hereof or thereof.
SECTION 10.8 Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be executed by
the Borrower, the Guarantor and the Arrangers and be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES, AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. THIS
AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 10.10 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(i) neither the Borrower nor the Guarantor may assign or transfer
its rights or obligations hereunder without the prior written consent of
all Banks; and
(ii) the rights of sale, assignment, participation and transfer by
the Banks are subject to Section 10.11.
SECTION 10.11 Sale and Transfers, etc., of Loans and Notes;
Participations in Loans and Notes.
(a) Each Bank may at any time sell to one or more banks or other
entities ("Participants") participating interests in all or any portion
of its Commitment and Loans or any other rights or interest of such Bank
hereunder (in respect of any Bank, its "Credit Exposure"). In the event
of any such sale by a Bank of participating interests to a Participant,
such Bank shall notify the Borrower of the identity of such Participant,
such Bank's obligations under this Agreement shall remain unchanged,
such Bank shall remain solely responsible for the performance thereof,
such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Arrangers shall continue
to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Except in the case
of the sale of a participation to a Bank or an Affiliate of a Bank, any
participation permitted hereunder shall be in a minimum amount of at
least $5,000,000, and the relevant participation agreement shall not
permit the Participant to transfer, pledge, assign, sell participations
in or otherwise encumber its portion of the Commitment or Loans. Each
Bank agrees that any agreement between such Bank and any such
Participant in respect of such participating interest shall not restrict
such Bank's right to agree to any amendment, supplement or modification
to the Agreement or any of the Loan Documents except to extend the final
maturity of any Note, reduce the rate or extend the time of payment of
interest thereon or any fees owed to the Banks under this Agreement or
any of the Loan Documents, reduce the principal amount of any Note or
release any collateral or Guaranty. The Borrower hereby acknowledges
and agrees that any such disposition described in this Section will give
rise to a direct obligation of the Borrower to the Transferee, and such
Participant shall, for purposes of Sections 3.7, 3.8, 3.9, 3.10, 4.4,
and 4.5, be considered a Bank and may rely on, and possess all rights
under, any opinions, certificates, or other Instruments delivered under
or in connection with this Agreement or any other Loan Document;
provided, however, that, the Borrower shall only be required to deliver
information and data required pursuant to this Agreement to the Bank
selling or granting a participation in (in whole or in part) its Credit
Exposure.
(b) Any Bank may at any time assign to one or more banks or other
entities ("Assignees") all or any part of its Credit Exposure, provided
that (i) unless assigned to an Affiliate of such Bank or another Bank,
it assigns its Credit Exposure in an amount not less than $10,000,000
and (ii) any Assignee must be acceptable to the Arrangers and acceptable
to the Borrower, whose consent shall not be unreasonably withheld, and
the Arrangers' and Borrower's decisions respecting the same shall be
made promptly. In the event of any assignment, the assignor Bank shall
give notice to the Borrower, the Banks and the Agent and shall deliver
to the Agent, for its acceptance and recording in its records, an
assignment agreement and any required fee. Upon receipt thereof, the
Agent shall, if such assignment has been fully executed and completed,
record the information contained therein in the Agent's records. The
Borrower and the Banks agree that to the extent of any assignment, the
Assignee shall be deemed to have the same rights and benefits with
respect to the Borrower under this Agreement and any Notes as it would
have had if it were a Bank hereunder; provided that the Borrower and the
Agent shall be entitled to continue to deal solely and directly with the
assignor Bank in connection with the interests so assigned to the
Assignee until the assignment agreement and a fee of $2,000 shall have
been delivered to the Agent by the assignor Bank and the Assignee. Upon
the assignment of Credit Exposure provided for hereby, the assignor Bank
shall be relieved of its obligations hereunder to the extent of such
assignment. In the event of any assignment, the Borrower shall, at its
sole cost and expense, prepare and deliver to the assignor Bank and to
the Assignee new Notes reflecting the effect of such assignment.
(c) T h e Borrower authorizes each Bank to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective
Transferee any and all financial information in such Bank's possession
concerning the Borrower, the Guarantor and any Subsidiary which has been
delivered to such Bank by the Borrower, the Guarantor or any Subsidiary
pursuant to this Agreement or which has been delivered to such Bank by
the Borrower, the Guarantor or any Subsidiary in connection with such
Bank's credit evaluation of the Borrower, the Guarantor or any
Subsidiary prior to entering into this Agreement.
SECTION 10.12 Other Transactions. Nothing contained herein shall
preclude either Arranger or any other Bank from engaging in any transaction,
in addition to those contemplated by this Agreement or any other Loan
Document, with the Borrower or any of its Affiliates in which the Borrower or
such Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13 Waiver of Jury Trial. THE ARRANGERS, THE BANKS, THE
GUARANTOR AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE
ARRANGERS, SUCH BANKS, OR THE BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE ARRANGERS AND SUCH BANKS ENTERING INTO THIS AGREEMENT.
SECTION 10.14 Consent to Jurisdiction and Service of Process. Any
judicial proceedings brought against the Borrower or the Guarantor with
respect to this Agreement or any Note may be brought in any state or federal
court of competent jurisdiction in the State of New York or the State of
Missouri and by the execution and delivery of this Agreement the Borrower
accepts the nonexclusive jurisdiction of the aforesaid courts. Service of
process may be made by any means authorized by federal law or the law of New
York, or Missouri, as the case may be. A copy of any such process so served
shall be mailed by registered mail to the Borrower or the Guarantor, as the
case may be, at its address set forth below its signature hereto or at such
other address as may be designated by the Borrower or the Guarantor, as the
case may be, in a notice to the Banks. Nothing herein shall limit the right
of any Bank to bring proceedings against the Borrower or the Guarantor in the
courts of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
AMERICAN MULTI-CINEMA, INC.
By_________________________________
Title:
Address: 106 West 14th Street
Kansas City, Missouri
64105-1977
Telecopy No.: (816) 421-5744
Attention: Peter C. Brown
AMC ENTERTAINMENT INC.
By_________________________________
Title:
Address: 106 West 14th Street
Kansas City, Missouri
64105-1977
Telecopy No.: (816) 421-5744
Attention: Peter C. Brown
THE BANK OF NOVA SCOTIA,
Commitment Percentage individually and as Agent
$20,000,000 50%
By______________________________
Title: Senior Assistant Agent
Domestic Atlanta Agency
Office: 600 Peachtree Street,
N.E.
Suite 2700
Atlanta, Georgia 30308
Telex No.: 00542319
Attention: Mr. F.C.H. Ashby
LIBOR
Office: Atlanta Agency
600 Peachtree Street,
N.E.
Suite 2700
Atlanta, Georgia 30308
Telex No.: 00542319
Attention: Mr. F.C.H. Ashby
Senior Assistant Agent
Commitment Percentage BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
$20,000,000 50% as Co-Arranger and as a Bank
By
Title: President
Domestic
Office: Payment Service
Operation - Number 5693
1850 Gateway Boulevard
Concord, CA 94520
Telex No.: 676-52BANKAMER SFO
Telephone: (510) 675-7494
Facsimile: (510) 675-7531
Attention: Paul Williams
LIBOR
Office: Payment Service
Operation - Number 5693
1850 Gateway Boulevard
Concord, CA 94520
Telex No.: 676-52BANKAMER SFO
Telephone: (510) 675-7494
Facsimile: (510) 675-7531
Attention: Paul Williams
Total $40,000,000 100.00%
ACKNOWLEDGEMENT
The undersigned Guarantor hereby acknowledges, consents and agrees to
the terms and conditions of the foregoing First Amended and Restated Loan
Agreement and all transactions contemplated thereby, and reaffirms that (i)
the obligations of the Guarantor under the AMCE Guaranty dated as of August
10, 1992 (the "AMCE Guaranty") continue in full force and effect with respect
to the Liabilities (as defined in the AMCE Guaranty) under such First Amended
and Restated Loan Agreement and (ii) that the Subordination Agreement dated
as of August 10, 1992 remains in full force and effect.
AMC ENTERTAINMENT INC.
By
Title:
Schedule 1.1
Replaced Facilities
1. 13.60% Senior Subordinated Notes due 2000 of the Guarantor (to be
redeemed at an aggregate price of $52,700,000, (representing
105.44% of the principal amount thereof) plus accrued and unpaid
interest).
2. 11-7/8% Senior Subordinated Notes due 2001 of the Guarantor (to be
redeemed at an aggregate price of $78,600,000 (representing 104.75%
of the principal amount thereof) plus accrued and unpaid interest).
3. Loan Agreement, dated as of April 27, 1990 (as amended by the First
Amendment thereto dated as of April 25, 1991 by the Second
Amendment thereto dated as of January 31, 1992), among the
Borrower, the Guarantor, BNS, BA and BNS and BA as Co-Agents.
SCHEDULE I
Unrestricted Subsidiaries
EXHIBIT 4(b)
SIGNIFICANT SUBSIDIARY GUARANTY
from
the
UNDERSIGNED SUBSIDIARIES
OF
AMERICAN MULTI-CINEMA, INC.
to
THE BANK OF NOVA SCOTIA,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
and
VARIOUS OTHER COMMERCIAL BANKING
INSTITUTIONS,
as the Banks,
THE BANK OF NOVA SCOTIA,
as Agent
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Co-Arranger
SIGNIFICANT SUBSIDIARY GUARANTY
FOR VALUE RECEIVED, and in consideration of any loan or other financial
accommodation heretofore or hereafter at any time made or granted to AMERICAN
MULTI-CINEMA, INC., a Missouri corporation (herein called the "Debtor"), by
THE BANK OF NOVA SCOTIA, individually (herein, in such capacity, together
with its successors and assigns, called "BNS") and as Agent (herein, in such
capacity together with its successors and assigns in such capacity, called
the "Agent") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
individually (herein, in such capacity together with its successors and
assigns in such capacity, called "BA") and as Co-Arranger (herein, in such
capacity together with its successors and assigns, called the "Co-Arranger")
under the Loan Agreement referred to below, and various other commercial
banking institutions who are the "Banks" thereunder (herein, together with
BNS, BA and their respective successors and assigns, collectively called the
"Banks" and individually called a "Bank"), each of the undersigned hereby
unconditionally guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of all monetary
obligations of the Debtor to any Bank, howsoever created, arising or
evidenced, whether direct or indirect, primary or secondary, absolute or
contingent, joint or several, or now or hereafter existing or due or to
become due (including in all cases all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C. 362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
502(b) and 506(b)) (all such monetary obligations being hereinafter
collectively called the "Liabilities"), under and in connection with that
certain First Amended and Restated Loan Agreement, dated as of June 14, 1994
(herein, as the same may be amended from time to time, called the "Loan
A g reement"), between the Debtor, AMC Entertainment Inc., a Delaware
corporation, the Banks, the Agent and the Co-Arranger and each of the under-
signed further agrees to pay all reasonable expenses (including attorneys'
fees and legal expenses) paid or incurred by the Banks in endeavoring to
collect the Liabilities, or any part thereof, and in enforcing this guaranty.
Each of the undersigned agrees that, in the event of the dissolution or
insolvency of the Debtor or such undersigned, or the inability or failure of
the Debtor or such undersigned to pay debts as they become due, or an
assignment by the Debtor or such undersigned for the benefit of creditors, or
the commencement of any case or proceeding in respect of the Debtor or such
undersigned under any bankruptcy, insolvency or similar laws, and if such
event shall occur at a time when any of the Liabilities may not then be due
and payable, such undersigned will pay to the Banks forthwith the full amount
which would be payable hereunder by such undersigned if all Liabilities were
then due and payable. To secure all obligations of each of the undersigned
hereunder, each Bank shall have a right to, and may, without demand or notice
of any kind, at any time and from time to time when any amount shall be due
and payable by such undersigned hereunder, set off, appropriate and apply
toward the payment of such amount, in such order of application as such Bank
may elect any and all balances, credits, deposits (general or special, time
or demand, provisional or final), accounts or moneys of or in the name of
such undersigned now or hereafter with such Bank.
This guaranty shall in all respects be a continuing, absolute and
u n c onditional guaranty, and shall remain in full force and effect
( n otwithstanding, without limitation, the dissolution of any of the
undersigned or that at any time or from time to time all Liabilities may have
been paid in full), until all Liabilities (including any extensions or
renewals of any thereof) and all interest thereon and all expenses (including
attorneys' fees and legal expenses) paid or incurred by each Bank in
endeavoring to collect the Liabilities and in enforcing this guaranty shall
have been finally paid in full.
Each of the undersigned further agrees that, if at any time all or any
part of any payment theretofore applied by any Bank to any of the Liabilities
is or must be rescinded or returned by such Bank for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization
of the Debtor), such Liabilities shall, for the purposes of this guaranty, to
the extent that such payment is or must be rescinded or returned, be deemed
to have continued in existence, notwithstanding such application by such
Bank, and this guaranty shall continue to be effective or be reinstated, as
the case may be, as to such Liabilities, all as though such application by
such Bank had not been made.
Each Bank may, from time to time, at its sole discretion and without
notice to the undersigned (or any of them), take any or all of the following
actions without impairing the obligation of the undersigned under this
guaranty: (a) retain or obtain a lien upon or a security interest in any
property to secure any of the Liabilities or any obligation hereunder;
(b) retain or obtain the primary or secondary obligation of any obligor or
obligors, in addition to the undersigned, with respect to any of the
Liabilities; (c) extend or renew for one or more periods (whether or not
longer than the original period), alter or exchange any of the Liabilities,
or release or compromise any obligation of any of the undersigned hereunder
or any obligation of any nature of any other obligor with respect to any of
the Liabilities; (d) release or fail to perfect its lien upon or security
interest in, or impair, surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Liabilities
or any obligation hereunder, or extend or renew for one or more periods
(whether or not longer than the original period) or release, compromise,
alter or exchange any obligations of any nature of any obligor with respect
to any such property; and (e) resort to the undersigned (or any of them) for
payment of any of the Liabilities, whether or not such Bank (i) shall have
resorted to any property securing any of the Liabilities or any obligation
hereunder or (ii) shall have proceeded against any other of the undersigned
or any other obligor primarily or secondarily obligated with respect to any
of the Liabilities (all of the actions referred to in preceding clauses (i)
and (ii) being hereby expressly waived by the undersigned).
Any amounts received by the Banks from whatsoever source on account of
the Liabilities may be applied by the Banks, toward the payment of such of
the Liabilities, and in such order of application, as the Banks may from time
to time elect.
Until such time as the Banks shall have received payment of the full
amount of all Liabilities and of all obligations of the undersigned
hereunder, no payment made by or for the account of the undersigned (or any
of them) pursuant to this guaranty shall entitle any of the undersigned by
subrogation or otherwise to any payment by the Debtor or from or out of any
property of the Debtor and none of the undersigned shall exercise any right
or remedy against the Debtor or any property of the Debtor by reason of any
performance by such undersigned of this guaranty.
Each of the undersigned hereby expressly waives: (a) notice of the
acceptance by the Banks of this guaranty; (b) notice of the existence or
creation or non-payment of all or any of the Liabilities; (c) presentment,
demand, notice of dishonor, protest, and all other notices whatsoever; and
(d) all diligence in collection or protection of or realization upon the
Liabilities or any thereof, any obligation hereunder, or any security for or
guaranty of any of the foregoing.
The creation or existence, with or without notice to the undersigned,
from time to time of Liabilities in excess of the amount to which the right
of recovery under this guaranty is limited shall not in any way affect or
impair the rights of the Banks and the obligation of the undersigned under
this guaranty.
The Banks may, from time to time, without notice to the undersigned (or
any of them), assign or transfer any or all of the Liabilities or any
interest therein; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer thereof, such Liabilities shall be and
remain Liabilities for the purposes of this guaranty, and each and every
immediate and successive assignee or transferee of any of the Liabilities or
of any interest therein shall, to the extent of the interest of such assignee
or transferee in the Liabilities, be entitled to the benefits of this
guaranty to the same extent as if such assignee or transferee were a Bank;
provided, however, that, unless any Bank shall otherwise consent in writing,
such Bank shall have an unimpaired right, prior and superior to that of any
such assignee or transferee, to enforce this guaranty, for the benefit of
such Bank, as to those of the Liabilities which such Bank has not assigned or
transferred.
No delay on the part of any Bank in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by any
Bank of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this guaranty be binding upon any Bank
except as expressly set forth in a writing duly signed and delivered on
behalf of such Bank. No action of any Bank permitted hereunder shall in any
way affect or impair the rights of such Bank and the obligations of the
undersigned under this guaranty. For the purposes of this guaranty,
Liabilities shall include all obligations of the Debtor to the Banks under
and in connection with the Loan Agreement, notwithstanding any right or power
of the Debtor or anyone else to assert any claim or defense as to the
invalidity or unenforceability of any such obligation, and no such claim or
defense shall affect or impair the obligations of the undersigned hereunder.
The obligations of the undersigned under this guaranty shall be absolute and
unconditional irrespective of any circumstance whatsoever which might
constitute a legal or equitable discharge or defense of the undersigned (or
any of them). Each of the undersigned hereby acknowledges that there are no
conditions to the effectiveness of this guaranty.
Each of the undersigned hereby warrants and represents to the Banks that
such undersigned now has and will continue to have independent means of
obtaining information concerning the affairs, financial condition and
business of the Debtor. The Banks shall not have any duty or responsibility
to provide the undersigned (or any of them) with any credit or other informa-
tion concerning the affairs, financial condition or business of the Debtor
which may come into any Bank's possession.
The undersigned hereby further warrant and represent to the Banks that
(a) the execution and delivery of this guaranty, and the performance by each
of the undersigned of its obligations hereunder, are within the corporate
right, power, authority and capacity of such undersigned and have been duly
authorized by all necessary corporate action on the part of such undersigned,
and (b) this guaranty has been duly executed and delivered on behalf of each
of the undersigned and is the legal, valid and binding obligation of such
undersigned, enforceable in accordance with its terms, the making and
performance of which do not and will not contravene or conflict with the
charter or by-laws of such undersigned or violate or constitute a default
under any law, any presently existing requirement or restriction imposed by
judicial, arbitral or any governmental instrumentality or any agreement,
instrument or indenture by which such undersigned is bound.
Anything else in this guaranty notwithstanding, each of the undersigned
shall be liable under this guaranty only for the maximum amount of such
liability that can be incurred by such undersigned without rendering this
guaranty, as it relates to such undersigned, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount; provided, however, that the foregoing limitation shall not be
construed, as between the Banks and any other creditor of the Debtor or any
of the undersigned whose claim is subordinated to the claim of the Banks with
respect to the Liabilities, to adversely affect the extent of such
subordination.
This guaranty shall be binding upon the undersigned, and upon the
successors and assigns of the undersigned; and to the extent that the Debtor
or any of the undersigned is either a partnership or a corporation, all
references herein to the Debtor and to such of the undersigned, respectively,
shall be deemed to include any successor or successors, whether immediate or
remote, to such partnership or corporation. The term "undersigned" as used
herein shall mean all parties executing this guaranty and each of them, and
all such parties shall, subject to the limitation on right of recovery in the
i m m ediately preceding paragraph, be jointly and severally obligated
hereunder.
This guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and such counterparts
shall together constitute one and the same guaranty. At any time after the
date of this guaranty, one or more additional persons or entities may become
parties hereto by executing and delivering to the Agent a counterpart of this
guaranty. Immediately upon such execution and delivery (and without any
further action), each such additional person or entity will become a party
to, and will be bound by all of the terms of, this guaranty.
THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. Wherever possible each provision of this
guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this guaranty shall be
prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this guaranty.
THE UNDERSIGNED HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
Each of the undersigned agrees that any judicial proceedings brought
against such undersigned with respect to this guaranty may be brought in any
state or federal court of competent jurisdiction in the State of New York and
by the execution and delivery of this guaranty, each of the undersigned
accepts the nonexclusive jurisdiction of the aforesaid courts. Service of
process may be made by any means authorized by federal law or the law of New
York, as the case may be. A copy of any such process so served shall be
mailed by registered mail to such undersigned at 106 West 14th Street, Kansas
City, Missouri 64105-1977, Telecopy No.: (816) 421-5744, Attention Peter C.
Brown, the address, if any, opposite its signature on any counterpart
signature page hereto or at such other address as may be designated by such
undersigned in a notice to the Banks. Nothing herein shall limit the right
of any Bank to bring proceedings against any of the undersigned in the courts
of any other jurisdiction.
SIGNED AND DELIVERED as of this 14th day of June, 1994.
BUDCO THEATRES, INC.
By:
Title:
CONCORD CINEMA, INC.
By:
Title:
AMC REALTY, INC.
By:
Title:
CONSERVCO, INC.
By:
Title:
AMC CANTON REALTY, INC.
By:
Title:
AMC PHILADELPHIA, INC.
By:
Title:
AMC FILM MARKETING, INC.
By:
Title:
The undersigned is executing a counterpart
hereof for purposes of becoming a party hereto:
By:
Address: Title:
a) Exhibit 11
AMC ENTERTAINMENT INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share amounts)
(Unaudited)
Thirteen
Weeks Ended
6/30/94 7/1/93
Net earnings $ 1,571 $ 3,790
Preferred dividends (1,750) -
Net earnings (loss) applicable to common stock
for primary and fully diluted earnings per share $ (179) $ 3,790
Average shares for primary earnings per share:
Weighted average number of shares outstanding 16,442 16,269
Stock options outstanding whose effect is dilutive - 20
Total shares outstanding 16,442 16,289
Average shares for fully diluted earnings per share:
Weighted average number of shares outstanding 16,442 16,269
Stock options outstanding whose effect is dilutive - 20
Total shares outstanding 16,442 16,289
Primary earnings (loss) per share $ (.01) $ .19
Fully diluted earnings (loss) per share $ (.01) $ .19
