<PAGE> 1
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 SEPTEMBER 30, 1997
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 0-14993
CARMIKE CINEMAS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 58-1469127
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1301 FIRST AVENUE, COLUMBUS, GEORGIA 31901-2109
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(706) 576-3400
(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 such 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 __
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class A Common Stock, $.03 par value -- 9,918,587 shares outstanding as of
November 10, 1997
Class B Common Stock, $.03 par value -- l,420,700 shares outstanding as of
November 10, 1997
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
(Unaudited)
(000's omitted)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 613 $ 5,569
Short-term investments 3,045 7,726
Recoverable construction allowances
under capital leases 7,005 4,178
Accounts and notes receivable 2,600 644
Inventories 3,602 2,631
Prepaid expenses 7,914 5,363
-------- --------
TOTAL CURRENT ASSETS 24,779 26,111
OTHER ASSETS 18,883 12,749
PROPERTY AND EQUIPMENT - Net of accumulated
depreciation and amortization - Notes B and D 480,531 387,915
EXCESS OF COST OVER FAIR
VALUE OF TANGIBLE ASSETS
ACQUIRED - Notes B and D 68,542 62,608
-------- --------
$592,735 $489,383
======== ========
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(Unaudited)
(000's omitted)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,402 $ 21,432
Accrued expenses 24,155 17,240
Current maturities of long-term debt
and capital lease obligations 18,859 15,026
-------- --------
TOTAL CURRENT LIABILITIES 60,416 53,698
LONG-TERM DEBT - less current maturities 209,808 124,476
SENIOR NOTES 79,870 93,831
CAPITAL LEASE OBLIGATIONS -
less current maturities 38,199 31,351
CONVERTIBLE SUBORDINATED DEBT -0- 3,575
DEFERRED INCOME TAXES 3,622 4,522
SHAREHOLDERS' EQUITY - Note D
Class A Common Stock, $.03 par value, one vote
per share, authorized 22,500,000 shares,
issued 9,918,587 and 9,758,601 shares, respectively 298 292
Class B Common Stock, $.03 par value, ten votes per
share, authorized 5,000,000 shares, issued and
outstanding 1,420,700 shares 43 43
Paid-in capital 104,677 99,927
Retained earnings 95,802 77,668
-------- --------
200,820 177,930
-------- --------
$592,735 $489,383
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
-------- -------- -------- ---------
(000's omitted except per share data)
<S> <C> <C> <C> <C>
REVENUES
Admissions $ 88,626 $ 83,385 $241,473 $ 219,924
Concessions and other 40,110 37,723 105,794 98,038
-------- -------- -------- ---------
128,736 121,108 347,267 317,962
COSTS AND EXPENSES
Film exhibition costs 47,571 43,600 126,166 113,704
Concession costs 5,382 5,137 13,763 13,026
Other theatre operating costs 46,532 43,439 132,402 123,586
General and administrative 1,485 1,443 4,713 4,446
Depreciation and amortization 8,346 7,199 24,183 21,288
Impairment of long-lived assets (Note B) -0- -0- -0- 45,447
-------- -------- -------- ---------
109,316 100,818 301,227 321,497
-------- -------- -------- ---------
OPERATING INCOME(LOSS) 19,420 20,290 46,040 (3,535)
Interest expense 6,148 4,862 16,791 14,933
-------- -------- -------- ---------
INCOME(LOSS) BEFORE INCOME TAXES 13,272 15,428 29,249 (18,468)
Income taxes(benefit) 5,044 5,863 11,115 (7,018)
NET INCOME (LOSS) $ 8,228 $ 9,565 $ 18,134 $ (11,450)
======== ======== ======== =========
NET INCOME(LOSS) PER SHARE $ .72 $ .85 $ 1.59 $ (1.02)
======== ======== ======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
----------- ---------
(000's omitted)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 18,134 $ (11,450)
Items which did not use cash:
Depreciation and amortization 24,183 21,288
Impairment of long-lived assets -0- 45,447
Deferred income taxes -0- (17,270)
Gain on sale of property and equipment (2,130) (807)
Changes in operating assets and liabilities:
Accounts and notes receivable and inventories (2,927) 2,368
Prepaid expenses (2,051) (2,998)
Accounts payable (4,531) (5,059)
Accrued expenses 6,015 1,473
----------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 36,693 32,992
INVESTING ACTIVITIES
Purchases of property and equipment (104,770) (47,332)
Purchases of assets from other theatre operators (16,800) (23,075)
Disposals of property and equipment 5,214 1,765
Decrease (increase) in:
Short-term investments 4,681 (321)
Other (6,227) (4,593)
----------- ---------
NET CASH USED IN INVESTING ACTIVITIES (117,902) (73,556)
FINANCING ACTIVITIES
Debt and other liabilities:
Borrowings under revolving credit line 1,598,500 811,000
Repayments of revolving credit line (1,513,000) (771,000)
Payments on long term obligations (11,177) (11,765)
Issuance of Class A Common Stock 4,757 111
Recoverable construction allowances
under capital leases (2,827) 2,900
----------- ---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 76,253 31,246
----------- ---------
DECREASE IN CASH AND
CASH EQUIVALENTS (4,956) (9,318)
Cash and cash equivalents at beginning of period 5,569 11,345
----------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 613 $ 2,027
=========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1997
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month and nine-month periods
ended September 30, 1997 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K, as amended, for the year ended
December 31, 1996.
NOTE B - IMPAIRMENT OF LONG LIVED ASSETS
The Company adopted Statement of Financial Accounting Standards 121 (FASB 121),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of", as of January 1, 1996. The Company reviews for impairment
long-lived assets, and goodwill related to those assets, to be held and used in
the business whenever events or changes in circumstances indicate that the
carrying amount of an asset or a group of assets may not be recoverable. The
Company considers a trend of operating results that are not in line with
management's expectations to be its primary indicator of potential impairment.
For purposes of FASB 121, assets are evaluated for impairment at the theatre
level, which management believes is the lowest level for which there are
identifiable cash flows. The Company deems a theatre to be impaired if a
forecast of undiscounted future operating cash flows directly related to the
theatre, including disposal value if any, is less than its carrying amount. If a
theatre is determined to be impaired, the loss is measured as the amount by
which the carrying amount of the theatre exceeds its fair value. Fair value is
based on management's estimates which are based on using the best information
available, including prices for similar theatres or the results of valuation
techniques such as discounting estimated future cash flows as if the decision to
continue to use the impaired theatres was a new investment decision.
Considerable management judgment is necessary to estimate discounted future cash
flows. Accordingly, actual results could vary significantly from such estimates.
Recoverability of other long-lived assets, primarily investments in
unconsolidated affiliates and goodwill not identified with impaired theatres
covered by the above paragraph, will continue to be evaluated on a recurring
basis. The primary indicator of recoverability is current or forecasted
profitability over the estimated remaining life of these assets. If
recoverability is unlikely based on the evaluation, the carrying amount is
written down to the fair value.
6
<PAGE> 7
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
NOTE B -- IMPAIRMENT OF LONG LIVED ASSETS(continued)
The initial non-cash charge upon the Company's adoption of FASB 121, recorded
during the period ended March 31, 1996, was approximately $45,447,000
($28,177,000 after tax or $2.50 per share) to reduce the carrying amount of 138,
or 26%, of the Company's theatres at January 1, 1996. This initial charge
resulted from evaluating the recoverability of individual theatres, which is at
a lower level of cash flow evaluation than under the Company's previous
accounting policy for measuring impairment. Under the Company's previous policy,
the Company's long-lived assets were evaluated on a market by market basis for
impairment.
FASB 121 also requires, among other provisions, that long-lived assets held for
disposal and certain identified intangibles be reported at the lower of the
asset's carrying amount or its fair value less costs to sell. The impact of
adopting FASB 121 on assets held for disposal during the first quarter of 1996
was not material.
The Company periodically reviews and monitors its internal management reports
and the competition in its markets for indicators of impairment of individual
theatres.
NOTE C --REVOLVING CREDIT FACILITY
On April 23, 1996, the Company entered into an Amended and Restated Credit
Agreement (the "1996 Credit Agreement") with four banks to provide a revolving
line of credit of up to $175 million for working capital, acquisitions and other
general corporate purposes. The 1996 Credit Agreement has a three year revolving
credit period, extended upon the mutual consent of the Company and the banks for
one year periods and will convert to a four year term loan at the end of the
revolving credit period. The Company has the option to borrow at rates based on
either the base rate of Wachovia Bank, N.A. or LIBOR + .50% and is required to
pay annual fees of .225% on the full amount of the facility. The interest rate
and facility fees are subject to adjustment based upon the Company's ratio of
total debt to defined cash flows. The 1996 Credit Agreement contains certain
restrictive provisions which, among other things, limit additional indebtedness
of the Company, limit dividend and other restricted payments, require that
certain debt to capitalization ratios be maintained and require minimum levels
of cash flows.
On June 20, 1997 Wachovia Bank, N.A. provided the Company a $30 million loan
(the "Loan") (the Loan and the 1996 Credit Agreement are collectively known as
the "Agreements") pending an increase in the revolving line of credit under the
1996 Credit Agreement. The Loan matures November 26, 1997 and the Company pays
interest under the Loan at the same rates as under the 1996 Credit Agreement.
7
<PAGE> 8
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
NOTE C -- REVOLVING CREDIT FACILITY (continued)
Under the terms of the Loan, no payments are due until after April 23, 1999, nor
does the Company anticipate reducing the amount outstanding at September 30,
1997. Accordingly, no amounts outstanding under the Loan have been classified as
current maturities in the accompanying Condensed Consolidated Financial
Statements.
At September 30, 1997, the Company had $207.5 million outstanding under these
facilities. Also see Note F - Subsequent Event.
The Company has entered into interest rate swap agreements to modify the
interest characteristics of a portion of its outstanding debt. The agreements
involve the exchange of amounts based on a variable interest rate for amounts
based on a fixed interest rate over the life of the agreements without an
exchange of the notional amount upon which the payments are based. The Company
specifically designates interest rate swaps on hedges of debt instruments and
recognizes interest differentials as adjustments to interest expense in the
period they occur. The differential to be paid or received as interest rates
change is accrued and recognized as an adjustment of interest expense related to
the debt (the accrual accounting method). The related amount payable to, or
receivable from, counter-parties is included in other liabilities or assets. The
fair value of the swap agreements is not recognized in the financial statements.
If, in the future, an interest rate swap agreement were terminated, any
resulting gain or loss would be deferred and amortized to interest expense over
the remaining life of the interest rate swap agreement. In the event of the
early extinguishment of a designated debt obligation, any realized or unrealized
gain or loss from the swap would be recognized in income coincident with the
extinguishment.
Under one agreement, the Company has fixed $50 million of the Company's floating
rate debt for seven years. The effective rate at September 30, 1997 was 6.205%,
equal to a fixed rate of 5.705% plus the margin of .50% the Company presently
pays over LIBOR. Under another agreement, the Company has fixed $20 million of
its floating rate debt for five years at a fixed rate of 5.51% plus the margin
the Company pays over LIBOR (presently .50%) for a total effective rate of
6.01%.
NOTE D -- ACQUISITIONS
The Company's acquisitions have been accounted for under the purchase method of
accounting. Under the purchase method of accounting, the results of operations
of the acquired businesses are included in the accompanying condensed
consolidated statements as of their respective acquisition dates. The assets and
liabilities of acquired businesses in 1997 are included based on a preliminary
allocation of the purchase price.
8
<PAGE> 9
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
NOTE D -- ACQUISITIONS(continued)
In separate transactions, the Company acquired certain assets and businesses as
follows:
<TABLE>
<CAPTION>
Number of
Approximate ---------
Seller Purchase Price Theatres Screens Effective Date
------ -------------- -------- ------- --------------
(in thousands)
<S> <C> <C> <C> <C>
1997
First International
Theatres $16,800 19 104 May 23, 1997
------- -- ---
1996
Maxi Saver Cinemas $ 3,975 2 18 January 5, 1996
Fox Theatres Corp. 19,100 12 61 February 16, 1996
------- -- ---
$23,075 14 79
======= == ===
</TABLE>
The First International Theatres acquisition purchase price included 128,986
shares of the Company's Class A Common Stock with a fair market value of
approximately $4.25 million.
The excess of purchase prices over net assets of businesses acquired has been
recorded as an intangible asset. Amounts recorded were approximately $7.5
million in 1997 and $17.0 million in 1996.
Pro-forma results have not been presented for those acquisitions which were not
significant during the periods presented.
NOTE E - ACCOUNTING POLICIES NOT YET ADOPTED
In February 1997, the Financial Accounting Standards Board "FASB" issued
Statement No. 128, Earnings per Share, which the Company will adopt on December
31, 1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact is expected to
result in an increase in primary earnings per share for the quarters ended
September 30, 1997 and September 30, 1996 of $.01 and $.01 per share,
respectively and for the year to date periods ended September 30, 1997 and
September 30, 1996 of $.02 and $.00 per share, respectively. The impact of
Statement 128 on the calculation of fully diluted earnings per share for these
quarters is not expected to be material.
9
<PAGE> 10
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income" and Statement No. 131, "Disclosures About Segments of an Enterprise and
Related Information". Statement No. 130 establishes standards for the reporting
and display of comprehensive income and its components in a full set of general
purpose financial statements. Statement No. 131 generally requires that
companies report segment information for operating segments which are revenue
producing components and for which separate financial information is produced
internally.
The Company plans to adopt Statement No. 130 and Statement No. 131 in 1998, but
has not yet completed its analysis of the impact, if any, that Statement No. 130
and Statement No. 131 may have on its financial statements.
NOTE F - SUBSEQUENT EVENT
On October 17, 1997, the Company entered into a Credit Agreement (the "1997
Credit Agreement") with a consortium of twelve banks to provide a revolving line
of credit of up to $275 million for working capital, acquisitions and other
general corporate purposes. The revolving line of credit under the 1997 Credit
Agreement is available for a five year period. The Company has the option to
borrow at rates based on either the base rate of Wachovia Bank, N.A. or LIBOR +
.50% and is required to pay annual fees of .225% on the full amount of the
facility. The interest rate and facility fees are subject to adjustment based
upon the Company's ratio of defined funded debt to defined cash flows. The 1997
Credit Agreement contains certain restrictive provisions which, among other
things, limit additional indebtedness of the Company, limit dividend and other
restricted payments, require that certain debt to capitalization ratios be
maintained and require minimum levels of cash flows. Upon entering into the 1997
Credit Agreement, the Company repaid the Loan and all amounts outstanding under
the 1996 Credit Agreement and terminated the Agreements.
10
<PAGE> 11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
COMPARISON OF THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the financial information included
herein and the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended (the "1996 Form 10-K"), as filed with the
Securities and Exchange Commission (the "SEC"). Except for the historical
information contained herein, the following discussion contains forward-looking
statements that involve a number of risks and uncertainties. Factors which could
cause the Company's actual results in future periods to differ materially
include, but are not limited to, those discussed below and other factors such as
the financial strength of the motion picture industry, the level of consumer
spending, the availability of popular motion pictures and the success of planned
advertising, marketing and promotional campaigns, as well as other factors
discussed or identified from time to time in the Company's filings with the SEC,
including, but not limited to, the Company's 1996 Form 10-K.
RESULTS OF OPERATIONS
Total revenues for the quarter ended September 30, 1997 increased 6.3% to $128.7
million from $121.1 million for the quarter ended September 30, 1996. This
increase consists of a $5.2 million increase in admissions and a $2.4 million
increase in concessions and other. The increases are attributed to additional
revenues generated by the increased number of screens in operation, increases in
admission prices and additional revenues from the Company's new family
entertainment center, The Hollywood Connection(SM). These increases were
partially offset by a 8.4% decline in attendance per average screen. For the
quarter ended September 30, 1997, the Company's average admission price was
$4.17, its average concession sale per patron was $1.68 and revenue per average
screen was $47,609. For the quarter ended September 30, 1996, the Company's
average admission price was $3.92, its average concession sale per patron was
$1.65 and revenue per average screen was $48,775.
Total revenues for the nine months ended September 30, 1997 increased 9.2% to
$347.3 million from $318.0 million for the nine months ended September 30, 1996.
This increase consists of a $21.5 million increase in admissions and a $7.8
million increase in concessions and other. These increases are due primarily to
the additional revenues generated by the increase in the number of screens in
operation, increases in admission prices, a higher level of gains on sale of
assets and additional revenues from the Company's new family entertainment
center, The Hollywood Connection(SM). These increases were partially
offset by a 4.2% decrease in attendance per average screen.
Cost of operations (film exhibition costs, concession costs and other theatre
operating costs) increased 7.9% from $92.2 million for the quarter ended
September 30, 1996 to $99.5 million for the quarter ended September 30, 1997.
This dollar increase is due to the increased number of screens in operation. As
a percentage of total revenues, cost of operations increased to 77.3 % of total
revenues in the quarter ended September 30, 1997 from 76.1% for the quarter
ended September 30, 1996, primarily a result of higher film exhibition costs in
the quarter ended September 30, 1997.
11
<PAGE> 12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Cost of operations for the nine months ended September 30, 1997 increased 8.8%
from $250.3 million to $272.3 million also as a result of the increased number
of screens in operation. As a percentage of total revenues, cost of operations
decreased from 78.7% of total revenues to 78.4% of total revenues in the nine
months ended September 30, 1997.
General and administrative costs for the quarters ended September 30, 1997 and
September 30, 1996 were the same at 1.2% of total revenues. For the year to date
periods ended September 30, 1997 and September 30, 1996, general and
administrative costs were 1.4% of total revenues.
Depreciation and amortization increased 15.9% from $7.2 million for the quarter
ended September 30, 1996 to $8.3 million for the quarter ended September 30,
1997 due to the additional depreciation and amortization from the acquisitions
and expansions in 1996 and 1997.
Depreciation and amortization for the nine months ended September 30, 1997
increased 13.6% from $21.3 million in the nine months ended September 30, 1996
to $24.2 million due to the Company's acquisitions and expansions.
Reference is made to Note B of Notes to Condensed Consolidated Financial
Statements with respect to the Company's adoption of FASB 121 effective January
1, 1996.
Interest expense for the quarter ended September 30, 1997 increased 26.5% to
$6.1 million from $4.9 million for the quarter ended September 30, 1996 due to
the increase in the average amount of outstanding debt incurred as a result of
capital expenditures incurred in connection with the Company's theatre
construction and the acquisitions completed in early 1996 and June 1997.
Interest expense for the nine months ended September 30, 1997 increased 12.4% to
$16.8 million from $14.9 million for the nine months ended September 30, 1996
due to the increase in the average amount of outstanding debt incurred as a
result of capital expenditures incurred in connection with the Company's theatre
construction and the acquisitions completed in early 1996 and June 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's revenues are collected in cash, principally through box office
admissions and theatre concessions. Because its revenues are received in cash
prior to the payment of related expenses, the Company has an operating "float"
which partially finances its operations.
12
<PAGE> 13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Through October 17, 1997 the Company had a credit agreement (the "1996 Credit
Agreement") (which was recently terminated, as set forth below) with four banks
to provide a revolving line of credit of up to $175 million for working
capital, acquisitions and other general corporate purposes. The Company had the
option to borrow at interest rates based on either the bank base rate or LIBOR
plus .50% (effective rate of 6.1563% at September 30, 1997) and was required to
pay annual commitment fees of .225% on the full amount of the facility. The
interest rate, facility fees and commitment fees were subject to adjustment
based upon the Company's ratio of total debt to defined cash flows.
On October 17, 1997, the Company entered into a new credit agreement (the "1997
Credit Agreement") with a consortium of twelve banks to provide a revolving line
of credit of up to $275 million for working capital, acquisitions and other
general corporate purposes. The revolving line of credit under the 1997 Credit
Agreement is available for a five year period. The Company has the option to
borrow at interest rates based on either the bank base rate or LIBOR plus .50%
and is required to pay annual commitment fees of .225% on the full amount of the
facility. The interest rate, facility fees and commitment fees are subject to
adjustment based upon the Company's ratio of total debt to defined cash flows.
Upon entering into the 1997 Credit Agreement, the Company repaid all amounts
outstanding under, and terminated, the 1996 Credit Agreement and the loan.
The Company's credit facilities contain certain restrictive provisions
which, among other things, limit additional indebtedness of the Company, limit
the payment of dividends and other defined restricted payments, require that
certain debt to capitalization ratios be maintained and require minimum levels
of cash flows.
Pursuant to a Stock Purchase Agreement (the "Agreement") by and between the
Company, Eastwynn Theatres, Inc., Morgan Creek Theatres, Inc., SB Holdings,
Inc., RDL Consulting Limited Liability Company and the Sellers (as defined in
the Agreement), effective May 23, 1997, the Company acquired First International
Theatres, which operated 19 theatres with an aggregate of 104 screens. The total
consideration for this $16.8 million acquisition was a combination of cash and
the issuance of an aggregate of 128,986 shares of the Company's Class A Common
Stock.
The Company's capital expenditures arise principally in connection with theatre
acquisitions, renovation and expansion of existing theatres and the development
of new theatres. During the first nine months of 1997, such capital expenditures
totaled $121.6 million. The Company estimates that total capital expenditures
for 1997 will be approximately $140.0 million.
The Company believes that its presently anticipated capital needs for theatre
construction and possible acquisitions will be satisfied by the cash and cash
equivalents and short-term investments on hand, borrowing under the revolving
credit lines (see Notes C and F of the Notes to Condensed Financial Statements
(Unaudited) herein), additional sale of debt and/or equity securities,
additional bank financings and other forms of long-term debt, internally
generated cash flow and, where appropriate, future lease financings. On November
10, 1997, the Company had approximately $10.2 million in cash and short term
investments on hand and approximately $55 million was available under the
Company's revolving credit facility.
13
<PAGE> 14
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Cash from operating activities was $36.7 million for the nine months ended
September 30, 1997, compared to $33.0 million for the nine months ended
September 30, 1996. The increase in cash flow from operating activities was
primarily due to the increase in net income. Net cash used in investing
activities was $117.9 million for the nine months ended September 30, 1997 as
compared to $73.6 million in the prior year period. The increase in cash used in
investing activities was primarily due to the increased level of capital
expenditures. For the nine month periods ended September 30, 1997 and 1996, cash
provided by financing activities was $76.3 million and $31.2 million,
respectively. The increase in cash provided by financing activities was
primarily from borrowings under the Company's revolving credit line.
14
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
4 - Loan Agreement dated as of October 17, 1997 by and between
Wachovia Bank, NA as agent and Carmike Cinemas, Inc.
11 - Statement re: computation of earnings per share
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
15
<PAGE> 16
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.
CARMIKE CINEMAS, INC.
(Registrant)
Date: 11/10/97 By: /s/ Michael W. Patrick
---------------- ------------------------------
Michael W. Patrick - President
(Chief Executive Officer)
Date: 11/10/97 By: /s/ John O. Barwick, III
---------------- ------------------------------
John O. Barwick, III - Vice
President Finance
(Chief Accounting and
Financial Officer)
16
<PAGE> 1
EXHIBIT 4
$275,000,000
CREDIT AGREEMENT
dated as of
October 17, 1997
among
CARMIKE CINEMAS, INC.
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
<PAGE> 2
TABLE OF CONTENTS
CREDIT AGREEMENT
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
SECTION 1.01. Definitions ...................................................... 1
SECTION 1.02. Accounting Terms and Determinations .............................. 16
SECTION 1.03. Use of Defined Terms ............................................. 17
SECTION 1.04. Terminology ...................................................... 17
SECTION 1.05. References ....................................................... 17
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Loans ........................................ 17
SECTION 2.02. Method of Borrowing Loans ........................................ 18
SECTION 2.03. Notes ............................................................ 19
SECTION 2.04. Maturity of Loans ................................................ 20
SECTION 2.05. Interest Rates ................................................... 20
SECTION 2.06. Fees ............................................................. 22
SECTION 2.07. Optional Termination or Reduction of Commitments ................. 24
SECTION 2.08. Mandatory Revolver Termination Date and Termination of Commitments 24
SECTION 2.09. Optional Prepayments ............................................. 24
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 2.10. Mandatory Prepayments ............................................ 24
SECTION 2.11. General Provisions as to Payments ................................ 24
SECTION 2.12. Computation of Interest and Fees ................................. 25
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions Precedent to Effectiveness ............................ 25
SECTION 3.02. Conditions to All Borrowings ..................................... 27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power .................................... 28
SECTION 4.02. Corporate and Governmental Authorization; No Contravention ....... 28
SECTION 4.03. Binding Effect ................................................... 28
SECTION 4.04. Financial Information ............................................ 28
SECTION 4.05. Litigation ....................................................... 29
SECTION 4.06. Compliance with ERISA ............................................ 29
SECTION 4.07. Taxes ............................................................ 29
SECTION 4.08. Subsidiaries ..................................................... 29
SECTION 4.09. Not an Investment Company ........................................ 29
SECTION 4.10 Public Utility Holding Company Act ............................... 29
SECTION 4.11. Ownership of Property; Liens ..................................... 30
SECTION 4.12. No Default ....................................................... 30
SECTION 4.13. Full Disclosure .................................................. 30
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 4.14. Environmental Matters ........................................... 30
SECTION 4.15. Compliance with Laws ............................................. 30
SECTION 4.16. Capital Stock .................................................... 31
SECTION 4.17. Margin Stock ..................................................... 31
SECTION 4.18. Insolvency ....................................................... 31
ARTICLE V
COVENANTS
SECTION 5.01. Information ...................................................... 31
SECTION 5.02. Inspection of Property, Books and Records ........................ 33
SECTION 5.03. Ratio of Consolidated Funded Debt to Consolidated Total
Capitalization ............................................... 33
SECTION 5.04. Ratio of Consolidated Funded Debt to Consolidated Cash Flow ...... 33
SECTION 5.05. Restricted Payments and Restricted Investments ................... 33
SECTION 5.06. Fixed Charge Coverage ............................................ 34
SECTION 5.07. Negative Pledge .................................................. 34
SECTION 5.08. Maintenance of Existence ......................................... 36
SECTION 5.09. Dissolution ...................................................... 36
SECTION 5.10. Consolidations, Mergers and Sales of Assets ...................... 36
SECTION 5.11. Use of Proceeds .................................................. 37
SECTION 5.12. Compliance with Laws; Payment of Taxes ........................... 37
SECTION 5.13. Insurance ........................................................ 37
SECTION 5.14. Change in Fiscal Year ............................................ 37
SECTION 5.15. Maintenance of Property .......................................... 37
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 5.16. Environmental Notices ............................................ 37
SECTION 5.17. Environmental Matters ............................................ 37
SECTION 5.18. Environmental Release ............................................ 38
SECTION 5.19. Additional Covenants, Etc ........................................ 38
SECTION 5.20. Operation of Unrestricted Subsidiaries ........................... 39
SECTION 5.21. Guaranty of Restricted Subsidiaries .............................. 39
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default ................................................ 40
SECTION 6.02. Notice of Default ................................................ 42
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities ............................... 42
SECTION 7.02. Reliance by Agent ................................................ 43
SECTION 7.03. Defaults ......................................................... 43
SECTION 7.04. Rights of Agent and Its Affiliates as a Bank ..................... 44
SECTION 7.05. Indemnification .................................................. 44
SECTION 7.06. Consequential Damages ............................................ 44
SECTION 7.07. Payee of Note Treated as Owner ................................... 44
SECTION 7.08. Non-Reliance on Agent and Other Banks 45
SECTION 7.09. Failure to Act ................................................... 45
SECTION 7.10. Resignation or Removal of Agent .................................. 45
</TABLE>
<PAGE> 6
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
<TABLE>
<S> <C> <C>
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair ......... 45
SECTION 8.02. Illegality ....................................................... 46
SECTION 8.03. Increased Cost and Reduced Return ................................ 46
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans ................ 48
SECTION 8.05. Compensation ..................................................... 48
SECTION 8.06. Replacement of Bank .............................................. 49
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices .......................................................... 49
SECTION 9.02. No Waivers ....................................................... 50
SECTION 9.03. Expenses; Documentary Taxes; Indemnification ..................... 50
SECTION 9.04. Setoffs; Sharing of Set-Offs ..................................... 50
SECTION 9.05. Amendments and Waivers ........................................... 51
SECTION 9.06. Margin Stock Collateral .......................................... 52
SECTION 9.07. Successors and Assigns ........................................... 52
SECTION 9.08. Confidentiality .................................................. 55
SECTION 9.09. Representation by Banks .......................................... 55
SECTION 9.10. Obligations Several .............................................. 55
SECTION 9.11. Survival of Certain Obligations .................................. 55
SECTION 9.12. Georgia Law ...................................................... 56
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 9.13. Severability ..................................................... 56
SECTION 9.14. Interest ......................................................... 56
SECTION 9.15. Interpretation ................................................... 56
SECTION 9.16. Consent to Jurisdiction .......................................... 56
SECTION 9.17. EDGAR Filing ..................................................... 56
SECTION 9.18. Counterparts ..................................................... 57
</TABLE>
SCHEDULE 1.01 List of Investments as of June 30, 1997
SCHEDULE 4.08 Existing Subsidiaries
SCHEDULE 4.14A Environmental Liabilities, Etc.
SCHEDULE 4.14B Environmental Releases
SCHEDULE 4.14C Environmental Authorizations
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Closing Certificate
EXHIBIT E Form of Secretary's Certificate
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Assignment and Acceptance
EXHIBIT H Form of Notice of Borrowing
<PAGE> 8
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 17, 1997, among CARMIKE
CINEMAS, INC., a Delaware corporation, the BANKS listed on the signature pages
hereof and WACHOVIA BANK, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment hereto
(except as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Adjusted Cash Flow" means, for any period, Consolidated
Operating Income for such period, plus, to the extent deducted in determining
the amount thereof, (i) Rental Obligations (less any principal portion of any
Off-Balance Sheet Lease), (ii) depreciation and amortization, and (iii) any
aggregate net income during such period arising from the sale, exchange or other
distribution of capital assets, provided that the total amount so included
pursuant to this clause (iii) shall not exceed 5% of Consolidated Operating
Income for such period.
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.05(c).
"Affiliate" of any Person means (i) any other Person which
directly, or indirectly through one or more intermediaries, controls such
Person, (ii) any other Person which directly, or indirectly through one or more
intermediaries, is controlled by or is under common control with such Person, or
(iii) any other Person of which such Person owns, directly or indirectly, 20% or
more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means Wachovia Bank, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Banks hereunder, and its successors and permitted
assigns in such capacity.
"Agent's Letter Agreement" means that certain letter agreement
(including the Term Sheet), dated September 5, 1997, between the Borrower and
the Agent relating to the structure of the Loans, and certain fees payable by
the Borrower to the Agent, together with all amendments and modifications
thereto.
<PAGE> 9
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Facility Fee Rate" has the meaning set forth in
Section 2.06(a).
"Applicable Margin" has the meaning set forth in Section
2.05(a).
"Assignee" has the meaning set forth in Section 9.07(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.07(c) in the form attached hereto as
Exhibit G.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent above the Federal Funds Rate for such day. For purposes
of determining the Base Rate for any day, changes in the Prime Rate and the
Federal Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear
interest at a rate based upon the Base Rate.
"Board of Directors" means the Board of Directors of the
Borrower or a duly authorized committee of directors lawfully exercising the
relevant powers of such Board.
"Borrower" means Carmike Cinemas, Inc., a Delaware
corporation, and its successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower at the same time by the Banks pursuant to Article II. A
Borrowing is a "Base Rate Borrowing" if such Loans are Base Rate Loans or a
"Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans.
"Bridge Loan Agreement" means the Loan Agreement dated as of
June 20, 1997, between the Borrower and Wachovia, as amended from time to time.
"Capital Lease" as applied to any Person, means any lease of
any property (whether real, personal or mixed) by such Person as lessee which
would, in accordance with GAAP, be required to be classified and accounted for
as a capital lease on the balance sheet of such Person, other than, in the case
of the Borrower or a Restricted Subsidiary, any such lease under which the
Borrower or a Wholly-owned Restricted Subsidiary is the lessor.
- 2 -
<PAGE> 10
"Capital Lease Obligation" with respect to any Capital Lease,
means the amount of the obligation of the lessee thereunder which would, in
accordance with GAAP, appear on a balance sheet of such lessee (or the notes
thereto) in respect of such Capital Lease.
"Capital Stock" means any capital stock (other than capital
stock which is either (i) mandatorily redeemable or (ii) redeemable at the
option of the holder thereof) of the Borrower or any Restricted Subsidiary (to
the extent issued to a Person other than the Borrower), whether common or
preferred.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss.9601 et seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Information System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code shall
also be deemed to be a reference to any successor provision or provisions
thereof.
"Commitment" means, with respect to each Bank, (i) the amount
set forth opposite the name of such Bank on the signature pages hereof, or (ii)
as to any Bank which enters into an Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.07.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Computation Period" has the meaning set forth in Section
5.05.
"Consolidated Cash Flow" means, for any period, the sum of
Consolidated Operating Income of the Borrower, and its Restricted Subsidiaries,
plus to the extent deducted in determining such Consolidated Operating Income
(i) depreciation and amortization, and (ii) any aggregate net income during such
period arising from the sale, exchange or other distribution of capital assets,
provided, however, that the total amount so included pursuant to this clause
(ii) shall not exceed 5% of Consolidated Operating Income for such period,
provided further, however, that, in calculating Consolidated Cash Flow for any
such period, any acquisition or disposition of assets that shall have occurred
during such period will be deemed to have occurred at the beginning of such
period; provided further, however, that (x) for purposes of determining the
ratio of Consolidated Funded Debt to Consolidated Cash Flow, all Off-Balance
Sheet Lease Payments made during the relevant period
- 3 -
<PAGE> 11
which has been deducted in computing Consolidated Net Income shall be added back
in computing Consolidated Cash Flow and (y) with respect to any Off-Balance
Sheet Property which was acquired or ground-leased by any entity acting in the
capacity of landlord (or in any functionally similar capacity to a landlord)
under any Off-Balance Sheet Lease within the 12-month period ending on the date
of determination of Consolidated Cash Flow, Consolidated Cash Flow shall include
Theatre-Level EBITDA for such Off-Balance Sheet Property and shall be determined
with respect to such Off-Balance Sheet Property on the basis of actual
Theatre-Level EBITDA within such period and projected Theatre-Level EBITDA for
the remainder of such period (with such projections being based on the average
Theatre-Level EBITDA of comparable theater properties of the Borrower which were
operated during the entire 12-month period).
"Consolidated Funded Debt" means at any date the Funded Debt
of the Borrower and its Restricted Subsidiaries, determined on a consolidated
basis as of such date.
"Consolidated Net Income" means for any period, the net income
(or deficit) of the Borrower and its Restricted Subsidiaries for such period in
question (taken as a cumulative whole) after deducting, without duplication, all
operating expenses, provisions for all taxes and reserves (including reserves
for deferred income taxes) and all other proper deductions, all determined in
accordance with GAAP on a consolidated basis, after eliminating material
inter-company items in accordance with GAAP and after deducting portions of
income properly attributable to outside minority interests, if any, in
Subsidiaries; provided however, that there shall be excluded (a) any income or
deficit of any other Person accrued prior to the date it becomes a Subsidiary or
merges into or consolidates with the Borrower or another Subsidiary, (b) the net
income in excess of an amount equal to 5% of Consolidated Net Income for such
period before giving effect to this clause (b) (or deficit) of any Person (other
than a Subsidiary) in which the Borrower or any Subsidiary has any ownership
interest, except to the extent that any such income has been actually received
by the Borrower or such Subsidiary in the form of cash dividends or similar
distributions, and provided that the resulting income is generated by lines of
businesses substantially similar to those of the Borrower and its Restricted
Subsidiaries taken as a whole during the fiscal year ended December 31, 1996,
(c) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period, (d) any deferred credit or amortization thereof from the acquisition of
any properties or assets of any Person, (e) any aggregate net income (but not
any aggregate net loss) during such period arising from the sale, exchange or
other distribution of capital assets (such term to include all fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities) to the extent the aggregate
gains from such transactions exceed losses from such transactions, (f) any
impact on the income statement resulting from any write-up of any assets after
the Effective Date, (g) any items properly classified as extraordinary in
accordance with GAAP, (h) proceeds of life insurance policies to the extent such
proceeds exceed premiums paid to maintain such life insurance policies, (i) any
portion of the net income of a Restricted Subsidiary which is unavailable for
the payment of dividends to the Borrower or a Restricted Subsidiary, (j) any
gain arising from the acquisition of any debt securities for a cost less than
principal and accrued interest, (k) in the case of a successor to the Borrower
by permitted consolidation or merger or transfer of assets pursuant to Section
5.12, any earnings, of such successor
- 4 -
<PAGE> 12
or transferee prior to the consolidation, merger or transfer of assets and (1)
any earnings on any Investments of the Borrower or any Subsidiary except to the
extent that such earnings are received by the Borrower or such Subsidiary as
cash, provided that earnings which would otherwise be excluded from Consolidated
Net Income pursuant to the preceding provisions of this clause (1) shall be
included in Consolidated Net Income but only to the extent that such earnings
are attributable to the net income of any Person (other than a Subsidiary) in
which the Borrower or any Subsidiary has any ownership interest and such net
income is not otherwise excluded from Consolidated Net Income by virtue of
clause (b) of this definition.
"Consolidated Net Worth" means as of any date of determination
(a) the sum of (i) the net book value (after deducting related depreciation,
obsolescence, amortization, valuation and other proper reserves other than any
such reserve maintained in accordance with GAAP in connection with the use of
the last-in-first-out method of inventory valuation) at which the assets of the
Borrower and its Restricted Subsidiaries would be shown on a consolidated
balance sheet at such date prepared in accordance with GAAP, but excluding any
amount on account of write-ups of assets after the date of the most recent
audited financial statements delivered pursuant to Section 5.01, and (ii) the
net book value of all Off-Balance Sheet Property minus (b) the sum of (i) the
net book value of all items of the following character to the extent, if any,
they are included in consolidated assets of the Borrower and its Restricted
Subsidiaries or deducted from consolidated liabilities of the Borrower and its
Restricted Subsidiaries: (A) Investments which, solely by reason of the
description in clause (c) of the definition of Restricted Investments, do not
constitute Restricted Investments, and (B) Restricted Investments made as
permitted by the provisions of Section 5.05, and (ii) the amount at which the
consolidated liabilities of the Borrower and its Restricted Subsidiaries (other
than capital stock and surplus) would be shown on such balance sheet, and
including as liabilities all reserves for contingencies and other potential
liabilities and all minority interests in Restricted Subsidiaries.
"Consolidated Operating Income" means, for any period,
Consolidated Net Income for such period plus, to the extent deducted in
determining the amount thereof, (i) the aggregate amount paid, or required to be
paid, in cash by the Borrower and its Restricted Subsidiaries in respect of
income taxes (including deferred taxes) during such period plus (ii) Interest
Expense.
"Consolidated Total Assets" means, at any time, the total
assets of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries, prepared in
accordance with GAAP.
"Consolidated Total Capitalization" means, at any time, the
sum of: (i) Consolidated Net Worth, and (ii) Consolidated Funded Debt.
"Control" means legal and beneficial ownership of that
percentage of Voting Stock which enables the owner thereof to elect a majority
of the corporate directors (or persons performing similar functions) of the
Borrower.
- 5 -
<PAGE> 13
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Current Debt" means as at any date of determination all Debt
for borrowed money maturing or payable on demand or within one year from the
date of the creation thereof including any Debt that is by its terms or by the
terms of any instrument or agreement relating thereto directly or indirectly
renewable or extendible, at the option of the debtor, to a date beyond such
year, including any outstanding amounts of any revolving credit facility, but
excluding any fixed or contingent payments maturing or required to be made not
more than one year after such date in respect of the principal and premium, if
any, on any Funded Debt. Any Debt that is extended or renewed shall be deemed to
have been created at the date of such extension or renewal.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under Capital
Leases, (v) all obligations of such Person to reimburse any bank or other Person
in respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations (absolute or contingent) of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit or
similar instrument, (viii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, and (ix) all
Debt of others Guaranteed by such Person. In determining the Debt and assets of
any Person, no effect shall be given to deposits, trust arrangements or similar
arrangements which, in accordance with GAAP, extinguish Debt for which such
Person remains legally liable, except Debt shall not include the promissory note
of the Borrower in a principal amount not to exceed $3,622,974 and bearing
interest at the rate of 10.083% per annum payable to Columbus Bank and Trust
Company, and any extensions and renewals thereof, provided the proceeds of such
promissory note are used to pay the full purchase price of a certificate of
deposit (the "IRB Certificate of Deposit"), such promissory note (and any such
extension or renewal thereof) is secured by the pledge of such IRB Certificate
of Deposit issued by Columbus Bank and Trust Company in an amount and bearing
interest at a rate sufficient to pay all obligations under such promissory note,
such promissory note is nonrecourse to the Borrower or to any Restricted
Subsidiary except to such IRB Certificate of Deposit and the obligation under
such promissory note is not, in accordance with GAAP, to be classified on its
balance sheet as debt.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived in writing, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day,
the sum of 2% plus the then highest interest rate (including the Applicable
Margin) which may be applicable to any Loans hereunder (irrespective of whether
any such type of Loans are actually outstanding hereunder).
- 6 -
<PAGE> 14
"Dividends" means for any period the sum of all dividends paid
or declared during such period in respect of any Capital Stock and Redeemable
Preferred Stock (other than dividends paid or payable in the form of additional
Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized or
required by law to close.
"Eastwynn" means Eastwynn Theaters, Inc., an Alabama
corporation, and its successors.
"Effective Date " has the meaning specified in Section 3.01.
"Environmental Authority" means any federal, state or local
government that exercises any form of jurisdiction or authority under any
Environmental Law.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Law.
"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or in any way associated with any Environmental
Laws, whether or not entered upon consent, or written agreements with an
Environmental Authority arising from or in any way associated with a
noncompliance with, or liability or claim arising under, any Environmental Law.
"Environmental Laws" means any and all federal, state and
local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses or other governmental restrictions relating to the
environment or to emissions, discharges or releases of pollutants, contaminants,
petroleum or petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes into the environment, including, without limitation,
ambient air, surface water, groundwater or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes or
the clean-up or other remediation thereof.
"Environmental Liability" shall mean any liability whatsoever,
whenever and by whomever asserted (whether absolute or contingent, matured or
unmatured) including, without limitation, any cost (including costs of
investigation), damage (including without limitation, damages for personal
injury or death, consequential damages and natural resource damages), penalty,
fine or order, expense, fee (including reasonable attorneys' fees and consulting
fees), or disbursement resulting from or related to a violation of any
Environmental Law or any remedial or response obligation arising under any
Environmental Law, or otherwise arising contractually with any party or entity
or by operation of any law relating to any Hazardous Material for which the
Borrower is responsible.
- 7 -
<PAGE> 15
"Environmental Notices" means notice from any Environmental
Authority of an alleged noncompliance with or liability under any Environmental
Law, including without limitation any complaints, citations, demands or requests
from any Environmental Authority or from any other person or entity for
correction of any violation of any Environmental Law or any investigations
concerning any violation of any Environmental Law.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from any Environmental Law.
"Environmental Releases" means releases as defined in CERCLA
or under any applicable state or local environmental law or regulation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a Loan which bears or is to bear
interest at a rate based upon the London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" means the $175,000,000 Amended and
Restated Credit Agreement dated as of April 23, 1996, among the Borrower, the
Banks listed therein and Wachovia Bank of Georgia, N.A., as Agent, as amended
from time to time.
"Facility Fee Determination Date" has the meaning set forth in
Section 2.06(a).
"Facility Fee Payment Date" means the last day of each March,
June, September and December.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate
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<PAGE> 16
for such day shall be the average rate charged to Wachovia on such day on such
transactions as determined by the Agent.
"Financing" shall mean (i) any transaction or series of
transactions for the incurrence by the Borrower of any Debt or for the
establishment of a commitment to make advances which would constitute Debt of
the Borrower, which Debt is not by its terms subordinate and junior to other
Debt of the Borrower, (ii) an obligation incurred in a transaction or series of
transactions in which assets of the Borrower are sold and leased back, or (iii)
a sale of accounts or other receivables or any interest therein, other than a
sale or transfer of accounts or receivables attendant to a sale permitted
hereunder of an operating division; provided that Capital Leases and Capital
Lease Obligations shall be excluded from this definition.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Charges" for any period, means without duplication, the
sum of (i) the aggregate amount of Interest Expense during such period plus (ii)
the aggregate amount of Rental Obligations (less any principal portion of any
Off-Balance Sheet Lease) for such period.
"Funded Debt" of any Person means (i) all Debt of such Person
which in accordance with GAAP would be classified on a balance sheet of such
Person as of such date as long-term debt, and including in any event all Debt of
such Person, whether secured or unsecured, having a final maturity (or which,
pursuant to its terms, is renewable or extendible at the option of such Person
for a period ending) more than one year after the date of the creation thereof
(including any portion thereof which is on such date included in current
liabilities of such Person) plus (ii) all Current Debt of such Person; it being
understood and agreed that, with respect to the Borrower, the term "Funded Debt"
shall include, in addition to all Debt which would otherwise be included
pursuant to the foregoing definition, but without duplication, (x) all
Unescrowed Off-Balance Sheet Lease Indebtedness, and (y) the Off-Balance Sheet
Lease Equity Amounts.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
secure, purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to provide collateral security, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such
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<PAGE> 17
obligee against loss in respect thereof (in whole or in part), provided that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guaranty" means the Guaranty Agreement of even date herewith
executed by the Guarantors for the benefit of the Agent and the Banks.
"Guarantors" means each Subsidiary which is a Restricted
Subsidiary as of the Effective Date and any Person which becomes a Restricted
Subsidiary after the Effective Date.
"Hazardous Materials" includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss.6901 et seq. and its implementing regulations and amendments,
or in any applicable state or local law or regulation, (b) any "hazardous
substance", "pollutant" or "contaminant", as defined in CERCLA, or in any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"Interest Expense" for any period, means the aggregate amount
(determined in accordance with GAAP on a consolidated basis after eliminating
all intercompany items) of all interest accrued (whether or not actually paid)
by the Borrower and its Restricted Subsidiaries during such period in respect of
Debt of the Borrower and its Restricted Subsidiaries (including Capital Lease
Obligations), provided that the term "Interest Expense" shall (i) include,
without limitation, net amounts paid or accrued during such period in connection
with interest rate protection products (including, without limitation, interest
rate swaps, caps, floors and collars), amortized (if appropriate under GAAP)
appropriately over the term of the applicable Debt, any amortized discount in
respect of Debt issued at a discount and any fees or commissions payable in
connection with any letters of credit, the portion of any Capital Lease
Obligation allocable to interest in accordance with GAAP, the amount of interest
costs incurred by any Person during any period that is capitalized in accordance
with GAAP and is not included as an interest cost in calculating Consolidated
Net Income for such period, and (ii) shall exclude all costs associated with the
prepayment of fixed-rate debt.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to clause (c) below) which
would otherwise end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-
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<PAGE> 18
Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day; (b) any Interest Period
which begins on the last Euro-Dollar Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of the appropriate
subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Revolver Termination Date and would otherwise end after the Revolver
Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending on the first day after the date of such Borrowing
which is the last day of a Fiscal Quarter; provided that:
(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day shall
be extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may end after the Revolver Termination
Date.
"Investment" means as to any Person, (a) any direct or
indirect purchase or other acquisition by such Person, for cash or other
property, of stock or other securities of any other Person, or (b) any direct or
indirect loan, advance or capital contribution by such Person to any other
Person, including all Debt and accounts receivable from such other Person which
are not current assets or did not arise from sales to such other Person in the
ordinary course of business. In computing the amount involved in any Investment,
(i) undistributed earnings of, and interest accrued in respect of Debt owing by,
such other Person accrued after the date of such Investment shall not be
included, (ii) there shall not be deducted from the amounts invested in such
other Person any amounts received as earnings (in the form of dividends,
interest or otherwise) on such Investment or as loans from such other Person and
(iii) unrealized increases or decreases in value, or write-ups, write-downs or
write-offs, of Investments in such other Person shall be disregarded.
"Lease" means the Master Lease to be entered into on or about
October 28, 1997 between Movieplex Realty Leasing, L.L.C., as Landlord, and the
Borrower, as Tenant.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the
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<PAGE> 19
practical effect of constituting a security interest or encumbrance, servitude
or encumbrance of any kind in respect of such asset to secure or assure payment
of a Debt or a Guarantee, whether by consensual agreement or by operation of
statute or other law, or by any agreement, contingent or otherwise, to provide
any of the foregoing. For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any asset 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 such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan and Loans
means Base Rate Loans or Euro-Dollar Loans, or any or all of them, as the
context shall require.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, any other document evidencing, relating to or securing the Loans, and
any other document or instrument delivered from time to time in connection with
this Agreement, the Notes or the Loans, as such documents and instruments may be
amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Margin Stock" means "margin stock" as defined in Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System, as in
effect from time to time, together with all official rulings and interpretations
issued thereunder.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations, business, properties or prospects of
the Borrower and its Restricted Subsidiaries taken as a whole, (b) the rights
and remedies of the Agent or the Banks under the Loan Documents, or the ability
of the Borrower to perform its obligations under the Loan Documents to which it
is a party, as applicable, or (c) the legality, validity or enforceability of
any Loan Document.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Proceeds of Capital Stock" means any proceeds received by
the Borrower or a Restricted Subsidiary in respect of the issuance of Capital
Stock, after deducting therefrom all reasonable and customary costs and expenses
incurred by the Borrower or such Restricted Subsidiary directly in connection
with the issuance of such Capital Stock.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, together with all amendments,
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<PAGE> 20
consolidations, modifications, renewals and supplements thereto and "Note" means
any one of such Notes.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Off-Balance Sheet Lease Equity Amounts" means the aggregate
amount of all capital contributions made from time to time to any entity acting
in the capacity of landlord (or in any functionally similar capacity to a
landlord) under any Off-Balance Sheet Lease by equity holders in such entity.
"Off-Balance Sheet Lease Indebtedness" means the aggregate
principal amount of (and capitalized interest on) all indebtedness incurred or
issued in connection with any Off-Balance Sheet Lease which is secured,
supported or serviced, directly or indirectly, by any payments made by the
Borrower or any Subsidiary.
"Off-Balance Sheet Lease Payments" means, for any period, the
aggregate amount of any rental payments or other similar payments made during
such period in connection with any Off-Balance Sheet Lease.
"Off-Balance Sheet Lease" means the Lease and any other lease
which is treated as a lease for accounting purposes and as a financing
instrument for property law and bankruptcy purposes, and in respect of which
transaction any Off-Balance Sheet Lease Indebtedness is issued or incurred.
"Off-Balance Sheet Property" means any property subject to an
Off-Balance Sheet Lease.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Operating Lease" means a lease of real or personal property
other than, in the case of the Borrower or a Restricted Subsidiary, (a) any such
lease under which the Borrower or a Wholly-Owned Restricted Subsidiary is the
lessor and (b) any Capital Lease.
"Participant" has the meaning set forth in Section 9.07(b).
"Patrick Family" means any or all of C. L. Patrick, Sr.,
Michael W. Patrick, Carl L. Patrick, Jr., Francis Patrick and Michael W.
Patrick, II, or trusts to which one or more of the foregoing are the sole
beneficiaries.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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<PAGE> 21
"Person" means an individual, a corporation, a partnership
(including without limitation, a joint venture), an unincorporated association,
a trust or any other entity or organization, including, but not limited to, a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of any member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Preferred Stock" means, as applied to any corporation, shares
of such corporation which are entitled to preference or priority over any other
shares of such corporation in respect of either the payment of dividends or the
distribution of assets upon liquidation.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased under a
ground lease or otherwise used or occupied by the Borrower or any Subsidiary,
wherever located.
"Rate Determination Date" has the meaning set forth in Section
2.05(a).
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Revolver
Termination Date either (i) mandatorily redeemable (by sinking fund or similar
payments or otherwise) or (ii) redeemable at the option of the holder thereof.
"Rental Obligations" means for any period, the total amount
(whether or not designated as rentals or additional or supplemental rentals)
payable by the Borrower or any Restricted Subsidiary under any Operating Lease
during such period (in each case exclusive of amounts so payable on account of
maintenance, repairs, insurance, taxes, assessments and other similar charges);
if and to the extent that the amount of any Rental Obligation during any future
period is not definitely determinable under the Operating Lease in question, the
amount of such Rental Obligation shall be estimated in such reasonable manner as
the Board of Directors in good faith may determine.
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments are no
longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding
principal amount of the Notes.
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<PAGE> 22
"Responsible Officer" means the chief financial officer or the
chief executive officer of the Borrower.
"Restricted Investment" means any Investment by the Borrower
or a Restricted Subsidiary in any Person (including a Subsidiary) other than (a)
Investments existing on June 30, 1997, and set forth in Schedule 1.01; (b)
Investments in (i) any Restricted Subsidiary or any Person which is or
simultaneously therewith becomes a Restricted Subsidiary; (ii) readily
marketable direct obligations issued by the United States of America or by any
agency thereof which in the case of the latter are unconditionally guaranteed
by, or backed by the full faith and credit of, the United States of America, in
each case having a maturity not in excess of one year from the date of
acquisition thereof; (iii) open market commercial paper maturing not later than
270 days from the date of creation thereof of corporations that are organized
under the laws of the United States of America or any state thereof, and having
the rating of P-1 or A-1 or such other comparable rating by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies ("S&P"), respectively; (iv) obligations of
municipalities or corporations organized under the laws of the United States of
America or any state thereof maturing not later than one year from the date of
acquisition thereof by the Borrower or any Restricted Subsidiary, and having the
rating of AA or Aa or such other comparable rating by S&P or Moody's,
respectively; (v) certificates of deposit maturing within one year from the date
of acquisition thereof ("Certificates of Deposit") issued by commercial banks or
trust companies organized under the laws of the United States of America or any
state thereof having not less than $100,000,000 of capital, surplus and
undivided profits and currently having the rating not less than A or such other
comparable rating by S&P or Moody's; (vi) Certificates of Deposit not to exceed
in aggregate principal amount $1,500,000 issued by Columbus Bank and Trust
Company; (vii) Certificates of Deposit issued by SunTrust Bank, Atlanta and
Wachovia Bank, N.A., provided that each such bank is owned by a "bank holding
company" (within the meaning of the Bank Holding Company Act of 1956, as
amended), which shall have a rating of not less than A or such other comparable
rating by each of S&P and Moody's; (viii) Eurodollar certificates of deposit
maturing within one year of the date of acquisition thereof issued by any bank
having not less than $1,000,000,000 of capital, surplus and undivided profits;
and (ix) the IRB Certificate of Deposit acquired as provided in the proviso set
forth in the definition of "Debt" in Section 1.01; and (c) Investments acquired
after the Effective Date in exchange for, or out of the net cash proceeds of the
substantially concurrent sale of, capital stock of the Borrower or a Restricted
Subsidiary.
"Restricted Payment" means any payment or the incurrence of
any liability to make any payment, in cash, property or other assets (other than
in shares of any class of capital stock, other than Preferred Stock, of the
Borrower) upon or in respect of any share of any class of capital stock of the
Borrower, including without limiting the generality of the foregoing, payments
as dividends and payments (other than out of the net cash proceeds from the
substantially concurrent sale of common shares of the Company) for the purpose
of purchasing, retiring or redeeming any such shares of stock (or any warrants,
options or other rights evidencing a right to purchase any such shares of stock)
or the making of any other distribution in respect of any such shares of stock
(or any warrants, options or other rights evidencing a right to purchase any
such shares of stock).
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<PAGE> 23
"Restricted Subsidiary" means any Subsidiary (i) which is
organized under the laws of, and which at the time in question conducts
substantially all of its business and maintains substantially all of its
property and assets within, the United States of America, or any state thereof,
Canada, or any province thereof, or Puerto Rico and (ii) at least 80% of the
Voting Stock of which is at the time owned by the Borrower or by one or more
Wholly-Owned Restricted Subsidiaries or by the Borrower and one or more
Wholly-Owned Restricted Subsidiaries.
"Revolver Termination Date" means November 10, 2002.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Taxes" has the meaning set forth in Section 2.11(c).
"Term Sheet" means the Summary of Terms and Conditions
attached to the Agent's Letter Agreement.
"Theater-Level EBITDA" means with respect to any Off-Balance
Sheet Property, operating income derived therefrom, without provision for any
interest, taxes related to income, depreciation, amortization and corporate
general and administrative expenses.
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 9.07(d).
"Unescrowed Off-Balance Sheet Lease Indebtedness" means the
aggregate amount of all Off-Balance Sheet Lease Indebtedness minus the aggregate
amount of any Off-Balance Sheet Lease Indebtedness being held in an escrow fund
pending expenditure with respect to the property or asset being financed in
connection with the Off-Balance Sheet Lease with respect to which such
Off-Balance Sheet Lease Indebtedness was issued or incurred.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Unused Commitments" means at any date an amount equal to the
aggregate amount of the Commitments less the aggregate outstanding principal
amount of the Loans.
"Voting Stock" means capital stock of a corporation the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect the corporate directors (or persons performing similar functions).
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<PAGE> 24
"Wachovia" means Wachovia Bank, N.A., a national banking
association and its successors.
"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary, all of the equity securities (except directors' qualifying shares)
of which are owned by the Borrower or another Wholly-Owned Restricted
Subsidiary.
"Wholly-Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks, unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Agreement or any of the other Loan
Documents: (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements delivered
under Section 5.01 hereof, shall mean the financial statements referred to in
Section 4.04); provided that, if either the Borrower or the Required Banks shall
so object, then the Borrower and the Banks shall negotiate in good faith to
modify the relevant covenants set forth in Article V in order to appropriately
reflect such changes in GAAP and, in the event such covenants are so modified,
upon execution of an amendment to this Agreement effectuating such modification,
the related changes in GAAP will be effective for calculation and reporting
purposes under this Agreement.
SECTION 1.03. Use of Defined Terms. All terms defined in this
Agreement shall have the same meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall
otherwise require.
SECTION 1.04. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
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SECTION 1.05. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", and
"Sections" are references to articles, exhibits, schedules and sections hereof.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Make Loans. Each Bank severally
agrees, on the terms and conditions set forth herein, to make Loans to the
Borrower from time to time during the period from the Effective Date and before
the Revolver Termination Date; provided that, immediately after each such Loan
is made, the aggregate outstanding principal amount of Loans by such Bank shall
not exceed the amount of its Commitment, provided further that the aggregate
principal amount of all Loans at any one time outstanding shall not exceed the
aggregate amount of the Commitments of all of the Banks at such time. Each
Euro-Dollar Borrowing under this Section shall be in an aggregate principal
amount of $3,000,000 or any larger multiple of $500,000 (except that any such
Euro-Dollar Borrowing may be in the amount of the Unused Commitments) and shall
be made from the several Banks ratably in proportion to their respective
Commitments. Each Base Rate Borrowing under this Section shall be in an
aggregate principal amount of $1,000,000 or any larger multiple of $500,000
(except that any such Base Rate Borrowing may be in the amount of the Unused
Commitments) and shall be made from the several Banks ratably in proportion to
their respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay or prepay Loans and reborrow under this Section
at any time before the Revolver Termination Date.
SECTION 2.02. Method of Borrowing Loans. (a) The Borrower
shall give the Agent notice in the form attached hereto as Exhibit H (a "Notice
of Borrowing") prior to 11:00 A.M. (Atlanta, Georgia time) on the Domestic
Business Day of each Base Rate Borrowing and at least 3 Euro-Dollar Business
Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
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<PAGE> 26
(b) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the
date of each Euro-Dollar Borrowing, and not later than 2:00 P.M. (Atlanta,
Georgia time) on the date of each Base Rate Borrowing, each Bank shall (except
as provided in subsection (d) of this Section) make available its ratable share
of such Borrowing, in Federal or other funds immediately available in Atlanta,
Georgia, to the Agent at its address referred to in or specified pursuant to
Section 9.01. Unless the Agent determines that any applicable condition
specified in Article III has not been satisfied, the Agent will make the funds
so received from the Banks available to the Borrower at the Agent's aforesaid
address. Unless the Agent receives notice from a Bank, at the Agent's address
referred to in Section 9.01, no later than 4:00 P.M. (local time at such
address) on the Domestic Business Day before the date of a Euro-Dollar
Borrowing, and no later than 1:00 P.M. (local time at such address) on the
Domestic Business Day of a Base Rate Borrowing, stating that such Bank will not
make a Loan in connection with such Borrowing, the Agent shall be entitled to
assume that such Bank will make a Loan in connection with such Borrowing and, in
reliance on such assumption, the Agent may (but shall not be obligated to) make
available such Bank's ratable share of such Borrowing to the Borrower for the
account of such Bank. If the Agent makes such Bank's ratable share available to
the Borrower and such Bank does not in fact make its ratable share of such
Borrowing available on such date, the Agent shall be entitled to recover such
Bank's ratable share from such Bank or the Borrower (and for such purpose shall
be entitled to charge such amount to any account of the Borrower maintained with
the Agent), together with interest thereon for each day during the period from
the date of such Borrowing until such sum shall be paid in full at a rate per
annum equal to the rate at which the Agent determines that it obtained (or could
have obtained) overnight Federal funds to cover such amount for each such day
during such period, provided that any such payment by the Borrower of such
Bank's ratable share and interest thereon shall be without prejudice to any
rights that the Borrower may have against such Bank. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
(d) If any Bank makes a new Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (c) of this Section, or remitted by the Borrower
to the Agent as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived in writing.
(f) In the event that a Notice of Borrowing fails to specify
whether the Loans comprising such Borrowing are to be Base Rate Loans or
Euro-Dollar Loans, such Loans shall be made
- 19 -
<PAGE> 27
as Base Rate Loans. If the Borrower is otherwise entitled under this Agreement
to repay any Loans maturing at the end of an Interest Period applicable thereto
with the proceeds of a new Borrowing, and the Borrower fails to repay such Loans
using its own moneys and fails to give a Notice of Borrowing in connection with
such new Borrowing, a new Borrowing shall be deemed to be made on the date such
Loans mature in an amount equal to the principal amount of the Loans so
maturing, and the Loans comprising such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein,
(i) there shall not be more than 7 different Interest Periods outstanding at the
same time (for which purpose Interest Periods described in different numbered
clauses of the definition of the term "Interest Period" shall be deemed to be
different Interest Periods even if they are coterminous) and (ii) the proceeds
of any Base Rate Borrowing shall be applied first to repay the unpaid principal
amount of all Base Rate Loans (if any) outstanding immediately before such Base
Rate Borrowing.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Lending Office in an amount equal to the original principal amount of such
Bank's Commitment.
(b) Upon receipt of each Bank's Notes pursuant to Section
3.01, the Agent shall deliver such Notes to such Bank. Each Bank shall record,
and prior to any transfer of its Notes shall endorse on the schedule forming a
part thereof appropriate notations to evidence, the date, amount and maturity
of, and effective interest rate for, each Loan made by it, the date and amount
of each payment of principal made by the Borrower with respect thereto and
whether such Loan is a Base Rate Loan or Euro-Dollar Loan, and such schedule
shall constitute rebuttable presumptive evidence of the principal amount owing
and unpaid on such Bank's Notes; provided that the failure of any Bank to make,
or any error in making, any such recordation or endorsement shall not affect the
obligation of the Borrower hereunder or under the Notes or the ability of any
Bank to assign its Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
SECTION 2.04. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.05. Interest Rates. (a) "Applicable Margin" shall be
determined quarterly based upon the ratio of Consolidated Funded Debt to
Consolidated Cash Flow (calculated as of the last day of each Fiscal Quarter for
the period of 4 consecutive Fiscal Quarters then ended), as follows:
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<PAGE> 28
<TABLE>
<CAPTION>
Ratio of Consolidated Funded
Debt to Consolidated
Cash Flow Base Rate Loans Euro-Dollar Loans
- --------- --------------- -----------------
<S> <C> <C>
Greater than or equal to 4.25 0% .875%
Greater than or equal to 4.0
but less than 4.25 0% .675%
Greater than or equal to 3.0
but less than 4.0 0% .50%
Greater than or equal to 2.0
but less than 3.0 0% .40%
Less than 2.0 0% .325%
</TABLE>
The Applicable Margin shall be determined effective as of each date (herein, the
"Rate Determination Date") which is 50 days after the last day of the final
Fiscal Quarter in the period for which the foregoing ratio is being determined,
and the Applicable Margin so determined shall remain effective from such Rate
Determination Date until the date which is 50 days after the last day of the
Fiscal Quarter in which such Rate Determination Date falls (which latter date
shall be a new Rate Determination Date); provided that (i) for the period from
and including the Effective Date to but excluding the Rate Determination Date
next following the Effective Date, the Applicable Margin shall be (A) 0% for
Base Rate Loans and (B) .50% for Euro-Dollar Loans, (ii) in the case of
Applicable Margins determined for the fourth and final Fiscal Quarter of a
Fiscal Year, the Rate Determination Date shall be the date which is 95 days
after the last day of such final Fiscal Quarter and such Applicable Margins
shall be determined based upon the annual audited financial statements for the
Fiscal Year ended on the last day of such final Fiscal Quarter, and (iii) if on
any Rate Determination Date the Borrower shall have failed to deliver to the
Banks the financial statements required to be delivered pursuant to Section 5.01
with respect to the Fiscal Quarter most recently ended prior to such Rate
Determination Date (or, in the case of annual audited financial statements, with
respect to the Fiscal Year which includes such final Fiscal Quarter), then for
the period beginning on such Rate Determination Date and ending on the earlier
of (x) the next Rate Determination Date (on which the Applicable Margin shall
again be determined pursuant to this paragraph) and (y) the date on which the
Borrower shall deliver to the Banks the financial statements to be delivered
pursuant to Section 5.01(b) with respect to such Fiscal Quarter (in the case of
a failure to deliver quarterly unaudited financial statements) or the date on
which the Borrower shall deliver to the Banks the annual audited financial
statements to be delivered pursuant to Section 5.01(a) with respect to the
Fiscal Year which includes such final Fiscal Quarter (in the case of a failure
to deliver annual audited financial statements), the Applicable Margin shall be
determined as if the ratio of Consolidated Funded Debt to Consolidated Cash Flow
was more than 4.25 at all times during such period. Any change in the Applicable
Margin on any Rate Determination Date shall result in a corresponding change,
effective on and as of such Rate Determination Date, in the interest rate
applicable to each Loan outstanding on such Rate Determination Date, provided
that (i) for Euro-Dollar Loans, changes in the Applicable Margin shall
- 21 -
<PAGE> 29
only be effective for Interest Periods commencing on or after the Rate
Determination Date, and (ii) no Applicable Margin shall be decreased pursuant to
this Section 2.05 if an Event of Default is in existence on the Rate
Determination Date.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin plus the
applicable Adjusted London Interbank Offered Rate for such Interest Period;
provided that if any Euro-Dollar Loan shall, as a result of clause (1)(c) of the
definition of Interest Period, have an Interest Period of less than one month,
such Euro-Dollar Loan shall bear interest during such Interest Period at the
rate applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 3 months, at intervals of 3 months after the first day
thereof. Any overdue principal of and, to the extent permitted by applicable
law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan the rate
per annum determined on the basis of the rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rate appears on Page "3750" of
Dow Jones Markets, Inc. (formerly known as Telerate Service) (or such other page
as may replace page 3750 of that service or such other service or services as
may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for deposits in Dollars), determined
as of 1:00 P.M. (Atlanta, Georgia time), 2 Euro-Dollar Business Days prior to
the first day of such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank
- 22 -
<PAGE> 30
Offered Rate shall be adjusted automatically on and as of the effective date of
any change in the Euro-Dollar Reserve Percentage.
(d) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks by telecopy of each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
(e) After the occurrence and during the continuance of a
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) may, at the election of the
Required Banks, bear interest at the Default Rate.
SECTION 2.06. Fees. (a) The Borrower shall pay to the Agent
for the ratable account of each Bank a facility fee equal to the product of: (i)
the aggregate of the daily average amounts of such Bank's Commitment, times (ii)
a per annum percentage equal to the Applicable Facility Fee Rate. Such facility
fee shall accrue from and including the Effective Date to and including the
Revolver Termination Date. Facility fees shall be payable quarterly in arrears
on the first Facility Fee Payment Date following each Facility Fee Determination
Date and on the Revolver Termination Date; provided that should the Commitments
be terminated at any time prior to the Revolver Termination Date for any reason,
the entire accrued and unpaid facility fee shall be paid on the date of such
termination. The "Applicable Facility Fee Rate" shall be determined quarterly
based upon the ratio of Consolidated Funded Debt to Consolidated Cash Flow
(calculated as of the last day of each Fiscal Quarter for the period of 4 Fiscal
Quarters then ended) as follows:
- 23 -
<PAGE> 31
<TABLE>
<CAPTION>
Ratio of Consolidated Funded Debt Applicable
to Consolidated Cash Flow Facility Fee Rate
------------------------- ------------------
<S> <C>
Greater than or equal to 4.25 .30%
Greater than or equal to 4.0
but less than 4.25 .275%
Greater than or equal to 3.0
but less than 4.0 .225%
Greater than or equal to 2.0
but less than 3.0 .20%
Less than 2.0 .15%
</TABLE>
The Applicable Facility Fee Rate shall be determined effective as of each date
(herein, the "Facility Fee Determination Date") which is 50 days after the last
day of the final Fiscal Quarter in the period for which the foregoing ratio is
being determined, and the Applicable Facility Fee Rate so determined shall
remain effective from such Facility Fee Determination Date until the date which
is 50 days after the last day of the Fiscal Quarter in which such Facility Fee
Determination Date falls (which latter date shall be a new Facility Fee
Determination Date); provided that (i) for the period from and including the
Effective Date to but excluding the Facility Fee Determination Date next
following the Effective Date, the Applicable Facility Fee Rate shall be .225%;
(ii) in the case of any Applicable Facility Fee Rate determined for the fourth
and final Fiscal Quarter of a Fiscal Year, the Facility Fee Determination Date
shall be the date which is 95 days after the last day of such final Fiscal
Quarter and such Applicable Facility Fee Rate shall be determined based upon the
annual audited financial statements for the Fiscal Year ended on the last day of
such final Fiscal Quarter, and (iii) if on any Facility Fee Determination Date
the Borrower shall have failed to deliver to the Banks the financial statements
required to be delivered pursuant to Section 5.01 with respect to the Fiscal
Quarter most recently ended prior to such Facility Fee Determination Date (or,
in the case of annual audited financial statements, with respect to the Fiscal
Year which includes such final Fiscal Quarter), then for the period beginning on
such Facility Fee Determination Date and ending on the earlier of (x) the next
Facility Fee Determination Date (on which the Applicable Facility Fee Rate shall
again be determined pursuant to this paragraph) and (y) the date on which the
Borrower shall deliver to the Banks the financial statements to be delivered
pursuant to Section 5.01(b) with respect to such Fiscal Quarter (in the case of
a failure to deliver quarterly unaudited financial statements) or the date on
which the Borrower shall deliver to the Banks the annual audited financial
statements to be delivered pursuant to Section 5.01(a) with respect to the
Fiscal Year which includes such final Fiscal Quarter (in the case of a failure
to deliver annual audited financial statements), the Applicable Facility Fee
Rate shall be determined as if the ratio of Consolidated Funded Debt to
Consolidated Cash Flow was more than 4.25 at all times during such period,
provided that the Applicable Facility Fee Rate shall not be decreased pursuant
to this Section 2.06 if an Event of Default is in existence on the Facility Fee
Determination Date.
(b) The Borrower shall pay to the Agent for the account of
each Bank an upfront fee, calculated as provided in the Term Sheet.
- 24 -
<PAGE> 32
(c) The Borrower shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.07. Optional Termination or Reduction of
Commitments. The Borrower may, upon at least 3 Domestic Business Days' notice to
the Agent, terminate at any time, or proportionately reduce from time to time by
an aggregate amount of at least $5,000,000 or any larger multiple of $1,000,000,
the Commitments. If the Commitments are terminated in their entirety, all
accrued fees (as provided under Section 2.06) shall be payable on the effective
date of such termination.
SECTION 2.08. Mandatory Revolver Termination Date and
Termination of Commitments. The Commitments shall terminate on the Revolver
Termination Date and any Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
SECTION 2.09. Optional Prepayments. (a) The Borrower may, upon
at least 1 Domestic Business Day's notice to the Agent, prepay any Base Rate
Borrowing in whole at any time, or from time to time in part in amounts
aggregating at least $500,000, or any larger multiple of $500,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Base Rate Loans of the several Banks included in such Base Rate
Borrowing.
(b) Except as provided in Sections 2.01 and 8.02, the Borrower
may prepay all or any portion of the principal amount of any Euro-Dollar Loan
prior to the maturity thereof only upon (i) at least 3 Euro-Dollar Business
Days' notice to the Agent, (ii) compliance with the provisions of Section 8.05,
and (iii) payment of an administrative fee of $250 to the Agent (which fee shall
be retained by the Agent).
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Prepayments. On each date on which the
Commitments are reduced or terminated pursuant to Section 2.07 or terminated
pursuant to Section 2.08, the Borrower shall repay or prepay (a) in the case of
a reduction of the Commitments pursuant to Section 2.07 such principal amount of
the outstanding Loans, if any (together with interest accrued thereon and any
amounts due under Section 8.05(a)), as may be necessary so that after such
payment the aggregate unpaid principal amount of the Loans does not exceed the
aggregate amount of the Commitments as then reduced, or (b) in the case of a
termination of the Commitments pursuant to Section 2.07 or 2.08, the entire
principal amount of the outstanding Loans (together with interest accrued
thereon and any amounts due under Section 8.05(a)).
SECTION 2.11. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of facility fees hereunder, not later than
- 25 -
<PAGE> 33
11:00 A.M. (Atlanta, Georgia time) on the date when due, in Federal or other
funds immediately available in Atlanta, Georgia, to the Agent at its address
referred to in Section 9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for the account of the
Banks.
(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans or the fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(c) Each payment or prepayment of Loans shall be applied by
the Agent to repay or prepay ratably the Loans of the several Banks in the
following order of priority:
(i) first, to Euro-Dollar Loans maturing on the date of
such payment or prepayment;
(ii) second, to Base Rate Loans maturing on or after the
date of such payment or prepayment (in the direct
order of maturity); and
(iii) third, to Euro-Dollar Loans maturing after the date
of such payment or prepayment (in direct order of
maturity).
SECTION 2.12. Computation of Interest and Fees. Interest on
Base Rate Loans based on the Base Rate shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day). Interest on Euro-Dollar Loans shall be computed
on the basis of a year of 360 days and paid for the actual number of days
elapsed, calculated as to each Interest Period from and including the first day
thereof to but excluding the last day thereof. Facility fees and any other fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the
last day).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions Precedent to Effectiveness. This
Agreement shall become effective on and as of the first date on which the
following conditions precedent have been satisfied (the "Effective Date"):
- 26 -
<PAGE> 34
(a) receipt by the Agent from each of the parties hereto of
either (i) a duly executed counterpart of this Agreement signed by such
party or (ii) a facsimile transmission stating that such party has duly
executed a counterpart of this Agreement and sent such counterpart to
the Agent;
(b) receipt by the Agent of a duly executed Note for the
account of each Bank complying with the provisions of Section 2.03;
(c) receipt by the Agent of an opinion (together with any
opinions of local counsel relied on therein) of Troutman Sanders,
counsel for the Borrower and the Guarantors, dated as of the Effective
Date, substantially in the form of Exhibit B hereto and covering such
additional matters relating to the transactions contemplated hereby as
the Agent or any Bank may reasonably request;
(d) receipt by the Agent of an opinion of Womble Carlyle
Sandridge & Rice, PLLC special counsel for the Agent, dated as of the
Effective Date, substantially in the form of Exhibit C hereto and
covering such additional matters relating to the transactions
contemplated hereby as the Agent may reasonably request;
(e) receipt by the Agent of a certificate (the "Closing
Certificate"), dated the date of the first Borrowing hereunder,
substantially in the form of Exhibit D hereto, signed by a principal
financial officer of the Borrower, to the effect that (i) no Default
has occurred and is continuing on the date of the first Borrowing and
(ii) the representations and warranties of the Borrower contained in
Article IV are true on and as of the date of the first Borrowing
hereunder;
(f) receipt by the Agent of all documents which the Agent or
any Bank may reasonably request relating to the existence of the
Borrower and each Guarantor, the corporate authority for and the
validity of this Agreement, the Guaranty and any other matters relevant
hereto, all in form and substance satisfactory to the Agent, including
without limitation a certificate of incumbency of the Borrower and each
Guarantor (the "Officer's Certificate"), signed by the Secretary or an
Assistant Secretary of the Borrower or each Guarantor, substantially in
the form of Exhibit E hereto, certifying as to the names, true
signatures and incumbency of the officer or officers of the Borrower or
each Guarantor authorized to execute and deliver the Loan Documents to
which the Borrower or each Guarantor is a party, and certified copies
of the following items: (i) the Certificate or Articles of
Incorporation of the Borrower and each Guarantor, (ii) the Bylaws of
the Borrower and each Guarantor, (iii) a certificate of the Secretary
of State of the State of Delaware as to the good standing of the
Borrower as a Delaware corporation and similar certificates for each
Guarantor from its jurisdiction of incorporation, and (iv) the action
taken by the Board of Directors of the Borrower and each Guarantor
authorizing the Borrower's and Guarantors' execution, delivery and
performance of this Agreement and the other Loan Documents to which the
Borrower and each Guarantor is a party;
- 27 -
<PAGE> 35
(g) receipt by the Agent from each of the Guarantors of a duly
executed counterpart of the Guaranty signed by such Guarantor;
(h) receipt by the Agent of the upfront fee and other fees
payable on the Closing Date in accordance with the Agent's Letter
Agreement; and
(i) receipt by the Agent of evidence satisfactory to it that
immediately upon funding of the first Borrowing under this Agreement,
(i) all Debt outstanding under the Existing Credit Agreement and the
Bridge Loan Agreement shall be paid in full, and (ii) the Existing
Credit Agreement and the Bridge Loan Agreement shall each be
terminated.
SECTION 3.02. Conditions to All Borrowings. The obligation of
each Bank to make a Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions:
(a) receipt by the Agent of Notice of Borrowing as required by
Section 2.02;
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Loans of each Bank will
not exceed the amount of its Commitment and (ii) the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments of all of the Banks as of such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in clauses (b), (c) and (d) of this Section; provided that (i)
such Borrowing shall not be deemed to be such a representation and warranty as
to the truth and accuracy of the fact specified in clause (c) of this Section,
if the aggregate outstanding principal amount of the Loans immediately after
such Borrowing will not exceed the aggregate outstanding principal amount
thereof immediately before such Borrowing, (ii) if the aggregate outstanding
principal amount of the Loans immediately after such Borrowing will not exceed
the aggregate outstanding principal amount thereof immediately before such
Borrowing, then (A) such Borrowing shall be deemed to be a representation and
warranty as to the truth and accuracy of the fact specified in clause (b) of
this Section determined as if the term "Default" appearing in such clause (b)
were instead the term "Event of Default" and (B) the representation contained in
the last sentence of Section 4.12 shall when remade pursuant to this Section in
connection with such Borrowing be deemed to exclude the words "Default or",
(iii) the representation contained in the first sentence of Section 4.12 shall
when remade pursuant to this Section in connection with such Borrowing be deemed
to refer to "Restricted Subsidiaries" instead of "Subsidiaries", (iv) any
representation and warranty contained in Article IV which by its terms is made
as to matters as of a specified date shall when remade pursuant to this Section
in connection with such Borrowing be deemed to be made as to matters as of such
- 28 -
<PAGE> 36
specified date and not any later date, and (v) the representation contained in
Section 4.04(b) shall when remade pursuant to this Section in connection with
such Borrowing be deemed to refer not to December 31, 1996, but rather to the
last day of the Fiscal Quarter most recently ended prior to the date of such
Borrowing as to which the Borrower shall have delivered financial statements to
the Bank pursuant to Section 5.01.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, unless the failure to be so qualified or to have such corporate
powers or governmental licenses, authorizations, consents or approvals would not
have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes and the other Loan Documents (i) are within the Borrower's
corporate powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of, or filing with, any
governmental body, agency or official (other than the filing of this Agreement
with the Securities and Exchange Commission), (iv) do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower enforceable in accordance with its
terms, and the Notes and the other Loan Documents, when executed and delivered
in accordance with this Agreement, will constitute valid and binding obligations
of the Borrower enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
SECTION 4.04. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Restricted Subsidiaries as of December 31,
1996 and the related consolidated statements of income, shareholders' equity and
cash flows for the Fiscal Year then ended, reported on by Ernst & Young, copies
of which have been delivered to each of the Banks, and the unaudited
consolidated financial statements of the Borrower and its Restricted
Subsidiaries for the interim period ended June 30, 1997, copies of which have
been delivered to each of the Banks, fairly present, in
- 29 -
<PAGE> 37
conformity with GAAP, the consolidated financial position of the Borrower and
its Restricted Subsidiaries as of such dates and their consolidated results of
operations and cash flows for such periods stated.
(b) Since December 31, 1996, there has been no event, act,
condition or occurrence having a Material Adverse Effect (other than any such
event, act, condition or occurrence which is disclosed in the consolidated
financial statements of the Borrower and its Restricted Subsidiaries for that
portion of the Fiscal Year ended on June 30, 1997).
SECTION 4.05. Litigation. On the Effective Date, there is no
action, suit or proceeding pending, or to the knowledge of the Borrower
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official which could
have a Material Adverse Effect or which in any manner draws into question the
validity or enforceability of, or could impair the ability of the Borrower to
perform its obligations under, this Agreement, the Notes or any of the other
Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each
member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
(b) On the Effective Date, neither the Borrower nor any member
of the Controlled Group is or ever has been obligated to contribute to any
Multiemployer Plan.
SECTION 4.07. Taxes. There have been filed on behalf of the
Borrower and its Subsidiaries all Federal, state and local income, material
excise, material property and other material tax returns which are required to
be filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower or any Subsidiary have been
paid prior to the same becoming delinquent, other than (i) those presently
payable without penalty or interest and (ii) those being contested in good faith
by appropriate proceedings with respect to which adequate reserves have been
established in accordance with GAAP. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate. As of the
Effective Date, United States income tax returns of the Borrower and its
Subsidiaries (other than Westwynn Theatres, Inc.) have been examined and closed
through the Fiscal Year ended December 31, 1993.
SECTION 4.08. Subsidiaries. Each of the Borrower's
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, is duly qualified
to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, unless the failure to be so qualified or to
have such corporate powers or governmental licenses, authorizations, consents or
approvals would not have a Material Adverse Effect. As of the Effective Date,
the Borrower has no
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Subsidiaries except those Subsidiaries listed on Schedule 4.08, which accurately
sets forth (i) each such Subsidiary's complete name and jurisdiction of
incorporation and (ii) whether such Subsidiary is a Restricted Subsidiary or an
Unrestricted Subsidiary.
SECTION 4.09. Not an Investment Company. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10 Public Utility Holding Company Act. Neither the
Borrower nor any of its Subsidiaries is 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", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the
Borrower and its Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 5.07.
SECTION 4.12. No Default. Neither the Borrower nor any of its
Subsidiaries is in Default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which could have or cause a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is as of
the Effective Date, and all such information hereafter furnished by the Borrower
to the Agent or any Bank will be, true, accurate and complete in every material
respect or based on reasonable estimates on the date as of which such
information is stated or certified. As of the Effective Date, the Borrower has
disclosed to the Banks in writing any and all facts which could have or cause a
Material Adverse Effect.
SECTION 4.14. Environmental Matters. (a) Except as otherwise
provided in Exhibit 4.14A, (1) neither the Borrower nor any Subsidiary is
subject to Environmental Liabilities which could cause a Material Adverse
Effect, (2) to the best of the Borrower's knowledge, neither the Borrower nor
any Subsidiary has been designated a potentially responsible party under CERCLA
or under any state statute similar to CERCLA, and (3) to the best of the
Borrower's knowledge, none of the Properties has been identified on any current
National Priorities List or CERCLIS List.
(b) Except as otherwise provided in Exhibit 4.14(B), to the
best of the Borrower's knowledge, (1) the Borrower, and each of its
Subsidiaries, have used, managed, stored and otherwise handled Hazardous
Materials at the Properties in compliance with applicable Environmental Laws,
excluding any violation of Environmental Laws which did not cause a Material
Adverse Effect, and (2) neither the Borrower nor any Subsidiary has caused an
Environmental Release of Hazardous Materials into the subsurface soil or
groundwater underlying the Properties which could reasonably be expected to
cause a Material Adverse Effect.
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<PAGE> 39
(c) Except as otherwise provided in Exhibit 4.14(C), to the
best of the Borrower's knowledge, the Borrower and each of its Subsidiaries
maintain all Environmental Authorizations necessary for the conduct of their
respective businesses and are in compliance with all Environmental Laws
applicable to the operation of the Properties and their respective businesses,
excluding any omission of Environmental Authorizations or violation of
Environmental Laws which could not reasonably be expected to cause a Material
Adverse Effect.
SECTION 4.15. Compliance with Laws. The Borrower and each
Subsidiary is in compliance with all applicable laws, including, without
limitation, all Environmental Laws, except where any failure to comply with any
such laws would not, alone or in the aggregate, have a Material Adverse Effect.
SECTION 4.16. Capital Stock. All Capital Stock, debentures,
bonds, notes and all other securities of the Borrower and its Subsidiaries
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including, but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws; provided that this
representation shall not extend to any violation of applicable laws in
connection with any such issuance occurring by reason of the action or inaction
of any Person other than the Borrower, any Subsidiary or any Person retained or
employed by the Borrower or any Subsidiary. The issued shares of Capital Stock
of the Borrower's Wholly Owned Subsidiaries are owned by the Borrower free and
clear of any Lien or adverse claim. At least a majority of the issued shares of
capital stock of each of the Borrower's other Subsidiaries (other than Wholly
Owned Subsidiaries) is owned by the Borrower free and clear of any Lien or
adverse claim.
SECTION 4.17. Margin Stock. Not more than 25% of the aggregate
fair market value of the assets of the Company and its Restricted Subsidiaries
which are subject to the provisions of Section 5.07 consists of Margin Stock.
Neither the Borrower nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of purchasing or carrying any
Margin Stock. No part of the proceeds of any Loan will be used for any purpose
which violates, or which is inconsistent with, the provisions of Regulation X.
SECTION 4.18. Insolvency. After giving effect to the execution
and delivery of the Loan Documents and the making of the Loans under this
Agreement, the Borrower will not be "insolvent," within the meaning of such term
as used in O.C.G.A. ss. 18-2-22 or as defined in ss. 101 of Title 11 of the
United States Code or Section 2 of the Uniform Fraudulent Transfer Act, or any
other applicable state law pertaining to fraudulent transfers, as each may be
amended from time to time, or be unable to pay its debts generally as such debts
become due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.
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ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid (unless
the Required Banks consent in writing):
SECTION 5.01. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Restricted Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of income, shareholders'
equity and cash flows for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous fiscal year, all
certified by Ernst & Young or other independent public accountants of
nationally recognized standing, with such certification to be free of
exceptions and qualifications not acceptable to the Required Banks;
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
condensed consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of the end of such Fiscal Quarter and the related
condensed statement of income and condensed statement of cash flows for
such Fiscal Quarter and for the portion of the Fiscal Year ended at the
end of such Fiscal Quarter, setting forth in each case in comparative
form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial officer or
the chief executive officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate,
substantially in the form of Exhibit I or in such other form as shall
be mutually satisfactory to the Borrower and the Agent (a "Compliance
Certificate"), of the chief financial officer or the chief executive
officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.03 through 5.07,
inclusive, on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in clause (a) above, a statement of
the firm of independent public accountants which reported on such
statements to the effect that nothing has come to their attention to
cause them to believe that any Default existed on the date of such
financial statements;
(e) within 5 Domestic Business Days after the Borrower becomes
aware of the occurrence of any Default, a certificate of the chief
financial officer or the chief executive
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officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Borrower shall have filed with
the Securities and Exchange Commission;
(h) if and when the Borrower or any member of the Controlled
Group (i) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect
to any Plan which might constitute grounds for a termination of such
Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or
(iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a copy
of such notice;
(i) promptly after the Borrower knows of the commencement
thereof, notice of any litigation, dispute or proceeding involving a
claim against the Borrower and/or any Subsidiary for $1,000,000 or more
in excess of amounts covered in full by applicable insurance;
(j) promptly after the Borrower knows of the existence
thereof, any and all facts which could have or cause a Material Adverse
Effect; and
(k) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The
Borrower will (i) keep, and will cause each Restricted Subsidiary to keep,
proper books of record and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities; and (ii) permit, and will cause each Restricted
Subsidiary to permit, representatives of any Bank at such Bank's expense prior
to the occurrence of an Event of Default and at the Borrower's expense after the
occurrence of an Event of Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower agrees to cooperate and assist in such visits and inspections, in each
case at such reasonable times and as often as may reasonably be desired.
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SECTION 5.03. Ratio of Consolidated Funded Debt to
Consolidated Total Capitalization. At the end of each Fiscal Quarter, commencing
with the Fiscal Quarter ending September 30, 1997, the ratio of Consolidated
Funded Debt to Consolidated Total Capitalization will not at any time exceed .70
to 1.00.
SECTION 5.04. Ratio of Consolidated Funded Debt to
Consolidated Cash Flow. At the end of each Fiscal Quarter, commencing with the
Fiscal Quarter ending September 30, 1997, the ratio of Consolidated Funded Debt
at the end of such Fiscal Quarter to Consolidated Cash Flow for the period of 4
consecutive Fiscal Quarters ending on such date will not be greater than 4.5 to
1.00.
SECTION 5.05. Restricted Payments and Restricted Investments.
The Borrower will not, directly, or indirectly through a Subsidiary or
otherwise, declare, order, pay, make or set apart any sum or property for any
Restricted Payment and the Borrower will not and will not permit any Restricted
Subsidiary to make or become obligated to make any Restricted Investment, in
each case unless, both at the time of the proposed action and immediately after
giving effect thereto, (x) no condition or event shall exist which constitutes a
Default or an Event of Default; and (y) the aggregate amount of:
(A) all sums and property included in all Restricted Payments
directly or indirectly declared, ordered, paid, made or set
apart by the Borrower during the period (the "Computation
Period") (taken as one accounting period) from and including
July 1, 1997 to and including the date of such proposed
action, plus
(B) the aggregate amount of all Restricted Investments of the
Borrower and all Restricted Subsidiaries made during the
Computation Period and outstanding on the date of such
proposed action and all commitments for such Restricted
Investments made by the Borrower or any Restricted Subsidiary
outstanding on such date,
shall not exceed the sum of $60,000,000 plus 80% (or minus 100% in the case of a
deficit) of Consolidated Net Income during the Computation Period; provided that
the Borrower may declare, order, pay, make or set apart funds for the payment of
a dividend on, and in accordance with the terms of, any class of its Preferred
Stock that is issued and sold by the Borrower for cash after the date hereof,
if, both at the time of the proposed action and immediately after giving effect
thereto, (x) the aggregate amount of Restricted Payments after the date hereof
with respect to all classes of Preferred Stock of the Borrower shall not exceed
the aggregate net proceeds to the Borrower from all issuances and sales of its
Preferred Stock after the date hereof, and (y) no condition or event shall exist
which constitutes a Default or an Event of Default.
For all purposes of this Section 5.05, (1) the amount involved
in any Restricted Payment directly or indirectly declared, ordered, paid, made
or set apart in property and the amount of any Restricted Investment made
through the transfer of property, shall be the greater of (x) the fair value of
such property (as determined in good faith by the Board of Directors of the
Borrower) and (y) the net book value thereof on the books of the Borrower (as
determined in accordance with GAAP), in each case as determined on the date such
Restricted Payment is declared, ordered, paid, made or set
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<PAGE> 43
apart or the date such Restricted Investment is made or committed to be made, as
the case may be, and (2) all Investments of any Person existing immediately
after such Person becomes a Restricted Subsidiary which would be Restricted
Investments if made by such Person while subject to the provisions of this
Agreement shall be deemed to be Restricted Investments and to have been made at
the time such Person becomes a Restricted Subsidiary.
SECTION 5.06. Fixed Charge Coverage. At the end of each Fiscal
Quarter, commencing with the Fiscal Quarter ending September 30, 1997, the ratio
of Adjusted Cash Flow to Fixed Charges, in each case for the current Fiscal
Quarter and the immediately preceding 3 Fiscal Quarters, shall not be less than
1.50 to 1.00. SECTION 5.07. Negative Pledge. Neither the Borrower nor any
Restricted Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal
amount not exceeding $18,000,000;
(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Restricted Subsidiary and not created
in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
or constructing such asset, provided that such Lien attaches to such
asset concurrently with or within 18 months after the acquisition or
completion of construction thereof;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the
Borrower or a Restricted Subsidiary and not created in contemplation of
such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Restricted Subsidiary and not created in
contemplation of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the
Borrower;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses (b) through (g) of this Section, provided that
(i) such Debt is not secured by any additional assets, and (ii) the
amount of such Debt secured by any such Lien is not increased;
(h) any Lien on Margin Stock;
(i) Liens for taxes, assessments or governmental charges or
levies either not yet due or the payment of which is not at the time
required by Section 5.12;
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<PAGE> 44
(j) Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other similar Persons incurred in the ordinary course
of business for sums either not yet due or the payment of which is not
at the time required by Section 5.12;
(k) Liens (other than any Lien created or imposed under ERISA)
incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations (exclusive in any case of obligations incurred in
connection with the borrowing of money or the obtaining of advances of
credit);
(l) any attachment or judgment Lien arising in connection with
court proceedings, provided that (i) the execution or other enforcement
of such Lien is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings
diligently conducted, and (ii) such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor and neither the Borrower's nor any such Restricted
Subsidiary's title to or right to use any of its property is impaired
in any material respect by reason of such contest;
(m) easements, licenses, rights-of-way and other rights and
privileges in the nature of easements and similar Liens incidental to
the ownership of property and not incurred in connection with the
borrowing of money or the obtaining of advances of credit, and which do
not, individually or in the aggregate, interfere with the ordinary
conduct of the business of the Borrower or any Restricted Subsidiary or
materially detract from the value of the properties subject to any such
Liens; and
(n) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt (other than indebtedness represented by the
Notes) in an aggregate principal amount at any time outstanding not to
exceed 15% of Consolidated Total Capitalization.
SECTION 5.08. Maintenance of Existence. The Borrower shall,
and shall cause each Restricted Subsidiary to, maintain its corporate existence
and carry on its business in substantially the same manner and in substantially
the same fields as such business is now carried on and maintained; provided that
(i) the Borrower and its Restricted Subsidiaries may engage in any transaction
permitted by Section 5.10 and (ii) dissolution of any Restricted Subsidiary
shall not be prohibited by this Section if all of the assets of such Restricted
Subsidiary are transferred to the Borrower or any other Restricted Subsidiary
following such dissolution.
SECTION 5.09. Dissolution. The Borrower shall not suffer or
permit dissolution or liquidation either in whole or in part or redeem or retire
any shares of its own stock, except (i) through corporate reorganization to the
extent permitted by Section 5.10, and (ii) through Restricted Payments permitted
by Section 5.05.
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<PAGE> 45
SECTION 5.10. Consolidations, Mergers and Sales of Assets. The
Borrower will not, nor will it permit any Restricted Subsidiary to, consolidate
or merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets to, any other Person, or discontinue or eliminate
any business line or segment, provided that (a) the Borrower may merge with
another Person if (i) such Person was organized under the laws of the United
States of America or one of its states, (ii) the Borrower is the corporation
surviving such merger and (iii) immediately after giving effect to such merger,
no Default shall have occurred and be continuing, (b) Restricted Subsidiaries of
the Borrower may merge or consolidate with one another or with the Borrower, (c)
any Restricted Subsidiary of the Borrower may be merged or consolidated with or
into another Person to consummate an acquisition of such other Person permitted
by Section 5.05, provided that the surviving Person shall be a Restricted
Subsidiary of the Borrower, and (d) the foregoing limitation on the sale, lease
or other transfer of assets and on the discontinuation or elimination of a
business line or segment shall not prohibit (i) the sale, lease or other
transfer of assets by a Restricted Subsidiary to any other Restricted Subsidiary
or to the Borrower, or (ii) during any Fiscal Quarter, a transfer of assets or
the discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all other
assets utilized in all other business lines or segments discontinued, during
such Fiscal Quarter and the immediately preceding seven Fiscal Quarters
(excluding, however, transfers of assets permitted by clause (i) of this
Section), either (x) constituted more than 15% of Consolidated Total Assets at
the end of the eighth Fiscal Quarter immediately preceding such Fiscal Quarter,
or (y) contributed more than 10% of Consolidated Operating Income during the 8
consecutive Fiscal Quarters immediately preceding such Fiscal Quarter.
SECTION 5.11. Use of Proceeds. No portion of the proceeds of
the Loans will be used by the Borrower or any Subsidiary for any purpose in
violation of any applicable law or regulation.
SECTION 5.12. Compliance with Laws; Payment of Taxes. The
Borrower will, and will cause each of its Restricted Subsidiaries and, in the
case of ERISA, each member of the Controlled Group to, comply in all material
respects with applicable laws (including but not limited to ERISA), regulations
and similar requirements of governmental authorities (including but not limited
to PBGC), except where the necessity of such compliance is being contested in
good faith through appropriate proceedings diligently pursued. The Borrower
will, and will cause each of its Restricted Subsidiaries to, pay promptly when
due all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which, if unpaid, might become a lien against the
property of the Borrower or any Restricted Subsidiary, except (i) liabilities
being contested in good faith by appropriate proceedings diligently pursued and
against which, if requested by the Agent, the Borrower shall have set up
reserves in accordance with GAAP and (ii) liabilities the nonpayment of which
could have a Material Adverse Effect.
SECTION 5.13. Insurance. The Borrower will maintain, and will
cause each of its Restricted Subsidiaries to maintain (either in the name of the
Borrower or in such Restricted Subsidiary's own name), with financially sound
and reputable insurance companies, insurance on all
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<PAGE> 46
its Property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar business.
SECTION 5.14. Change in Fiscal Year. The Borrower will not
change its Fiscal Year.
SECTION 5.15. Maintenance of Property. The Borrower shall, and
shall cause each Restricted Subsidiary to, maintain all of its material
properties and assets in good condition, repair and working order, ordinary wear
and tear excepted.
SECTION 5.16. Environmental Notices. When a Responsible
Officer or any officer of the Borrower or any Subsidiary responsible for
compliance with Environmental Laws with respect to any Property becomes aware of
(i) an Environmental Liability associated with the Properties which could cause
a Material Adverse Effect, (ii) an Environmental Release at any of the
Properties which could cause a Material Adverse Effect, (iii) the designation of
the Borrower or such Subsidiary as a potentially responsible party under CERCLA
or any state statute similar to CERCLA, or (iv) identification of such Property
on any National Priorities List or CERCLIS List, the Borrower shall promptly
furnish to the Banks and the Agent written notice thereof.
SECTION 5.17. Environmental Matters. The Borrower and its
Subsidiaries will not, and will not knowingly permit any Third Party to, use,
produce, manufacture, process, treat, recycle, generate, store, dispose, manage,
or otherwise handle at the Properties any Hazardous Materials in such a manner
which gives rise to an Environmental Liability which could cause a Material
Adverse Effect.
SECTION 5.18. Environmental Release. Upon the occurrence of an
Environmental Release of Hazardous Materials at any of the Properties of which
Borrower or a Subsidiary becomes aware, Borrower or the Subsidiary shall comply
with any and all notice, investigation, removal and remediation requirements
applicable to the Borrower or Subsidiary under Environmental Laws with respect
to such Environmental Release.
SECTION 5.19. Additional Covenants, Etc. In the event that at
any time this Agreement is in effect or any Note remains unpaid the Borrower
shall enter into any agreement, guarantee, indenture or other instrument
governing, relating to, providing for commitments to advance or guaranteeing any
Financing which exceeds $3,000,000 in aggregate amount (a "New Financing
Agreement") or to amend any terms and conditions applicable to any Financing
which exceeds $3,000,000 in aggregate amount (a "Financing Agreement
Amendment"), which New Financing Agreement includes or which Financing Agreement
Amendment adds or modifies Covenants, warranties, representations, defaults or
events of default (or any other type of restriction which would have the
practical effect of any of the foregoing, including, without limitation, any
"put" or mandatory prepayment of all or substantially all of such debt) not
substantially as, or in addition to those, provided in this Agreement or any
other Loan Document, or more favorable to the lender or other counterparty
thereunder than those provided in this Agreement or any other Loan Document
(individually an "Additional Term" and collectively, the "Additional Terms"),
the Borrower shall promptly so notify
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<PAGE> 47
the Agent and the Banks. Thereupon, if the Agent shall request by written notice
to the Borrower (after a determination has been made by the Required Banks that
any such New Financing Agreement or Financing Agreement Amendment contains any
provisions which either individually or in the aggregate are more favorable than
one of the provisions set forth herein), the Borrower, the Agent and the Banks
shall enter into an amendment to this Agreement providing for substantially the
same such Additional Terms as those provided for in such New Financing Agreement
or Financing Agreement Amendment, as the case may be, to the extent required and
as may be selected by the Agent, such amendment to remain in effect, unless
otherwise specified in writing by the Agent, for the entire duration of the
stated term to maturity of such Financing (to and including the date to which
the same may be extended at the Borrower's option), notwithstanding that such
Financing might be earlier terminated by prepayment, refinancing, acceleration
or otherwise; provided that if any such New Financing Agreement or the
agreement, guarantee, indenture or other instrument amended by a Financing
Agreement Amendment shall be modified, supplemented, amended or restated so as
to modify, amend or eliminate therefrom any such Additional Term so made a part
of this Agreement, then so long as there exists no Default or Event of Default,
the Agent and the Banks shall, at the Borrower's request made within 90 days
following the date on which such New Financing Agreement or the agreement,
guarantee, indenture or other instrument amended by a Financing Agreement
Amendment is so modified, supplemented, amended or restated, amend this
Agreement to similarly modify, amend or eliminate such Additional Term so made a
part of this Agreement, provided that in no event will the Banks and the Agent
be required to (i) eliminate any Covenant, representation, warranty, default or
event of default which was set forth in this Agreement on the Effective Date or
added to this Agreement pursuant to an amendment to this Agreement entered into
other than pursuant to this Section, or (ii) modify or amend any Covenant,
representation, warranty, default or event of default which was set forth in
this Agreement on the Effective Date or added to this Agreement pursuant to any
amendment to this Agreement entered into other than pursuant to this Section in
a manner such that such Covenant, representation, warranty, default or event of
default is less favorable to the Banks or the Agent than such Covenant,
representation, warranty, default or event of default was on the Effective Date
or the date the same was added to this Agreement pursuant to such an amendment,
as the case may be.
As used in this Section, the term "Covenants" shall mean
covenants of a type similar to those set forth in Article V hereof or which
customarily are described as affirmative, negative or financial covenants, but
in no event shall such term encompass (w) agreements of the Borrower in respect
of interest rate, fees, expenses, yield protection, indemnities, collateral,
loan maturities, prepayment premiums, prepayment prohibitions or "call"
protection or conditions precedent, (x) provisions whereby the Borrower waives
rights, (y) provisions of a type comparable to those contained in Article IX or
customarily included in the miscellaneous section of a credit agreement or
similar instrument, or (z) definitions to the extent such definitions relate to
any of the provisions described in the foregoing clauses (w), (x) and (y).
SECTION 5.20. Operation of Unrestricted Subsidiaries. The
Borrower shall cause each Unrestricted Subsidiary to conduct its business and
operations separate and apart from that of any Restricted Subsidiary or the
Borrower, including, without limitation, (i) segregating assets of the Borrower
and each Restricted Subsidiary from, and not allowing funds or other assets of
the Borrower
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or any Restricted Subsidiary to be commingled with, the funds or other assets of
any Unrestricted Subsidiary, (ii) maintaining books and financial records of
each Unrestricted Subsidiary separate from the books and financial records of
the Borrower or any Restricted Subsidiary, (iii) observing all corporate
procedures and formalities in connection with the operation of each Unrestricted
Subsidiary, including, without limitation, maintaining minutes of shareholders'
and directors' meetings of each Unrestricted Subsidiary, (iv) causing each
Unrestricted Subsidiary to pay its liabilities from assets of such Unrestricted
Subsidiary or any other Unrestricted Subsidiary, and (v) causing each
Unrestricted Subsidiary to conduct its dealings with third parties in its own
name and as a separate and independent entity; provided that nothing contained
in this Section shall prohibit the Borrower from acting as collection agent and
paying agent for an Unrestricted Subsidiary, as long as proper books of account
are maintained and reconciled in connection therewith.
SECTION 5.21. Guaranty of Restricted Subsidiaries. (a) The
Borrower shall deliver to the Agent and each Bank notice that a Person has
become a Restricted Subsidiary within 10 days after the day on which such Person
became a Restricted Subsidiary. The Borrower shall cause any Person which
becomes a Restricted Subsidiary after the Effective Date to become a party to,
and agree to be bound by the terms of, the Guaranty Agreement pursuant to an
instrument in form and substance satisfactory to the Agent executed and
delivered to the Agent within 30 days after the day on which such Person became
a Restricted Subsidiary.
(b) Together with the instrument referred to in Section
5.21(a), the Borrower shall deliver to the Agent an opinion of counsel to such
Restricted Subsidiary substantially in the form of Exhibit B (to the extent
Exhibit B contains opinions applicable to the Guarantors), modified
appropriately to refer to such Restricted Subsidiary, and the items specified in
Section 3.01(f) (to the extent such items relate to the Guarantors) for such
Restricted Subsidiary.
(c) Once any Person becomes a Restricted Subsidiary and
therefore becomes a party to the Guaranty Agreement in accordance with Section
5.21(a), such Person thereafter shall remain a party to the Guaranty Agreement
without regard to whether it thereafter ceases to be a Restricted Subsidiary.
(d) If (i) the Borrower and/or any Subsidiary sells all of the
equity interests owned by the Borrower and its Subsidiaries in any Guarantor,
(ii) immediately before and after giving effect to such sale no Default or Event
of Default shall have occurred, and (iii) the Borrower shall have delivered to
the Agent and the Banks notice of such sale, then the Agent shall release such
Guarantor from the Guaranty.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
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(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within five
Domestic Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within five
Domestic Business Days after such fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02(ii), 5.03 to 5.07, inclusive, or Section
5.10, 5.11 or 5.14;
(c) the Borrower shall fail to observe or perform any covenant
or agreement contained or incorporated by reference in this Agreement
(other than those covered by clause (a) or (b) above) for thirty days
after the earlier of (i) the first day on which the a Responsible
Officer has knowledge of such failure or (ii) written notice thereof
has been given to the Borrower by the Agent at the request of any Bank;
or
(d) any representation, warranty, certification or statement
made or deemed made by the Borrower in Article IV of this Agreement or
in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower or any Restricted Subsidiary shall fail to
make any payment in respect of Debt or any Off-Balance Sheet Lease
Indebtedness in an aggregate amount in excess of $3,000,000 outstanding
(other than the Notes) when due or within any applicable grace period;
or
(f) any event or condition shall occur (other than (i) any
voluntary notice of purchase, payment or prepayment delivered by the
Borrower as Tenant under the Lease which results in any amount which is
the subject of such notice becoming due prior to its scheduled due
date, and (ii) any damage, destruction, other casualty or condemnation
which under Article 19 of the Lease results in any amount payable under
the Lease becoming due prior to its scheduled due date) which results
in the acceleration of the maturity of Debt or Off-Balance Sheet Lease
Indebtedness in an aggregate amount in excess of $3,000,000 outstanding
of the Borrower or any Restricted Subsidiary or the mandatory
prepayment or purchase of such Debt or Off-Balance Sheet Lease
Indebtedness by the Borrower (or its designee) or such Restricted
Subsidiary (or its designee) prior to the scheduled maturity thereof,
or enables the holders of such Debt or Off-Balance Sheet Lease
Indebtedness or any Person acting on such holders' behalf to accelerate
the maturity thereof or require the mandatory prepayment or purchase
thereof prior to the scheduled maturity thereof, without regard to
whether such holders or other Person shall have exercised their right
to do so; or
(g) the Borrower or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
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appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
they become due, or shall take any corporate action to authorize any of
the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Restricted Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Restricted
Subsidiary under the federal bankruptcy laws as now or hereafter in
effect; or
(i) the Borrower or any member of the Controlled Group shall
fail to pay when due any material amount which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or
a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated or
the Borrower or any other member of the Controlled Group shall enter
into, contribute or be obligated to contribute to, terminate or incur
any withdrawal liability with respect to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $500,000 shall be rendered against
the Borrower or any Restricted Subsidiary and such judgment or order
shall continue unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower
under Section 6323 of the Code or a lien of the PBGC shall be filed
against the Borrower or any Restricted Subsidiary under Section 4068 of
ERISA and in either case such lien shall remain undischarged for a
period of 25 days after the date of filing; or
(l) the Patrick Family shall at any time fail to Control the
Borrower; or
(m) the occurrence of any event, act or condition which the
Required Banks determine either does or has a reasonable probability of
causing a Material Adverse Effect and the failure of the Borrower to
cure or prevent such Material Adverse Effect within 45 days after
receipt of notice of such determination from the Required Banks, or
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(n) the Guaranty shall cease to be in full force and effect or
any Guarantor shall deny or disaffirm its obligations thereunder;
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Banks, by notice to
the Borrower declare the Notes (together with accrued interest thereon) and all
other amounts payable hereunder and under the other Loan Documents to be, and
the Notes (together will all accrued interest thereon) and all other amounts
payable hereunder and under the other Loan Documents shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that if
any Event of Default specified in clause (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the Agent
or the Banks, the Commitments shall thereupon automatically terminate and the
Notes (together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower. Notwithstanding the
foregoing, the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice
to the Borrower of any Default under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment, Powers and Immunities. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent: (a)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by the Borrower to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agent, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
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negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, the Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower. The duties of the Agent shall be ministerial and administrative in
nature, and the Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks or all the Banks where unanimity is required under this Agreement, and
such instructions of the Required Banks or all the Banks where unanimity is
required under this Agreement in any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of a Default or an Event of
Default, the Agent shall give prompt notice thereof to the Banks. The Agent
shall give each Bank prompt notice of each non-payment of principal of or
interest on the Loans, whether or not it has received any notice of the
occurrence of such non-payment. The Agent shall (subject to Section 9.05) take
such action with respect to such Default or Event of Default as shall be
directed by the Required Banks, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
SECTION 7.04. Rights of Agent and Its Affiliates as a Bank.
With respect to any Loan made by Wachovia or an Affiliate of Wachovia, such
Affiliate and Wachovia in their capacity as a Bank hereunder shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not an Affiliate of Wachovia (or in Wachovia's case, acting as
the Agent), and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include such Affiliate of Wachovia or Wachovia in its individual
capacity. Such Affiliate and Wachovia may (without having to account therefor to
any Bank) accept deposits from, lend money to and generally engage in any kind
of banking, trust or other business with the Borrower (and any of its
Affiliates) as if they were not an Affiliate of the Agent or the Agent,
respectively; and such Affiliate and Wachovia may accept fees and
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other consideration from the Borrower (in addition to any agency fees and
arrangement fees heretofore agreed to between the Borrower and Wachovia) for
services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however, that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES. THE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Agent and the provisions of Section 9.07(c) have
been satisfied. Any requests, authority or consent of any Person who at the time
of making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of that Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 7.08. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Borrower of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
other Person. Except for notices, reports and other
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documents and information expressly required to be furnished to the Banks by the
Agent hereunder or under the other Loan Documents, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Person (or any of their Affiliates) which may come into the possession of
the Agent.
SECTION 7.09. Failure to Act. Except for action expressly
required of the Agent hereunder or under the other Loan Documents, the Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by the Agent by reason of
taking, continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. 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 notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Any successor Agent shall be a bank which has
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 thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period in respect of
any Euro-Dollar Loan:
(a) the Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for
such Interest Period, or
(b) the Required Banks advise the Agent that the London
Interbank Offered Rate as determined by the Agent will not adequately
and fairly reflect the cost to such Banks of funding the Euro-Dollar
Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the
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obligations of the Banks to make the Euro-Dollar Loans specified in such notice
shall be suspended. Unless the Borrower notifies the Agent at least 2 Domestic
Business Days before the date of any Borrowing of Euro-Dollar Loans for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the
adoption of any applicable law, rule or regulation, or any change in any
existing or future law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof (any
such authority, bank or agency being referred to as an "Authority" and any such
event being referred to as a "Change of Law"), or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any Authority shall make it unlawful or impossible for any Bank (or
its Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to
the other Banks and the Borrower, whereupon until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall, on
the later of (i) the date such notice is received by the Borrower and (ii) the
date such Change of Law becomes applicable, prepay in full the then outstanding
principal amount of each Euro-Dollar Loan of such Bank, together with accrued
interest thereon and any amount due such Bank pursuant to Section 8.05(a).
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after
the date hereof, a Change of Law or compliance by any Bank (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Authority:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Euro-Dollar Loans, its
Notes or its obligation to make Euro-Dollar Loans, or shall change the
basis of taxation of payments to any Bank (or its Lending Office) of
the principal of or interest on its Euro-Dollar Loans or any other
amounts due under this Agreement in respect of its Euro-Dollar Loans or
its obligation to make Euro-Dollar Loans (except for changes in the
rate of tax on the overall net income of such Bank or its Lending
Office imposed by the jurisdiction in which such Bank's principal
executive office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of
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Governors of the Federal Reserve System, but excluding with respect to
any Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its Lending
Office); or
(iii) shall impose on any Bank (or its Lending Office) or on
the United States market for certificates of deposit or the London
interbank market any other condition affecting its Euro-Dollar Loans,
its Notes or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any existing or future law, rule or regulation, or
any change in the interpretation or administration thereof, or compliance by any
Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Authority, has or would
have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such reduction.
(c) Each Bank shall notify the Borrower of any event occurring
after the date of this Agreement entitling such Bank to compensation under this
Section as promptly as practicable, but in any event within 45 days, after the
officer of such Bank responsible for the business relationship of the Bank with
the Borrower obtains actual knowledge thereof; provided that (i) if any Bank
fails to give such notice within 45 days after such officer obtains actual
knowledge of such an event, such Bank shall with respect to compensation payable
pursuant to this Section in respect of any costs resulting from such event, only
be entitled to payment under this Section for costs incurred from and after the
date 45 days prior to the date that such Bank does give such notice and (ii)
each Bank will designate a different Lending Office for the Loans of such Bank
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such Bank,
be disadvantageous to such Bank or contrary to its general lending policies.
Each Bank will furnish to the Borrower a certificate setting forth the basis and
amount of each request by such Bank for compensation under this Section,
accompanied by a statement of an officer of such Bank certifying that such
request for compensation is being made pursuant to a policy adopted by such Bank
to seek such compensation generally from customers similar to the Borrower.
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(d) The provisions of this Section 8.03 shall be applicable
with respect to any Participant, Assignee or other Transferee.
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar
Loans. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans
has been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03, and the Borrower shall, by at least 5
Euro-Dollar Business Days' prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans (in which
case interest and principal on such Loans shall be payable
contemporaneously with the related Euro-Dollar Loans of the other
Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans
instead.
In the event that the Borrower shall elect that the provisions of this Section
shall apply to any Bank, the Borrower shall remain liable for, and shall pay to
such Bank as provided herein, all amounts due such Bank under Section 8.03 in
respect of the period preceding the date of conversion of such Bank's Loans
resulting from the Borrower's election.
SECTION 8.05. Compensation. Upon the request of any Bank,
delivered to the Borrower and the Agent, the Borrower shall pay to such Bank
such amount or amounts as shall compensate such Bank for any loss, cost or
expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.08, Section 2.09,
Section 8.02 or otherwise) of a Euro-Dollar Loan on a date other than the last
day of an Interest Period for such Euro-Dollar Loan, as the case may be;
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on
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the date of such failure to prepay or borrow) at the applicable rate of interest
for such Euro-Dollar Loan provided for herein (excluding, however, for purposes
of this Section only the Applicable Margin in determining such rate of interest)
over (y) the amount of interest (as reasonably determined by such Bank) such
Bank would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
SECTION 8.06. Replacement of Bank. In the event that any Bank
gives any notice under Section 8.02 resulting in the suspension of its
obligation to make Euro-Dollar Loans or requests compensation pursuant to
Section 8.03, then, so long as the condition giving rise to such suspension or
compensation exists, the Borrower may designate another bank or financial
institution (such bank or financial institution being herein called a
"Replacement Bank") acceptable to the Agent (which acceptance will not be
unreasonably withheld) and which is not an Affiliate of the Borrower, to assume
such Bank's Commitment hereunder and to purchase the Loans of such Bank and such
Bank's rights under this Agreement and the Notes held by such Bank, all without
recourse to or representation or warranty by, or expense to, such Bank, for a
purchase price equal to the outstanding principal amount of the Loans payable to
such Bank plus any accrued but unpaid interest on such Loans and accrued but
unpaid fees owing to such Bank plus any amounts payable to such Bank under
Section 8.05 or otherwise owing to such Bank under the Loan Documents, and upon
such assumption, purchase and substitution, and subject to the execution and
delivery to the Agent by the Replacement Bank of documentation satisfactory to
the Agent (pursuant to which such Replacement Bank shall assume the obligations
of such original Bank under this Agreement), the Replacement Bank shall succeed
to the rights and obligations of such Bank hereunder. In the event that the
Borrower exercises its rights under the preceding sentence, the Bank against
which such rights were exercised shall no longer be a party hereto or have any
rights or obligations hereunder; provided that the obligations of the Borrower
to such Bank under Article VIII and Section 9.03 with respect to events
occurring or obligations arising before or as a result of such replacement shall
survive such exercise.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party at its address
or telecopy number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopy number specified in this Section and the telecopy machine used by the
sender provides a written confirmation that such telecopy has been so
transmitted or receipt of such telecopy transmission is otherwise confirmed,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, and (iii) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article II or Article VIII
shall not be effective until received.
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SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any Note
or other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Agent, in connection
with the preparation of this Agreement and the other Loan Documents, any waiver
or consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all out-of-pocket expenses incurred by the Agent or any Bank, including fees and
disbursements of counsel, in connection with such Default and collection and
other enforcement proceedings resulting therefrom, including out-of-pocket
expenses incurred in enforcing this Agreement and the other Loan Documents.
(b) The Borrower shall indemnify the Agent and each Bank
against any transfer taxes, documentary taxes, assessments or charges made by
any Authority by reason of the execution and delivery of this Agreement or the
other Loan Documents.
(c) The Borrower shall indemnify the Agent, the Banks and each
Affiliate thereof and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims or damages to which any of them may become subject, insofar as such
losses, liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by any
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from investigation, litigation (including, without limitation, any
actions taken by the Agent or any of the Banks to enforce this Agreement or any
of the other Loan Documents) or other proceeding (including, without limitation,
any threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Agent and each Bank, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for any
expenses (including, without limitation, legal fees) incurred in connection with
any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
SECTION 9.04. Setoffs; Sharing of Set-Offs. (a) The Borrower
hereby grants to each Bank, as security for the full and punctual payment and
performance of the obligations of the Borrower under this Agreement, a
continuing lien on and security interest in all deposits and other sums credited
by or due from such Bank to the Borrower or subject to withdrawal by the
Borrower; and regardless of the adequacy of any collateral or other means of
obtaining repayment of such obligations, each Bank may at any time upon or after
the occurrence of any Event of Default, and without notice to the Borrower, set
off the whole or any portion or portions of any or all such deposits and other
sums against such obligations, whether or not any other Person or Persons could
also withdraw money therefrom.
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(b) Each Bank agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Notes held
by it which is greater than the proportion received by any other Bank in respect
of the aggregate amount of all principal and interest owing with respect to the
Notes held by such other Bank, the Bank receiving such proportionately greater
payment shall purchase such participations in the Notes held by the other Banks
owing to such other Banks, and/or such other adjustments shall be made, as may
be required so that all such payments of principal and interest with respect to
the Notes held by the Banks owing to such other Banks shall be shared by the
Banks pro rata; provided that (i) nothing in this Section shall impair the right
of any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes, and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter recovered
from such purchasing Bank, such purchase from each other Bank shall be rescinded
and such other Bank shall repay to the purchasing Bank the purchase price of
such participation to the extent of such recovery together with an amount equal
to such other Bank's ratable share (according to the proportion of (x) the
amount of such other Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
(c) Notwithstanding the foregoing, it is hereby expressly
agreed that neither the Agent nor any Bank shall have any lien or security
interest in, or right to set-off against, any amount held for the Borrower (i)
by the Agent's or such Bank's Affiliates, including, but not limited to, Trustco
Capital Management, Inc. and Synovus Securities, Inc., or (ii) in any corporate
custody account or similar account maintained at any Bank in a trust capacity,
in either case as security for or for application to the Loans or other
obligations owing to the Agent, or such Bank under this Agreement or the Loan
Documents; provided, however, that nothing contained in this subsection (c)
shall in any way be construed as limiting the ability of any such Affiliate of
the Agent or any Bank to set-off against the Borrower's accounts for any amount
owing to such Affiliate or such Bank arising other than under this Agreement and
the Loan Documents.
SECTION 9.05. Amendments and Waivers. (a) Any provision of
this Agreement, the Notes or any other Loan Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) change the Commitment of any Bank or
subject any Bank to any additional obligation (provided that an Assignment and
Acceptance executed in connection with an assignment effected pursuant to, and
in compliance with, Section 9.07(c) shall not be deemed to be a violation of
this clause (i)), (ii) change the principal of or rate of interest on any Loan
or any fees hereunder, (iii) change the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder, (iv) change the amount of
principal, interest or fees due on any date fixed for the
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payment thereof, (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the percentage of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the Notes, (vii) change
this Section 9.05(a), (viii) change the definition of "Required Banks", or (ix)
release any Guarantor from its obligations under the Guaranty (other than any
release of a Guarantor pursuant to Section 5.21(d)).
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement from or with any Bank, except on terms fully disclosed to the
Agent (which terms the Agent shall be authorized to disclose to the Banks).
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this Agreement shall be delivered by the Borrower to the
Agent (for delivery to each Bank) forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks. The
Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 9.06. Margin Stock Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.07. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that, except as
provided in paragraph (g) of this Section, the Borrower may not assign or
otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each
a "Participant") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment hereunder or any other interest of such
Bank hereunder. In the event of any such sale by a Bank of a participating
interest to a 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 Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
Loan or Loans, (ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the related Loan
or Loans, (iii) the change of the principal of the related Loan or Loans, or
(iv) any change in the rate at which either interest is payable thereon or (if
the Participant is entitled to any part thereof) commitment or facility fee is
payable hereunder from the rate at which
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the Participant is entitled to receive interest or commitment or facility fee
(as the case may be) in respect of such participation. Each Bank selling a
participating interest in any Loan, Note, Commitment or other interest under
this Agreement shall, within 10 Domestic Business Days of such sale, provide the
Borrower and the Agent with written notification stating that such sale has
occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in Loans outstanding
from time to time, subject to the provisions of Section 9.07(e).
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance in the form attached hereto as Exhibit
G, executed by such Assignee, such transferor Bank and the Agent (and, in the
case of (x) an Assignee that is not then a Bank or an Affiliate of a Bank; and
(y) an assignment not made during the existence of an Event of Default, by the
Borrower); provided that (i) no interest may be sold by a Bank pursuant to this
paragraph (c) unless the Assignee shall agree to assume ratably equivalent
portions of the transferor Bank's Commitment (provided that the Borrower and the
Agent may waive the requirement contained in this clause (i)), (ii) no interest
may be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not
then a Bank or an Affiliate of a Bank without the consent of the Borrower, which
consent shall not be unreasonably withheld (provided that (1) the Borrower's
consent shall not be necessary with respect to any assignment made during the
existence of an Event of Default, and (2) it shall not constitute the
unreasonable withholding of consent if the Borrower shall decline to consent
because (1) the Borrower makes a reasonable determination that it is materially
more likely that the proposed Assignee will be entitled to compensation, or to a
greater amount of compensation, than the transferor Bank, or (2) the proposed
Assignee is a competitor, or an Affiliate of a competitor, of the Borrower or
any Subsidiary) and (iv) the minimum amount of any Commitment, and the minimum
aggregate principal amount of Loans, that may be so assigned by any transferor
Bank shall be $10,000,000 (provided that (i) a Bank may assign all of its
Commitment and its Loans even if the amount of its Commitment and the aggregate
principal amount of its Loans is less than $10,000,000, and (ii) the Agent and
the Borrower may waive the requirement contained in this clause (iv) without the
consent of any Bank). Upon (A) execution of the Assignment and Acceptance by
such transferor Bank, such Assignee, the Agent and (if applicable) the Borrower,
(B) delivery of an executed copy of the Assignment and Acceptance to the
Borrower and the Agent, (C) payment by such Assignee to such transferor Bank of
an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, and (D) payment by such transferor Bank of a processing and
recordation fee of $2,500 to the Agent, such Assignee shall for all purposes be
a Bank party to this Agreement and shall have all the rights and obligations of
a Bank under this Agreement to the same extent as if it were an original party
hereto with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower, the
Banks or the Agent shall be required. Upon the consummation of any transfer to
an Assignee pursuant to this paragraph (c), the transferor Bank, the Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to each of such Assignee and such transferor Bank.
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(d) Subject to the provisions of Section 9.08, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession concerning the
Borrower which has been delivered to such Bank by the Borrower pursuant to this
Agreement or which has been delivered to such Bank by the Borrower in connection
with such Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 than the transferor Bank would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 8.02 or 8.03 requiring such Bank to designate a different Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.
(f) Anything in this Section 9.07 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of the Loans
and/or obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and Operating Circular issued by such
Federal Reserve Bank, provided that any payment in respect of such assigned
Loans and/or obligations made by the Borrower to the assigning and/or pledging
Bank in accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
(g) Upon (1) delivery of 30 days' prior written notice to the
Agent and each of the Banks, and (2) satisfaction of the following conditions
precedent, the Borrower may assign all of its rights and obligations under this
Agreement and each Loan Document to which it is a party to Eastwynn:
(i) delivery to the Agent of an assignment and
assumption agreement, executed by the Borrower and Eastwynn,
in form and substance satisfactory to the Agent and each Bank,
pursuant to which the Borrower assigns, and Eastwynn assumes,
all of the rights and obligations of the Borrower under this
Agreement and each other Loan Document to which the Borrower
is a party;
(ii) delivery to the Agent of an executed
counterpart of a guaranty agreement, executed by Borrower, as
guarantor, pursuant to which the Borrower guarantees the
obligations of Eastwynn under this Agreement and the other
Loan Documents, in form and substance satisfactory to the
Agent and the Banks;
(iii) at the option of the Agent and the Banks,
delivery to the Agent of either (A) consents by each of the
Guarantors to the assignment and assumption and
acknowledgments by each of the Guarantors that their
respective obligations under the Guaranty remain in full force
and effect with respect to Eastwynn's obligations under
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this Agreement and the other Loan Documents, or (B) a new
guaranty agreement executed by each Guarantor substantially in
the form of the Guaranty;
(iv) delivery to the Agent of an amendment to this
Agreement, executed by the Borrower and Eastwynn, in form and
substance satisfactory to the Agent and the Banks, modifying
this Agreement to reflect that certain covenants and other
provisions relating to the Borrower shall be set forth in the
guaranty agreement of the Borrower referred to in clause (ii)
of this paragraph (h);
(v) delivery to the Agent of a duly executed Note
for the account of each Bank, executed by Eastwynn, in form
and substance substantially identical to the form of Note
attached to this Agreement as Exhibit A;
(vi) delivery to the Agent of legal opinions,
certificates and such other items as requested by the Agent or
any Bank in connection with such assignment and assumption,
all in form and substance satisfactory to the Agent and the
Banks; and
(vii) payment to the Agent of all out of pocket
expenses, including fees and disbursements of counsel to the
Agent, incurred by the Agent in connection with such
assignment and the other actions referred to in this paragraph
(g).
SECTION 9.08. Confidentiality. Each Bank agrees to exercise
its best efforts to keep any information delivered or made available by the
Borrower to it which such Bank knows to be or which is clearly indicated to be
confidential information, confidential from anyone other than persons employed
or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided,
however, that nothing herein shall prevent any Bank from disclosing such
information (i) to any other Bank, (ii) upon the order of any court or
administrative agency, (iii) to any regulatory agency or authority having
jurisdiction over such Bank, upon the request or demand of such regulatory
agency or authority, (iv) which has been publicly disclosed (unless such Bank
knows such disclosure was made by a Person in violation of a confidentiality
agreement with or confidentiality obligation to the Borrower or any Subsidiary),
(v) to the extent reasonably required in connection with any litigation to which
the Agent, any Bank or their respective Affiliates may be a party, (vi) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (vii) to such Bank's legal counsel and independent auditors and
(viii) to any actual or proposed Participant, Assignee or other Transferee of
all or part of its rights hereunder which has agreed in writing to be bound by
the provisions of this Section 9.08.
SECTION 9.09. Representation by Banks. Each Bank hereby
represents that it is a commercial lender or financial institution which makes
loans in the ordinary course of its business and that it will make its Loans
hereunder for its own account in the ordinary course of such business; provided,
however, that, subject to Section 9.07, the disposition of the Note or Notes
held by that Bank shall at all times be within its exclusive control.
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SECTION 9.10. Obligations Several. The obligations of each
Bank hereunder are several, and no Bank shall be responsible for the obligations
or commitment of any other Bank hereunder. Nothing contained in this Agreement
and no action taken by the Banks pursuant hereto shall be deemed to constitute
the Banks to be a partnership, an association, a joint venture or any other kind
of entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall, subject to Article VI, be
entitled to protect and enforce its rights arising out of this Agreement or any
other Loan Document and it shall not be necessary for any other Bank to be
joined as an additional party in any proceeding for such purpose.
SECTION 9.11. Survival of Certain Obligations. Sections
8.03(a), 8.03(b), 8.05 and 9.03 of this Agreement and the obligations of the
Borrower thereunder shall, without duplication, survive and continue to be
enforceable notwithstanding the termination of this Agreement and the
Commitments and the payment in full of the principal of and interest on all
Loans.
SECTION 9.12. Georgia Law. This Agreement and each Note shall
be construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of
interest due or payable hereunder or under the Notes exceed the maximum rate of
interest allowed by applicable law, and in the event any such payment is
inadvertently made to any Bank by the Borrower or inadvertently received by any
Bank, then such excess sum shall be credited as a payment of principal, unless
the Borrower shall notify such Bank in writing that it elects to have such
excess sum returned forthwith. It is the express intent hereof that the Borrower
not pay and the Banks not receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may legally be paid by the Borrower
under applicable law.
SECTION 9.15. Interpretation. No provision of this Agreement
or any of the other Loan Documents shall be construed against or interpreted to
the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.
SECTION 9.16. Consent to Jurisdiction. The Borrower (a)
submits to personal jurisdiction in the State of Georgia, the courts thereof and
the United States District Courts sitting therein, for the enforcement of this
Agreement, the Notes and the other Loan Documents, (b) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Georgia for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (c) agrees that service of
process may be made upon it in the manner prescribed in Section 9.01 for the
giving of
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notice to the Borrower. Nothing herein contained, however, shall prevent the
Agent from bringing any action or exercising any rights against any security and
against the Borrower personally, and against any assets of the Borrower, within
any other state or jurisdiction.
SECTION 9.17. EDGAR Filing. Promptly after the Effective Date,
the Agent agrees to deliver to the Borrower a 3 1/2 inch high density computer
disk containing the final form of this Agreement, formatted on WordPerfect 6.0.
After the execution and delivery of any amendment, modification or supplement to
this Agreement, the Agent agrees to deliver to the Borrower, upon request of the
Borrower, a 3 1/2 inch high density computer disk or other electronic or
computer record mutually agreeable to the Borrower and the Agent containing the
final form of such amendment, modification or supplement, formatted on
WordPerfect 6.0 or other software program mutually agreeable to the Borrower and
the Agent.
SECTION 9.18. Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
CARMIKE CINEMAS, INC.
By: ___________________________ (SEAL)
Title:
Carmike Cinemas, Inc.
1301 First Avenue
Columbus, Georgia 31901
Attention: John O. Barwick, III
Vice President-Finance
Telecopy number: (706) 576-3419
Telephone number: (706) 576-3400
- 60 -
<PAGE> 68
COMMITMENTS
$67,500,000 WACHOVIA BANK, N.A., as Agent and as a Bank
By: ___________________________(SEAL)
Title:
Lending Office
---------------
Wachovia Bank, N.A.
Syndication Services
191 Peachtree Street, N.E.
Mail Code: GA-0423
Atlanta, Georgia 30303-1757
Attention: Elizabeth Dreiling (27th floor)
Telecopy Number: (404) 332-4005
Telephone Number: (404) 332-4008
with a copy to:
--------------
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Douglas W. Strickland
Telecopy number: (404) 332-6920
Telephone number: (404) 332-1382
- 61 -
<PAGE> 69
$55,000,000 FIRST UNION NATIONAL BANK
By:___________________________ (SEAL)
Title:
Lending Office
--------------
First Union National Bank - Florida
214 Hogan Street, 9th Floor
Jacksonville, Florida 32202
Attention: Kathy Love
Telecopy number: (904) 361-1010
Telephone number: (904) 361-1729
with a copy to:
--------------
First Union National Bank
999 Peachtree Street
12th Floor
Atlanta, Georgia 30309
Attention: Donald Q. Dalton
Telecopy number: (404) 225-4255
Telephone number: (404) 225-4004
- 62 -
<PAGE> 70
$42,500,000 SUNTRUST BANK, ATLANTA
By:___________________________(SEAL)
Title:
By:___________________________
Title:
Lending Office
--------------
SunTrust Bank, Atlanta
25 Park Place
23rd Floor
Atlanta, Georgia 30303
Attention: Trey Harvin
Telecopy number: (404) 588-8833
Telephone number: (404) 588-8658
- 63 -
<PAGE> 71
$20,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Long-Term Credit Bank of Japan, Ltd.
165 Broadway, 49th Floor
New York, New York 10006
Attention: Kathleen Dorsch-Santiago
Telecopy number: (212) 608-2371
Telephone number: (212) 335-4578
with a copy to:
--------------
The Long-Term Credit Bank of Japan, Ltd.
245 Peachtree Center Avenue
Suite 2801, Marquis One Tower
Atlanta, Georgia 30303
Attention: Rebecca Silbert
Telecopy number: (404) 658-9751
Telephone number: (404) 659-7210
- 64 -
<PAGE> 72
$12,500,000 THE BANK OF NEW YORK
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Bank of New York
1 Wall Street, 16th Floor
New York, New York 10286
Attention: Cynthia L. Rogers
Telecopy number: (212) 635-8595
Telephone number: (212) 635-8608
- 65 -
<PAGE> 73
$12,500,000 FIRST AMERICAN NATIONAL BANK
By:___________________________ (SEAL)
Title:
Lending Office
--------------
First American National Bank
First American Center
Fourth & Union Street, 3rd Floor
Nashville, Tennessee 37238-0310
Attention: Hope Stewart
Telecopy number: (615) 748-6072
Telephone number: (615) 748-6099
- 66 -
<PAGE> 74
$12,500,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, ATLANTA AGENCY
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Industrial Bank of Japan, Limited,
Atlanta Agency
191 Peachtree Street, N.E., Suite 3600
Atlanta, Georgia 30303-1757
Attention: William D. LaDuca
Telecopy number: (404) 524-8509
Telephone number: (404) 420-3329
- 67 -
<PAGE> 75
$12,500,000 THE SANWA BANK LIMITED
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Sanwa Bank Limited
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attention: Renko Hara
Telecopy number: (212) 754-2368
Telephone number: (212) 339-6390
with a copy to:
---------------
The Sanwa Bank Limited
133 Peachtree Street, N.E.
Georgia Pacific Center, Suite 4950
Atlanta, Georgia 30303
Attention: Dennis S. Losin
Telecopy number: (404) 589-1629
Telephone number: (404) 586-6889
- 68 -
<PAGE> 76
$10,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Bank of Tokyo-Mitsubishi, Ltd.
133 Peachtree Street, Suite 4970
Atlanta, Georgia 30303
Telecopy number: (404) 577-1155
Telephone number: (404) 577-2960
- 69 -
<PAGE> 77
$10,000,000 COLUMBUS BANK AND TRUST COMPANY
By:___________________________ (SEAL)
Title:
Lending Office
--------------
Columbus Bank and Trust Company
1148 Broadway
Columbus, Georgia 31901
Attention: Philip A. Badcock, Jr.
Telecopy number: (706) 649-6988
Telephone number: (706) 649-6989
- 70 -
<PAGE> 78
10,000,000 HIBERNIA NATIONAL BANK
By:___________________________ (SEAL)
Title:
Lending Office
--------------
Hibernia National Bank
313 Carondelet Street
New Orleans, LA 70131
Attention: Troy Villafarra
Telecopy number: (504) 533-5344
Telephone number: (504) 533-2738
- 71 -
<PAGE> 79
$10,000,000 THE SUMITOMO BANK, LIMITED
By:___________________________ (SEAL)
Title:
By:___________________________ (SEAL)
Title:
Lending Office
--------------
The Sumitomo Bank, Limited
233 S. Wacker Drive, Suite 5400
Chicago, Illinois 60606
Telecopy number: (312) 876-1995
Telephone number: (312) 993-6210
with a copy to:
--------------
The Sumitomo Bank, Limited
303 Peachtree Street, Suite 4420
Atlanta, Georgia 30308
Attention: ____________________
Telecopy number: (404) 523-7983
Telephone number: (404) 524-6544
- ------------------
TOTAL COMMITMENTS:
$275,000,000
- 72 -
<PAGE> 80
SCHEDULE 1.01
INVESTMENTS OF CARMIKE CINEMAS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
June 30, 1997
Instrument Type of Date of Principal, Coupon
Instrument Maturity Shares or
% Ownership
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MANAGED BY
SYNOVUS
SECURITIES
US Treasury Note Bond 08/15/96 3,085,000.00 4.375%
US Treasury Note Bond 08/31/96 2,050,000.00 6.25%
US Treasury Note Bond 01/31/97 2,250,000.00 6.25%
Money Market 6,363.00
OTHER
Conway Theater Partnership N/A 50% N/A
Company
Ocean Theater Company Partnership N/A 50% N/A
Roanoke Rapids Theater Partnership N/A 37% N/A
Company
Film Pro Assoc. Partnership N/A Negligible
N/A
Over The Summer Partnership N/A Negligible
N/A
Goldrush Partnership N/A Negligible
N/A
Bakers Hawk Partnership N/A Negligible
N/A
John McConnell Note Receivable 03/01/96 6,741.00 10.00%
Hazel Davis Note Receivable 11/16/98 10,622.00 8.00%
Rocking Chair, Note Receivable 12/15/0 18,045.00 10.40%
Myrtle Beach
Kerasotes Indians Note Receivable 04/01/99 917,630.00 Prime
Theatres, Inc.
AMC Entertainment Stock N/A 1 N/A
Loews Corp. Stock N/A 2 N/A
Marcus Corp Stock N/A 1 N/A
</TABLE>
<PAGE> 81
<TABLE>
<CAPTION>
June 30, 1997
Instrument Type of Date of Principal, Coupon
Instrument Maturity Shares or
% Ownership
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trans Lux Stock N/A 1 N/A
United Artists Stock N/A 2 N/A
Wometco Stock N/A 1 N/A
General Cinema Stock N/A 2 N/A
Loews Stock N/A 4 N/A
Cineplex Stock N/A 1 N/A
Altus Parking Lot Stock N/A 25 N/A
Trans World Stock N/A 2,000 N/A
Airlines
Dunn Investors Stock N/A 50 N/A
Southbridge Partnership N/A 50% N/A
partnership
</TABLE>
<PAGE> 82
SCHEDULE 4.08
SUBSIDIARIES
CARMIKE CINEMAS, INC.
<TABLE>
<CAPTION>
Subsidiary Percent Owned Jurisdiction of Restricted or
Incorporation Unrestricted
====================================================================================================================
<S> <C> <C> <C>
Wooden Nickel Pub, Inc. 100% Delaware Restricted
Military Services, Inc. 100% Delaware Restricted
Eastwynn Theaters, Inc. 100% Alabama Restricted
</TABLE>
<PAGE> 83
SCHEDULE 4.14A
Environmental Liabilities, Etc.
None
<PAGE> 84
SCHEDULE 4.14B
Environmental Releases
None
<PAGE> 85
SCHEDULE 4.14C
Environmental Authorizations
None
<PAGE> 86
EXHIBIT A
NOTE
$____________ Atlanta, Georgia
October 17, 1997
For value received, CARMIKE CINEMAS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Lending Office, the principal sum of
________________ ______________________________ and No/100 Dollars
($____________), or such lesser amount as shall equal the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below, on the dates and in the amounts provided in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of this Note on the dates and at the rate or rates provided for in the
Credit Agreement. Interest on any overdue principal of and, to the extent
permitted by law, overdue interest on the principal amount hereof shall bear
interest at the Default Rate, as provided for in the Credit Agreement. All such
payments of principal and interest shall be made in lawful money of the United
States in Federal or other immediately available funds at the office of Wachovia
Bank, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303, or such other
address as may be specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make, or any error of the Bank in making, any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of October 17, 1997, among the Borrower, the banks listed on
the signature pages thereof and their successors and assigns and Wachovia Bank,
N.A., as Agent (as the same may be amended or modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment and the repayment hereof and the acceleration of the maturity
hereof.
The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided for
in the Credit Agreement.
<PAGE> 87
The Borrower agrees, in the event that this note or any
portion hereof is collected by law or through an attorney at law, to pay all
reasonable costs of collection, including, without limitation, reasonable
attorneys' fees.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed under seal, by its duly authorized officer as of the day and year
first above written.
CARMIKE CINEMAS, INC.
By: ______________________________(SEAL)
Title:
<PAGE> 88
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Type Amount Amount of
of Interest of Principal Maturity Notation
Date Loan(1) Rate Loan Repaid Date Made By
- ---- ------- -------- ------ --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) i.e., a Base Rate or Eruo-Dollar Loan.
<PAGE> 89
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
[To be provided]
<PAGE> 90
EXHIBIT C
OPINION OF
WOMBLE CARLYLE SANDRIDGE & RICE, SPECIAL COUNSEL
FOR THE AGENT
[Date as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Dear Sirs:
We have participated in the preparation of the Credit Agreement
(the "Credit Agreement") dated as of October 17, 1997 among CARMIKE CINEMAS,
INC., a Delaware corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Wachovia Bank, N.A., as Agent (the "Agent"), and
have acted as special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement and each of the
Notes by or on behalf of the Borrower, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes valid and binding obligations of the Borrower, in each case
enforceable in accordance with its terms except as: (i) the enforceability
thereof may be affected by bankruptcy, insolvency, reorganization, fraudulent
conveyance, voidable preference, moratorium or similar laws applicable to
creditors' rights or the collection of debtors' obligations generally; (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and (iii) the enforceability
of certain of the remedial, waiver and other provisions of the Credit Agreement
and the Notes may be further limited by the laws of the State of Georgia;
provided, however, such additional laws do not, in our opinion, substantially
interfere with the practical realization of the
<PAGE> 91
benefits expressed in the Credit Agreement and the Notes, except for the
economic consequences of any procedural delay which may result from such laws.
In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction except the State of Georgia.
We express no opinion as to the effect of the compliance or noncompliance of the
Agent or any of the Banks with any state or federal laws or regulations
applicable to the Agent or any of the Banks by reason of the legal or regulatory
status or the nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you and any
Assignee, Participant or other Transferee under the Credit Agreement without our
prior written consent.
Very truly yours,
WOMBLE CARLYLE SANDRIDGE & RICE
a Professional Limited Liability Company
By:
--------------------------------------
James E. Lilly
2
<PAGE> 92
EXHIBIT D
CLOSING CERTIFICATE
OF
CARMIKE CINEMAS, INC.
Reference is made to the Credit Agreement (the "Credit Agreement")
dated as of October 17, 1997, among Carmike Cinemas, Inc. (the "Borrower"),
Wachovia Bank, N.A., as Agent and as a Bank, and certain other Banks listed on
the signature pages thereof. Capitalized terms used herein have the meanings
ascribed thereto in the Credit Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement,
___________________, the duly authorized ____________________ of the Borrower,
hereby certifies to the Agent and the Banks that: (i) no Default has occurred
and is continuing on the date hereof; and (ii) the representations and
warranties of the Borrower contained in Article IV of the Credit Agreement are
true on and as of the date hereof.
Certified as of the 17th day of October, 1997.
CARMIKE CINEMAS, INC.
-----------------------------------
Name:
Title:
<PAGE> 93
EXHIBIT E
CARMIKE CINEMAS, INC. [GUARANTOR]
SECRETARY'S CERTIFICATE
The undersigned, _____________, _______ Secretary of Carmike
Cinemas, Inc., a Delaware corporation (the "Borrower") [______________, a
______________ corporation (the "Guarantor")] hereby certifies that he has been
duly elected, qualified and is acting in such capacity and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Credit Agreement
dated as of October 17, 1997 among the Borrower, Wachovia Bank, N.A., as Agent
and as a Bank, and the Banks listed on the signature pages thereof (the "Credit
Agreement") [the Guaranty Agreement dated as of October 17, 1997 (the
"Guaranty") made by the Guarantor and certain other guarantors named therein for
the benefit of Wachovia Bank, N.A., as Agent and as a Bank and the Banks that
are a party to that certain Credit Agreement dated as of October 17, 1997, among
Carmike Cinemas, Inc., the Agent and the Banks] that:
1. Attached hereto as Exhibit A is a complete and correct copy of
the Articles of Incorporation of the Borrower [Guarantor] as in full force and
effect on the date hereof as certified by the Secretary of State of the State of
Delaware, the Borrower's [Guarantor's] state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy of
the Bylaws of the Borrower [Guarantor] as in full force and effect on the date
hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of
the resolutions duly adopted by the Board of Directors of the Borrower
[Guarantor] on ___________ __, 19__ approving, and authorizing the execution and
delivery of, the Credit Agreement and the other Loan Documents (as such term is
defined in the Credit Agreement) to which the Borrower is a party [the
Guaranty]. Such resolutions have not been repealed or amended and are in full
force and effect, and no other resolutions or consents have been adopted by the
Board of Directors of the Borrower [Guarantor] in connection therewith.
4. ____________, who as ________________________ of the Borrower
[Guarantor] signed the Credit Agreement and the other Loan Documents to which
the Borrower is a party [the Guaranty], was duly elected, qualified and acting
as such at the time he signed the Credit Agreement and other Loan Documents to
which the Borrower is a party [the Guaranty], and his signature appearing on the
Credit Agreement and the other Loan Documents to which the Borrower is a party
[the Guaranty] is his genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as
of the 17th day of October, 1997.
--------------------------------
Name:
Title:
<PAGE> 94
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of October 17,
1997 (as modified and supplemented and in effect from time to time, the "Credit
Agreement") among Carmike Cinemas, Inc., the Banks from time to time parties
thereto, and Wachovia Bank, N.A., as Agent. Capitalized terms used herein shall
have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement,
______________________, the duly authorized ____________________, of Carmike
Cinemas, Inc., hereby certifies to the Agent and the Banks that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of ______________, 199_, and that no Default is in existence on and
as of the date hereof.
CARMIKE CINEMAS, INC.
By:
--------------------------
Title:
<PAGE> 95
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
____________, 199_
1. Ratio of Consolidated Funded Debt to Consolidated Total Capitalization
(Section 5.03)
At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending September 30, 1997, the ratio of Consolidated Funded Debt to
Consolidated Total Capitalization will not exceed .70 to 1.00.
<TABLE>
<S> <C> <C>
(a) Consolidated Funded Debt Schedule - 4 $
------------
(b) Consolidated Total Capitalization Schedule - 1 $
------------
Actual Ratio of (a) to (b)
------------
Maximum Ratio .70 to 1.00
</TABLE>
2. Ratio of Consolidated Funded Debt to Consolidated Cash Flow (Section
5.04)
At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending September 30, 1997, the ratio of Consolidated Funded Debt at the
end of each Fiscal Quarter to Consolidated Cash Flow for the period of
4 consecutive Fiscal Quarters ending on such date will not at any time
exceed 4.5 to 1.00.
<TABLE>
<S> <C> <C>
(a) Consolidated Funded Debt Schedule - 4 $
------------
(b) Consolidated Cash Flow Schedule - 5 $
------------
Actual Ratio of (a) to (b)
------------
Maximum Ratio 4.5 to 1.00
</TABLE>
3. Restricted Payments and Restricted Investments (Section 5.05)
The Borrower will not, directly, or indirectly through a Subsidiary or
otherwise, declare, order, pay, make or set apart any sum or property
for any Restricted Payment and the Borrower will not and will not
permit any Restricted Subsidiary to make or become obligated to make
any Restricted Investment, in each case unless, both at the time of the
proposed action and immediately after giving effect thereto, (x) no
condition or event shall exist which constitutes a Default or an Event
of Default; and (y) the aggregate amount of:
(A) all sums and property included in all Restricted Payments
directly or indirectly declared, ordered, paid, made or set
apart by the Borrower during the period (the
1
<PAGE> 96
"Computation Period") (taken as one accounting period)
from and including July 1, 1997 to and including the date of
such proposed action, plus
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
____________, 199_
(B) the aggregate amount of all Restricted Investments of the Borrower
and all Restricted Subsidiaries made during the Computation Period
and outstanding on the date of such proposed action and all
commitments for such Restricted Investments made by the Borrower
or any Restricted Subsidiary outstanding on such date,
shall not exceed the sum of $60,000,000 plus 80% (or minus 100% in the
case of a deficit) of Consolidated Net Income during the Computation
Period; provided that the Borrower may declare, order, pay, make or set
apart funds for the payment of a dividend on, and in accordance with
the terms of, any class of its Preferred Stock that is issued and sold
by the Borrower for cash after the date hereof, if, both at the time of
the proposed action and immediately after giving effect thereto, (x)
the aggregate amount of Restricted Payments after the date hereof with
respect to all classes of Preferred Stock of the Borrower shall not
exceed the aggregate net proceeds to the Borrower from all issuances
and sales of its Preferred Stock after the date hereof, and (y) no
condition or event shall exist which constitutes a Default or an Event
of Default.
<TABLE>
<S> <C>
(a) Total Restricted Payments
made during Computation Period $____________
(net of amount excluded pursuant to the
foregoing proviso)
(b) Total Restricted Investments
made during Computation Period $____________
(c) Total Restricted Payments and Restricted Investments
made during Computation Period (sum of (a) plus (b)) $____________
(d) 80% of positive Consolidated Net Income
during Computation Period,
or
100% of negative Consolidated Net Income
during Computation Period $____________
(e) Base Amount $ 50,000,000
(f) Limitation (sum of (d) plus (e)) $____________
----
</TABLE>
2
<PAGE> 97
4. Fixed Charge Coverage (Section 5.06)
At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending September 30, 1997, the ratio of Adjusted Cash Flow to Fixed
Charges, in each case for the current Fiscal Quarter and the
immediately preceding 3 Fiscal Quarters, shall not be less than 1.50 to
1.00.
3
<PAGE> 98
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
____________, 199_
<TABLE>
<S> <C> <C>
(a) Adjusted Cash Flow Schedule - 3 $
------------
(b) Fixed Charges Schedule - 2 $
------------
Actual Ratio of (a) to (b)
------------
Maximum Ratio 1.50 to 1.00
</TABLE>
5. Negative Pledge (Section 5.07)
None of the Borrower's or any Consolidated Subsidiary's property is
subject to any Lien securing Debt except for (i) Liens permitted by
paragraph (a) through (h) of Section 5.07 of the Credit Agreement and
(b) Liens not permitted by the aforementioned paragraphs of Section
5.07 securing Debt in an aggregate principal amount at any time
outstanding not to exceed 15% of Consolidated Total Capitalization:
(a) Description of Lien and Property subject to same: Amount of
Debt Secured:
<TABLE>
<S> <C>
1. $
---------------------------------------- --------------------
2. $
---------------------------------------- --------------------
3. $
---------------------------------------- --------------------
4. $
---------------------------------------- --------------------
5. $
---------------------------------------- --------------------
6. $
---------------------------------------- --------------------
7. $
---------------------------------------- --------------------
Total of items 1-7 $
====================
(b) Limitation (15% of Consolidated
Total Capitalization) $
--------------------
</TABLE>
<PAGE> 99
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
____________, 19__
Schedule - 1
Consolidated Total Capitalization
<TABLE>
<S> <C> <C>
(a) Consolidated Net Worth $
---------------
- ---------------------
(b) Consolidated Funded Debt $
---------------
(c) Consolidated Total Capitalization
(sum of (a) plus (b)) $
===============
</TABLE>
<PAGE> 100
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
____________, 19__
Schedule - 2
Fixed Charges
<TABLE>
<S> <C> <C>
(a) Rental Obligations for:
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
Total Rental Obligations $
-------------
(b) Interest Expense for:
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
____ quarter 199_-__ $
-------------
Total Interest Expense $
-------------
Total Fixed Charges (sum of (a) plus (b)) $
-------------
</TABLE>
<PAGE> 101
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
_____________, 19__
Schedule - 3
Adjusted Cash Flow
<TABLE>
<S> <C>
(a) ____ quarter 199_ $
Consolidated Operating Income ------------
$
Rental Obligations ------------
$
Depreciation and amortization ------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated $
Operating Income for such period) ------------
$
Total for Quarter ------------
(b) ____ quarter 199_ $
Consolidated Operating Income ------------
$
Rental Obligations ------------
$
Depreciation and amortization ------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated $
Operating Income for such period) ------------
$
Total for Quarter ------------
(c) ____ quarter 199_ $
Consolidated Operating Income ------------
$
Rental Obligations ------------
$
Depreciation and amortization ------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated $
Operating Income for such period) ------------
$
Total for Quarter ------------
(d) ____ quarter 199_ $
Consolidated Operating Income ------------
$
Rental Obligations ------------
$
Depreciation and amortization ------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated $
Operating Income for such period) ------------
$
Total for Quarter ------------
$
Adjusted Cash Flow ============
(sum of (a) plus (b) plus (c) plus (d))
</TABLE>
<PAGE> 102
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
_____________, 199_ Schedule - 4
Consolidated Funded Debt
<TABLE>
<CAPTION>
Interest
(a) Funded Debt Rate Maturity Total
----------- ----------- -------- -----
Secured
-------
<S> <C> <C> <C> <C>
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
Total Secured
Unsecured
---------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
$
-------------------------------- ----------- -------- ------------
Total Unsecured
Guarantees
$
--------------------------------------------------------- ------------
$
--------------------------------------------------------- ------------
$
------------
Total $
------------
Redeemable Preferred Stock $
-------------------------- ------------
Total $
------------
Other Debt
$
--------------------------------------------------------- ------------
$
--------------------------------------------------------- ------------
$
--------------------------------------------------------- ------------
Total Funded Debt $
============
(b) Current Debt $
------------
(c) Unescrowed Off-Balance Sheet Lease Indebtedness (to the
</TABLE>
<PAGE> 103
<TABLE>
<S> <C>
extent not included in (a) or (b)) $
------------
(d) Off-Balance Sheet Lease Equity Amounts (to the extent
not included in (a) or (b)) $
------------
(c) Consolidated Funded Debt( (a) plus (b) plus (c) plus (d)) $
---- ------------
</TABLE>
<PAGE> 104
COMPLIANCE CHECK LIST
Carmike Cinemas, Inc.
_____________, 19__
Schedule - 5
Consolidated Cash Flow
<TABLE>
<S> <C>
(a) ____ quarter 199_
Consolidated Operating Income $
------------
Depreciation and amortization $
------------
Off-Balance Sheet Lease Payments $
------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated
Operating Income for such period) $
------------
Total for Quarter $
------------
(b) ____ quarter 199_
Consolidated Operating Income $
------------
Depreciation and amortization $
------------
Off-Balance Sheet Lease Payments $
------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated
Operating Income for such period) $
------------
Total for Quarter $
------------
(c) ____ quarter 199_
Consolidated Operating Income $
------------
Depreciation and amortization $
------------
Off-Balance Sheet Lease Payments $
------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated
Operating Income for such period) $
------------
Total for Quarter $
------------
(d) ____ quarter 199_
Consolidated Operating Income $
------------
Depreciation and amortization $
------------
Off-Balance Sheet Lease Payments $
------------
Net income arising from sale, exchange or
distribution of capital assets
(not to exceed 5% of Consolidated
Operating Income for such period) $
------------
Total for Quarter $
------------
Consolidated Cash Flow $
------------
(sum of (a) plus (b) plus (c) plus (d))
</TABLE>
<PAGE> 105
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated ________________ __, ____
Reference is made to the Credit Agreement dated as of October
17, 1997 (together with all amendments and modifications thereto, the "Credit
Agreement") among Carmike Cinemas, Inc., a Delaware corporation (the
"Borrower"), the Banks (as defined in the Credit Agreement) and Wachovia Bank,
N.A., as Agent (the "Agent"). Terms defined in the Credit Agreement are used
herein with the same meaning.
_____________________________________________________ (the
"Assignor") and _____________________________________________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
without recourse to, or representation or warranty of any kind except as set
forth herein by, the Assignor, and the Assignee hereby purchases and assumes
from the Assignor, a ______% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a ______% interest (which on the
Effective Date hereof is $_______________) in the Assignor's Commitment and a
______% interest (which on the Effective Date hereof is $_______________) in the
Loans owing to the Assignor and a ______% interest in the Note held by the
Assignor (which on the Effective Date hereof is $__________________)).
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any other
instrument or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder, that such interest is free and clear of
any adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$_________________ and the aggregate outstanding principal amount of Loans owing
to it (without giving effect to assignments thereof which have not yet become
effective) is $_________________; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iii) attaches the
Note[s] referred to in paragraph 1 above and requests that the Agent exchange
such Note[s] as follows: [a new Note dated _______________, ____ in the
principal amount of _________________ payable to the order of the Assignee] [new
Notes as follows: a Note dated ____________, ____ in the principal amount of
$_______________ payable to the order of the Assignor and a Note dated
______________, ____ in the principal amount of $______________ payable to the
order of the Assignee].
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 4.04(a) thereof (or any more recent
financial statements of the Borrower delivered pursuant to Section 5.01(a) or
(b) thereof) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit
1
<PAGE> 106
decisions in taking or not taking action under the Credit Agreement; (iii)
confirms that it is a bank or financial institution; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; (vi) specifies as its Lending Office (and address for
notices) the office set forth beneath its name on the signature pages hereof,
(vii) represents and warrants that the execution, delivery and performance of
this Assignment and Acceptance are within its corporate powers and have been
duly authorized by all necessary corporate action[, and (viii) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement and the Notes or such other documents as are
necessary to indicate that all such payments are subject to such taxes at a rate
reduced by an applicable tax treaty].*
4. The Effective Date for this Assignment and Acceptance shall
be _______________ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for execution and
acceptance by the Agent [and to the Borrower for execution by the Borrower].**
5. Upon such execution and acceptance by the Agent [and
execution by the Borrower]**, from and after the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent rights and
obligations have been transferred to it by this Assignment and Acceptance, have
the rights and obligations of a Bank thereunder and (ii) the Assignor shall, to
the extent its rights and obligations have been transferred to the Assignee by
this Assignment and Acceptance, relinquish its rights (other than under Section
8.03 and Section 9.03 of the Credit Agreement) and be released from its
obligations under the Credit Agreement.
3. Upon such execution and acceptance by the Agent [and execution by the
Borrower]**, from and after the Effective Date, the Agent shall make all
payments in respect of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Agent directly between themselves.
4. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
--------------------------
Title:
* If the Assignee is organized under the laws of a jurisdiction outside
the United States.
** If the Assignee is not a Bank or an Affiliate of a Bank prior to the
Effective Date and if an Event of Default is not in existence on the
Effective Date.
2
<PAGE> 107
[NAME OF ASSIGNEE]
By:
--------------------------
Title:
Lending Office:
[Address]
WACHOVIA BANK, N.A., as Agent
By:
--------------------------
Title:
CARMIKE CINEMAS, INC.**
By:
--------------------------
Title:
3
<PAGE> 108
EXHIBIT H
NOTICE OF BORROWING
__________, 19__
Wachovia Bank, N.A., as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Manager, Syndications Group
Re: Credit Agreement (as amended and modified from time
to time, the "Credit Agreement") dated as of October
17, 1997 by and among Carmike Cinemas, Inc., the
Banks from time to time parties thereto, and Wachovia
Bank, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section
2.02 of the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] in the aggregate principal amount of $___________ to be made on
________, 19__, and for interest to accrue thereon at the rate established by
the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans]. The duration of
the Interest Period with respect thereto shall be [1 month] [2 months] [3
months] [6 months] [30 days].
The Borrower has caused this Notice of Borrowing to be executed
and delivered by its duly authorized officer this ___ day of ____, 199_.
Carmike Cinemas, Inc.
By:
----------------------
Title:
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
($000's omitted, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
------- ------- ------- --------
(000's omitted except for per share data)
<S> <C> <C> <C> <C>
Average shares outstanding 11,339 11,180 11,257 11,173
Net effect of dilutive stock options
based on the treasury stock method
using average market price 115 107 118 -0-
------- ------- ------- --------
TOTALS 11,454 11,287 11,375 11,173
======= ======= ======= ========
NET INCOME (LOSS) $ 8,228 $ 9,565 $18,134 $(11,450)
======= ======= ======= ========
NET INCOME (LOSS) PER SHARE $ .72 $ .85 $ 1.59 $ (1.02)
======= ======= ======= ========
</TABLE>
Note: Fully diluted calculation is not presented because dilution is less
than 3%.
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q OF
CARMIKE CINEMAS, INC FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 613
<SECURITIES> 3,045
<RECEIVABLES> 9,605
<ALLOWANCES> 0
<INVENTORY> 3,602
<CURRENT-ASSETS> 24,779
<PP&E> 621,729
<DEPRECIATION> 141,198
<TOTAL-ASSETS> 592,735
<CURRENT-LIABILITIES> 60,416
<BONDS> 0
0
0
<COMMON> 341
<OTHER-SE> 200,479
<TOTAL-LIABILITY-AND-EQUITY> 592,735
<SALES> 105,794
<TOTAL-REVENUES> 347,267
<CGS> 13,763
<TOTAL-COSTS> 258,568
<OTHER-EXPENSES> 28,896
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,791
<INCOME-PRETAX> 29,249
<INCOME-TAX> 11,115
<INCOME-CONTINUING> 18,134
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,134
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.59
</TABLE>
