United states securities and exchange commission



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(c)      no Alternate Base Rate Loan may be converted to a LIBOR Loan and no LIBOR Loan may be continued as a LIBOR Loan if, after such conversion or continuance, and after giving effect to any concurrent prepayment of Loans, an aggregate of more than ten (10) separate LIBOR Loans would be outstanding hereunder (for purposes of determining the number of such Loans outstanding, Loans with different Interest Periods shall be counted as different Loans even if made on the same date);

(d)      if fewer than all Loans at the time outstanding shall be continued or converted, such continuation or conversion shall be made pro rata among the Lenders in accordance with the respective Percentage of the principal amount of such Loans held by the Lenders immediately prior to such continuation or conversion;

(e)      the aggregate principal amount of Loans continued as or converted to LIBOR Loans as part of the same Borrowing shall be in a minimum aggregate principal amount of $250,000 or such greater amount that is an integral multiple of $100,000;

(f)      accrued interest on the LIBOR Loans (or portion thereof) being continued shall be paid by the Borrower at the time of continuation;

(g)      the Interest Period with respect to a new LIBOR Loan effected by a continuation or conversion shall commence on the date of such continuation or conversion;

(h)      if a LIBOR Loan is converted to another Type of Loan prior to the last day of the Interest Period with respect thereto, the amounts required by Section 2.7(b) shall be paid as provided in such Section;

(i)      each request for a continuation as or conversion to a LIBOR Loan which fails to state an applicable Interest Period shall be deemed to be a request for an Interest Period of one (1) month; and

(j)      in the event that the Borrower shall not give the Administrative Agent a notice to continue or convert any LIBOR Loan as provided above, then such Loan (unless repaid) shall automatically be converted to an Alternate Base Rate Loan at the expiration of the then current Interest Period.

The Administrative Agent shall, after it receives notice from the Borrower, promptly give the Lenders notice of any continuation or conversion.

SECTION 2.7      Voluntary and Mandatory Prepayment of Loans; Reimbursement of Lenders.


(a)      (i) Subject to the terms of Section 2.7(b) below, the Borrower shall have the right at its option at any time and from time to time to prepay without premium or penalty (except as set forth in clause (ii) below) (A) any Alternate Base Rate Loan, in whole or in part, upon at least one (1) Business Day’s prior written, telephonic (promptly confirmed in writing, including via electronic mail) or facsimile notice to the Administrative Agent given prior to 2:00 p.m. New York City time, in a minimum aggregate principal amount of $250,000 or such greater amount that is an integral multiple of $100,000 if prepaid in part, or the remaining balance of such Loan if prepaid in full, and (B) any LIBOR Loan, in whole or in part, upon at least three (3) Business Days’ prior written, telephonic (promptly confirmed in writing, including via electronic mail) or facsimile notice given prior to 2:00 p.m. New York City time, in a minimum aggregate principal amount of $250,000 or such greater amount that is an integral multiple of $100,000 if prepaid in part, or the remaining balance of such Loan if prepaid in full. Each notice of prepayment shall specify the prepayment date, each Loan to be prepaid and the principal amount thereof, shall be irrevocable and shall commit the Borrower to prepay such Loan in the amount and on the date stated therein. All prepayments under this Section 2.7(a) shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to (but excluding) the date of prepayment.

(ii)    Notwithstanding anything to the contrary herein, (A) any prepayment of the Loans effected on or prior to the first anniversary of the Closing Date with the proceeds of a Repricing Transaction described in clause (1) of the definition thereof below shall be accompanied by a fee equal to 1.00% of the principal amount of the Loans prepaid, and (B) if in connection with a Repricing Transaction described in clause (2) of the definition thereof below on or prior to such first anniversary of the Closing Date, any Lender is replaced as a result of its being a non-consenting Lender in respect of such Repricing Transaction pursuant to Section 2.14(i), such Lender shall be entitled to the 1.00% fee provided under this Section 2.7(a)(ii) as to its Loans so assigned. A “ Repricing Transaction ” means (1) any prepayment of the Loans using proceeds of Indebtedness for which the interest rate payable thereon on the date of such prepayment is lower than LIBOR on the date of such prepayment plus the Applicable Margin with respect to the Loans on the date of such prepayment, provided that the primary purpose of such prepayment is to refinance Loans at a lower interest rate or (2) any repricing of the Loans pursuant to an amendment hereto resulting in the interest rate payable thereon on the date of such amendment being lower than LIBOR on the date of such prepayment plus the Applicable Margin with respect to the Loans on the date of such prepayment.

(b)      The Borrower shall reimburse each Lender on demand for any loss, cost or expense incurred or to be incurred by any such Lender in the reemployment of the funds released (i) by any prepayment (for any reason) of any LIBOR Loan if such Loan is repaid prior to the last day of the Interest Period for such Loan, or (ii) in the event that, after the Borrower delivers a notice of Borrowing under Section 2.1(b), or a notice of continuation or conversion of a Borrowing under Section 2.6(a) in respect of LIBOR Loans, such Loan is not made, converted to or continued as a LIBOR Loan on the first day of the Interest Period specified in such notice of Borrowing for any reason other than (A) a suspension or limitation under Section 2.5(b) of the right of the Borrower to select a LIBOR Loan, (B) a breach by any such Lender of its obligation to fund such Borrowing when it is otherwise required to do so hereunder, or (C) a repayment resulting from a conversion required by a Lender pursuant to Section 2.9(a). Such loss shall be the amount as reasonably determined by such Lender as the excess, if any, of (I) the amount of interest which would have


accrued to such Lender on the amount so paid or not borrowed, continued or converted at a rate of interest equal to the interest rate applicable to such Loan pursuant to Section 2.3, for the period from the date of such payment or failure to borrow, continue or convert to the last day (x) in the case of a payment prior to the last day of the Interest Period for such Loan, of the then current Interest Period for such Loan, or (y) in the case of a failure to borrow, continue or convert, of the Interest Period for such Loan which would have commenced on the date of such failure to borrow, continue or convert, over (II) the amount realized or to be realized by such Lender in reemploying the funds not advanced or the funds received in prepayment or realized from the Loan not so continued or converted during the period referred to above at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for Dollar deposits of a comparable amount and period from other banks in the London Interbank Market. Each Lender shall deliver to the Borrower from time to time one or more certificates setting forth the amount of such loss, cost or expense as determined by such Lender, which certificates shall be conclusive absent manifest error. The Borrower shall pay such Lender the amounts shown on such certificate within ten (10) Business Days of the Borrower’s receipt of such certificate. The Administrative Agent or any affected Lender is hereby authorized (but not obligated) to debit any deposit account of any Credit Party now or hereafter maintained by such Credit Party at such entity (including, without limitation, the JPMorgan Clearing Account, any Cash Collateral Account or any Collection Account) to pay any such amounts that are not paid when due.

(c)      In the event the Borrower fails to prepay any Loan on the date specified in any prepayment notice delivered pursuant to Section 2.7(a), the Borrower shall pay to the Administrative Agent for the account of the applicable Lender any amounts required to compensate such Lender for any actual loss incurred by such Lender as a result of such failure to prepay, including, without limitation, any loss, cost or expenses incurred by reason of the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of such prepayment. Each Lender shall deliver to the Borrower and the Administrative Agent from time to time one or more certificates setting forth the calculation of the amount of such loss, cost or expense as determined by such Lender, which certificates shall be conclusive absent manifest error. The Borrower shall pay such Lender the amounts shown on such certificate within ten (10) Business Days of the Borrower’s receipt of such certificate. The Administrative Agent or any affected Lender is hereby authorized (but not obligated) to debit any deposit account of any Credit Party now or hereafter maintained by such Credit Party at such entity (including, without limitation, the JPMorgan Clearing Account, any Cash Collateral Account or any Collection Account) to pay any such amounts that are not paid when due.

(d)      The Borrower shall apply 100% of Net Available Proceeds promptly upon receipt thereof to prepay the Loans.

(e)      Not later than 60 days after the end of each fiscal quarter of the Borrower (commencing with the quarter ending March 31, 2012), the Borrower shall calculate Adjusted Excess Cash Flow for such fiscal quarter and shall prepay the Loans in an amount equal to 50% of such Adjusted Excess Cash Flow. Not later than the date on which the Borrower makes the foregoing payment (or if no such payment is required, then not later than the end of the foregoing 60-day period), the Borrower will deliver to the Administrative Agent a certificate signed by an Authorized Officer of the Borrower setting forth the amount, if any, of Adjusted Excess Cash Flow for such

fiscal quarter and the calculation thereof in reasonable detail.

(f)      On the date of the prepayment set forth in Section 2.7(e), but in no case later than 60 days after the end of each fiscal quarter of the Borrower (commencing with the quarter ending March 31, 2012), the Borrower shall calculate Breaking Dawn Cash Flow for such fiscal quarter and shall prepay the Loans in an amount equal to 75% of such Breaking Dawn Cash. Not later than the date on which the Borrower makes the foregoing payment (or if no such payment is required, then not later than the end of the foregoing 60-day period), the Borrower will deliver to the Administrative Agent a certificate signed by an Authorized Officer of the Borrower setting forth the amount, if any, of Breaking Dawn Cash Flow for such fiscal quarter and the calculation thereof in reasonable detail.

(g)      On the date of each of the prepayments set forth in Sections 2.7(e) and (f) above (commencing with the payments made in respect of the quarter ending June 30, 2012), but in no case later than 60 days after the end of each fiscal quarter of the Borrower, the Borrower shall prepay the Loans in an amount equal to 100% of the amount by which, after giving effect to the prepayments in Sections 2.7(e) and (f) above, available cash of the Credit Parties (excluding Unreleased Picture Expense Reserve Amounts and New Picture Expense Reserve Amounts) exceeds the following thresholds on the last day of such quarter (after giving effect to any amortization payment on such date) or on the date of such payment (using the date that results in a smaller excess, and the amount of such excess shall be “ Excess Available Cash ”): (i) for each quarter through and including the quarter ending June 30, 2013, $75,000,000, (ii) for each quarter thereafter through and including the quarter ending June 30, 2014, $50,000,000, and (iii) for each quarter thereafter, $35,000,000. Not later than each date on which the Borrower makes each of the foregoing payments (or if no such payment is required, then not later than the end of the foregoing 60-day period), the Borrower will deliver to the Administrative Agent a certificate signed by an Authorized Officer of the Borrower setting forth the amount, if any, of the Excess Available Cash on such date of determination and the calculation thereof in reasonable detail.

(h)      If at any time after December 31, 2014, the ratio of (i) available cash of the Credit Parties (excluding Unreleased Picture Expense Reserve Amounts and New Picture Expense Reserve Amounts) to (ii) outstanding Loans exceeds 3.0 to 1.0, the Borrower shall prepay all outstanding Obligations.

(i)      The Borrower shall apply 100% of the proceeds of any initial public offering of Equity Interests in the Borrower, any Subsidiary of the Borrower or any holding company parent of the Borrower (as applicable, the “ Offeror ”) that are payable in respect of Equity Interests issued in such offering by the Offeror (net of reasonable and customary transaction costs and excluding proceeds that such entity or holders of Equity Interests are not entitled to receive) promptly following completion thereof to prepay the Loans.

(j)      All outstanding Obligations shall be paid in full on the Maturity Date.

(k)      Notwithstanding anything to the contrary herein, if an Event of Default shall have occurred and be continuing, (i) all proceeds that the Credit Parties are entitled to receive from the distribution or other exploitation or disposition of a Picture (but subject to any third-party rights


under any Co-Financing Intercreditor Agreement, the LG Intercreditor Agreement and any other Interparty Agreement), shall be applied to satisfy the Obligations in the manner set forth in Section 8.7 and (ii) all other payments shall be applied to satisfy the Obligations in the manner set forth in Section 12.2.

(l)      Unless otherwise designated in writing by the Borrower, all prepayments of principal shall be applied to the applicable principal payment set forth in this Section 2.7, first to that amount of such applicable principal payment then maintained as Alternate Base Rate Loans by the Borrower, and then, to that amount of such applicable principal payment maintained as LIBOR Loans by the Borrower in order of the scheduled expiry of Interest Periods with respect thereto.

(m)      All prepayments shall be accompanied by accrued but unpaid interest on the principal amount being prepaid to but not including the date of prepayment.

(n)      If, on any day on which Loans are required to be prepaid (each, a “ Prepayment Date ”), the aggregate principal amount of the Loans required to be so prepaid would exceed the then outstanding aggregate principal amount of the Loans that constitute Alternate Base Rate Loans, and no Default or Event of Default is then continuing, then on such Prepayment Date the Borrower may, at its option, deposit Dollars into the Cash Collateral Account in an amount equal to such excess. If the Borrower makes such deposit, then (i) only the outstanding Alternate Base Rate Loans shall be required to be prepaid on such Prepayment Date, and (ii) on the last day of each Interest Period with respect to any LIBOR Loan ending after such Prepayment Date, the Administrative Agent is irrevocably authorized and directed to apply funds from the Cash Collateral Account, if any (and liquidate investments held in such Cash Collateral Account as necessary) to prepay LIBOR Loans for which the Interest Period is then ending until the aggregate principal amount of all Loans prepaid pursuant to clauses (i) and (ii) above equals the aggregate principal amount of Loans which would have been required to be prepaid on such Prepayment Date but for the operation of this Section 2.7(n).

(o)      Except as otherwise specifically provided in this Article 2, should any payment or prepayment of principal of or interest on the Loans or any other amount due hereunder become due and payable on a day other than a Business Day, the due date of such payment or prepayment shall be extended to the next succeeding Business Day and, in the case of a payment or prepayment of principal, interest shall be payable thereon at the rate herein specified during such extension.

(p)      On the date of payment of the Additional Amount (as defined in Section 2.2(a)(iii) of the Purchase Agreement), Borrower shall prepay the Loans in an amount equal to $20,000,000 minus the Additional Amount actually paid pursuant to Section 2.2(a)(iii) of the Purchase Agreement; provided that such prepayment must be made with the proceeds of additional cash equity contributions made to a Credit Party from a non-Credit Party after the Closing Date.

SECTION 2.8      Increased Costs .

(a)      If any Change in Law shall:

(i)      impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBOR); or

(ii)      impose on any Lender or the London Interbank Market any other condition affecting this Credit Agreement or LIBOR Loans made by such Lender;

and the result of any of the foregoing shall be to increase, from the conditions that existed on the Closing Date, the cost to such Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered; provided , however , that (x) the Borrower shall not be obligated to pay such compensation to any Lender on account of any Change in Law affecting or altering the Excluded Taxes, and (y) any amounts in respect of Indemnified Taxes and Other Taxes shall be governed exclusively by Section 2.11.

(b)      If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Credit Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)      A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company the changes as a result of which such amounts are due and the manner of computing such amounts, as specified in Section 2.10(a) or (b) above (as the case may be) shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.

(d)      Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.10 shall not constitute a waiver of such Lender’s right to demand such compensation. Notwithstanding anything to the contrary in this Section, the Borrower shall not be required to compensate a Lender pursuant to this Section for any amounts incurred more than 270 days prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided , that if the Change in Law giving rise to such claim have a retroactive effect, then such 270-day period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.

(e)      Each Lender agrees that after it becomes aware of the occurrence of an event or the existence of a condition that (i) would cause it to incur any increased cost hereunder or render it unable to perform its agreements hereunder for the reasons specifically set forth in Section 2.5


(b), this Section 2.8 or Section 2.9, or (ii) would require the Borrower to pay an increased amount under Section 2.5(b), this Section 2.8 or Section 2.11, it will use commercially reasonable efforts to notify the Borrower of such event or condition and, to the extent not inconsistent with such Lender’s internal policies, will use commercially reasonable efforts to make, fund or maintain the affected Loans of such Lender through another Lending Office of such Lender if as a result thereof the additional monies which would otherwise be required to be paid or the reduction of amounts receivable by such Lender thereunder in respect of such Loans would be materially reduced, or such inability to perform would cease to exist, or the increased costs which would otherwise be required to be paid in respect of such Loans pursuant to Section 2.5(b), this Section 2.8 or Section 2.11 would be materially reduced or taxes or other amounts otherwise payable under Section 2.5(b), this Section 2.8 or Section 2.11 would be materially reduced, and if, as determined by such Lender, in its sole discretion, the making, funding or maintaining of such Loans through such other Lending Office would not otherwise adversely affect such Loans or such Lender. Notwithstanding the foregoing, a failure on the part of any Lender to provide notice or take any other action pursuant to this Section 2.8(e) shall not affect the Borrower’s obligation to make any payments or deductions required by this Article 2. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

SECTION 2.9      Change in Legality .

(a)      Notwithstanding anything to the contrary contained elsewhere in this Credit Agreement, if any change after the Closing Date in any Applicable Law, guideline or order, or in the interpretation thereof by any Governmental Authority charged with the administration thereof, shall make it unlawful for any Lender to make or maintain any LIBOR Loan or to give effect to its obligations as contemplated hereby with respect to a LIBOR Loan, then, by written notice to the Borrower and the Administrative Agent, such Lender may (i) declare that LIBOR Loans will not thereafter be made by such Lender hereunder for as long as such condition may be continuing, and/or (ii) require that, subject to Section 2.7(b), all outstanding LIBOR Loans made by it be converted to Alternate Base Rate Loans, whereupon all of such LIBOR Loans shall automatically be converted to Alternate Base Rate Loans, as of the effective date of such notice as provided in Section 2.9(b) below. Such Lender’s Pro Rata Share of any subsequent LIBOR Borrowing shall instead be an Alternate Base Rate Loan unless such declaration is subsequently withdrawn.

(b)      A notice to the Borrower by any Lender pursuant to Section 2.9(a) above shall be effective for purposes of clause (ii) thereof, if lawful, on the last day of the current Interest Period for each outstanding LIBOR Loan; and in all other cases, on the date of receipt of such notice by the Borrower.

SECTION 2.10      Manner of Payments . Subject to Section 2.13, all payments of principal and interest by the Borrower in respect of any Loans made to it shall be remitted to the Lenders in accordance with their Pro Rata Share of the outstanding Loans and all Borrowings of any Loans by the Borrower hereunder shall be made by the Lenders in accordance with their Pro Rata Share thereof. All payments by the Borrower hereunder shall be absolute and unconditional obligations not subject to offset, counterclaim, recoupment or reduction of any kind and shall be made in Dollars in Federal or other immediately available funds at the Funding Office for credit to the JPMorgan Clearing Account (with a specific reference to “Summit Entertainment, LLC”) no




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