United states securities and exchange commission



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later than 2:00 p.m., New York City time, on the date on which such payment shall be due.

SECTION 2.11      Taxes .

(a)      Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided , however , that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.11) the Administrative Agent or the applicable Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)      In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)      The Borrower shall indemnify the Administrative Agent and each Lender, within ten (10) Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority (except for any interest, penalties, or expenses payable by the Administrative Agent or a Lender if caused by its own gross negligence or willful misconduct as determined by a final, non-appealable judgment). A certificate setting forth the nature and amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)      As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)      Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Credit Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), on or prior to the Initial Date with respect to such Foreign Lender (and from time to time thereafter at the time or times prescribed by Applicable Law or upon the request of the Borrower or the Administrative Agent), two (2) copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Foreign Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit M and an Internal Revenue Service Form W-8BEN, or any subsequent versions thereof or successors


thereto, duly executed and properly completed by such Foreign Lender.

(f)      Any Lender that is not a Foreign Lender and has not otherwise established to the reasonable satisfaction of the Borrower and the Administrative Agent that it is an exempt recipient (as defined in section 6049(b)(4) of the Code and the regulations thereunder) shall deliver to the Borrower (with a copy to the Administrative Agent) on or prior to the Initial Date with respect to such Lender (and from time to time thereafter as prescribed by Applicable Law or upon the request of the Borrower or the Administrative Agent), a duly executed and properly completed copy of Internal Revenue Service Form W-9 (or any subsequent versions thereof or successors thereto).

(g)      If the Administrative Agent or a Lender determines, in its sole discretion exercised in good faith, that it has received a refund of or any credit for any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.11, it shall pay over such refund or credit to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.11 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund or credit), net of all reasonable out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit); provided , that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund or credit to such Governmental Authority. This Section 2.11 shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

SECTION 2.12      Interest Adjustments .

(a)      If the provisions of this Credit Agreement or any Note would at any time require payment by the Borrower to a Lender of any amount of interest in excess of the maximum amount then permitted by the law applicable to any Loan, the interest payments to that Lender shall be reduced to the extent necessary so that such Lender shall not receive interest in excess of such maximum amount. If, as a result of the foregoing, a Lender receives interest payments hereunder or under a Note in an amount less than the amount otherwise provided hereunder, such deficit (hereinafter called the “ Interest Deficit ”) will, to the fullest extent permitted by Applicable Law, cumulate and will be carried forward (without interest) until the termination of this Credit Agreement. Interest otherwise payable to a Lender hereunder or under a Note for any subsequent period shall be increased by the maximum amount of the Interest Deficit that may be so added without causing such Lender to receive interest in excess of the maximum amount then permitted by the law applicable to the Loans.

(b)      The amount of any Interest Deficit relating to a particular Loan or Note shall be treated as a prepayment penalty and shall, to the fullest extent permitted by Applicable Law, be paid in full at the time of any optional prepayment by the Borrower to the Lenders of all the Loans at that time outstanding pursuant to Section 2.7(a). The amount of any Interest Deficit relating to

a particular Loan or Note at the time of the termination of the Commitments and payment in full of the Loans at that time outstanding (other than an optional prepayment thereof pursuant to Section 2.7(a)), shall be canceled and not paid.

SECTION 2.13      Defaulting Lenders . Notwithstanding any provision of this Credit Agreement to the contrary, if any Lender becomes a Defaulting Lender, the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)      The Commitment of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or modification pursuant to Section 13.10(a)); provided , that any amendment, waiver or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender or all Defaulting Lenders differently than other affected Lenders shall require the consent of such Defaulting Lender.

(b)      So long as no Event of Default shall have occurred and be continuing, any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 12.3 but excluding payments to the Defaulting Lender pursuant to Section 13.10(b)) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Administrative Agent (i)  first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second , to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its Pro Rata Share as required by this Credit Agreement, (iii) third , if so determined by the Administrative Agent and the Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender under this Credit Agreement, (iv) fourth , pro rata, to the payment of any amounts owing to the Borrower or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by the Borrower or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement, and (v) fifth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided , that if such payment is a prepayment of the principal amount of any outstanding Loans, such payment shall be applied solely to prepay the outstanding Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any outstanding Loans of, or reimbursement obligations owed to, such Defaulting Lender.

(c)      Upon the occurrence and during the continuance of an Event of Default, all amounts which would otherwise be payable to the Defaulting Lender shall, in lieu of being distributed to such Defaulting Lender, be applied to satisfy in full the Obligations owing to the Administrative Agent and the non-Defaulting Lenders in accordance with the other provisions of this Credit Agreement with the balance, if any, being applied to the Obligations owing to such Defaulting Lender.

(d)      Neither the provisions of this Section 2.13, nor the provisions of any other Section of this Credit Agreement relating to a Defaulting Lender, are intended by the parties to constitute liquidated damages. Subject to the limitations contained in Section 13.8 regarding special,

indirect, consequential and punitive damages, each of the Administrative Agent, each non-Defaulting Lender and each Credit Party hereby reserves its respective rights to proceed against such Defaulting Lender for any damages incurred as a result of it becoming a Defaulting Lender hereunder.

SECTION 2.14      Replacement of Lenders . If any Lender (i) requests compensation under Section 2.5(b), 2.8 or 2.11, or (ii) becomes a Defaulting Lender, or (iii) is replaced pursuant to Section 13.10(d), then the Borrower may, at its sole expense and effort and upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 13.3), all of its interests, rights and obligations under this Credit Agreement and the other Fundamental Documents to another Lender or a replacement lender approved by the Administrative Agent (such approval not to be unreasonably withheld), which shall assume such obligations and which accepts such assignment; provided , that (x) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees, and all other amounts then payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (y) in the case of any such assignment resulting from a claim for compensation under Section 2.8 or payments required to be made pursuant to Section 2.5(b) or 2.11, such assignment will result in a reduction in such compensation or payment on an ongoing basis. No Lender shall be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. No such replacement shall be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender or of any rights that such replaced Lender shall have against the Borrower, the Administrative Agent or any other Lender.

3.      REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

In order to induce the Administrative Agent and the Lenders to enter into this Credit Agreement and make the Loans provided for herein, as applicable, the Credit Parties, jointly and severally, make the following representations and warranties to, and agreements with, the Administrative Agent and the Lenders, all of which shall survive the execution and delivery of this Credit Agreement, the issuance of the Notes and the making of the Loans.

SECTION 3.1      Existence and Power .

(a)      Each of the Credit Parties is a limited liability company or corporation, duly formed or organized, validly existing and (other than Proscenium Pictures Ltd. as a result of its failure to file its 2010 annual report with the UK Registrar) in good standing under the laws of its jurisdiction of formation or organization, and in good standing as a foreign entity in all other jurisdictions where the failure to be so qualified or be in good standing in such other jurisdictions could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. A list of the foregoing jurisdictions as of the Closing Date is attached hereto as Schedule 3.1 .

(b)      Each Credit Party has the power and authority (i) to own its respective properties and carry on its respective business as now being conducted and as intended to be


conducted, (ii) to execute, deliver and perform, as applicable, its obligations under the Fundamental Documents and any other documents contemplated thereby to which it is or will be a party, (iii) to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in the Collateral as contemplated by Article 8, (iv) in the case of the Pledgors, to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in the Pledged Collateral as contemplated by Article 10, and (v) in the case of the Guarantors, to guaranty the Obligations as contemplated by Article 9.

SECTION 3.2      Authority and No Violation .

(a)      The execution, delivery and performance by each Credit Party of the Fundamental Documents to which it is a party, the grant by each Credit Party to the Administrative Agent for the benefit of the Secured Parties of the security interest in the Collateral and the grant by each Pledgor to the Administrative Agent for the benefit of the Secured Parties of the security interest in the Pledged Collateral, in each case, as contemplated by the Fundamental Documents and, in the case of the Borrower, the Borrowings hereunder and the execution, delivery and performance of the Notes and, in the case of each Guarantor, the guaranty of the Obligations as contemplated in Article 9, (i) have been duly authorized by all necessary company action (or similar action) on the part of each Credit Party, (ii) will not constitute a violation of any provision of Applicable Law or any order of any Governmental Authority applicable to such Credit Party or any of its properties or assets, (iii) will not violate any provision of the certificate of formation or organization, by laws, operating agreement, partnership agreement or any other organizational document of such Credit Party, (iv) will not violate any provision of, be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or create any right to terminate, any Distribution Agreement, or any indenture, agreement, bond, note or other similar instrument to which a Credit Party or by which a Credit Party or any of its properties or assets are bound, other than where any such violation, conflict, breach, default or termination described in clauses (ii) and (iv) above could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (v) will not result in the creation or imposition of any Lien of any nature whatsoever upon any of the properties or assets of such Credit Party other than pursuant to the Fundamental Documents.

(b)      Other than the restrictions listed on Schedule 3.2(b) , there are no restrictions on the transfer of any of the Pledged Securities other than as a result of this Credit Agreement or Applicable Law, including any securities laws and the regulations promulgated thereunder.

SECTION 3.3      Governmental Approval . All authorizations, approvals, consents, registrations or filings from or with any Governmental Authority required for the consummation of the execution, delivery and performance by any Credit Party of the Fundamental Documents to which it is a party in accordance with its terms, and the execution and delivery by the Borrower of the Notes, have been duly obtained or made or duly applied for, and are in full force and effect and, if any further such authorizations, consents, approvals, registrations or filings should hereafter become necessary, the Credit Parties shall obtain or make all such authorizations, approvals, registrations or filings.

SECTION 3.4      Binding Agreements . This Credit Agreement and the other

Fundamental Documents, when executed, will constitute the legal, valid and binding obligations of each Credit Party that is a party hereto or thereto, enforceable against each Credit Party in accordance with their respective terms, subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

SECTION 3.5      Financial Statements . The audited consolidated balance sheets for the fiscal year ending December 31, 2010 and unaudited consolidated balance sheets for the fiscal quarter ending September 30, 2011, in each case of the Borrower and its Consolidated Subsidiaries, together with the related statements of income, members’ equity and cash flows, and the related notes and supplemental information for the audited statements, and the most recent annual audited and quarterly unaudited consolidated balance sheet, together in each case with the related statements of income, members’ equity and cash flows, and the related notes and supplemental information for the audited statements, in each case delivered pursuant to Section 5.1, have been prepared in accordance with GAAP then in effect, except as otherwise indicated in the notes to such financial statements and subject, in the case of unaudited statements, to changes resulting from year-end and audit adjustments and the absence of footnotes.  All of such financial statements fairly present in all material respects the financial position or the results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis at the dates or for the periods indicated, subject, in the case of unaudited statements, to changes resulting from year-end and audit adjustments and the absence of footnotes, and reflect all known liabilities, contingent or otherwise, that GAAP requires, as of such dates, to be shown or reserved against.

SECTION 3.6      No Material Adverse Change . There has been no material adverse change, or any occurrence, condition or circumstance which could reasonably be expected to be a material adverse change, with respect to the business, operations, performance, assets, properties or financial condition of the Credit Parties, taken as a whole, since December 31, 2010.

SECTION 3.7      Ownership of Pledged Securities, Subsidiaries, etc.

(a)      Attached hereto as Schedule 3.7(a) is a correct and complete list as of the Closing Date of each Credit Party showing as to each (i) the jurisdiction of formation or organization (as the case may be) of such Credit Party, (ii) the authorized capitalization of such Credit Party, (iii) each Person holding ownership interests in such Credit Party and the type of such interests, and (iv) the percentage of ownership of such Credit Party represented by such ownership interests.

(b)      Except as disclosed on Schedule 3.7(b) , (i) no Credit Party owns any voting stock, Equity Interest or other beneficial interest, either directly or indirectly, in any Person other than another Credit Party, and (ii) no Credit Party is a general or limited partner in any partnership or a participant in a joint venture (other than Approved Co-Financing Venture Transactions).

(c)      Attached hereto as Schedule 3.7(c) is a correct and complete organizational chart as of the Closing Date reflecting the organizational structure of the Credit Parties and their Subsidiaries.


SECTION 3.8      Copyrights, Trademarks and Other Rights .



(a)      As of the Closing Date, Schedule 3.8(a) included: (i) the application filing dates or copyright registration numbers and name of the Credit Party that is the applicant or registrant for each U.S. copyright owned, in whole or in part, by a Credit Party in (x) Completed Pictures which have been commercially released in the U.S. (“ Released Pictures ”), (y) screenplays for Pictures which are not Released Pictures but have commenced or completed production, or which a Credit Party has otherwise elected to register (excluding with respect to screenplays, registrations issued before April 18, 2007 which in the aggregate are not material) (“ Produced Screenplays ”) and (z) items of Music Product for which a Credit Party has elected to obtain a registration, and (ii) the recordation filing dates or recordation numbers and dates, for each acquisition of a Completed Picture for which a Credit Party obtained the U.S. distribution rights (an “ Acquired Picture ”) other than with respect to non-theatrical direct to video Pictures for which a Credit Party obtained less than all of the United States distribution rights and did not obtain the copyright in and to such Picture, or which a Credit Party has otherwise elected to record (it being understood that with respect to any such Acquired Pictures acquired prior to April 18, 2007, Schedule 3.8(a) will only list the titles thereof). As of the date hereof, each Credit Party that owns a copyright, in whole or in part, to a Completed Picture or Produced Screenplay, has registered such copyright, or has filed an application for registration of such copyright, with the U.S. Copyright Office. As of the date hereof, each Credit Party that obtained the U.S. distribution rights to a Completed Picture has recorded an instrument of transfer, or has filed an instrument of transfer for recordation, with the U.S. Copyright Office in respect of its rights to such Acquired Picture (with the exception of Acquired Pictures acquired prior to April 18, 2007 and non-theatrical direct to video Pictures for which a Credit Party obtained less than all of the United States distribution rights and did not obtain the copyright in and to such Picture). To the best of each Credit Party’s knowledge, (A) all such Pictures and all component parts thereof do not and will not violate or infringe upon any copyright, right of privacy, trademark, patent, trade name, performing right or any literary, dramatic, musical, artistic, personal, private, civil, contract, property or copyright right or any other right of any Person or contain any libelous or slanderous material, and (B) from and after the commencement of principal photography for any Picture, or if acquired subsequent to the commencement of principal photography, then at the time of such acquisition, each Credit Party owns or is licensed sufficient rights under copyright to such Picture to perform its obligations under (and not be in breach of) the Distribution Agreements applicable to such Picture in effect at such time. Except as disclosed on Schedule 3.12 , there is no claim, suit, action or proceeding pending or, to the best of each Credit Party’s knowledge, threatened against any Credit Party that involves a claim of infringement of any copyright with respect to any Picture or item of Music Product listed on Schedule 3.8(a) , and no Credit Party has any knowledge of any existing infringement or any other violation by any other Person of any copyright held by any Credit Party with respect to any Picture or item of Music Product listed on Schedule 3.8(a) which, in each case, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each copyright set forth on Schedule 3.8(a) that is registered or has been duly submitted for registration to the U.S. Copyright Office in the name of a Credit Party and each Completed Picture for which a Credit Party obtained the U.S. distribution rights after April 18, 2007, in each case as of the Closing Date, has been included on Schedule A to the Copyright Security Agreement that was delivered to the Administrative Agent on or prior to the Closing Date pursuant to Section 4.1(f).



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