FIRST AMENDMENT AGREEMENT
THIS FIRST AMENDMENT AGREEMENT ("First Amendment") is entered into as
of March 31, 1998, and is among HOLLYWOOD ENTERTAINMENT CORPORATION an Oregon
corporation dba "Hollywood Video" (the "Borrower"), SOCIETE GENERALE, as Agent,
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION, as Administrative Agent,
and XXXXXXX SACHS CREDIT PARTNERS L.P., as Documentation Agent, the Co-Agents
named in the Credit Agreement referred to below, and each of the Lenders, as
defined therein, currently party to the Credit Agreement.
RECITALS:
A. The Borrower, Societe Generale, as Agent, Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, as Administrative Agent, and Xxxxxxx Sachs Credit
Partners L.P., as Documentation Agent, the Co-Agents named therein and the
Lenders are parties to that certain Revolving Credit Agreement dated as of
September 5, 1997, providing initially for a revolving credit facility in the
maximum principal amount of $300,000,000 (as from time to time amended,
supplemented or restated, the "Credit Agreement"). Capitalized terms used herein
without definition have the meanings ascribed to them in the Credit Agreement.
B. The parties desire to amend the Credit Agreement to modify certain of
the terms and conditions of the Loan Documents.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
1.1 Amendments to Definitions. The definition of each of the following
terms is hereby amended to read in its entirety as set forth below:
"EBITDA" means, for any Person for any period, such Person's net
income (or net loss), excluding any extraordinary gains or losses and taxes
associated therewith, plus the sum of (a) interest expense, (b) income tax
expense, (c) depreciation expense, (d) amortization expense, and (e) all
other noncash items deducted for purposes of determining net income (other
than items that will require cash payments and for which an accrual or
reserve is, or is required under GAAP, to be made), in each case determined
on a consolidated basis in accordance with GAAP for such Person for such
period; provided, however, that in determining net income (or net loss) for
Borrower (x) for any period that includes the three months ended March 31,
1997, there shall be excluded the nonrecurring $18.9 million pre-tax
expense related to the settlement in such period of the securities class
action lawsuit Xxxxxx v. Hollywood Entertainment Corporation et al.; and
(y) for any period that includes the three months ended
March 31, 1998, there shall be excluded the nonrecurring $4.6 million
pre-tax expense related to Borrower's proposed tender offer for its own
shares.
2. Amendments to Article II.
2.1 Additional Provision Regarding Interest. There is hereby added to
Section 2.6.1 of the Credit Agreement a new Section 2.6.1(e), reading in its
entirety as follows:
(e) Notwithstanding anything herein or in any other Loan
Document to the contrary, under no circumstances whatsoever shall
interest charged in respect of the Loans for the benefit of any
Lender, however such interest may be characterized or computed, exceed
the highest rate permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable to the
Loans of such Lender. If such a court determines that any Lender has
received interest hereunder in excess of the highest rate applicable
to its Loans, such Lender shall, at the Lender's election, either (i)
promptly refund such excess interest to the Borrower or (ii) credit
such excess to the principal balance of such Lender's Loans. This
provision shall control over every other provision of all agreements
between the Borrower and any Lender.
2.2 Amendment of Section 2.9. Section 2.9 of the Credit Agreement is
hereby amended to read in its entirety as follows:
2.9 Notes. The Loans made by each Lender shall, if requested by such
Lender, be evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A hereto, with appropriate insertions, dated as of the
date hereof and payable to the order of such Lender, in the face amount of
such Lender's Commitment (all promissory notes so requested and issued, the
"Notes"). Each Lender is hereby authorized to record the date and the
amount of each Loan it makes, and the date and amount of each payment of
principal and interest thereon, (i) on a schedule annexed to its Note, if
any, or maintained in connection therewith, or (ii) otherwise in such
Lender's records. Any such recordation by any Lender shall constitute prima
facie evidence of the accuracy of the information so recorded; provided,
however, that neither the failure to make any such recordation, nor any
error in any such recordation, shall affect the Obligations. The election
by any Lender not to request the execution and delivery of a Note, or its
surrender of a Note for cancellation without requesting the issuance of a
replacement Note, shall in no way impair or otherwise adversely affect the
Borrower's Obligations to such Lender in respect of the Loans, which
Obligations shall be evidenced (or continued to be evidenced)
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by the Loan Documents. References in the Loan Documents to amounts payable
under any Lender's Note shall mean, with respect to a Lender to whom no
Note is then outstanding, amounts payable to such Lender under the Loan
Documents. In connection with any permitted assignment of an interest in
the Loans by a Lender to whom no Note is then issued, then, notwithstanding
the provisions of Section 9.5.5(b) requiring the surrender by the assigning
Lender of its Note, the assignee shall be entitled, upon request, to the
issuance to it of a Note reflecting the amount of its Commitment.
3. Effectiveness. The amendments to the terms of the Credit Agreement
provided for herein shall become effective, as of March 31, 1998, immediately
upon the execution and delivery by the Borrower, the Agent and Majority Lenders
of counterparts hereof; and each reference herein to the effect that any
provision of the Credit Agreement is "hereby amended" shall mean that such
provision is so amended, effective upon such execution and delivery.
4. Representations and Warranties. The Borrower represents and warrants to
Agent and the Lenders as follows, which representations and warranties shall
survive the execution of this First Amendment: except as set forth in the
Borrower Disclosure Letter (which indicates which sections of this First
Amendment or the Credit Agreement are qualified by the disclosures set forth
therein, provided that inadvertent failure to indicate all sections of this
First Amendment or the Credit Agreement that a particular disclosure is intended
to qualify shall not constitute a breach hereunder):
4.1 Binding Obligations, Etc. This First Amendment has been duly
executed and delivered by the Borrower and constitutes (and the Credit
Agreement, as amended hereby constitutes), and the other Loan Documents when
duly executed and delivered will constitute, the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms.
4.2 Other Representations and Warranties. Each of the representations
and warranties of Borrower set forth in Sections 4.1 through 4.17 of the Credit
Agreement is true and correct as if set forth herein in full and made on and as
of the date hereof.
4.3 Absence of Defaults. As of the date hereof, no Event of Default or
Default has occurred and is continuing.
5. Miscellaneous.
5.1 Execution in Counterparts. This First Amendment may be executed in
any number of counterparts, all of which taken together shall constitute a
single agreement, and shall not become effective until the parties described in
Section 3 hereof have executed and delivered this First Amendment.
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5.2 Limitation; Certain Acknowledgments.
5.2.1 Except as expressly provided herein, nothing in this First
Amendment shall alter or affect any provision, condition or covenant contained
in the Credit Agreement or any other Loan Document, or limit or impair any
rights, powers or remedies of the Agent or any Lender thereunder, it being the
intent of the parties hereto that the provisions of the Loan Documents shall
continue in full force and effect except as expressly modified hereby or
pursuant to another Loan Document executed and delivered in connection with the
transactions contemplated hereby.
5.2.2 The Borrower acknowledges and agrees that the Obligations,
as amended pursuant hereto, are intended to, and shall, continue to constitute
"Designated Senior Indebtedness" for all purposes of the High Yield Notes and
the Indenture. The Borrower shall designate the Agent as the "Representative" of
the Lenders for purposes of the Indenture in accordance with the procedures set
forth therein, and shall take such action as may be required from time to time
under the Indenture to keep each such designation in effect.
5.2.3 The Borrower's Obligations with respect to Loans made by
any Lender who surrenders its Note for cancellation without requesting the
issuance of a replacement Note shall in no manner be impaired or otherwise
adversely affected by such surrender and cancellation, it being the intent of
the parties that such surrender shall not effect a release or other discharge of
any of such Obligations.
5.3 Entire Agreement. This First Amendment contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior written or oral communications between the parties with
respect thereto.
5.4 Governing Law. This First Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without reference to principles of conflicts of law.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their respective officers or agents thereunto duly authorized as
of the date first written above.
BORROWER:
HOLLYWOOD ENTERTAINMENT CORPORATION
By: XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: Senior Vice President
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AGENT:
SOCIETE GENERALE
By: J. XXXXX XXXXX
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Name: J. Xxxxxx Xxxxx
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Title: Regional Manager
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ADMINISTRATIVE AGENT: XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES
CORPORATION
By: XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
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Title: Managing Director
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DOCUMENTATION AGENT: XXXXXXX SACHS CREDIT PARTNERS L.P.
By: XXXXXXX X. XxXXXXX
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Name: Xxxxxxx X. XxXxxxx
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Title:
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LENDERS AND CO-AGENTS: SOCIETE GENERALE
By: J. XXXXXX XXXXX
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Name: J. Xxxxxx Xxxxx
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Title: Regional Manager
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DLJ CAPITAL FUNDING, INC.
By: XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
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Title: Managing Director
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XXXXXXX XXXXX CREDIT PARTNERS L.P.
By: XXXXXXX X. XxXXXXX
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Name: Xxxxxxx X. XxXxxxx
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Title:
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CREDIT LYONNAIS LOS ANGELES BRANCH as a
Co-Agent and a lender
By: XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
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Title: Vice President and Manager
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DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH, as a Co-Agent and a
Lender
By: XXXXXX XXXX
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Name: Xxxxxx Xxxx
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Title: Director
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By: XXXX X. XXXXXXXX
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Name: Xxxx X. Xxxxxxxx
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Title: Assistant Vice President
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KEYBANK NATIONAL ASSOCIATION,
as a Co-Agent and a Lender
By: XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
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Title: Commercial Banking Officer
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U.S. BANK NATIONAL ASSOCIATION
By: XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
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Title: Vice President
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BARCLAYS BANK PLC, as a Co-Agent and a
Lender
By:
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Name:
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Title:
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THE SUMITOMO BANK, LIMITED
By: X. X. XXXXXXXX
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Name: X. X. Xxxxxxxx
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Title: Vice President
New York Office
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By: XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Senior Vice President and
Regional Manager (East)
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UNION BANK OF CALIFORNIA, N.A.
By: XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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XXX XXXXXX AMERICAN PRIME RATE INCOME
TRUST
By: XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
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Title: Senior Vice President and Director
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THE BANK OF NOVA SCOTIA
By: X. XXXXX
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Name: X. Xxxxx
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Title: Officer
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By: XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
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Title: Officer
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THE FUJI BANK, LIMITED - SAN FRANCISCO
AGENCY
By:
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Name:
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Title:
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THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: X. XXXXXXX
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Name: Xx. Xxxxxxxxx Xxxxxxx
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Title: Senior Vice President
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THE SAKURA BANK, LTD., SAN FRANCISCO
AGENCY
By: YOSHI KAZUKAMURA
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Name: Yoshi Kazukamura
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Title: Vice President
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SUNTRUST BANK CENTRAL FLORIDA, N.A.
By: XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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TRANSAMERICA BUSINESS CREDIT CORPORATION
By: PERRY VANVOULES
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Name: Perry Vanvoules
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Title: Senior Vice President
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CITY NATIONAL BANK
By:
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Name:
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Title:
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BANQUE WORMS CAPITAL CORPORATION
By: X. XXXXX / C. V. VALL
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Name: X. Xxxxx / C. V. Vall
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Title: SVP / VP
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GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Name:
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Title:
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