HOLLYWOOD ENTERTAINMENT CORPORATION,
HOLLYWOOD MANAGEMENT COMPANY
and
BNY WESTERN TRUST COMPANY,
as Trustee
9.625% Senior Subordinated Notes due 2011
____________
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 18, 2002
to
Indenture Dated as of January 25, 2002
____________
TABLE OF CONTENTS
ARTICLE I
Application of Supplemental Indenture
and Creation of 9.625% Senior Subordinated Notes due 2011
Section 1.01 Application of This Supplemental Indenture.
Section 1.02 Effect of Supplemental Indenture.
Section 1.03 Authentication; Designation and Amount of Notes.
Section 1.04 Form and Dating.
Section 1.05 Registrar and Paying Agent.
Section 1.06 Paying Agent To Hold Money in Trust.
Section 1.07 Defaulted Interest.
Section 1.08 Outstanding Notes.
Section 1.09 Treasury Notes.
ARTICLE II
Definitions and Incorporation by Reference
Section 2.01 Definitions.
Section 2.02 Other Definitions.
Section 2.03 Incorporation by Reference of Trust Indenture
Act.
ARTICLE III
Transfer and Exchange
Section 3.01 Transfer and Exchange of Global Notes.
Section 3.02 Global Notes.
Section 3.03 Transfer and Exchange of Beneficial Interests in
the Global Notes.
Section 3.04 Transfer or Exchange of Beneficial Interests for
Definitive Notes.
Section 3.05 Transfer and Exchange of Definitive Notes for
Beneficial Interests.
Section 3.06 Transfer and Exchange of Definitive Notes for
Definitive Notes.
Section 3.07 Exchange Offer.
Section 3.08 Legends.
Section 3.09 Cancellation and/or Adjustment of Global Notes.
Section 3.10 General Provisions Relating to Transfers and
Exchanges.
ARTICLE IV
Redemption
Section 4.01 Optional Redemption.
Section 4.02 Offer to Purchase by Application of Excess
Proceeds Offer Amount.
ARTICLE V
Covenants
Section 5.01 Limitation on Incurrence of Additional
Indebtedness.
Section 5.02 Limitation on Restricted Payments.
Section 5.03 Limitation on Asset Sales.
Section 5.04 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries.
Section 5.05 Limitation on Preferred Stock of Restricted
Subsidiaries.
Section 5.06 Limitation on Liens.
Section 5.07 Prohibition on Incurrence of Senior Subordinated
Debt.
Section 5.08 Offer to Repurchase upon Change of Control.
Section 5.09 Limitations on Transactions with Affiliates.
Section 5.10 Limitation of Guarantees by Restricted
Subsidiaries.
Section 5.11 Additional Subsidiary Guarantees.
Section 5.12 Conduct of Business.
Section 5.13 Reports to Holders.
Section 5.14 Stay, Extension and Usury Laws.
ARTICLE VI
Successor Company
Section 6.01 Merger, Consolidation and Sale of Assets.
Section 6.02 Successor Corporation Substituted.
ARTICLE VII
Defaults and Remedies
Section 7.01 Events and Remedies.
Section 7.02 Acceleration.
Section 7.03 Waiver of Past Defaults.
Section 7.04 Notice of Defaults.
ARTICLE VIII
Legal Defeasance and Covenant Defeasance
Section 8.01 Option To Effect Legal Defeasance or Covenant
Defeasance.
Section 8.02 Legal Defeasance and Discharge.
Section 8.03 Covenant Defeasance.
Section 8.04 Conditions to Legal or Covenant Defeasance.
Section 8.05 Deposited Money and Government Securities To Be
Held in Trust; Other Miscellaneous Provisions.
Section 8.06 Satisfaction and Discharge.
Section 8.07 Reinstatement.
Section 8.08 Survival.
ARTICLE IX
Amendment, Supplement and Waiver
Section 9.01 Without Consent of Holders of Notes.
Section 9.02 With Consent of Holders of Notes.
ARTICLE X
Subordination
Section 10.01 Securities Subordinated to Senior Debt.
Section 10.02 Suspension of Payment When Senior Debt Is in
Default.
Section 10.03 Obligations Subordinated to Prior Payment of All
Senior Debt on Dissolution, Liquidation or
Reorganization of Company.
Section 10.04 Payments May Be Paid Prior to Dissolution.
Section 10.05 Holders To Be Subrogated to Rights of Holders of
Senior Debt.
Section 10.06 Obligations of the Company Unconditional.
Section 10.07 Reliance on Judicial Order or Certificate of
Liquidating Agent.
Section 10.08 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Debt.
Section 10.09 Holders Authorize Trustee To Effectuate
Subordination of Obligations.
Section 10.10 This Article X Not To Prevent Events of Default.
Section 10.11 Amendments or Modifications to Article X.
Section 10.12 Acceleration of Notes.
Section 10.13 Notice to Trustee; Rights of Trustee and Paying
Agent.
ARTICLE XI
Guarantee
Section 11.01 Unconditional Guarantee.
Section 11.02 Subordination of Guarantee.
Section 11.03 Severability.
Section 11.04 Release of a Guarantor.
Section 11.05 Limitation of Guarantor's Liability.
Section 11.06 Guarantors May Consolidate, etc., on Certain
Terms.
Section 11.07 Contribution.
Section 11.08 Waiver of Subrogation.
Section 11.09 Evidence of Guarantee.
Section 11.10 Waiver of Stay, Extension or Usury Laws.
ARTICLE XII
Subordination of Guarantee Obligations
Section 12.01 Guarantee Obligations Subordinated to Guarantor
Senior Debt.
Section 12.02 Suspension of Guarantee Obligations When
Guarantor Senior Debt Is in Default
Section 12.03 Guarantee Obligations Subordinated to Prior
Payment of All Guarantor Senior Debt on
Dissolution, Liquidation or Reorganization of
Such Guarantor.
Section 12.04 Payments May Be Paid Prior to Dissolution.
Section 12.05 Holders To Be Subrogated to Rights of Holders of
Guarantor Senior Debt.
Section 12.06 Guarantee Obligations of the Guarantors
Unconditional.
Section 12.07 Reliance on Judicial Order or Certificate of
Liquidating.
Section 12.08 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of
Guarantor Senior Debt.
Section 12.09 Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations.
Section 12.10 This Article XII Not To Prevent Events of
Default.
Section 12.11 Amendments or Modifications to Article XII.
Section 12.12 Acceleration of Notes.
Section 12.13 Notice to Trustee; Rights of Trustee and Paying
Agent.
ARTICLE XIII
Miscellaneous
Section 13.01 Trust Indenture Act Controls.
Section 13.02 Notices.
Section 13.03 Rules by Trustee, Paying Agent and Security
Registrar.
Section 13.04 Governing Law.
Section 13.05 No Personal Liability of Directors, etc.
Section 13.06 Successors.
Section 13.07 Multiple Originals.
Section 13.08 Table of Contents; Headings.
Section 13.09 Not Responsible for Recitals or Issuance of
Notes.
Section 13.10 Adoption, Ratification and Confirmation.
EXHIBIT A Form of Note
EXHIBIT B Form of Senior Subordinated Guarantee
EXHIBIT C Form of Certificate of Transfer
EXHIBIT D Form of Certificate of Exchange
EXHIBIT E Form of Certificate of Acquiring Institutional Accredited
Investor
This FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Inden-
ture") dated as of December 18, 2002 to the Indenture between HOLLYWOOD EN-
TERTAINMENT CORPORATION, an Oregon corporation (the "Company"), HOLLYWOOD
MANAGEMENT COMPANY (as defined herein and, together with the Company, the
"Issuers") and BNY WESTERN TRUST COMPANY, a California corporation, as
Trustee, dated as of January 25, 2002 (the "Base Indenture", as supple-
mented by this Supplemental Indenture, the "Indenture").
RECITALS
WHEREAS, the Company, Hollywood Management Company and the
Trustee have heretofore executed and delivered the Base Indenture to pro-
vide for the issuance of the Company's debt securities in one or more se-
xxxx;
WHEREAS, Sections 2.01, 2.02 and 10.01 of the Base Indenture
provide, among other things, that the Company, Hollywood Management Company
and the Trustee may enter into indentures supplemental to the Base Inden-
ture to provide for specific terms applicable to any series of Securities
(as defined in the Base Indenture) and to add to or modify the covenants of
the Company or other provisions of the Base Indenture for the benefit of
the Holders of all or any series of Securities;
WHEREAS, the Company has duly authorized the execution and de-
livery of this Supplemental Indenture to provide for the issuance of:
(i) on December 18, 2002 (the "Issue Date"), $225,000,000
aggregate principal amount of its 9.625% Senior Subordinated Notes
due 2011 (the "Initial Notes");
(ii) if and when issued, additional 9.625% Senior Subordinated
Notes due 2011 which may be offered subsequent to the Issue Date in
accordance with the Indenture (the "Additional Notes"), which may be
in the form of Restricted Additional Notes or Unrestricted Additional
Notes;
(iii) if and when issued pursuant to a registered exchange
off`er for Restricted Additional Notes as provided for in the
applicable Registration Rights Agreement, if any, its additional
9.625% Senior Subordinated Notes due 2011 (the "Exchange Notes"); and
(iv) if and when issued pursuant to a private exchange for
Restricted Additional Notes as provided for in the applicable
Registration Rights Agreement, if any, its additional 9.625% Senior
Subordinated Notes due 2011 (the "Private Exchange Notes," and
together with the Initial Notes, any Additional Notes and any
Exchange Notes, the "Notes"),
and the Company and the Trustee have agreed that the Company shall issue
and deliver, and the Trustee shall authenticate, the Notes pursuant to the
terms of this Supplemental Indenture and substantially in the form set
forth as Exhibit A hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by the Base Indenture and this Supplemental Indenture;
WHEREAS, Hollywood Management Company has duly authorized the
execution and delivery of this Supplemental Indenture to provide for the
Guarantee of the Notes by Hollywood Management Company substantially in the
form of Exhibit B hereto, with such appropriate insertions, omissions, sub-
stitutions and other variations as are required or permitted by the Base
Indenture and this Supplemental Indenture; and
WHEREAS, all action on the part of the Issuers necessary to
make this Supplemental Indenture a valid agreement of the Issuers and to
authorize the issuance of the Notes (and the Guarantee endorsed thereon)
under the Indenture has been duly taken;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the sufficiency and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Application of Supplemental Indenture
and Creation of 9.625% Senior Subordinated Notes due 2011
Section 1.01 Application of This Supplemental Indenture.
Notwithstanding any other provision of this Supplemental Inden-
ture, the provisions of this Supplemental Indenture, including as provided
in Section 1.02 below, are expressly and solely for the benefit of the
Notes and the Guarantees. The Notes constitute a series of Securities as
provided in Section 2.01 of the Base Indenture. Unless otherwise expressly
specified, references in this Supplemental Indenture to specific Article
numbers or Section numbers refer to Articles and Sections contained in this
Supplemental Indenture, and not the Base Indenture or any other document.
Section 1.02 Effect of Supplemental Indenture.
With respect to the Notes (and any Guarantee endorsed thereon)
only, the Base Indenture shall be supplemented pursuant to Sections 2.01,
2.02 and 10.01 thereof to establish the terms of the Notes (and any Guaran-
tee endorsed thereon) as set forth in this Supplemental Indenture, includ-
ing as follows:
(a) Definitions. The definitions set forth in Article I of
the Base Indenture shall be modified to the extent provided in Arti-
cle II of this Supplemental Indenture;
(b) Form and Terms. The form and terms of the securities
representing the Notes required to be established pursuant to Sec-
tions 2.01 and 2.02 of the Base Indenture shall be established in ac-
cordance with Sections 1.03 through 1.09 of this Supplemental Inden-
ture;
(c) Transfer and Exchange. The provisions of Section 2.05 of
the Base Indenture regarding transfer and exchange are deleted and
replaced in their entirety by the provisions of Article III of this
Supplemental Indenture;
(d) Redemption. The provisions of Article III of the Base
Indenture regarding redemption are supplemented by the provisions of
Article IV of this Supplemental Indenture;
(e) Covenants. The provisions of Article VI of the Base In-
denture regarding certain covenants of the Company are supplemented
and amended by the provisions of Article V of this Supplemental In-
denture;
(f) Discharge and Defeasance. The provisions of Articles V
and XII of the Base Indenture regarding discharge and defeasance are
deleted and replaced in their entirety by the provisions of Arti-
cle VIII of this Supplemental Indenture;
(g) Events of Default. The provisions of Section 8.01 of the
Base Indenture regarding Events of Default are deleted and replaced
in their entirety by the provisions of Article VII of this Supplemen-
tal Indenture;
(h) Mergers; Transfers of Assets. The provisions of Arti-
cle XI of the Base Indenture regarding mergers and transfers of as-
sets are deleted and replaced in their entirety by Article VI of this
Supplemental Indenture;
(i) Consents and Waivers. The provisions of Sections 10.01
and 10.02 of the Base Indenture regarding consents and waivers are
deleted and replaced in their entirety by the provisions of Article
IX of this Supplemental Indenture;
(j) Guarantees. The provisions of Section 10.07 of the Base
Indenture regarding Guarantees are deleted and replaced in their en-
tirety by Article XI of this Supplemental Indenture;
(k) Subordination. The provisions of Articles X and XII of
this Supplemental Indenture regarding subordination shall supplement
the Base Indenture; and
(l) Miscellaneous. The provisions of Article XIII of this
Supplemental Indenture regarding other items shall supplement the
Base Indenture.
To the extent that the provisions of this Supplemental Inden-
ture (including those referred to in clauses (a) through (l) above) con-
flict with any provision of the Base Indenture, the provisions of this Sup-
plemental Indenture shall govern and be controlling.
Section 1.03 Authentication; Designation and Amount of Notes.
One Responsible Officer shall sign the Notes for the Company by
manual or facsimile signature.
If a Responsible Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note shall nev-
ertheless be valid.
The Trustee shall authenticate the Notes upon receipt of a
written authentication order by the Company (an "Authentication Order").
A Note shall not be valid until authenticated by the manual or
facsimile signature of the Trustee. The signature shall be conclusive evi-
dence that the Note has been authenticated under the Indenture.
The Notes shall be known and designated as the "9.625% Senior
Subordinated Notes due 2011." The aggregate principal amount of the Ini-
tial Notes to be authenticated and delivered by the Trustee shall be an
amount up to $225,000,000 (except for Notes authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, Notes
pursuant to Section 2.06, 2.07, 3.05 or 10.06 of the Base Indenture). The
aggregate principal amount of Additional Notes that may be authenticated
and delivered under the Indenture on one or more occasions is unlimited;
provided the issuance of any Additional Notes is subject to compliance with
Section 5.01 of this Supplemental Indenture.
The Notes (including the Initial Notes and any Additional
Notes, Exchange Notes or Private Exchange Notes) shall together constitute
one series for purposes of the Base Indenture and this Supplemental Inden-
ture, including, without limitation, vote, waivers, consents, amendments,
redemptions and offers to purchase.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenti-
cate Notes whenever the Trustee may do so. Each reference in this Supple-
mental Indenture to authentication by the Trustee includes authentication
by such agent. An authenticating agent has the same rights as an Agent to
deal with Holders or an Affiliate of the Company.
Section 1.04 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A to this Sup-
plemental Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note shall be dated
the date of its authentication. The Notes shall be in denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall consti-
tute, and are hereby expressly made, a part of this Supplemental Indenture
and the Base Indenture, and the Company and the Trustee, by their execution
and delivery of this Supplemental Indenture, expressly agree to such terms
and provisions and to be bound hereby and thereby. However, to the extent
any provision of any Note conflicts with the express provisions of this
Supplemental Indenture, the provisions of this Supplemental Indenture shall
govern and be controlling.
(b) Global Notes. The Initial Notes and, unless specified in
a Board Resolution and Officer's Certificate as provided in clause (d) be-
low, any Additional Notes shall be issued initially in the form of a Global
Note or Global Notes. Subject to Article III of this Supplemental Inden-
ture, Notes issued in global form shall be substantially in the form of Ex-
hibit A (including the Global Note Legend thereon), and Notes issued in de-
finitive form shall be substantially in the form of Exhibit A (but without
the Global Note Legend thereon). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide
that it shall represent the aggregate principal amount of outstanding Notes
from time to time endorsed thereon and that the aggregate principal amount
of outstanding Notes represented thereby may from time to time be reduced
or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or de-
crease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direc-
tion of the Trustee, in accordance with instructions given by the Holder
thereof as required by Article III of this Supplemental Indenture.
(c) Global Note Legend. Each Global Note shall bear a legend
substantially in the following form:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANS-
FERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. THE DEPOSITORY TRUST COMPANY SHALL ACT
AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE
COMPANY AND THE REGISTRAR. UNLESS THIS CERTIFICATE IS PRE-
SENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (00 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC") TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
(d) Additional Notes. The terms of any Additional Notes
shall be substantially identical to those of the Initial Notes (except for
the first interest payment date and except that Additional Notes may be is-
sued as Restricted Additional Notes or Unrestricted Additional Notes).
With respect to any Additional Notes, the Company shall set forth in a
Board Resolution and in an Officer's Certificate, a copy of each of which
shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes
to be authenticated and delivered pursuant to this Supplemental In-
denture;
(2) the issue price and issue date of such Additional Notes
and the amount of interest payable on the first interest payment date
applicable thereto; and
(3) whether such Additional Notes shall be Restricted Addi-
tional Notes or Unrestricted Additional Notes, and in the case of Re-
stricted Additional Notes, (i) limitations on purchasers for such Re-
stricted Additional Notes (e.g., issuances to qualified institutional
buyers (as defined in Rule 144A promulgated under the Securities Act)
only) and (ii) registration obligations relating to the Restricted
Additional Notes, including relating to additional interest payable
on such Notes in the event of the failure by the Company to register
such Notes during the periods specified in the applicable Registra-
tion Rights Agreement.
Section 1.05 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars
and one or more additional paying agents. The term "Registrar" includes
any co-registrar and the term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company shall notify the Trustee in writing of the name
and address of any Agent not a party to this Supplemental Indenture. If
the Company fails to appoint or maintain another entity as Registrar or
Paying Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Regis-
trar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
Section 1.06 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent
for the payment of principal, premium, if any, or interest (including Addi-
tional Interest, if any) on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by
it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trus-
tee shall serve as Paying Agent for the Notes.
Section 1.07 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the ex-
tent lawful, interest payable on the defaulted interest to the Persons who
are Holders on a subsequent special record date (a "Special Record Date"),
in each case at the rate provided in the Notes. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Company shall
fix or cause to be fixed each such Special Record Date and payment date;
provided that no such Special Record Date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days
before the Special Record Date, the Company (or, upon the written request
of the Company, the Trustee in the name and at the expense of the Company)
shall mail or cause to be mailed to Holders a notice that states the Spe-
cial Record Date, the related payment date and the amount of such interest
to be paid.
Section 1.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenti-
cated by the Trustee except for those canceled by it, those delivered to it
for cancellation, those reductions in the interest in a Global Note ef-
fected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding. Except as set forth in Sec-
tion 1.09, a Note does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 of the Base In-
denture, it ceases to be outstanding unless the Trustee receives proof sat-
isfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 6.01 of the Base Indenture, it ceases to be outstanding and inter-
est on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease
to accrue interest.
Section 1.09 Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company, or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Com-
pany, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes that the Trustee knows
are so owned shall be so disregarded.
ARTICLE II
Definitions and Incorporation by Reference
Section 2.01 Definitions.
(a) All capitalized terms used herein and not otherwise de-
fined below shall have the meanings ascribed thereto in the Base Indenture.
(b) The following are definitions used in this Supplemental
Indenture and to the extent that a term is defined both herein and in the
Base Indenture, unless otherwise specified, the definition in this Supple-
mental Indenture shall govern with respect to the Notes.
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with or
into the Company or any of its Subsidiaries or assumed in connection with
the acquisition of assets from such Person and in each case not incurred by
such Person in connection with, or in anticipation or contemplation of,
such Person becoming a Restricted Subsidiary of the Company or such acqui-
sition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any
other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such speci-
fied Person. The term "control" means the possession, directly or indi-
rectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of DTC, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Acquisition" means (1) an Investment by the Company or
any Restricted Subsidiary of the Company in any other Person pursuant to
which such Person shall become a Restricted Subsidiary of the Company or
any Restricted Subsidiary of the Company, or shall be merged with or into
the Company or any Restricted Subsidiary of the Company, or (2) the acqui-
sition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company)
which constitute all or substantially all of the assets of such Person or
comprises any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" means any direct or indirect issuance, sale, lease
(other than operating leases entered into in the ordinary course of busi-
ness), assignment or other disposition for value by the Company or any of
its Restricted Subsidiaries (including any Sale and Leaseback Transaction)
to any Person other than the Company or a Wholly Owned Restricted Subsidi-
ary of the Company of: (1) any Capital Stock of any Restricted Subsidiary
of the Company other than directors' qualifying shares; or (2) any other
property or assets of the Company or any Restricted Subsidiary of the Com-
pany other than in the ordinary course of business; provided, however, that
the term "Asset Sale" shall not include: (a) any transaction or series of
related transactions for which the Company or its Restricted Subsidiaries
receive aggregate consideration of less than $1.0 million; (b) any sale,
lease, or other disposition of all or substantially all of the assets of
the Company as permitted by Section 6.01; (c) any Restricted Payment per-
mitted by Section 5.02 or that constitutes a Permitted Investment; and
(d) any sale or disposition that may be deemed to result from the creation
of, or exercise or remedies under, any in connection with Permitted Liens.
"Bankruptcy Law" means Title 11 of the United States Code enti-
tled "Bankruptcy," as now and hereafter in effect, or any successor statute
or any other United States federal, state or local law or the law of any
other jurisdiction relating to bankruptcy, insolvency, winding up, liquida-
tion, reorganization or relief of debtors, whether in effect on the date
hereof or hereafter.
"Board of Directors" means, as to any Person, the board of di-
rectors of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of
a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person; and
(2) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such
Person.
"Capitalized Lease Obligation" means, as to any Person, the ob-
ligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes
of this definition, the amount of Indebtedness represented by such obliga-
tions at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or uncondition-
ally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acqui-
sition thereof;
(2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either Standard
& Poor's Ratings Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Xxxxx'x");
(3) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any
bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capi-
tal and surplus of not less than $250.0 million;
(5) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1)
above entered into with any bank meeting the qualifications specified
in clause (4) above; and
(6) investments in money market funds which invest substan-
tially all their assets in securities of the types described in
clauses (1) through (5) above.
"Change of Control" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substan-
tially all of the assets of the Company to any Person or group of re-
lated Persons for purposes of Section 13(d) of the Exchange Act (a
"Group"), together with any Affiliates thereof (whether or not other-
wise in compliance with the provisions of the Indenture);
(2) the approval by the holders of Capital Stock of the Com-
pany of any plan or proposal for the liquidation or dissolution of
the Company (whether or not otherwise in compliance with the provi-
sions of the Indenture);
(3) any Person or Group (other than any entity formed for the
purpose of owning Capital Stock of the Company) shall become the
owner, directly or indirectly, beneficially or of record, of shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Com-
pany; or
(4) during any consecutive two-year period, individuals who
at the beginning of the period constituted the Board of Directors of
the Company (together with any new directors whose election by the
Board of Directors of the Company or whose nomination for election by
the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at
the beginning of the period or whose election or nomination for elec-
tion was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
"Clearstream" means Clearstream Banking, societe anonyme.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, inter-
ests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of such Person's common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
"Consolidated EBITDA" means, with respect to any Person, for
any period, the sum (without duplication) of:
(1) Consolidated Net Income; plus
(2) to the extent Consolidated Net Income has been reduced
thereby:
(a) all income taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses or taxes attributable
to sales or dispositions outside the ordinary course of busi-
ness);
(b) Consolidated Interest Expense;
(c) (i) any amortization of debt discount and amortiza-
tion or write-off of deferred financing costs; (ii) the net
costs under Interest Swap Obligations; (iii) all capitalized
interest; and (iv) the interest portion of any deferred payment
obligation; and
(d) Consolidated Non-cash Charges;
less any non-cash items (other than the accrual of revenue in the ordinary
course of business) increasing Consolidated Net Income for such period, all
as determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person, the ratio of Consolidated EBITDA of such Person for the most
recently ended four full fiscal quarters for which internal financial
statements are available (the "Four Quarter Period") immediately preceding
the date of the transaction giving rise to the need to calculate the Con-
solidated Fixed Charge Coverage Ratio (the "Transaction Date") to Xxxxxxx-
dated Fixed Charges of such Person for the Four Quarter Period. For pur-
poses of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis,
without duplication, to:
(1) the incurrence or repayment, purchase, defeasance, re-
demption or other acquisition or retirement of any Indebtedness of
such Person or any of its Restricted Subsidiaries giving rise to the
need to make such calculation (including, with respect to such incur-
rence, any application of the proceeds thereof) to any such repay-
ment, purchase, defeasance, redemption or other acquisition or re-
tirement and any other incurrence or repayment, purchase, defeasance,
redemption or other acquisition or retirement of Indebtedness, other
than the incurrence or repayment of Indebtedness in the ordinary
course of business for working capital purposes pursuant to working
capital facilities, occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on
or prior to the Transaction Date, as if such incurrence and/or repay-
ment, purchase, defeasance, redemption or other acquisition or re-
tirement, as the case may be, occurred on the first day of the Four
Quarter Period; and
(2) any Asset Sale or Asset Acquisition giving rise to the
need to make such calculation and any other Asset Sale or Asset Ac-
quisition occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date (including in each case any pro forma expense
and cost reductions calculated on a basis consistent with Regula-
tion S-X under the Exchange Act), as if such Asset Sale or Asset Ac-
quisition occurred on the first day of the Four Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the provisions of clause (1)
above shall give effect to the incurrence of such guaranteed Indebtedness
as if such Person or any Restricted Subsidiary of such Person had directly
incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for
purposes of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue
to be so determined thereafter shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on such Indebted-
ness in effect on the Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebted-
ness determined on a fluctuating basis, to the extent such interest
is covered by agreements relating to Interest Swap Obligations, shall
be deemed to accrue at the rate per annum resulting after giving ef-
fect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the product of (x) the amount of all dividend payments on
any series of Preferred Stock of such Person (other than dividends
paid in Qualified Capital Stock) paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denomina-
tor of which is one minus the then current effective consolidated
federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Interest Expense" means, with respect to any Per-
son for any period, the sum of, without duplication:
(1) the aggregate of the interest expense of such Person and
its Restricted Subsidiaries for such period determined on a xxxxxxx-
dated basis in accordance with GAAP, excluding (i) (a) any amortiza-
tion of debt discount and amortization or write-off of deferred fi-
nancing costs or (b) any other cost associated with the early extin-
guishment of debt included in the calculation of interest expense in
accordance with GAAP; (ii) the net costs under Interest Swap Obliga-
tions; (iii) all capitalized interest; and (iv) the interest portion
of any deferred payment obligation; and
(2) the interest attributable to Capitalized Lease Obliga-
tions as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate net income (or loss) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; provided that there shall be excluded therefrom:
(1) after-tax gains and losses from Asset Sales (without re-
gard to the $1.0 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto;
(2) after-tax items classified as extraordinary, unusual or
nonrecurring gains and losses;
(3) any cost associated with the early extinguishment of debt
described in clause (1) (i) (b) of the definition of Consolidated In-
terest Expense;
(4) the net income (or loss) of any Person acquired in a
"pooling of interests" transaction accrued prior to the date it be-
comes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of
the referent Person;
(5) the net income (but not loss) of any Restricted Subsidi-
ary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of
that income is restricted by a contract, operation of law or other-
wise;
(6) the net income (or loss) of any other Person, other than
a Restricted Subsidiary of the referent Person, except to the extent
of cash dividends or distributions paid to the referent Person or to
a Wholly Owned Restricted Subsidiary of the referent Person by such
other Person;
(7) cumulative effect of changes in accounting principles;
(8) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontin-
ued); and
(9) in the case of a successor to the referent Person by con-
solidation or merger or as a transferee of the referent Person's as-
sets, any earnings of the successor prior to such consolidation,
merger or transfer of assets;
"Consolidated Non-cash Charges" means, with respect to any Per-
son, for any period, the aggregate depreciation, amortization (other than
the amortization of Rental Items (except for one time and incremental
charges associated with changes in accounting policies)) and other non-cash
charges and expenses of such Person and its Restricted Subsidiaries reduc-
ing Consolidated Net Income of such Person and its Restricted Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP
(excluding any such non-cash charge or expense to the extent that it repre-
sents an accrual of or a reserve for cash charges or expenses for any fu-
ture period).
"Corporate Trust Office" means the corporate trust office of
the Trustee, at which at any particular time its corporate business shall
be principally administered, which on the date hereof is initially 000
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
"Currency Agreement" means any foreign exchange contract, cur-
rency swap agreement or other similar agreement or arrangement designed to
protect the Company or any Restricted Subsidiary of the Company against
fluctuations in currency values.
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Article III in the
form of Exhibit A, except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Notes" attached
thereto.
"Depositary" means, with respect to the Global Notes, a clear-
ing agency registered under the Exchange Act that is designated to act as
Depositary for such Global Notes as contemplated by Section 1.05.
"Designated Senior Debt" means:
(1) Senior Debt outstanding under the Senior Credit Facili-
ties; and
(2) any other Senior Debt permitted under the Indenture, the
principal amount of which is $25 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Disqualified Capital Stock" means that portion of any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event (other than an event which
would constitute a Change of Control), matures or is mandatorily redeem-
able, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control) on or prior to the final maturity date
of the Notes.
"Distribution Compliance Period" means the "distribution com-
pliance period" as defined in Regulation S.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
incorporated or otherwise organized or existing under the laws of the
United States, any state thereof or any territory or possession of the
United States.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Notes" means the Notes issued pursuant to the appli-
cable Exchange Offer, if any.
"Exchange Offer" means, in the case of Restricted Additional
Notes, the offer to exchange such Notes in accordance with the terms of the
applicable Registration Rights Agreement.
"Existing Note Indenture" means the indenture, dated August 13,
1997, between the Company and BNY Western Trust Company, successor in in-
terest to U.S. Trust Company of California, N.A., as trustee, as amended
through the Issue Date relating to the Existing Notes.
"Existing Notes" means the 10.625% senior subordinated notes
due 2004 of the Company outstanding on the Issue Date.
"fair market value" means, with respect to any asset or prop-
erty, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete
the transaction. Fair market value shall be determined by the Board of Di-
rectors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States, which are in effect as
of the Issue Date.
"Global Note Legend" means the legend set forth in Section
1.04(c) which is required to be placed on all global Notes issued under the
Indenture.
"Global Notes" means, individually and collectively, each Note
in global form issued under the Indenture, substantially in the form of Ex-
hibit A, bearing the Global Note Legend and issued in accordance with Sec-
tion 1.04 and, in the case of exchanges of Notes initially issued as Re-
stricted Additional Notes, Sections 3.05(b) or 3.07.
"Government Securities" means direct obligations of, or obliga-
tions guaranteed by, the United States of America, and for the payment of
which the United States pledges its full faith and credit.
"Guarantee Obligations" shall mean, as to any Guarantor, all
Obligations of every nature of such Guarantor from time to time owing to
the Holders and the Trustee under, or with respect to, the Notes (including
its Guarantee).
"Guarantor" means: (1) Hollywood Management Company and (2)
each of the Company's Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Restricted Subsidiary agrees to be
bound by the terms of the Indenture as a Guarantor; provided that any Per-
son constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the
terms of the Indenture.
"Guarantor Senior Debt" means, in respect of any Guarantor, the
principal of, premium, if any, and interest (including any interest accru-
ing subsequent to the filing of a petition of bankruptcy at the rate pro-
vided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of a
Guarantor, whether outstanding on the Issue Date or thereafter created, in-
curred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior
in right of payment to the Guarantee of such Guarantor. Without limiting
the generality of the foregoing, "Guarantor Senior Debt" shall also include
the principal of, premium, if any, interest (including any interest accru-
ing subsequent to the filing of a petition of bankruptcy at the rate pro-
vided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of:
(1) all monetary obligations of every nature of such Guaran-
tor under, or with respect to, the Senior Credit Facilities, includ-
ing, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof);
(2) all Interest Swap Obligations (and guarantees thereof);
and
(3) all obligations (and guarantees thereof) under Currency
Agreements,
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall
not include:
(1) any Indebtedness of such Guarantor to a Subsidiary of
such Guarantor;
(2) Indebtedness of such Guarantor to, or Indebtedness guar-
anteed by such Guarantor on behalf of, any shareholder, director, of-
ficer or employee such Guarantor or any Subsidiary of such Guarantor
(including, without limitation, amounts owed for compensation) other
than a shareholder who is also a lender (or an Affiliate of a lender)
under the Senior Credit Facilities;
(3) Indebtedness of such Guarantor to trade creditors and
other amounts incurred in connection with obtaining goods, materials
or services;
(4) Indebtedness of such Guarantor represented by Disquali-
fied Capital Stock;
(5) any liability of such Guarantor for federal, state, local
or other taxes owed or owing by such Guarantor;
(6) that portion of any Indebtedness incurred by such Guaran-
tor in violation of Section 5.01 (but, as to any such obligation, no
such violation shall be deemed to exist for purposes of this clause
(6) if the holder(s) of such obligation or their representative shall
have received an officer's certificate of the Company to the effect
that the incurrence of such Indebtedness does not (or, in the case of
revolving credit indebtedness, that the incurrence of the entire com-
mitted amount thereof at the date on which the initial borrowing
thereunder is made would not) violate such provisions of the Inden-
ture);
(7) Indebtedness of such Guarantor which, when incurred and
without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to such Guarantor; and
(8) any Indebtedness which is, by its express terms, subordi-
nated in right of payment to any other Indebtedness of such Guaran-
tor.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered.
"Hollywood Management Company" means Hollywood Management Com-
pany, an Oregon corporation and a Wholly Owned Subsidiary of the Company.
"IAI Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Deposi-
tary or its nominee that will be issued in a denomination equal to the out-
standing principal amount of the Notes sold to an Institutional Accredited
Investor.
"Indebtedness" means with respect to any Person, without dupli-
cation:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, deben-
tures, notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
and all Obligations under any title retention agreement (but exclud-
ing trade accounts payable, including accounts payable arising from
the participation by such Person in any floor plan financing program,
and other accrued liabilities arising in the ordinary course of busi-
ness, or, to the extent they are on the same terms as such accounts
payable, notes in exchange therefor);
(5) all Obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transac-
tion;
(6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause
(8) below;
(7) all Obligations of any other Person of the type referred
to in clauses (1) through (6) which are secured by any lien on any
property or asset of such Person, the amount of such Obligation being
deemed to be the lesser of the fair market value of such property or
asset or the amount of the Obligation so secured;
(8) all Obligations under currency agreements and interest
swap agreements of such Person; and
(9) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liq-
uidation preference and its maximum fixed repurchase price, but ex-
cluding accrued dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capi-
tal Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to the
Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the
issuer of such Disqualified Capital Stock.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is not also a QIB.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or in-
directly, such Person may become entitled to receive from such other Person
payments calculated by applying either a floating or a fixed rate of inter-
est to a stated notional amount and such other Person may conversely become
entitled to receive from the first Person payments calculated by applying a
fixed or a floating rate of interest to the same notional amount and shall
include, without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation,
a guarantee) or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evi-
dences of Indebtedness issued by, any Person. "Investment" shall exclude
extensions of trade credit by the Company and its Restricted Subsidiaries
on commercially reasonable terms in accordance with normal trade practices
of the Company or such Restricted Subsidiary, as the case may be. If the
Company or any Restricted Subsidiary of the Company sells or otherwise dis-
poses of any Common Stock of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposi-
tion, such Restricted Subsidiary is no longer a Wholly Owned Restricted
Subsidiary, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Common Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means December 18, 2002, the date of original is-
suance of the Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York, the city in which the princi-
pal corporate trust office of the Trustee is located or at a place of pay-
ment are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by
such Holders in connection with the Exchange Offer.
"Lien" means any lien, mortgage, deed of trust, pledge, secu-
rity interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof
and any agreement to give any security interest).
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in re-
spect of deferred payment obligations when received in the form of cash or
Cash Equivalents (other than the portion of any such deferred payment con-
stituting interest) received by the Company or any of its Restricted Sub-
sidiaries from such Asset Sale net of:
(1) reasonable out-of-pocket expenses and fees relating to
such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) taxes paid or payable after taking into account any re-
duction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements;
(3) repayment of Indebtedness that is secured by the property
or assets that are the subject of such Asset Sale; and
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accor-
dance with GAAP, against any liabilities associated with such Asset
Sale and retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnifi-
cation obligations associated with such Asset Sale.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Obligations" means all obligations for principal, premium, in-
terest, penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any Indebted-
ness.
"144A Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Deposi-
tary or its nominee that will be issued in a denomination equal to the out-
standing principal amount of any Restricted Additional Notes sold in reli-
ance on Rule 144A.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear
or Clearstream, respectively (and, with respect to DTC, shall include Euro-
clear or Clearstream).
"Participating Broker-Dealer" means any broker-dealer that is
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer.
"Permitted Indebtedness" means, without duplication, each of
the following:
(1) Indebtedness under the Initial Notes in an aggregate
principal amount not to exceed $225.0 million, and any Guarantees
thereof;
(2) Indebtedness incurred pursuant to the Senior Credit Fa-
cilities in an aggregate principal amount at any time outstanding not
to exceed $250.0 million less the amount of all repayments of term
debt and permanent commitment reductions under the Senior Credit Fa-
cilities, in each case with the Net Cash Proceeds of Asset Sales ap-
plied thereto as required by Section 5.03;
(3) other Indebtedness of the Company and its Restricted Sub-
sidiaries outstanding on the Issue Date (other than Capitalized Lease
Obligations, which are subject to clause (10) below); provided that,
a notice of redemption of that portion of the Existing Notes that can
be redeemed with the net proceeds from the issuance of Notes on the
Issue Date shall be given in accordance with Article III of the Ex-
isting Note Indenture on the Issue Date;
(4) Interest Swap Obligations of the Company or any Re-
stricted Subsidiary; provided, however, that (a) such Interest Swap
Obligations arise pursuant to an arrangement entered into to protect
the Company and/or its Restricted Subsidiaries from fluctuations in
interest rates on their outstanding Indebtedness and (b) the notional
amount subject to such arrangement does not, at the time of the in-
xxxxxxxx thereof, exceed the principal amount of the Indebtedness to
which such arrangement relates;
(5) Indebtedness under Currency Agreements; provided that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company
and its Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(6) Indebtedness of a Restricted Subsidiary of the Company to
the Company or to a Wholly Owned Restricted Subsidiary of the Company
for so long as such Indebtedness is held by the Company or a Wholly
Owned Restricted Subsidiary of the Company, in each case subject to
no Lien held by a Person other than the Company or a Wholly Owned Re-
stricted Subsidiary of the Company; provided that if any such Indebt-
edness shall subsequently become Indebtedness to, or subject to a
Lien held by, any Person other than the Company or a Wholly Owned Re-
stricted Subsidiary of the Company the Indebtedness referred to in
this proviso shall thereupon be deemed to be incurred as Indebtedness
that is not permitted by this clause (6);
(7) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by
a Wholly Owned Restricted Subsidiary of the Company subject to no
Lien held by a Person other than a Restricted Subsidiary of the Com-
pany; provided that (a) such Indebtedness is unsecured and subordi-
nated, pursuant to a written agreement, to the Company's obligations
under the Indenture and the Notes and (b) if any such Indebtedness
subsequently becomes Indebtedness to, or subject to a Lien held by,
any Person other than a Wholly Owned Restricted Subsidiary of the
Company, the Indebtedness referred to in this subclause (b) shall
thereafter be deemed to be incurred as Indebtedness that is not per-
mitted by this subclause (b);
(8) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inad-
vertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, how-
ever, that such Indebtedness is extinguished within five Business
Days of incurrence;
(9) Indebtedness of the Company or any of its Restricted Sub-
sidiaries in respect of performance bonds, bankers' acceptances,
workers' compensation claims, surety or appeal bonds, payment obliga-
tions in connection with self-insurance or similar obligations, and
bank overdrafts (and letters of credit in respect thereof) in the or-
dinary course of business;
(10) Indebtedness represented by Capitalized Lease Obligations
and Purchase Money Indebtedness of the Company and its Restricted
Subsidiaries, in each case incurred in the ordinary course of busi-
ness, not to exceed $35.0 million at any one time outstanding;
(11) Refinancing Indebtedness;
(12) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or as-
sumed in connection with the disposition of any business, assets or
Capital Stock of a Restricted Subsidiary, provided that the maximum
aggregate liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Company and
its Restricted Subsidiaries in connection with such disposition;
(13) Indebtedness incurred in connection with the financing of
the Company's insurance premiums in the ordinary course of business
consistent with past practices; and
(14) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $25.0
million at any one time outstanding (which amount may, but need not,
be incurred in whole or in part under the Senior Credit Facilities).
For purposes of determining compliance with Section 5.01, (i)
in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Permitted Indebtedness described in clauses (1)
through (14) above or is entitled to be incurred pursuant to the Xxxxxxx-
dated Fixed Charge Coverage Ratio provisions of such covenant, the Company
shall be entitled, in its sole discretion, to classify (or later reclas-
sify) such item of Indebtedness or any portion thereof in any manner that
complies with this covenant and (ii) accrual of interest, accretion or am-
ortization of original issue discount, the payment of interest on any In-
debtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Capital Stock in the form of addi-
tional shares of the same class of Disqualified Capital Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified
Capital Stock.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary
of the Company in any Person that is or will become immediately after
such Investment a Wholly Owned Restricted Subsidiary of the Company
or that will merge or consolidate with or into or transfer or convey
all or substantially all of its assets to, the Company or a Wholly
Owned Restricted Subsidiary of the Company;
(2) Investments in the Company by any Restricted Subsidiary
of the Company; provided that any Indebtedness evidencing such In-
vestment is unsecured and subordinated, pursuant to a written agree-
ment, to the Company's obligations under the Notes and the Indenture;
(3) Investments in cash and Cash Equivalents;
(4) loans and advances to employees, officers and directors
of the Company and its Restricted Subsidiaries in the ordinary course
of business consistent with past practices for bona fide business
purposes not in excess of $5.0 million at any one time outstanding;
(5) Investments resulting from Currency Agreements and Inter-
est Swap Obligations entered into in the ordinary course of the Com-
pany's or its Restricted Subsidiaries' businesses and otherwise in
compliance with the Indenture;
(6) additional Investments not to exceed $20.0 million at any
one time outstanding;
(7) Investments received in compromise or settlement of
claims against any other Person arising in the ordinary course of
business, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any Person;
(8) Investments made by the Company or its Restricted Sub-
sidiaries as a result of non-cash consideration received in connec-
tion with an Asset Sale made in compliance with Section 5.03;
(9) receivables owing to the Company or any Restricted Sub-
sidiary created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concession-
ary trade terms as the Company or any such Restricted Subsidiary
deems reasonable under the circumstances;
(10) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(11) Investments in existence on the Issue Date;
(12) endorsements of negotiable instruments and documents in
the ordinary course of business; and
(13) any Investment acquired for consideration consisting ex-
clusively of common equity securities of the Company that is Quali-
fied Capital Stock.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or
claims either (a) not yet subject to penalties for non-payment or (b)
contested in good faith by appropriate proceedings and as to which
the Company or its Restricted Subsidiaries shall have set aside on
its books such reserves as may be required pursuant to GAAP;
(2) statutory or contractual Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen
and other Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent or being contested in good
faith, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment in-
surance and other types of social security, including any Lien secur-
ing letters of credit issued in the ordinary course of business con-
sistent with past practice in connection therewith, 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 of obligations
for the payment of borrowed money);
(4) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal pro-
ceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(5) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances (including for licenses, rights-of-
way, sewers, electric lines, telegraph and telephone lines) in re-
spect of real property not interfering in any material respect with
the ordinary conduct of the business of the Company or any of its Re-
stricted Subsidiaries;
(6) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect
of bankers' acceptances issued or created for the account of such
Person to facilitate the purchase, shipment or storage of such inven-
tory or other goods;
(7) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other prop-
erty relating to such letters of credit and products and proceeds
thereof;
(8) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty require-
ments of the Company or any of its Restricted Subsidiaries, including
rights of offset and set-off;
(9) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted
under the Indenture;
(10) Liens securing Capitalized Lease Obligations and Purchase
Money Indebtedness that are otherwise permitted under the Indenture;
provided, however, that (a) in the case of Purchase Money Indebted-
ness (i) the Indebtedness shall not exceed the cost of such property
or assets and shall not be secured by any property or assets of the
Company or any Restricted Subsidiary of the Company other than the
property and assets so acquired or constructed and (ii) the Lien se-
curing such Indebtedness shall be created within 180 days of such ac-
quisition or construction or, in the case of a refinancing of any
Purchase Money Indebtedness, within 180 days of such refinancing, and
(b) in the case of Capitalized Lease Obligations, such Liens do not
extend to any property or assets which are not leased property sub-
ject to such Capitalized Lease Obligation;
(11) Liens securing Indebtedness under Currency Agreements;
(12) Liens securing Acquired Indebtedness incurred in accor-
dance with Section 5.01; provided that:
(a) such Liens secured such Acquired Indebtedness at
the time of and prior to the incurrence of such Acquired In-
debtedness by the Company or a Restricted Subsidiary of the
Company and were not granted in connection with, or in antici-
pation of, the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company;
(b) such Liens do not extend to or cover any property
or assets of the Company or of any of its Restricted Subsidiar-
ies other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Ac-
quired Indebtedness of the Company or a Restricted Subsidiary
of the Company and are no more favorable to the lienholders
than those securing the Acquired Indebtedness prior to the in-
xxxxxxxx of such Acquired Indebtedness by the Company or a Re-
stricted Subsidiary of the Company;
(13) leases and subleases of real property which do not mate-
rially interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries; and
(14) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Com-
pany and its Restricted Subsidiaries in the ordinary course of busi-
ness.
"Person" means an individual, partnership, corporation, unin-
corporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Per-
son with respect to dividends or redemptions or upon liquidation.
"Private Placement Legend" means the legend set forth in Sec-
tion 3.08(a) to be placed on any Restricted Additional Notes issued under
the Indenture except where otherwise permitted by the provisions of the In-
denture.
"Public Equity Offering" means an underwritten public offering
of Qualified Capital Stock of the Company pursuant to a registration state-
ment filed with the Commission in accordance with the Securities Act.
"Purchase Money Indebtedness" means Indebtedness of the Company
and its Restricted Subsidiaries incurred in the normal course of business
for the purpose of financing all or any part of the purchase price, or the
cost of installation, construction or improvement, of property or equip-
ment.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Refinance" means, in respect of any security or Indebtedness,
to refinance, extend (including pursuant to any defeasance or discharge
mechanism), renew, refund, repay, replace, prepay, redeem, defease or re-
tire, or to issue a security or incur Indebtedness in exchange or replace-
ment for, such security or Indebtedness in whole or in part. "Refinanced"
and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means any Indebtedness incurred by
the Company or any Restricted Subsidiary of the Company to Refinance any
Indebtedness incurred otherwise than in breach of Section 5.01 (other than
the Existing Notes to be redeemed with the net proceeds from the issuance
of the Notes on the Issue Date and Indebtedness classified under any of
clause (2), (4), (5), (6), (7), (8), (9), (10), (12), (13) or (14) of the
definition of Permitted Indebtedness), in each case that does not:
(1) have an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is greater
than the sum of the aggregate outstanding principal amount (or if is-
sued with original issue discount, the aggregate accreted value) of
the Indebtedness being refinanced plus, without duplication, accrued
and unpaid interest on the Indebtedness being Refinanced and out-of-
pocket costs and expenses, including any premium and defeasance
costs); or
(2) have: (a) a Weighted Average Life to Maturity that is
less than the Weighted Average Life to Maturity of the Indebtedness
being Refinanced; or (b) a final maturity earlier than the final ma-
turity of the Indebtedness being Refinanced; provided that (x) if
such Indebtedness being Refinanced is Indebtedness of the Company
(other than the Notes), then such Refinancing Indebtedness shall be
Indebtedness solely of the Company (except that any Restricted Sub-
sidiary that shall have guaranteed or otherwise been obligated with
respect to the Indebtedness of the Company being Refinanced may simi-
larly guarantee or be obligated with respect to such Refinancing In-
debtedness) and (y) if such Indebtedness being Refinanced is subordi-
nate or junior to the Notes, then such Refinancing Indebtedness shall
be subordinate to the Notes at least to the same extent and in the
same manner as the Indebtedness being Refinanced.
"Registration Rights Agreement" means one or more registration
rights agreements to be entered into by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time, relating to rights
given by the Company to the purchasers of Restricted Additional Notes which
may be issued under the Indenture from time to time to register such notes,
or exchange such notes for Exchange Notes or Private Exchange Notes, under
the Securities Act.
"Regular Record Date" shall have the meaning specified in the
Notes.
"Regulation S" means Regulation S promulgated under the Securi-
ties Act, as such may be amended from time to time, or any similar rules or
regulation hereafter adopted by the SEC.
"Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
Note in the form of Exhibit A hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered
in the name of the Depositary or its nominee, issued in a denomination
equal to the outstanding principal amount of the Regulation S Temporary
Global Note upon expiration of the Distribution Compliance Period.
"Regulation S Temporary Global Note" means a temporary global
Note in the form of Exhibit A hereto bearing the Global Note Legend, the
Private Placement Legend and the Regulation S Temporary Global Note Legend
and deposited with or on behalf of and registered in the name of the De-
positary or its nominee, issued in a denomination equal to the outstanding
principal amount of any Restricted Additional Notes initially sold in reli-
ance on Rule 903 of Regulation S.
"Regulation S Temporary Global Note Legend" means the legend
set forth in Section 3.08(c) which is required to be placed on all Regula-
tion S Temporary Global Notes issued under the Indenture.
"Rental Items" means, with respect to any Person, videotapes,
video discs (regardless of format), video games, audiotapes and related
equipment to the extent that such items were acquired by such Person or its
Restricted Subsidiaries for sale or rental to their customers or are held
by such Person or its Restricted Subsidiaries for sale or rental to their
customers.
"Representative" means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Debt; provided
that if, and for so long as, any Designated Senior Debt lacks such a repre-
sentative, then the Representative for such Designated Senior Debt shall at
all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Debt in respect of any Designated Senior
Debt.
"Restricted Additional Notes" means Additional Notes that, upon
issuance, are not registered under the Securities Act and which shall be
initially issued as Restricted Global Notes and/or Restricted Definitive
Notes.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Pri-
vate Placement Legend.
"Restricted Subsidiary" of any Person means any Subsidiary of
such Person which at the time of determination is not an Unrestricted Sub-
sidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regu-
lation hereafter adopted by the Commission.
"Rule 144A" means Rule 144A promulgated under the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission.
"Rule 903" means Rule 903 promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regu-
lation hereafter adopted by the Commission.
"Rule 904" means Rule 904 promulgated under the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regu-
lation hereafter adopted by the Commission.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, provid-
ing for the leasing to the Company or a Restricted Subsidiary of any prop-
erty, whether owned by the Company or any Restricted Subsidiary at the Is-
sue Date or later acquired, which has been or is to be sold or transferred
by the Company or such Restricted Subsidiary to such Person or to any other
Person from whom funds have been or are to be advanced by such Person on
the security of such Property.
"Securities Act" means the U.S. Securities Act of 1933, as
amended, and (unless the context otherwise requires) includes the rules and
regulations of the Commission promulgated thereunder.
"Senior Credit Facilities" means with respect to the Company,
one or more credit facilities (including, without limitation the credit fa-
cilities provided for in the Credit Agreement dated as of March 18, 2002,
among the Company and UBS Warburg LLC, as lead arranger, UBS AG, Stamford
Branch, as Administrative Agent and the other parties thereto) or commer-
cial paper facilities, in each case with banks or other institutional lend-
ers providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receiv-
xxxxx) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to
time (including successive amendments, modifications, renewals, refundings,
replacements or refinancings) and whether by the same or any other agent,
lender or group of lenders.
"Senior Debt" means the principal of, premium, if any, and in-
terest (including any interest accruing subsequent to the filing of a peti-
tion of bankruptcy at the rate provided for in the documentation with re-
spect thereto, whether or not such interest is an allowed claim under ap-
plicable law) on any Indebtedness of the Company, whether outstanding on
the Issue Date or thereafter created, incurred or assumed, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly provides
that such Indebtedness shall not be senior in right of payment to the
Notes. Without limiting the generality of the foregoing, "Senior Debt"
shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy
at the rate provided for in the documentation with respect thereto, whether
or not such interest is an allowed claim under applicable law) on, and all
other amounts owing in respect of:
(1) all monetary obligations of every nature of the Company
under, or with respect to, the Senior Credit Facilities, including,
without limitation, obligations to pay principal and interest, xxxx-
bursement obligations under letters of credit, fees, expenses and in-
demnities (and guarantees thereof);
(2) all Interest Swap Obligations (and guarantees thereof);
and
(3) all obligations (and guarantees thereof) under Currency
Agreements;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to a Subsidiary of the
Company;
(2) Indebtedness of the Company to, or Indebtedness xxxxxx-
xxxx by the Company on behalf of, any shareholder, director, officer
or employee of the Company or any Subsidiary of the Company (includ-
ing, without limitation, amounts owed for compensation) other than a
shareholder who is also a lender (or an Affiliate of a lender) under
the Senior Credit Facilities;
(3) Indebtedness of the Company to trade creditors and other
amounts incurred in connection with obtaining goods, materials or
services;
(4) Indebtedness of the Company represented by Disqualified
Capital Stock;
(5) any liability of the Company for federal, state, local or
other taxes owed or owing by the Company;
(6) that portion of any Indebtedness incurred by the Company
in violation of Section 5.01 (but, as to any such obligation, no such
violation shall be deemed to exist for purposes of this clause (6) if
the holder(s) of such obligation or their representative shall have
received an officer's certificate of the Company to the effect that
the incurrence of such Indebtedness does not (or, in the case of re-
volving credit indebtedness, that the incurrence of the entire com-
mitted amount thereof at the date on which the initial borrowing
thereunder is made would not) violate Section 5.01);
(7) Indebtedness of the Company which, when incurred and
without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to the Company; and
(8) any Indebtedness which is, by its express terms, subordi-
nated in right of payment to any other Indebtedness of the Company.
"Shelf Registration" means the shelf registration relating to
Restricted Additional Notes to be provided for in the applicable Registra-
tion Rights Agreement.
"Significant Subsidiary", with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under
the Exchange Act.
"Stated Maturity" means, with respect to any installment of in-
terest or principal on any series of Indebtedness, the date on which such
payment of interest or principal is scheduled to be paid in the documenta-
tion governing such Indebtedness (after giving effect to any amendments,
modifications or waivers thereto), and shall not include any contingent ob-
ligations to repay, redeem or repurchase any such interest or principal
prior to the date originally scheduled for the payment thereof.
"Subsidiary", with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock
having at least a majority of the votes entitled to be cast in the
election of directors under ordinary circumstances shall at the time
be owned, directly or indirectly, by such Person; or
(2) any other Person of which at least a majority of the vot-
ing interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"Trustee" means the Person named as the "Trustee" in the xxxxx-
ble to this Supplemental Indenture until a successor Trustee shall have be-
come such pursuant to the applicable provisions of the Indenture.
"Unrestricted Additional Notes" means Additional Notes that,
upon issuance, are registered under the Securities Act.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Note" means a permanent Global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" at-
tached thereto and that is deposited with or on behalf of and registered in
the name of the Depositary, but that does not bear the Private Placement
Legend.
"Unrestricted Subsidiary" of any Person means:
(1) any Subsidiary of such Person that at the time of deter-
mination shall be or continue to be designated an Unrestricted Sub-
sidiary by the Board of Directors of such Person in the manner pro-
vided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Sub-
sidiary (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of,
or owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary of the Company; provided that:
(1) the Company certifies to the Trustee that such designa-
tion complies with Section 5.02; and
(2) each Subsidiary to be so designated and each of its Sub-
sidiaries has not at the time of designation, and does not thereaf-
ter, create, incur, issue, assume, guarantee or otherwise become di-
rectly or indirectly liable with respect to any Indebtedness pursuant
to which the lender has recourse to any of the assets of the Company
or any of its Restricted Subsidiaries.
The Board of Directors may designate any Unrestricted Subsidi-
ary to be a Restricted Subsidiary only if:
(1) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 5.01;
and
(2) immediately before and immediately after giving effect to
such designation, no Default or Event of Default shall have occurred
and be continuing.
"U.S. Person" means a "U.S. person" as defined in Rule 902(o)
under the Securities Act.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding aggregate principal amount of such Indebtedness into (b)
the sum of the total of the products obtained by multiplying (i) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payment of principal, including payment at final maturity, in re-
spect thereof, by (ii) the number of years (calculated to the nearest one-
twelfth) which will elapse between such date and the making of such pay-
ment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Wholly Owned Subsidiary of such Person which at the time of determination
is a Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of
such Person of which all the outstanding voting securities (other than, in
the case of a foreign Subsidiary, directors' qualifying shares or an imma-
terial amount of shares required to be owned by other Persons pursuant to
applicable law) are owned by such Person or any Wholly Owned Subsidiary of
such Person.
Section 2.02 Other Definitions.
Term
Defined
in Section
"Acceleration Notice"
7.02
"Additional Notes"
Preamble
"Adjusted Net Assets"
11.07
"Affiliate Transaction"
5.09
"Authentication Order"
1.03
"Base Indenture"
Preamble
"Change of Control Date"
5.08
"Change of Control Offer"
5.08
"Company"
Preamble
"Covenant Defeasance"
8.03
"DTC"
1.05
"Events of Default"
7.01
"Excess Proceeds"
5.03
"Excess Proceeds Offer"
5.03
"Excess Proceeds Offer Amount"
5.03
"Excess Proceeds Offer Trigger Date"
5.03
"Exchange Notes"
Preamble
"Four Quarter Period"
2.01
"Funding Guarantor"
11.07
"Guarantee"
11.01
"incur"
5.01
"Indenture"
Preamble
"Initial Notes"
Preamble
"Issuers"
Preamble
"Legal Defeasance"
8.02
"Xxxxx'x"
2.01
"Non-Payment Default"
10.02
"Notes"
Preamble
"Notice of Default"
7.01(c)
"Offer Payment Date"
5.08
"Offer Period"
4.02
"Paying Agent"
1.05
"Payment Blockage Notice"
10.02
"Payment Blockage Period"
10.02
"Payment Default"
10.02
"Private Exchange Notes
Preamble
"Purchase Date"
4.02
"Registrar"
1.05
"Replacement Assets"
5.03
"Restricted Payment"
5.02
"S&P"
2.01
"Special Record Date"
1.07
"Supplemental Indenture"
Preamble
"Surviving Entity"
6.01(1)(b)
"Transaction Date"
2.01
Section 2.03 Incorporation by Reference of Trust Indenture Act.
The Indenture is subject to the mandatory provisions of the
Trust Indenture Act, which are incorporated by reference in and made a part
of the Indenture. The following Trust Indenture Act terms have the follow-
ing meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Supplemental Indenture.
"indenture trustee" or "institutional trustee" means the Trus-
tee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other Trust Indenture Act terms used in the Indenture that
are defined by the Trust Indenture Act, defined by Trust Indenture Act ref-
erence to another statute or defined by Commission rule have the meanings
assigned to them by such definitions.
ARTICLE III
Transfer and Exchange
Section 3.01 Transfer and Exchange of Global Notes.
A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or to another nominee of the Depositary, the Depositary
or any such nominee to a successor Depositary or a nominee of such succes-
sor Depositary. All Global Notes will be exchanged by the Company for De-
finitive Notes if (i) the Trustee receives notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Company within 90 days
after the date of such notice from the Depositary or (ii) the Company in
its sole discretion determines that the Global Notes (in whole but not in
part) should be exchanged for Definitive Notes and delivers a written no-
xxxx to such effect to the Trustee; provided that in no event shall the
Regulation S Temporary Global Note be exchanged by the Company for Defini-
tive Notes prior to (x) the expiration of the Distribution Compliance Pe-
riod and (y) the receipt by the Registrar of any certificates required pur-
suant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occur-
rence of either of the preceding events in (i) or (ii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.06 and 2.07 of the Base Indenture. Except
as provided in this Section 3.01 and in Section 3.03(b) and Section 3.04
for the exchange or transfer of Global Notes for Definitive Notes, every
Note authenticated and delivered in exchange for, or in lieu of, a Global
Note or any portion thereof, pursuant to this Article III or Sections 2.06
or 2.07 of the Base Indenture, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged
for another Note other than as provided in this Section 3.01; however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Sections 3.02, 3.03 or 3.06.
Section 3.02 Global Notes.
(a) Temporary Global Notes. Restricted Additional Notes of-
fered and sold in reliance on Regulation S shall be issued initially in the
form of the Regulation S Temporary Global Note, which shall be deposited on
behalf of the purchasers of such Notes represented thereby with the Trus-
tee, at its New York office, as custodian for the Depositary, and regis-
tered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Clear-
stream, duly executed by the Company and authenticated by the Trustee as
provided in Section 1.03. The Distribution Compliance Period shall be ter-
minated upon the receipt by the Trustee of (i) a written certificate from
the Depositary, together with copies of certificates from Euroclear and
Clearstream certifying that they have received certification of non-United
States beneficial ownership of 100% of the aggregate principal amount of
the Regulation S Temporary Global Note (except to the extent of any benefi-
cial owners thereof who acquired an interest therein during the Distribu-
tion Compliance Period pursuant to another exemption from registration un-
der the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private
Placement Legend, all as contemplated by Section 3.08(a)), and (ii) an Of-
ficer's Certificate from the Company certifying compliance with the forego-
ing. Following the termination of the Distribution Compliance Period,
beneficial interests in the Regulation S Temporary Global Note shall be ex-
changed for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentica-
tion of Regulation S Permanent Global Notes, the Trustee shall cancel the
Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global
Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the
case may be, in connection with transfers of interest as hereinafter pro-
vided.
(b) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms
and Conditions Governing Use of Euroclear" and the "General Terms and Con-
ditions of Clearstream" and "Customer Handbook" of Cedel Bank (as adopted
by Clearstream) and any alternative or additional procedures from time to
time adopted by Euroclear or Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 3.03 Transfer and Exchange of Beneficial Interests in the
Global Notes.
The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the pro-
visions of the Indenture and the Applicable Procedures. Beneficial inter-
ests in the Restricted Global Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also
shall require compliance with either subparagraph (a) or (b) below, as ap-
plicable, as well as one or more of the other following subparagraphs, as
applicable:
(a) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial in-
terest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend; pro-
vided, however, that prior to the expiration of the Distribution Com-
pliance Period, transfers of beneficial interests in the Temporary
Regulation S Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person. Beneficial interests in any Un-
restricted Global Note may be transferred to Persons who take deliv-
ery thereof in the form of a beneficial interest in an Unrestricted
Global Note. No written orders or instructions shall be required to
be delivered to the Registrar to effect the transfers described in
this Section 3.03(a).
(b) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 3.03(a) above,
the transferor of such beneficial interest must deliver to the De-
positary either (i) (A) a written order from a Participant or an In-
direct Participant given to the Depositary in accordance with the Ap-
plicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and
(B) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be cred-
ited with such increase or (ii) (A) a written order from a Partici-
pant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial in-
terest to be transferred or exchanged and (B) instructions given by
the Depositary to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be registered to ef-
fect the transfer or exchange referred to in (A) above; provided that
in no event shall Definitive Notes be issued upon the transfer or ex-
change of beneficial interests in the Regulation S Temporary Global
Note prior to (x) the expiration of the Distribution Compliance Pe-
riod and (y) the receipt by the Registrar of any certificates re-
quired pursuant to Rule 903. Upon consummation of an Exchange Offer
by the Company in accordance with Section 3.07, the requirements of
this Section 3.03(b) shall be deemed to have been satisfied upon re-
ceipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the re-
quirements for transfer or exchange of beneficial interests in Global
Notes contained in the Indenture and the Notes or otherwise applica-
ble under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 3.09.
(c) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of
a beneficial interest in another Restricted Global Note if the trans-
fer complies with the requirements of Section 3.03(b) above and the
Registrar receives the following:
(i) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit C
hereto, including the certifications in item (1) thereof;
(ii) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Temporary Global Note
or the Regulation S Global Note, then the transferor must
deliver a certificate in the form of Exhibit C hereto,
including the certifications in item (2) thereof; and
(iii) if the transferee will take delivery in the form of
a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit C
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3)(d) thereof, if
applicable.
(d) Transfer and Exchange of Beneficial Interests in a Re-
stricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may
be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes deliv-
ery thereof in the form of a beneficial interest in an Unrestricted
Global Note if the exchange or transfer complies with the require-
ments of Section 3.03(b) above and:
(i) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal or via the Depositary's book-entry system that it
is not (A) a broker-dealer, (B) a Person participating in the
distribution of the Exchange Notes or (C) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(ii) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(iii) such transfer is effected by a Participating
Broker-Dealer pursuant to the Registration Statement filed to
effect the Exchange Offer in accordance with the Registration
Rights Agreement; or
(iv) the Registrar receives the following:
(A) if the holder of such beneficial interest
in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an Un-
restricted Global Note, a certificate from such holder
in the form of Exhibit D, including the certifications
in item (1)(a) thereof; or
(B) if the holder of such beneficial interest
in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an Un-
restricted Global Note, a certificate from such holder
in the form of Exhibit C, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (iv), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Private Placement Leg-
end are no longer required in order to maintain compliance with
the Securities Act.
If any such transfer is effected pursuant to subparagraph (ii),
(iii) or (iv) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt of a
written Authentication Order in accordance with Section 1.03, the
Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal amount
of beneficial interests transferred pursuant to subparagraph (ii),
(iii) or (iv) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Global Note.
Section 3.04 Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(a) Beneficial Interests in Restricted Global Notes to Re-
stricted Definitive Notes. If any holder of a beneficial interest in a Re-
stricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:
(i) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit D, including the certifications in item (2)(a)
thereof;
(ii) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A, a certificate to the effect set forth
in Exhibit C, including the certifications in item (1) thereof;
(iii) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit C,
including the certifications in item (2) thereof;
(iv) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144, a certificate to the effect set
forth in Exhibit C, including the certifications in item (3)(a)
thereof;
(v) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (ii) through (iv) above, a certificate to the
effect set forth in Exhibit C, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable;
(vi) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit C, including the certifications in item (3)(b)
thereof; or
(vii) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit C, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 3.09, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 3.04 shall be
registered in such name or names and in such authorized denomination or de-
nominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Global
Note pursuant to this Section 3.04(a) shall bear the Private Placement Leg-
end and shall be subject to all restrictions on transfer contained therein.
(b) Notwithstanding Sections 3.04(a)(i) and (iii), a benefi-
cial interest in the Regulation S Temporary Global Note may not be ex-
changed for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903(c)(3)(ii)(B), except in the case
of a transfer pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 903 or Rule 904.
(c) Beneficial Interests in Restricted Global Notes to Unre-
stricted Definitive Notes. A holder of a beneficial interest in a Re-
stricted Global Note may exchange such beneficial interest for an Unre-
stricted Definitive Note or may transfer such beneficial interest to a Per-
son who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(i) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(ii) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(iii) such transfer is effected by a Participating Broker-
Dealer pursuant to the Registration Statement filed to effect the
Exchange Offer in accordance with the Registration Rights Agreement;
or
(iv) the Registrar receives the following:
(A) if the holder of such beneficial interest in a Re-
stricted Global Note proposes to exchange such beneficial in-
terest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit D, including the certifications in item (1)(b) thereof;
or
(B) if the holder of such beneficial interest in a Re-
stricted Global Note proposes to transfer such beneficial in-
terest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Ex-
hibit C, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (iv), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(d) Beneficial Interests in Unrestricted Global Notes to Un-
restricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for
a Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon satis-
faction of the conditions set forth in Section 3.03(b), the Trustee shall
cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 3.09, and the Company shall execute
and the Trustee shall authenticate and deliver to the Person designated in
the instructions a Definitive Note in the appropriate principal amount.
Any Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 3.04(d) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such benefi-
cial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial in-
terest pursuant to this Section 3.04(d) shall not bear the Private Place-
ment Legend.
Section 3.05 Transfer and Exchange of Definitive Notes for
Beneficial Interests.
(a) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following documen-
tation:
(i) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit D,
including the certifications in item (2)(b) thereof;
(ii) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit C, including the
certifications in item (1) thereof;
(iii) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit C, including the certifications in item
(2) thereof;
(iv) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act,
a certificate to the effect set forth in Exhibit C, including the
certifications in item (3)(a) thereof;
(v) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (ii) through (iv) above, a certificate
to the effect set forth in Exhibit C, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof,
if applicable;
(vi) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit C, including the certifications in item
(3)(b) thereof; or
(vii) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit C, including
the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(i) above, the appropriate Restricted Global Note, in the case of clause
(ii) above, the 144A Global Note, in the case of clause (iii) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(b) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(i) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(ii) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(iii) such transfer is effected by a Participating Broker-
Dealer pursuant to the Registration Statement filed to effect the
Exchange Offer in accordance with the Registration Rights Agreement;
or
(iv) the Registrar receives the following:
(A) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unre-
stricted Global Note, a certificate from such Holder in the
form of Exhibit D, including the certifications in item (1)(c)
thereof; or
(B) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit C,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (iv), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 3.05(b), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the Un-
restricted Global Note.
(c) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and in-
crease or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (b)(ii), (b)(iv)
or (c) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of a written Authentica-
tion Order in accordance with Section 1.03, the Trustee shall authenticate
one or more Unrestricted Global Notes in an aggregate principal amount
equal to the principal amount of Definitive Notes so transferred.
Section 3.06 Transfer and Exchange of Definitive Notes for
Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 3.06, the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such reg-
istration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompa-
xxxx by a written instruction of transfer in form satisfactory to the Reg-
istrar duly executed by such Holder or by his attorney, duly authorized in
writing. In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant
to the following provisions of this Section 3.06.
(a) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and reg-
istered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the follow-
ing:
(i) if the transfer will be made pursuant to Rule 144A,
then the transferor must deliver a certificate in the form of
Exhibit C, including the certifications in item (1) thereof;
(ii) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit C, including the certifications in item (2)
thereof; and
(iii) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit C, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(b) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Per-
son or Persons who take delivery thereof in the form of an Unre-
stricted Definitive Note if:
(i) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(ii) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(iii) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Registration Statement filed to
effect the Exchange Offer in accordance with the Registration
Rights Agreement; or
(iv) the Registrar receives the following:
(A) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the
form of Exhibit D, including the certifications in item
(1)(d) thereof; or
(B) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an Unre-
stricted Definitive Note, a certificate from such Holder
in the form of Exhibit C, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (iv), if
the Registrar so requests, an Opinion of Counsel in form rea-
sonably acceptable to the Registrar to the effect that such ex-
change or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(c) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unre-
stricted Definitive Note. Upon receipt of a request to register such
a transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions from the Holder thereof.
Section 3.07 Exchange Offer.
Notwithstanding the provisions of Section 3.03, upon the occur-
rence of the Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 1.03, the Trustee shall authenticate (i)
one or more Unrestricted Global Notes in an aggregate principal amount
equal to the principal amount of the beneficial interests in the Restricted
Global Notes tendered for acceptance by Persons that certify in the appli-
cable Letters of Transmittal that (x) they are not broker-dealers, (y) they
are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted
for exchange in the Exchange Offer and (ii) Definitive Notes in an aggre-
gate principal amount equal to the principal amount of the Restricted De-
finitive Notes accepted for exchange in the Exchange Offer. Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate
principal amount of the applicable Restricted Global Notes to be reduced
accordingly, and the Company shall execute and the Trustee shall authenti-
cate and deliver (i) to the Depositary, the Unrestricted Global Note(s) in
the amount(s) referred to above and (ii) to the Persons designated by the
Holders of Definitive Notes so accepted, Definitive Notes in the appropri-
ate principal amounts, in each case in accordance with the applicable terms
of the Indenture.
Section 3.08 Legends.
The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under the Indenture unless specifically
stated otherwise in the applicable provisions of the Indenture.
(a) Private Placement Legend.
(i) Except as permitted by subparagraph (ii) be-
low, each Restricted Additional Note evidenced by a
Global Note or a Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SE-
CURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISI-
TION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501 (a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN
"ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SE-
CURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO HOLLYWOOD ENTERTAINMENT CORPORATION OR ANY SUB-
SIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALI-
FIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UN-
DER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO
AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FUR-
NISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRIC-
TIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECU-
RITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UN-
DER THE SECURITIES ACT (IF AVAILABLE), OR IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUN-
SEL IF HOLLYWOOD ENTERTAINMENT CORPORATION SO REQUESTS),
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NO-
XXXX SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CON-
NECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUS-
TEE AND HOLLYWOOD ENTERTAINMENT CORPORATION SUCH CERTIFI-
CATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFF-
SHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(ii) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to Sections
3.03(d), 3.04(c), 3.04(d), 3.05(b), 3.05(c), 3.06(b),
3.06(c) or 3.07 (and all Notes issued in exchange there-
for or substitution thereof) shall not bear the Private
Placement Legend.
(b) Global Note Legend. Each Global Note shall bear the
Global Note Legend specified in Section 1.04(c).
(c) Regulation S Temporary Global Note Legend. The Regulation
S Temporary Global Note shall bear a legend in substantially the fol-
lowing form:
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING
ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF IN-
TEREST HEREON.
Section 3.09 Cancellation and/or Adjustment of Global Notes.
At such time as all beneficial interests in a particular Global
Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each
such Global Note shall be returned to or retained and canceled by the Trus-
tee in accordance with Section 2.08 of the Base Indenture. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount at maturity of Notes represented by such Global
Note shall be reduced accordingly and an endorsement shall be made on such
Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note, such other Global
Note shall be increased accordingly and an endorsement shall be made on
such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.
Section 3.10 General Provisions Relating to Transfers and
Exchanges.
(a) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(b) No service charge shall be made to a holder of a benefi-
cial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Section 2.06 or 3.05 of the Base Indenture or Sections 4.02, 5.03 and
5.08 of this Supplemental Indenture.
(c) The Registrar shall not be required (A) to register the
transfer of or to exchange any Notes during a period beginning at the open-
ing of business 15 days before the day of the mailing of notice of redemp-
tion under Section 3.02 of the Base Indenture and ending at the close of
business on such day, or (B) to register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(d) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under the Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or ex-
change.
(e) The Company shall not be required (A) to issue, to regis-
ter the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of the mailing of notice of
redemption under Section 3.02 of the Base Indenture and ending at the close
of business on such day, or (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the unre-
deemed portion of any Note being redeemed in part.
(f) Prior to due presentment for the registration of a trans-
fer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and interest
on such Notes and for all other purposes, and none of the Trustee, any
Agent or the Company shall be affected by notice to the contrary.
(g) The Trustee shall authenticate Global Notes and Defini-
tive Notes in accordance with the provisions of Section 1.03.
(h) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Article III to
effect a registration of transfer or exchange may be submitted by facsim-
ile.
ARTICLE IV
Redemption
Section 4.01 Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Section
4.01, the Notes are not redeemable before March 15, 2007. Thereafter, the
Company may redeem the Notes at its option, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if re-
deemed during the twelve-month period commencing on March 15 of the years
indicated below:
Year
Percentage
2007
104.813%
2008
102.406%
2009 and thereafter
100.000%
In addition, the Company must pay accrued and unpaid interest
on the Notes redeemed.
(b) Notwithstanding the foregoing, at any time, or from time
to time, on or prior to March 15, 2006, the Company may, at its option, use
the net cash proceeds from one or more Public Equity Offerings to redeem up
to 35% of the principal amount of the Notes issued under the Indenture at a
redemption price of 109.625% of the principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the date of redemption; provided
that:
(i) at least 65% of the aggregate principal amount of
Notes issued under the Indenture remains outstanding immedi-
ately after any such redemption; and
(ii) the Company makes such redemption not more than 90
days after the consummation of any such Public Equity Offering.
Section 4.02 Offer to Purchase by Application of Excess Proceeds
Offer Amount.
In the event that the Company shall be required to commence a
Excess Proceeds Offer pursuant to Section 5.03, it shall follow the proce-
dures specified below.
The Excess Proceeds Offer shall remain open for a period of 20
Business Days following its commencement or such longer period as may be
required by applicable law (the "Offer Period"). No later than the date of
the termination of the Offer Period (the "Purchase Date"), the Company
shall purchase an amount of Notes equal to the Excess Proceeds Offer Amount
or, if Notes in an aggregate principal amount less than the Excess Proceeds
Offer Amount have been tendered, all Notes validly tendered in response to
the Excess Proceeds Offer.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid in-
terest shall be paid to the Person in whose name a Note is registered at
the close of business on such record date, and no additional interest shall
be payable to Holders who tender Notes pursuant to the Excess Proceeds Of-
fer.
Upon the commencement of an Excess Proceeds Offer, the Company
shall send, by first-class mail, a notice of such Excess Proceeds Offer to
the Trustee and each of the Holders, with a copy to the Trustee. The no-
xxxx shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Excess Proceeds Offer. The Excess
Proceeds Offer shall be made to all Holders. The notice, which shall gov-
ern the terms of the Excess Proceeds Offer, shall state:
(a) that the Excess Proceeds Offer is being made pursuant to
this Section 4.02 and Section 5.03 and the length of time the Excess
Proceeds Offer shall remain open;
(b) the Excess Proceeds Offer Amount, the purchase price and
the Purchase Date;
(c) that any Note not validly tendered or accepted for pay-
ment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Excess Proceeds Offer
shall cease to accrue interest after the Purchase Date and the only
remaining right of the Holder is to receive payment of the purchase
price upon surrender of the applicable Note to the Paying Agent;
(e) that Holders electing to have a portion of a Note pur-
chased pursuant to an Excess Proceeds Offer may only elect to have
such Note purchased in integral multiples of $1,000;
(f) that Holders electing to have a Note purchased pursuant
to any Excess Proceeds Offer shall be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, or transfer by book-entry transfer, to
the Company, a depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days be-
fore the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may
be, receives, not later than the third Business Day before the Pur-
chase Date, a telegram, telex, facsimile transmission or letter set-
ting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Xxxxxx is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surren-
dered by Holders exceeds the Excess Proceeds Offer Amount, the Com-
pany shall select the Notes to be purchased on a pro rata basis
(based on amounts tendered and with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part
shall be issued a new Note or Notes in principal amount equal to the
unpurchased portion of the Notes surrendered (or transferred by book-
entry transfer) in the name of the Holder thereof upon cancellation
of the original Note.
On or before the Purchase Date, the Company shall, to the ex-
tent lawful, accept for payment, on a pro rata basis to the extent neces-
sary, an amount of Notes or portions thereof validly tendered pursuant to
the Excess Proceeds Offer equal to the Excess Proceeds Offer Amount, or if
less than the Excess Proceeds Offer Amount attributed to the Notes has been
validly tendered, all Notes or portions thereof validly tendered, and shall
deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 4.02. The Company, the Depositary or the
Paying Agent, as the case may be, shall promptly (but in any case not later
than five Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes ten-
dered by such Holder and accepted by the Company for purchase, and the Com-
pany shall promptly issue a new Note, and the Trustee, upon written request
from the Company, shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the
Note surrendered. Any Note not so accepted shall be promptly mailed or de-
livered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Excess Proceeds Offer on the Purchase Date.
Other than as specifically provided in this Section 4.02, any
purchase pursuant to this Section 4.02 and Section 5.03 shall be made pur-
suant to the provisions of Sections 3.01 through 3.05 of the Base Inden-
ture.
To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.02 or Section 5.03, the Company
shall comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations under this Section 4.02 or
Section 5.03.
ARTICLE V
Covenants
The covenants contained in this Article V and Sections 6.01
through 6.08 of the Base Indenture shall be applicable to the Notes. In
the event that this Article V conflicts with any provision of the Base In-
denture, the provisions of this Article V shall govern and be controlling.
Section 5.01 Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
become liable, contingently or otherwise, with respect to, or otherwise be-
come responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness); provided, however, that if no Default
or Event of Default shall have occurred and be continuing at the time of or
as a consequence of the incurrence of any such Indebtedness, the Company or
any of its Restricted Subsidiaries that is or, upon such incurrence, be-
comes a Guarantor may incur Indebtedness (including, without limitation,
Acquired Indebtedness) and any Restricted Subsidiary of the Company that is
not or will not, upon such incurrence, become a Guarantor may incur Ac-
quired Indebtedness, in each case if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Xxxxxxx-
dated Fixed Charge Coverage Ratio of the Company is greater than 2.25 to
1.0.
Section 5.02 Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on
or in respect of shares of the Company's Capital Stock to holders of
such Capital Stock except dividends or distributions payable in
Qualified Capital Stock of the Company or warrants, options or other
rights to acquire Qualified Capital Stock of the Company;
(2) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or any warrants, rights or options
to purchase or acquire shares of any class of such Capital Stock;
(3) make any principal payment on, purchase, defease, redeem,
prepay or otherwise acquire or retire for value, prior to any sched-
uled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company or a Guarantor that is sub-
ordinate or junior in right of payment to the Notes or such Guaran-
tor's Guarantee, respectively; or
(4) make any Investment (other than Permitted Investments)
(each of the foregoing actions set forth in clauses (1), (2), (3) and (4)
being referred to as a "Restricted Payment"), if at the time of such Re-
stricted Payment or immediately after giving effect thereto,
(i) a Default or an Event of Default shall have
occurred and be continuing; or
(ii) the Company is not able to incur at least
$1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 5.01; or
(iii) the aggregate amount of Restricted Payments
(including Restricted Payments permitted by clauses (1),
(2) (ii),(4), (5) and (6) of the next following para-
graph, but excluding Restricted Payments permitted by
clauses (2)(i) and (3) of the next following paragraph)
made subsequent to the Issue Date (the amount expended
for such purposes, if other than in cash, being the fair
market value of such property as determined in good faith
by the Board of Directors of the Company) shall exceed
the sum of:
(v) 50% of the cumulative Consolidated Net Income (or
if cumulative Consolidated Net Income shall be a loss, minus
100% of such loss) of the Company for the period (which shall
be treated as single accounting period) from the Issue Date to
the end of the most recent fiscal quarter ended prior to the
date of such Restricted Payment for which financial statements
are in existence; plus
(w) 100% of the aggregate net cash proceeds received by
the Company subsequent to the Issue Date from any Person (other
than a Restricted Subsidiary of the Company) as a contribution
to the Company's capital or from the issuance and sale of
Qualified Capital Stock of the Company or warrants, options or
other rights to acquire Qualified Capital Stock of the Company
(but excluding any debt security that is convertible into, or
exchangeable for, Qualified Capital Stock); plus
(x) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Restricted Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than Dis-
qualified Capital Stock) of the Company (less the amount of any
cash, or other property, distributed by the Company upon such
conversion or exchange); plus
(y) without duplication, the sum of:
(1) the aggregate amount returned in cash to the
Company or any of its Restricted Subsidiaries on or with
respect to Investments (other than Permitted Investments)
made subsequent to the Issue Date whether through inter-
est payments, principal payments, dividends or other dis-
tributions or payments; plus
(2) the net cash proceeds received by the Company
or any of its Restricted Subsidiaries from the disposi-
tion of all or any portion of such Investments (other
than to a Restricted Subsidiary of the Company); plus
(3) upon redesignation of an Unrestricted Sub-
sidiary as a Restricted Subsidiary, the fair market value
of such Subsidiary (as determined in good faith by the
Company's Board of Directors); provided, however, that
the sum of clauses (1), (2) and (3) above shall not ex-
ceed the aggregate amount of all such Investments.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph will not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration of such dividend if the dividend would have been per-
mitted on the date of declaration;
(2) if no Default or Event of Default shall have occurred and
be continuing, the purchase, redemption or other acquisition or re-
tirement of any shares of Capital Stock of the Company, either (i)
solely in exchange for shares of Qualified Capital Stock of the Com-
pany or (ii) through the application of net proceeds of a substan-
tially concurrent sale for cash (other than to a Restricted Subsidi-
ary of the Company) of shares of Qualified Capital Stock of the Com-
pany;
(3) if no Default or Event of Default shall have occurred and
be continuing, the making of a principal payment on, purchase, xxxxx-
xxxxx, redemption, payment or other acquisition or retirement of any
Indebtedness of the Company or a Guarantor that is subordinate or
junior in right of payment to the Notes or such Guarantor's Guaran-
tee, respectively, either (i) solely in exchange for shares of Quali-
fied Capital Stock of the Company or Refinancing Indebtedness, or
(ii) through the application of net proceeds of a substantially con-
current sale for cash (other than to a Restricted Subsidiary of the
Company) of (a) shares of Qualified Capital Stock of the Company or
(b) Refinancing Indebtedness;
(4) the purchase, redemption or other acquisition or retire-
ment of Capital Stock pursuant to the terms of any stock option,
stock purchase or other equity-based compensation plan or arrangement
established or entered into for the benefit of any director, employee
or consultant of the Company or any of its Restricted Subsidiaries in
an amount not to exceed $1.0 million in any fiscal year;
(5) any redemption, at an aggregate price not to exceed the
product of $0.01 and the and the total number of shares of Common
Stock of the Company then outstanding, of share purchase rights is-
sued pursuant to the share purchase rights plan adopted by the Board
of Directors of the Company; and
(6) additional Restricted Payments up to $5.0 million.
In the event that a proposed Restricted Payment or any portion
thereof meets the criteria of more than one of the clauses in the immedi-
ately preceding paragraph, the Company will be permitted to classify such
Restricted Payment or portion thereof as being within any one or more such
clauses in respect of which it meets the criteria.
Section 5.03 Limitation on Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to consummate an Asset Sale, unless:
(1) the Company or the applicable Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset
Sale at least equal to the fair market value of the Capital Stock,
property or assets issued, sold or otherwise disposed of (as deter-
mined in good faith by the Company's Board of Directors); and
(2) at least 75% of the consideration received by the Company
or the Restricted Subsidiary, as the case may be, from such Asset
Sale shall be in the form of cash or Cash Equivalents, Replacement
Assets or any combination of the foregoing received at the time of
such disposition.
Following the consummation of an Asset Sale, the Company shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 360 days of receipt thereof either:
(a) to prepay any Senior Debt, any Guarantor Senior
Debt or any then outstanding Existing Notes and, in the case of
any Senior Debt or any Guarantor Senior Debt under any revolv-
ing credit facility, effect a permanent reduction in the avail-
ability under such revolving credit facility;
(b) acquire properties and assets (including Asset Ac-
quisitions or capital expenditures) that replace the properties
and assets that were the subject of such Asset Sale or proper-
ties and assets that will be used in the business of the Com-
pany and its Restricted Subsidiaries as existing on the Issue
Date or in businesses reasonably related thereto ("Replacement
Assets"); and/or
(c) any combination of the foregoing.
For purposes of clause (2) above, the amount of any liabili-
ties, as shown on the Company's or such Restricted Subsidiary's most recent
balance sheet, of the Company or any Restricted Subsidiary (other than con-
tingent liabilities and liabilities that are by their terms subordinated to
the Notes) that are assumed by the transferee of any such assets and any
cash proceeds in respect of any securities, notes or other obligations re-
ceived by the Company or any such Restricted Subsidiary from such trans-
feree that are converted into cash within 30 days following the consumma-
tion of such Asset Sale, to the extent of the cash received by the Company
or such Restricted Subsidiary in that conversion, shall be deemed to con-
stitute cash received at the time of such disposition.
Any Net Cash Proceeds resulting from Asset Sales consummated
after the Issue Date that are not timely applied as permitted in the two
preceding paragraphs shall constitute "Excess Proceeds". If on any date
(an "Excess Proceeds Offer Trigger Date") the aggregate amount of Excess
Proceeds, excluding any amounts thereof previously applied pursuant to this
paragraph, exceeds $10.0 million, the Company and/or a Restricted Subsidi-
ary shall, within 30 days thereafter, make an offer (the "Excess Proceeds
Offer") to purchase from all Holders on a pro rata basis, at a price equal
to 100% of the principal amount of the Notes to be purchased, plus accrued
and unpaid interest thereon, the maximum principal amount of Notes that can
be so purchased at such price with such Excess Proceeds (the "Excess Pro-
ceeds Offer Amount").
Each Excess Proceeds Offer will be mailed to the record Holders
as shown on the register of Holders, with a copy to the Trustee, and shall
comply with the procedures set forth in Section 4.02. Upon receiving no-
xxxx of the Excess Proceeds Offer, Holders may elect to tender their Notes
in whole or in part in integral multiples of $1,000 in exchange for cash.
To the extent Holders properly tender Notes in an amount exceeding the Ex-
cess Proceeds Offer Amount, Notes of tendering Holders shall be purchased
on a pro rata basis (based on amounts tendered). Any Excess Proceeds Offer
shall remain open for a period of 20 Business Days or such longer period as
may be required by law.
The Company will comply with the requirements of Rule 14e-1 un-
der the Exchange Act and any other securities laws and regulations thereun-
der to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to an Excess Proceeds Offer. To the
extent that the provisions of any securities laws or regulations conflict
with the provisions of Section 4.02 and this Section 5.03, the Company
shall comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations under the provisions of Sec-
tion 4.02 and this Section 5.03 by virtue thereof.
Section 5.04 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
consensual restriction on the ability of any Restricted Subsidiary of the
Company to:
(1) pay dividends or make any other distributions on or in
respect of its Capital Stock;
(2) make loans or advances or to pay any Indebtedness or
other obligation owed to the Company or any other Restricted Subsidi-
ary of the Company; or
(3) transfer any of its property or assets to the Company or
any other Restricted Subsidiary of the Company;
except for such encumbrances or restrictions existing under or by reason
of:
(a) applicable law, regulations or orders;
(b) the Indenture and the Notes;
(c) customary non-assignment provisions of any contract
or agreement to which any Restricted Subsidiary of the Company
is a party;
(d) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Per-
son, or the properties or assets of any Person, other than the
Person or the properties or assets of the Person so acquired;
(e) agreements existing on the Issue Date to the extent
and in the manner such agreements are in effect on the Issue
Date, including the Senior Credit Facilities;
(f) any instrument or agreement governing Indebtedness
incurred to Refinance the Indebtedness governed by any instru-
ment or agreement referred to in clause (b), (d) or (e) above
or governing any other Indebtedness the incurrence of which is
permitted under the Indenture; provided, however, the restric-
tions and encumbrances contained in the instruments and agree-
ments referred to in clauses (b), (d) and (e) above, taken as a
whole, are not materially less favorable to the Company than
the restrictions and encumbrances contained in the instruments
and agreements referred to in clauses (b), (d) and (e), taken
as a whole, as determined in good faith by the Board of Direc-
tors of the Company;
(g) any agreement for the sale or other disposition of
any Capital Stock, property or assets that restricts or encum-
bers transfers of such Capital Stock, property or assets pend-
ing the consummation of such sale or other disposition; or
(h) any agreement for the sale or other disposition of
a Restricted Subsidiary that restricts or encumbers distribu-
tions by that Restricted Subsidiary pending its sale or other
disposition.
Section 5.05 Limitation on Preferred Stock of Restricted
Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries
to issue any Preferred Stock (other than to the Company or to a Wholly
Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company) to
own any Preferred Stock of any Restricted Subsidiary of the Company.
Section 5.06 Limitation on Liens.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or permit or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or any
proceeds therefrom, or assign or otherwise convey any right to receive in-
come or profits therefrom unless:
(1) in the case of Liens securing Indebtedness that is ex-
pressly subordinate or junior in right of payment to the Notes or a
Guarantee, the Notes or such Guarantee, respectively, are secured by
a Lien on such property, assets or proceeds that is senior in prior-
ity to such Liens; and
(2) in all other cases, the Notes or such Guarantee, respec-
tively, are equally and ratably secured, except for:
(a) Liens existing as of the Issue Date to the extent
and in the manner such Liens are in effect on the Issue Date;
(b) Liens securing Senior Debt and Liens securing any
Guarantor Senior Debt;
(c) Liens securing the Notes and any Guarantees;
(d) Liens of the Company or a Wholly Owned Restricted
Subsidiary of the Company on assets of any Restricted Subsidi-
ary of the Company;
(e) Liens securing Refinancing Indebtedness which is
incurred to Refinance any Indebtedness which has been secured
by a Lien permitted under the Indenture and which has been in-
curred in accordance with the provisions of the Indenture; pro-
vided, however, that such Liens: (i) are no less favorable to
the Holders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebt-
edness being Refinanced; and (ii) do not extend to or cover any
property or assets of the Company or any of its Restricted Sub-
sidiaries not securing the Indebtedness so Refinanced; and
(f) Permitted Liens.
Section 5.07 Prohibition on Incurrence of Senior Subordinated
Debt.
The Company will not, and will not permit any Restricted Sub-
sidiary that is a Guarantor to, incur or suffer to exist Indebtedness that
is senior in right of payment to the Notes or such Guarantor's Guarantee,
respectively, and subordinate in right of payment to any other Indebtedness
of the Company or such Guarantor, respectively.
Section 5.08 Offer to Repurchase upon Change of Control.
(a) Upon the occurrence of a Change of Control (the date of
such occurrence, the "Change of Control Date"), each Holder shall have the
right to require the purchase of all or a portion of such Holder Notes pur-
suant to an offer to purchase (the "Change of Control Offer") at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued
interest thereon to the date of purchase. Prior to the mailing of the no-
xxxx to the Holders and the Trustee provided for in paragraphs (b) and (c)
below but in any event within 30 days following any Change of Control, the
Company hereby covenants to (i) repay in full and terminate all commitments
under Indebtedness under the Senior Credit Facilities and all other Senior
Debt the terms of which require repayment upon a Change of Control (or that
prohibits a Change of Control Offer) or to offer to repay in full and ter-
minate all commitments under all Indebtedness under the Senior Credit Fa-
cilities and all other such Senior Debt and to repay the Indebtedness of
each lender which has accepted such offer or (ii) obtain the requisite con-
sents under the Senior Credit Facilities and all other such Senior Debt to
permit the repurchase of the Notes as provided for in paragraph (d) below.
The Company shall first comply with the covenant in the immediately preced-
ing sentence before it shall be required to repurchase the Notes pursuant
to this Section 5.08. The Company's failure to comply with the covenants
described in the second preceding sentence (and any failure to send the no-
xxxx described in this Section 5.08 as a result of the prohibition in the
preceding sentence) may (with notice and lapse of time) constitute an Event
of Default described in clause (c) of Section 7.01 but shall not constitute
an Event of Default described in clause (b) of Section 7.01.
(b) The notice to the Holders and the Trustee shall contain
all instructions and materials necessary to enable the Holders to tender
Notes pursuant to the Change of Control Offer. The notice will govern the
terms of the Change of Control Offer.
(c) Within 30 days following the Change of Control Date the
Company shall send, by first class mail, a notice to the Holders and the
Trustee stating:
(1) that the Change of Control Offer is being made pursuant
to this Section 5.08 and that all Notes validly tendered will be ac-
cepted for payment;
(2) the purchase price and the purchase date, which shall be
a Business Day that is no earlier than 30 days nor later than 45 days
from the date such notice is mailed (the "Offer Payment Date") other
than as may be required by law;
(3) that any Note not tendered will continue to accrue inter-
est;
(4) that any Note accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Offer Pay-
ment Date unless the Company shall default in the payment of the pur-
chase price of the Notes and the only remaining right of the Holder
is to receive payment of the purchase price upon surrender of the ap-
plicable Note to the Paying Agent;
(5) that Holders electing to have a portion of a Note pur-
chased pursuant to a Change of Control Offer may only elect to have
such Note purchased in integral multiples of $1,000;
(6) that if a Holder elects to have a Note purchased pursuant
to the Change of Control Offer it will be required to surrender the
Note, with the form entitled "Option to Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry trans-
fer, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Offer
Payment Date;
(7) that a Holder will be entitled to withdraw its election
if the Company or the Trustee receives, not later than the third
Business Day preceding the Offer Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Notes such Holder delivered for pur-
chase, and a statement that such Holder is withdrawing its election
to have such Note purchased;
(8) that if Notes are purchased only in part a new Note of
the same type will be issued in principal amount equal to the unpur-
chased portion of the Notes surrendered; and
(9) that Holders whose Notes were purchased only in part
shall be issued a new Note or Notes in principal amount equal to the
unpurchased portion of the Notes surrendered (or transferred by book-
entry transfer) in the name of the Holder upon cancellation of the
original Note.
(d) On or before the Offer Payment Date, the Company shall,
to the extent lawful, accept for payment, all Notes or portions thereof
validly tendered pursuant to the Change of Control Offer, and shall deliver
to the Trustee an Officer's Certificate stating that such Notes or portions
thereof were accepted for payment by the Company in accordance with the
terms of this Section 5.08. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in all case not later than
five days after the Offer Payment Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or deliv-
ered by the Company to the Holder thereof. The Company shall publicly an-
nounce the results of the Change of Control Offer on the Offer Payment
Date.
(e) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in con-
nection with the purchase of Notes pursuant to an offer hereunder. To the
extent the provisions of any securities laws or regulations conflict with
the provisions under this Section, the Company shall comply with the appli-
cable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
(f) The Company is not required to make a Change of Control
Offer upon a Change of Control if a third party (i) makes the Change of
Control Offer in the manner and at the time and otherwise in compliance
with the terms of this Section, and (ii) purchases all Notes validly ten-
dered and not withdrawn under the Change of Control Offer.
Section 5.09 Limitations on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Re-
stricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affili-
ates (each an "Affiliate Transaction"), other than (x) Affiliate Transac-
tions permitted under paragraph (b) below and (y) Affiliate Transactions on
terms that are not materially less favorable in the aggregate than those
that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate
of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affili-
ate Transactions which are similar or part of a common plan) involving ag-
gregate payments or other property with a fair market value in excess of
$2.5 million shall be approved by the Board of Directors of the Company or
such Restricted Subsidiary, as the case may be, such approval to be evi-
denced by a Board Resolution stating that such Board of Directors has de-
termined that such transaction complies with the foregoing provisions. If
the Company or any Restricted Subsidiary of the Company enters into an Af-
filiate Transaction (or a series of related Affiliate Transactions related
to a common plan) that involves an aggregate fair market value of more than
$7.5 million, the Company or such Restricted Subsidiary, as the case may
be, shall, prior to the consummation thereof, obtain a favorable opinion as
to the fairness of such transaction or series of related transactions to
the Company or the relevant Restricted Subsidiary, as the case may be, from
a financial point of view, from an accounting, appraisal or investment
banking firm of national standing in the United States and file the same
with the Trustee.
(b) The restrictions set forth in the first paragraph of this
covenant shall not apply to:
(1) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans
and other reasonable fees, compensation, benefits and indemnities
paid or entered into by the Company or its Restricted Subsidiaries in
the ordinary course of business to or with officers, directors or em-
ployees of the Company and its Subsidiaries, in each case as deter-
mined in good faith by the Company's Board of Directors or senior
management;
(2) transactions exclusively between or among the Company and
any of its Wholly Owned Restricted Subsidiaries or exclusively be-
tween or among such Wholly Owned Restricted Subsidiaries, provided
such transactions are not otherwise prohibited by the Indenture;
(3) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement
thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the
original agreement as in effect on the Issue Date; and
(4) Restricted Payments permitted by the Indenture.
Section 5.10 Limitation of Guarantees by Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company or any other Restricted Subsidi-
ary of the Company (other than: (1) Permitted Indebtedness of a Restricted
Subsidiary of the Company; (2) Indebtedness under Currency Agreements in
reliance on clause (5) of the definition of Permitted Indebtedness; or (3)
Interest Swap Obligations incurred in reliance on clause (4) of the defini-
tion of Permitted Indebtedness), unless, in any such case:
(1) such Restricted Subsidiary executes and delivers, or has
previously executed and delivered, a supplemental indenture to the
Indenture, providing a guarantee of payment of the Notes by such Re-
stricted Subsidiary; and
(2) (a) if any such assumption, guarantee or other liability
of such Restricted Subsidiary is provided in respect of Senior Debt,
the guarantee or other instrument provided by such Restricted Sub-
sidiary in respect of such Senior Debt may be superior to the Guaran-
tee pursuant to subordination provisions no less favorable to the
Holders of the Notes than those contained in the Indenture and (b) if
such assumption, guarantee or other liability of such Restricted Sub-
sidiary is provided in respect of Indebtedness that is expressly sub-
ordinated to the Notes, the guarantee or other instrument provided by
such Restricted Subsidiary in respect of such subordinated Indebted-
ness shall be subordinated to the Guarantee pursuant to subordination
provisions no less favorable to the Holders of the Notes than those
contained in the Indenture.
Notwithstanding the foregoing, any such Guarantee by a Re-
stricted Subsidiary of the Notes shall provide by its terms that it shall
be automatically and unconditionally released and discharged, without any
further action required on the part of the Trustee or any Holder, upon:
(3) the unconditional release of such Restricted Subsidiary
from its liability in respect of the Indebtedness in connection with
which such Guarantee was executed and delivered pursuant to the pre-
ceding paragraph; or
(4) any sale or other disposition (by merger or otherwise) to
any Person which is not a Restricted Subsidiary of the Company of all
of the Company's Capital Stock in, or all or substantially all of the
assets of, such Restricted Subsidiary; provided that (a) such sale or
disposition of such Capital Stock or assets is otherwise in compli-
ance with the terms of the Indenture and (b) such assumption, guaran-
tee or other liability of such Restricted Subsidiary has been re-
leased by the holders of the other Indebtedness so guaranteed.
Section 5.11 Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries transfers
or causes to be transferred, in one transaction or a series of related
transactions, any property to any Domestic Restricted Subsidiary that is
not a Guarantor, or if the Company or any of its Restricted Subsidiaries
shall organize, acquire or otherwise invest in another Domestic Restricted
Subsidiary having total assets with a book value in excess of $1.0 million,
then such transferee or acquired or other Restricted Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental inden-
ture in form reasonably satisfactory to the Trustee pursuant to which
such Restricted Subsidiary shall unconditionally guarantee all of the
Company's obligations under the Notes and the Indenture on the terms
set forth in the Indenture; and
(2) deliver to the Trustee an Opinion of Counsel to the ef-
fect that such supplemental indenture has been duly authorized, exe-
cuted and delivered by such Restricted Subsidiary and constitutes a
legal, valid, binding and enforceable obligation of such Restricted
Subsidiary. Thereafter, such Domestic Restricted Subsidiary shall be
a Guarantor for all purposes of the Indenture.
Section 5.12 Conduct of Business.
The Company and its Restricted Subsidiaries will not engage in
any businesses which are not the same, similar, ancillary, complementary or
reasonably related to the businesses in which the Company and its Re-
stricted Subsidiaries are engaged on the Issue Date.
Section 5.13 Reports to Holders.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company will furnish
the Holders of Notes:
(1) all quarterly and annual financial information that would
be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Company were required to file such Forms, in-
cluding a "management's discussion and analysis of financial condi-
tion and results of operations" that describes the financial condi-
tion and results of operations of the Company and its consolidated
Subsidiaries and, with respect to the annual information only, a re-
port thereon by the Company's certified independent accounts; and
(2) all current reports (excluding exhibits) that would be
required to be filed with the Commission on Form 8-K if the Company
were required to file such reports;
in each case within the time periods specified in the Commission's rules
and regulations. For purposes of the foregoing covenant, any information
or reports that are filed with the Commission and accessible by the public
through XXXXX or any similar successor or replacement system that may be
adopted by the Commission shall, upon becoming so accessible, be deemed to
have been furnished to the Holders of the Notes.
In addition, whether or not required by the rules and regula-
tions of the Commission, the Company will file a copy of all such informa-
tion and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless
the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.
Section 5.14 Stay, Extension and Usury Laws.
The Company and each Guarantor covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of the Indenture;
and the Company and each Guarantor (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law
has been enacted.
ARTICLE VI
Successor Company
Section 6.01 Merger, Consolidation and Sale of Assets.
The Company will not, in a single transaction or series of re-
lated transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit
any Restricted Subsidiary of the Company to sell, assign, transfer, lease,
convey or otherwise dispose of) all or substantially all of the Company's
assets (determined on a consolidated basis for the Company and the Com-
pany's Restricted Subsidiaries) whether as an entirety or substantially as
an entirety to any Person unless:
(1) either:
(a) the Company shall be the surviving or continuing
corporation; or
(b) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the
Person which acquires by sale, assignment, transfer, lease,
conveyance or other disposition the properties and assets of
the Company and of the Company's Restricted Subsidiaries sub-
stantially as an entirety (the "Surviving Entity"):
(x) shall be a corporation organized and validly
existing under the laws of the United States or any State
thereof or the District of Columbia; and
(y) shall expressly assume, by supplemental in-
denture (in form and substance satisfactory to the Trus-
tee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if
any, and interest on all of the Notes and the performance
of every covenant of the Notes and the Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and
the assumption contemplated by clause (1)(b)(y) above (including giv-
ing effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may
be, shall be able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 5.01;
(3) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (1)(b)(y)
above (including, without limitation, giving effect to any Indebted-
ness and Acquired Indebtedness incurred or anticipated to be incurred
and any Lien granted in connection with or in respect of the transac-
tion), no Default or Event of Default shall have occurred or be con-
tinuing; and
(4) the Company or the Surviving Entity shall have delivered
to the Trustee an officer's certificate and an Opinion of Counsel,
each to the effect that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemen-
tal indenture is required in connection with such transaction, such
supplemental indenture complies with the applicable provisions of the
Indenture and that all conditions precedent in the Indenture relating
to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assign-
ment, sale or otherwise, in a single transaction or series of transactions)
of all or substantially all of the properties or assets of one or more Re-
stricted Subsidiaries of the Company the Capital Stock of which constitutes
all or substantially all of the properties and assets of the Company, shall
be deemed to be the transfer of all or substantially all of the properties
and assets of the Company.
Section 6.02 Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer
of all or substantially all of the assets of the Company in accordance with
the foregoing, in which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under the Indenture and the Notes with the same effect as if such
surviving entity had been named as such, and the Company shall be released
from the obligations under the Notes and the Indenture except in the case
of a lease of the Company's assets and except with respect to any obliga-
tions under the Notes and the Indenture that arise from, or related to,
such transaction.
ARTICLE VII
Defaults and Remedies
Section 7.01 Events and Remedies.
The following events shall constitute "Events of Default":
(a) the failure to pay interest on any Notes when the same
becomes due and payable and the default continues for a period of 30
days (whether or not such payment shall be prohibited by Article X or
Article XII);
(b) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or an Excess Proceeds
Offer) (whether or not such payment shall be prohibited by Article X
or Article XII);
(c) a default in the observance or performance of any other
covenant or agreement contained in the Indenture which default con-
tinues for a period of 45 days after the Company receives written no-
xxxx stating that such notice is a "Notice of Default" hereunder and
specifying the default (and demanding that such default be remedied)
from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Notes (except in the case of a default with
respect to Section 6.01 of this Supplemental Indenture, which will
constitute an Event of Default with such notice requirement but with-
out such passage of time requirement);
(d) the failure to pay at final maturity (giving effect to
any applicable grace periods and any extensions thereof) the princi-
pal amount of any Indebtedness of the Company or any Restricted Sub-
sidiary of the Company, or the acceleration of the final Stated Ma-
turity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 20 days of receipt by the Company
or such Restricted Subsidiary of notice of any such acceleration) if
the aggregate principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness in default for
failure to pay principal at final maturity or which has been acceler-
ated (in each case with respect to which the 20-day period described
above has elapsed), aggregates $10.0 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of
$10.0 million shall have been rendered against the Company or any of
its Restricted Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;
(f) the Company or any of its Significant Subsidiaries pursu-
ant to or within the meaning of Bankruptcy Laws: (i) commences a
voluntary case; (ii) consents to the entry of an order for relief
against it in an involuntary case; (iii) consents to the appointment
of a custodian of it or for all or substantially all of its property;
or (iv) makes a general assignment for the benefit of its creditors;
(g) a court of competent jurisdiction enters an order or xx-
xxxx under any Bankruptcy Law that: (i) is for relief against the
Company or any of its Significant Subsidiaries; (ii) appoints a cus-
todian of the Company or any of its Significant Subsidiaries or for
all or substantially all of the property of the Company or any of its
Significant Subsidiaries; or (iii) orders the liquidation of the Com-
pany or any of its Significant Subsidiaries; and, in each case, the
order or decree remains unstayed and in effect for 60 consecutive
days; or
(h) any Guarantee of a Significant Subsidiary ceases to be in
full force and effect or any Guarantee of a Significant Subsidiary is
declared to be null and void and unenforceable or any Guarantee of a
Significant Subsidiary is found to be invalid or any Guarantor that
is a Significant Subsidiary denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with
the terms of the Indenture).
Section 7.02 Acceleration.
If an Event of Default (other than an Event of Default speci-
fied in clause (f) or (g) above with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued inter-
est on all the Notes to be due and payable by notice in writing to the Com-
pany and the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration" (the "Acceleration Notice"), and the same:
(a) shall become immediately due and payable; or
(b) if there are any amounts outstanding under the Senior
Credit Facilities, shall become immediately due and payable upon the
first to occur of an acceleration under the Senior Credit Facilities
or five Business Days after receipt by the Company and the Represen-
tative under the Senior Credit Facilities of such Acceleration Notice
but only if such Event of Default is then continuing.
If an Event of Default specified in clause (f) or (g) above
with respect to the Company occurs and is continuing, then all unpaid prin-
cipal of, and premium, if any, and accrued and unpaid interest on all of
the outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after a declaration of acceleration with respect to
the Notes as described in the preceding paragraph, the Holders of a major-
ity in principal amount of the Notes may rescind and cancel such declara-
tion and its consequences:
(a) if the rescission would not conflict with any judgment or
decree;
(b) if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due
solely because of the acceleration;
(c) to the extent the payment of such interest is lawful, in-
terest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of accelera-
tion, has been paid;
(d) if the Company has paid the Trustee its reasonable com-
pensation and reimbursed the Trustee for its expenses, disbursements
and advances; and
(e) in the event of the cure or waiver of an Event of Default
of the type described in clause (f) or (g) of the description above
of Events of Default, the Trustee shall have received an Officer's
Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived.
No such rescission shall affect any subsequent Default or im-
pair any right consequent thereto.
Section 7.03 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding (including consents obtained in con-
nection with a tender offer or exchange offer for, or purchase of, the
Notes) may, by notice to the Trustee, on behalf of the Holders of all the
Notes waive any past Default hereunder and its consequences, except a De-
fault:
(a) in the payment of the principal (or premium, if
any) or interest on any Note (including any Note which is re-
quired to have been purchased pursuant to an offer to purchase
that the Company is required to make under the Indenture); or
(b) in respect of a Section of the Indenture which can-
not be modified or amended without the consent of the holder of
each outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of the Indenture; provided, however, no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 7.04 Notice of Defaults.
In addition to its obligations under Section 6.08 of the Base
Indenture, the Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Responsible Officer of the Com-
pany becoming aware of any Default or Event of Default, an Officer's Cer-
tificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
ARTICLE VIII
Legal Defeasance and Covenant Defeasance
Section 8.01 Option To Effect Legal Defeasance or Covenant
Defeasance.
The Company may, at the option of its Board of Directors evi-
denced by a Board Resolution set forth in an Officer's Certificate, at any
time, elect to have either Section 8.02 or 8.03 applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article
VIII.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.02, the Company and the Guarantors shall, sub-
ject to the satisfaction of the conditions set forth in Section 8.04, be
deemed to have been discharged from their obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the en-
tire Indebtedness represented by the outstanding Notes, which shall there-
after be deemed to be "outstanding" only for the purposes of Section 8.05
and the other Sections of the Indenture referred to in clauses (a) through
(d) below, and to have satisfied all its other obligations under such Notes
and the Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated
or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04(a), and as more
fully set forth in such Section, payments in respect of the principal
amount of, premium, if any, and interest on such Notes when such pay-
ments are due;
(b) the Company's obligations with respect to such Notes un-
der Article II and Section 6.02 of the Base Indenture;
(c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection there-
with; and
(d) this Section 8.02.
Subject to compliance with this Article VIII, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exer-
cise of its option under Section 8.03.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04, the Company shall be released from
its obligations under the covenants contained in Sections 4.02, 5.01, 5.02,
5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12 and 5.13 and the
Guarantors shall be released from their obligations under Section 11.04
with respect to the outstanding Notes on and after the date the conditions
set forth in Section 8.04 are satisfied (hereinafter, "Covenant Xxxxx-
xxxxx"), and the Notes and Guarantee shall thereafter be deemed not "out-
standing" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with
such covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Notes shall not be deemed
outstanding for accounting purposes). For this purpose, Covenant Xxxxx-
xxxxx means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such cove-
nant or by reason of any reference in any such covenant to any other provi-
sion herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 7.01, but, except
as specified above, the remainder of the Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section
8.01 of the option applicable to this Section 8.03 and subject to the sat-
isfaction of the conditions set forth in Section 8.04, the failure to com-
ply with the terms of Section 7.01(d), Section 7.01(e) and Section 7.01(h)
shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of ei-
ther Section 8.02 or 8.03 to the outstanding Notes:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recog-
nized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay the principal
of, premium, if any, and interest on the Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may
be, in each case in accordance with the terms of the Indenture and
the Notes;
(b) in the case of an election under Section 8.02, the Com-
pany shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that:
(a) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling; or
(b) since the date of the Indenture, there has been a
change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Le-
gal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03, the Com-
pany shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that
the Holders will not recognize income, gain or loss for federal in-
come tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of De-
fault specified in Sections 7.01(f) or (g) are concerned, at any time
in the period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under the
Indenture or any other material agreement or instrument (including,
without limitation, the Senior Credit Facilities) to which the Com-
pany or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Offi-
cer's Certificate stating that the deposit was not made by the Com-
pany with the intent of preferring the Holders over any other credi-
tors of the Company or with the intent of defeating, hindering, de-
laying or defrauding any other creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Offi-
cer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opin-
ion of Counsel to the effect that:
(a) the trust funds will not be subject to any rights
of holders of Senior Debt, including, without limitation, those
arising under the Indenture; and
(b) assuming no intervening bankruptcy of the Company
between the date of deposit and the 91st day following the date
of deposit and that no Holder is an insider of the Company, af-
ter the 91st day following the date of deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally or, in the case of Covenant Defeasance, will
be subject to a first priority Lien in favor of the Trustee for
the benefit of the Holders.
Notwithstanding the foregoing, the Opinion of Counsel required
by clause (b) above with respect to a Legal Defeasance need not be deliv-
ered if all Notes not theretofore delivered to the Trustee for cancellation
(1) have become due and payable or (2) will become due and payable on the
maturity date within one year under arrangements satisfactory to the Trus-
tee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
Section 8.05 Deposited Money and Government Securities To Be Held
in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pur-
suant to Section 8.04 in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and the Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become
due thereon in respect of principal amount, premium, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-
callable Government Securities deposited pursuant to Section 8.04 or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held
by it as provided in Section 8.04 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a)), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Xxxxx-
xxxxx or Covenant Defeasance.
Section 8.06 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of fur-
ther effect (except as to surviving rights of registration of transfer or
exchange of the Notes, as expressly provided for in the Indenture) as to
all outstanding Notes when:
(1) either:
(a) all the Notes theretofore authenticated and deliv-
ered (except lost, stolen or destroyed Notes which have been
replaced or paid and Notes for whose payment money has thereto-
fore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged
from such trust) have been delivered to the Trustee for cancel-
lation; or
(b) all Notes not theretofore delivered to the Trustee
for cancellation have become due and payable, pursuant to an
optional redemption notice or otherwise, and the Company has
irrevocably deposited or caused to be deposited with the Trus-
tee funds in an amount sufficient to pay and discharge the en-
tire Indebtedness on the Notes not theretofore delivered to the
Trustee for cancellation, for principal of, premium, if any,
and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee
to apply such funds to the payment thereof at maturity or re-
demption, as the case may be;
(2) the Company has paid all other sums payable under the In-
denture by the Company; and
(3) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel stating that all conditions
precedent under the Indenture relating to the satisfaction and dis-
charge of the Indenture have been complied with.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03, as the case may be, by reason of any order or judg-
ment of any court or governmental authority enjoining, restraining or oth-
erwise prohibiting such application, then the Company's obligations under
the Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 until such time as
the Trustee or Paying Agent is permitted to apply all such money in accor-
dance with Section 8.02 or 8.03, as the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
Section 8.08 Survival.
The Trustee's rights under this Article VIII shall survive ter-
mination of the Indenture.
ARTICLE IX
Amendment, Supplement and Waiver
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 (but subject to the last paragraph
thereof), the Company, the Guarantors and the Trustee may amend or supple-
ment the Indenture, the Guarantees or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article III
(including the related definitions) in a manner that does not materi-
ally adversely affect any Holder;
(c) to provide for the assumption of the Company's or a Guar-
antor's obligations to the Holders of the Notes by a successor to the
Company or a Guarantor pursuant to Article XI;
(d) to make any changes that would provide any additional
rights or benefits to the Holders of the Notes or that does not ad-
versely affect the legal rights hereunder of any Holder of the Note;
(e) to comply with requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust
Indenture Act;
(f) to allow any Guarantor to execute a supplemental inden-
ture and/or a Guarantee with respect to the Notes or to provide for
the release of a Guarantee in compliance with the Indenture; or
(g) to evidence and provide for the acceptance of appointment
under the Indenture of a successor Trustee.
Upon the request of the Company accompanied by a Board Resolu-
tion authorizing the execution of any such amended or supplemental Inden-
ture, and upon receipt by the Trustee of the documents described in Sec-
tions 9.02 and 10.03 of the Base Indenture, the Trustee shall join with the
Company and the Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of the Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under the Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided in this Section 9.02, the Indenture, the
Guarantees and the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class (including consents obtained in con-
nection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07, any existing Default or
Event of Default (other than a Default or Event of Default in the payment
of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of the Indenture, the Guarantees or the Notes
may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for,
or purchase of, the Notes). Section 1.08 shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a Board Resolu-
tion authorizing the execution of any such amended or supplemental Inden-
ture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon re-
ceipt by the Trustee of the documents described in Sections 9.02 and 10.03
of the Base Indenture, the Trustee shall join with the Company in the exe-
cution of such amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties or immuni-
ties under the Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or sup-
plemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any pro-
posed amendment or waiver, but it shall be sufficient if such consent ap-
proves the substance thereof.
After an amendment, supplement or waiver under this Section be-
comes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Section 7.03 of
this Supplemental Indenture and Section 8.09 of the Base Indenture, the
Holders of a majority in aggregate principal amount of the Notes then out-
standing voting as a single class (including consents obtained in connec-
tion with a tender offer or exchange offer for, or purchase of, the Notes)
may waive compliance in a particular instance by the Company with any pro-
vision of the Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the amount of Notes whose Holders must consent to
an amendment;
(2) reduce the rate of or change or have the effect of xxxxx-
ing the time for payment of interest, including defaulted interest,
on any Notes;
(3) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on which
any Notes may be subject to redemption or reduce the redemption price
therefor;
(4) make any Notes payable in money other than that stated in
the Notes;
(5) make any change in provisions of the Indenture protecting
the right of each Holder to receive payment of principal of and in-
terest on such Note on or after the due date thereof or to bring suit
to enforce such payment, or permitting Holders of a majority in prin-
cipal amount of Notes to waive Defaults or Events of Default;
(6) alter the Company's obligation to purchase Notes arises
thereunder, amend, change or modify in any material respect the obli-
gation of the Company to make and consummate a Change of Control Of-
fer in the event of a Change of Control or make and consummate an Ex-
cess Proceeds Offer with respect to any Asset Sale that has been con-
summated or, after such Change of Control has occurred or such Asset
Sale has been consummated, modify any of the provisions or defini-
tions with respect thereto;
(7) modify or change any provision of the Indenture or the
related definitions affecting the subordination or ranking of the
Notes or any Guarantee in a manner which adversely affects the Hold-
ers; or
(8) release any Guarantor that is a Significant Subsidiary
from any of its obligations under its Guarantee or the Indenture oth-
erwise than in accordance with the terms of the Indenture.
No amendment of, or supplement or waiver to, the Indenture
shall adversely affect the rights of any holder of Senior Debt or Guarantor
Senior Debt under this Section 9.02, Article X or Article XII without the
consent of such holder of Senior Debt or Guarantor Senior Debt, as the case
may be.
ARTICLE X
Subordination
Section 10.01 Securities Subordinated to Senior Debt.
Anything herein to the contrary notwithstanding, the Company,
for itself and its successors, and each Holder agrees that the payment of
all Obligations owing on or relating to the Notes to the Holders is subor-
dinated, to the extent and in the manner provided in this Article X, to the
prior payment in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, of all Ob-
ligations on Senior Debt (including all Obligations with respect to the
Senior Credit Facilities, whether outstanding on the Issue Date or thereaf-
ter incurred). Notwithstanding the provisions of this Article X, payments
and distributions made relating to the Notes pursuant to a trust fund es-
tablished under Section 8.04(a) pursuant to the terms of Article VIII (so
long as all of the conditions contained in Section 8.04 were satisfied at
the time of such deposit) shall not be subordinated to Senior Debt under
this Article X.
This Article X shall constitute a continuing offer to all Per-
sons who become holders of, or continue to hold, Senior Debt, and such pro-
visions are made for the benefit of the holders of Senior Debt and such
holders are made obligees hereunder and any one or more of them may enforce
such provisions.
Section 10.02 Suspension of Payment When Senior Debt Is in
Default.
(a) If any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or oth-
erwise, of any principal of, interest on, unpaid drawings for letters of
credit issued in respect of, or regularly accruing fees with respect to,
any Senior Debt (including, without limitation, guarantees of the foregoing
items which constitute Senior Debt) (a "Payment Default"), then no payment
or distribution of any kind or character shall be made by or on behalf of
the Company or any other Person on its or their behalf with respect to any
Obligations owing on, or with respect to, the Notes or to acquire any of
the Notes for cash or property or otherwise until such Payment Default (and
all other Payment Defaults) shall have been cured or waived in accordance
with the terms of the documentation governing the respective Senior Debt or
ceased to exist or all Senior Debt with respect to which any Payment De-
fault has occurred and is continuing shall have been discharged or paid in
full in cash or Cash Equivalents.
(b) If any event of default (other than a Payment Default)
occurs and is continuing with respect to any Designated Senior Debt (as
such event of default is defined in the instrument creating or evidencing
such Designated Senior Debt) permitting the holders of such Designated Sen-
ior Debt then outstanding to accelerate the maturity thereof (a "Non-
payment Default"), and if the Representative for the respective issue of
Designated Senior Debt gives notice of the event of default to the Trustee
stating that such notice is a payment blockage notice (a "Payment Blockage
Notice"), then during the period (the "Payment Blockage Period") beginning
upon the delivery of such Payment Blockage Notice and ending on the earlier
of (x) the date on which all events of default with respect to all Desig-
nated Senior Debt have been cured or waived or ceased to exist, (y) 180
days after the date on which the applicable Payment Blockage Notice is re-
ceived, or (z) the date on which the Trustee receives notice thereof from
the Representative for the respective issue of Designated Senior Debt ter-
minating the Payment Blockage Period, neither the Company nor any other
Person on its behalf shall (i) make any payment of any kind or character
with respect to any Obligations owing on, or with respect to, the Notes or
(ii) acquire any of the Notes for cash or property or otherwise. Notwith-
standing anything herein to the contrary, (x) in no event will a Payment
Blockage Period extend beyond 180 days from the date the applicable Payment
Blockage Notice is received by the Trustee and (y) only one such Payment
Blockage Period may be commenced within any 360 consecutive days. For all
purposes of this Section 10.02(b), no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Debt shall be, or be made, the basis
for the commencement of a second Payment Blockage Period by the Representa-
tive of such Designated Senior Debt whether or not within a period of 360
consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowl-
edged that any subsequent action, or any breach of any financial covenants
for a period ending after the date of commencement of such Payment Blockage
Period that, in either case, would give rise to an event of default pursu-
ant to any provisions under which an event of default previously existed or
was continuing shall constitute a new event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by the foregoing provisions of this Section 10.02, such payment
shall be held in trust for the benefit of, and shall be paid over or deliv-
ered to, the holders of Senior Debt (pro rata to such holders on the basis
of the respective amount of Senior Debt held by such holders) or their re-
spective Representatives, as their respective interests may appear. The
Trustee shall be entitled to rely on information regarding amounts then due
and owing on the Senior Debt, if any, received from the holders of Senior
Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only
amounts included in the information provided to the Trustee shall be paid
to the holders of Senior Debt.
Nothing contained in this Article X shall limit the right of
the Trustee or the Holders to take any action to accelerate the maturity of
the Notes and all other Obligations owing on, or with respect to, the Notes
pursuant to Article VII or to pursue any rights or remedies hereunder (sub-
ject to the rights, if any, under this Article X, of the holders of Senior
Debt in respect of cash, property or securities of the Company received
upon exercise of any such remedy); provided that all Senior Debt thereafter
due or declared to be due shall first be paid in full in cash or Cash
Equivalents before the Holders are entitled to receive any payment of any
kind or character with respect to Obligations owing under the Notes.
Section 10.03 Obligations Subordinated to Prior Payment of All
Senior Debt on Dissolution, Liquidation or
Reorganization of Company.
(a) Upon any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to
creditors upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of
assets of the Company or in a bankruptcy, reorganization, insolvency, re-
ceivership or other similar proceeding relating to the Company or its as-
sets, whether voluntary or involuntary, all Obligations in respect of Sen-
ior Debt due or to become due shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of the Senior Debt (including interest after the commencement of
any bankruptcy or other like proceeding at the rate specified in the appli-
cable Senior Debt whether or not such interest is an allowed claim in any
such proceeding), before any payment or distribution of any kind or charac-
ter is made on account of any Obligations on, or with respect to, the Notes
or for the acquisition of any of the Notes for cash or property or other-
wise. Upon any such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or secu-
rities, to which the Holders or the Trustee would be entitled, except for
the provisions hereof, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, or by the Holders or by the Trustee if re-
ceived by it, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been
paid in full in cash or Cash Equivalents after giving effect to any concur-
rent payment, distribution or provision therefor to or for the holders of
Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or
on behalf of the Company, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential,
set aside or required to be paid to any receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then, if
such payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Debt or part thereof originally intended to be satisfied shall be deemed to
be reinstated and outstanding as if such payment had not occurred.
It is further agreed that any diminution (whether pursuant to
court decree or otherwise, including without limitation for any of the rea-
sons described in the preceding sentence) of the Company's obligation to
make any distribution or payment pursuant to any Senior Debt, except to the
extent such diminution occurs by reason of the repayment (which has not
been disgorged or returned) of such Senior Debt in cash or Cash Equiva-
xxxxx, shall have no force or effect for purposes of the subordination pro-
visions contained in this Article X, with any turnover of payments as oth-
erwise calculated pursuant to this Section 10.03 to be made as if no such
diminution had occurred.
(c) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by any Holder
when such payment or distribution is prohibited by this Section 10.03, such
payment or distribution shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to
such holders on the basis of the respective amount of Senior Debt held by
such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may
have been issued, as their respective interests may appear, for application
to the payment of Senior Debt remaining unpaid until all such Senior Debt
has been paid in full in cash or Cash Equivalents, after giving effect to
any concurrent payment, distribution or provision therefor to or for the
holders of such Senior Debt.
Section 10.04 Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article X or elsewhere in this Sup-
plemental Indenture shall prevent (i) the Company, except under the condi-
tions described in Sections 10.02 and 10.03, from making payments at any
time for the purpose of making payments of principal of and interest on the
Obligations owing under the Notes, or from depositing with the Trustee, any
monies for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 10.02, 10.03,
12.02 or 12.03, the application by the Trustee of any monies deposited with
it by or on behalf of the Company for the purpose of making such payments
of principal of, and interest on, the Obligations owing under the Notes to
the Holders entitled thereto unless at least one Business Day prior to the
date upon which such payment would otherwise become due and payable the
Trustee shall have actually received the written notice provided for in
Section 10.13 and in the first sentence of Section 10.02(b) or in the last
sentence of this Section 10.04 (provided that, notwithstanding the forego-
ing, the Holders receiving any payments made in contravention of Section
10.02 and/or 10.03 (and the respective such payments) shall otherwise be
subject to the provisions of Section 10.02 and Section 10.03). The Company
shall give prompt written notice to the Trustee of any dissolution, wind-
ing-up, liquidation or reorganization of the Company, although any delay or
failure to give any such notice shall have no effect on the subordination
provisions contained herein.
Section 10.05 Holders To Be Subrogated to Rights of Holders of
Senior Debt.
Subject to the payment in full in cash or Cash Equivalents of
all Senior Debt, the Holders shall be subrogated to the rights of the hold-
ers of Senior Debt to receive payments or distributions of cash, property
or securities of the Company applicable to the Senior Debt until the Obli-
gations owing under the Notes shall be paid in full; and, for the purposes
of such subrogation, no such payments or distributions to the holders of
the Senior Debt by or on behalf of the Company, or by or on behalf of the
Holders by virtue of this Article X, which otherwise would have been made
to the Holders shall, as between the Company and the Holders, be deemed to
be a payment by the Company to or on account of the Senior Debt, it being
understood that the provisions of this Article X are and are intended
solely for the purpose of defining the relative rights of the Holders, on
the one hand, and the holders of Senior Debt, on the other hand.
Section 10.06 Obligations of the Company Unconditional.
Nothing contained in this Article X or elsewhere in this Sup-
plemental Indenture is intended to or shall impair, as among the Company,
its creditors other than the holders of Senior Debt, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of and any interest on the Obligations owing un-
der the Notes as and when the same shall become due and payable in accor-
dance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the holders
of the Senior Debt, nor shall anything herein or therein prevent any Holder
or the Trustee on its behalf from exercising all remedies otherwise permit-
xxx by applicable law upon default under this Supplemental Indenture, sub-
ject to the rights, if any, under this Article X, of the holders of Senior
Debt in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Section 10.07 Reliance on Judicial Order or Certificate of
Liquidating Agent.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given
to their Representative.
Upon any payment or distribution of assets of the Company re-
ferred to in this Article X, the Trustee, subject to the provisions of Ar-
ticle IX, and the Holders shall be entitled to rely upon any order or xx-
xxxx made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganiza-
tion or similar case or proceeding is pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, assignee for the
benefit of creditors, agent or other person making such payment or distri-
bution, delivered to the Trustee or the Holders, for the purpose of ascer-
taining the Persons entitled to participate in such payment or distribu-
tion, the holders of the Senior Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or dis-
tributed thereon and all other facts pertinent thereto or to this Article
X. Nothing in this Article X shall apply to the claims of, or payments to,
the Trustee in its capacity as such under or pursuant to Section 9.06 of
the Base Indenture. The Trustee shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself or itself to be
a holder of any Senior Debt (or a trustee on behalf of, or other represen-
tative of, such holder) to establish that such notice has been given by a
holder of such Senior Debt or a trustee or representative on behalf of any
such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held
by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights
of such Person under this Article X, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determi-
nation as to the right of such Person to receive such payment.
Section 10.08 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Com-
pany or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms of this Supplemental In-
denture, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders and without impairing or re-
leasing the subordination provided in this Article X or the obligations
hereunder of the Holders to the holders of the Senior Debt, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt, or any instrument evidencing
the same or any agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person li-
able in any manner for the payment or collection of Senior Debt; and
(iv) exercise or refrain from exercising any rights against the Company and
any other Person.
Section 10.09 Holders Authorize Trustee To Effectuate
Subordination of Obligations.
Each Holder authorizes and expressly directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectu-
ate, as between the holders of Senior Debt and the Holders, the subordina-
tion provided in this Article X, and appoints the Trustee its attorney-in-
fact for such purposes, including, in the event of any dissolution, wind-
ing-up, liquidation or reorganization of the Company (whether in bank-
ruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of credits or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a
claim for the unpaid balance of its Obligations owing under the Notes and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration
of the time to file such claim or claims, then the holders of the Senior
Debt or their Representative shall have the right to file and are or is
hereby authorized to file an appropriate claim for and on behalf of the
Holders. Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Senior Debt or their Representative to authorize or con-
sent to or accept or adopt on behalf of any Holder any plan of reorganiza-
tion, arrangement, adjustment or composition affecting the Obligations ow-
ing under the Notes or the rights of any Holder thereof, or to authorize
the Trustee or the holders of Senior Debt or their Representative to vote
in respect of the claim of any Holder in any such proceeding.
Section 10.10 This Article X Not To Prevent Events of Default.
The failure to make a payment on account of principal of or in-
terest on the Obligations owing under the Notes by reason of any provision
of this Article X will not be construed as preventing the occurrence of an
Event of Default.
Section 10.11 Amendments or Modifications to Article X.
Notwithstanding anything to the contrary contained in this Sup-
plemental Indenture, no amendment or modification to any provision of this
Article X or the related definitions used herein (other than to cure any
ambiguity, defect, mistake or inconsistency herein, so long as such amend-
ment or modification does not adversely affect the rights of any holder of
Senior Debt without the consent of such holder of Senior Debt) shall be
permitted without the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), or if required by Section 9.02(7),
by each holder affected.
Section 10.12 Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.13 Notice to Trustee; Rights of Trustee and Paying
Agent.
The Company shall give prompt notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes or the Guarantee Obligations pursu-
ant to the provisions of this Article X or Article XII, as the case may be,
although any delay or failure to give any such notice shall have no effect
on the subordination provisions contained herein.
Notwithstanding the provisions of this Article X or any other
provision of the Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and (in the absence of actual knowledge
that the respective payment will violate the applicable provisions of this
Article X or Article XII) the Trustee and the Paying Agent may continue to
make payments on the Notes, unless the Trustee shall have received at least
one Business Day prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to the Notes
to violate this Article X (although the receipt of such payment shall oth-
erwise be subject to the applicable provisions of this Article X) or Arti-
cle XII (although the receipt of such payment shall otherwise be subject to
the applicable provisions of Article XII). Only the Company, a Guarantor,
a holder of Senior Debt or a Representative therefor may give the notice.
Nothing in this Article X shall impair the claims of, or payments to, the
Trustee in its capacity as such under or pursuant to Section 9.06 of the
Base Indenture. Nothing in this Section 10.13 is intended to or shall re-
lieve any Holder of Notes from the obligations imposed under Sections
10.02(c) and 10.03(c) with respect to other distributions received in vio-
lation of the provisions hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
ARTICLE XI
Guarantee
Section 11.01 Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee"),
subject to Article XII, to each of the Holders and to the Trustee and their
respective successors and assigns that (i) the principal of and interest on
the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and inter-
est on the overdue principal, if any, and interest on any interest, if any,
to the extent lawful, of the Notes and all other obligations of the Company
to the Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any of
the Notes or of any such other obligations, the same will be promptly paid
in full when due or performed in accordance with the terms of the extension
or renewal, subject to any applicable grace period, whether at Stated Ma-
turity, by acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in Section 11.05.
Each Guarantor hereby agrees that its obligations hereunder shall be uncon-
ditional, irrespective of the validity, regularity or enforceability of the
Notes or this Supplemental Indenture, the absence of any action to enforce
the same, any waiver or consent by any of the Holders with respect to any
provisions hereof or thereof, the recovery of any judgment against the Com-
pany, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guaran-
tor. Each Guarantor hereby waives diligence, presentment, demand of pay-
ment, filing of claims with a court in the event of insolvency or bank-
ruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that this
Guarantee will not be discharged except by complete performance of the ob-
ligations contained in the Notes, this Supplemental Indenture and in this
Guarantee. If any Holder or the Trustee is required by any court or other-
wise to return to the Company, any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or
any Guarantor, any amount paid by the Company or any Guarantor to the Trus-
tee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further
agrees that, as between each Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article VII for the
purposes of this Guarantee, and (y) in the event of any acceleration of
such obligations as provided in Article VII, such obligations (whether or
not due and payable) shall forthwith become due and payable by each Guaran-
tor for the purpose of this Guarantee.
Section 11.02 Subordination of Guarantee.
The obligations of each Guarantor to the Holders and to the
Trustee pursuant to the Guarantee of such Guarantor and this Supplemental
Indenture are expressly subordinate and subject in right of payment to the
prior payment in full of all Guarantor Senior Debt of such Guarantor, to
the extent and in the manner provided in Article XII.
Section 11.03 Severability.
In case any provision of this Guarantee shall be invalid, ille-
gal or unenforceable, the validity, legality and enforceability of the re-
maining provisions shall not in any way be affected or impaired thereby.
Section 11.04 Release of a Guarantor.
In the event of a sale or other disposition of all of the prop-
erties and assets of any Guarantor, by way of merger, consolidation or oth-
erwise, the sale of all of the Capital Stock of a Guarantor, whether by way
of merger, consolidation or otherwise, in either case provided that such
sale or other disposition complies with Section 5.03 (other than provisions
for future application of the Net Cash Proceeds), or in the event of the
designation of any Guarantor as an Unrestricted Subsidiary in accordance
with the Indenture, the Guarantor's Guarantee will be released.
In addition to releases pursuant to the immediately preceding
paragraph, the Guarantee of any Person which becomes a Guarantor after the
Issue Date shall be released in accordance with the applicable provisions
of Section 5.10.
The Trustee shall promptly deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompa-
xxxx by an Officer's Certificate certifying as to the compliance with this
Section 11.04. Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Notes as provided in this Arti-
cle XI.
Section 11.05 Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance hereof each of the Holders
hereby confirms that it is the intention of all such parties that the guar-
xxxxx by such Guarantor pursuant to its Guarantee not constitute a fraudu-
lent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any simi-
lar Federal or state law. To effectuate the foregoing intention, the Hold-
ers and such Guarantor hereby irrevocably agree that the obligations of
such Guarantor under the Guarantee shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities
of such Guarantor (including, but not limited to, all Guarantor Senior Debt
of such Guarantor) and after giving effect to any collections from or pay-
ments made by or on behalf of any other Guarantor in respect of the obliga-
tions of such other Guarantor under its Guarantee or pursuant to Section
11.07, result in the obligations of such Guarantor under the Guarantee not
constituting such fraudulent transfer or conveyance.
Section 11.06 Guarantors May Consolidate, etc., on Certain Terms.
Each Guarantor (other than any Guarantor whose Guarantee is to
be released in accordance with the terms of the Guarantee and the Indenture
in connection with any transaction complying with the provisions of Sec-
tion 5.03) will not, and the Company will not cause or permit any Guarantor
to, consolidate with or merge with or into any Person other than the Com-
pany or any other Guarantor unless:
(1) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) or to which such sale, lease,
conveyance or other disposition shall have been made is a corporation
organized and existing under the laws of the United States or any
State thereof or the District of Columbia;
(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee; and
(3) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
and
(4) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a pro forma basis, the Com-
pany could satisfy the provisions of clause (2) of Section 6.01.
Any merger or consolidation of a Guarantor with and into the
Company (with the Company being the surviving entity) or another Guarantor
that is a Wholly Owned Restricted Subsidiary of the Company need only com-
ply with clause (2) above.
Section 11.07 Contribution.
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any pay-
ment or distribution is made by any Guarantor (a "Funding Guarantor") under
its Guarantee, such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount based on the Adjusted Net
Assets of each Guarantor (including the Funding Guarantor) for all pay-
ments, damages and expenses incurred by that Funding Guarantor in discharg-
ing the Company's obligations with respect to the Obligations. "Adjusted
Net Assets" of such Guarantor at any date shall mean the lesser of (x) the
amount by which the fair value of the property of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabili-
ties incurred or assumed on such date (other than liabilities of such Guar-
antor under Subordinated Indebtedness)), but excluding liabilities under
the Guarantee, of such Guarantor at such date and (y) the amount by which
the present fair salable value of the assets of such Guarantor at such date
exceeds the amount that will be required to pay the probable liabilities of
such Guarantor on its debts including, without limitation, Guarantor Senior
Debt (after giving effect to all other fixed and contingent liabilities in-
curred or assumed on such date and after giving effect to any collection
from any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding debt in respect of the Guarantee
of such Guarantor, as they become absolute and matured.
Section 11.08 Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise
from the existence, payment, performance or enforcement of such Guarantor's
obligations under its Guarantee and this Supplemental Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly
or indirectly, in cash or other property or by setoff or in any other man-
ner, payment or security on account of such claim or other rights unless
and until the Notes shall have been paid in full. If any amount shall be
paid to any Guarantor in violation of the preceding sentence and the Notes
shall not have been paid in full, such amount shall be deemed to have been
paid to such Guarantor for the benefit of, and held in trust for the bene-
fit of, the Holders, and shall, subject to the provisions of Article X,
Section 11.02 and Article XII, forthwith be paid to the Trustee for the
benefit of such Holders to be credited and applied upon the Notes, whether
matured or unmatured, in accordance with the terms of this Supplemental In-
denture. Each Guarantor acknowledges that it will receive direct and indi-
rect benefits from the financing arrangements contemplated by this Supple-
mental Indenture and that the waiver set forth in this Section 11.08 is
knowingly made in contemplation of such benefits.
Section 11.09 Evidence of Guarantee.
To evidence their guarantees to the Holders set forth in this
Article XI, each of the Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in Exhibit B. Each such nota-
tion of Guarantee shall be signed on behalf of each Guarantor by an Officer
or an assistant Secretary by manual or facsimile signature.
Each Guarantor hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee.
If an Officer or assistant Secretary whose signature is on the
Indenture or on the Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which a Guarantee is endorsed, the Guar-
xxxxx shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentica-
tion thereof hereunder, shall constitute due delivery of the Guarantee set
forth in the Indenture on behalf of the Guarantors.
Section 11.10 Waiver of Stay, Extension or Usury Laws.
Each Guarantor covenants that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or ad-
vantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive such Guarantor from performing its Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Supple-
mental Indenture; and each Guarantor hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE XII
Subordination of Guarantee Obligations
Section 12.01 Guarantee Obligations Subordinated to Guarantor
Senior Debt.
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Holder agrees that the
payment of all Guarantee Obligations of such Guarantor are subordinated, to
the extent and in the manner provided in this Article XII, to the prior
payment in full in cash or Cash Equivalents, or such payment duly provided
for to the satisfaction of the holders of Guarantor Senior Debt, of all Ob-
ligations on Guarantor Senior Debt of such Guarantor (including all Obliga-
tions of such Guarantor with respect to the Senior Credit Facilities,
whether outstanding on the Issue Date or thereafter incurred).
This Article XII shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Guarantor Senior Debt,
and such provisions are made for the benefit of the holders of Guarantor
Senior Debt and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
Section 12.02 Suspension of Guarantee Obligations When Guarantor
Senior Debt Is in Default
(a) If any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or oth-
erwise, of any principal of, interest on, unpaid drawings for letters of
credit issued in respect of, or regularly accruing fees with respect to,
any Guarantor Senior Debt (including, without limitation, guarantees of the
foregoing items which constitute Guarantor Senior Debt), then no payment or
distribution of any kind or character shall be made by or on behalf of such
Guarantor or any other Person on its or their behalf with respect to any
Guarantee Obligations or to acquire any of the Notes for cash or property
or otherwise until such Payment Default (and all other Payment Defaults)
shall have been cured or waived in accordance with the terms of the docu-
mentation governing the respective Guarantor Senior Debt or ceased to exist
or all Guarantor Senior Debt with respect to which any Payment Default has
occurred and is continuing shall have been discharged or paid in full in
cash or Cash Equivalents.
(b) During any Payment Blockage Period (as determined in ac-
cordance with Section 10.02(b)), neither any Guarantor nor any other Person
on any Guarantor's behalf shall (i) make any payment of any kind or charac-
ter with respect to any Guarantee Obligations or (ii) acquire any of the
Notes for cash or property or otherwise.
(c) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by the foregoing provisions of this Section 12.02, such payment
shall be held in trust for the benefit of, and shall be paid over or deliv-
ered to, the holders of Guarantor Senior Debt (pro rata to such holders on
the basis of the respective amount of Guarantor Senior Debt held by such
holders) or their respective Representatives, as their respective interests
may appear. The Trustee shall be entitled to rely on information regarding
amounts then due and owing on the Guarantor Senior Debt, if any, received
from the holders of Guarantor Senior Debt (or their Representatives) or, if
such information is not received from such holders or their Representa-
tives, from a Guarantor and only amounts included in the information pro-
vided to the Trustee shall be paid to the holders of Guarantor Senior Debt.
Section 12.03 Guarantee Obligations Subordinated to Prior Payment
of All Guarantor Senior Debt on Dissolution,
Liquidation or Reorganization of Such Guarantor.
(a) Upon any payment or distribution of assets of any Guaran-
tor of any kind or character, whether in cash, property or securities, to
creditors upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of
assets of such Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to such Guarantor or its
assets, whether voluntary or involuntary, all Obligations in respect of
Guarantor Senior Debt due or to become due shall first be paid in full in
cash or Cash Equivalents, or such payment duly provided for to the satis-
faction of the holders of the Guarantor Senior Debt (including interest af-
ter the commencement of any bankruptcy or other like proceeding at the rate
specified in the applicable Guarantor Senior Debt whether or not such in-
terest is an allowed claim in any such proceeding), before any payment or
distribution of any kind or character is made on account of any Guarantee
Obligations or for the acquisition of any of the Notes for cash or property
or otherwise. Upon any such dissolution, winding-up, liquidation, reor-
ganization, receivership or similar proceeding, any payment or distribution
of assets of such Guarantor of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee would be enti-
tled, except for the provisions hereof, shall be paid by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Holders or by the
Trustee if received by them, directly to the holders of Guarantor Senior
Debt (pro rata to such holders on the basis of the respective amounts of
Guarantor Senior Debt held by such holders) or their respective Representa-
tives, or to the trustee or trustees under any indenture pursuant to which
any of such Guarantor Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Guarantor Senior
Debt remaining unpaid until all such Guarantor Senior Debt has been paid in
full in cash or Cash Equivalents after giving effect to any concurrent pay-
ment, distribution or provision therefor to or for the holders of Guarantor
Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt
(whether by or on behalf of a Guarantor, as proceeds of security or en-
forcement of any right of setoff or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to any receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person,
the Guarantor Senior Debt or part thereof originally intended to be satis-
fied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) It is further agreed that any diminution (whether pursu-
ant to court decree or otherwise, including without limitation for any of
the reasons described in the preceding sentence) of the Guarantor's obliga-
tion to make any distribution or payment pursuant to any Guarantor Senior
Debt, except to the extent such diminution occurs by reason of the repay-
ment (which has not been disgorged or returned) of such Guarantor Senior
Debt in cash or Cash Equivalents, shall have no force or effect for pur-
poses of the subordination provisions contained in this Article X, with any
turnover of payments as otherwise calculated pursuant to this Section 12.03
to be made as if no such diminution had occurred.
(d) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of any Guarantor of any kind or charac-
ter, whether in cash, property or securities, shall be received by any
Holder when such payment or distribution is prohibited by this Section
12.03, such payment or distribution shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Guarantor Senior
Debt (pro rata to such holders on the basis of the respective amount of
Guarantor Senior Debt held by such holders) or their respective Representa-
tives, or to the trustee or trustees under any indenture pursuant to which
any of such Guarantor Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Guarantor Senior
Debt remaining unpaid until all such Guarantor Senior Debt has been paid in
full in cash or Cash Equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such
Guarantor Senior Debt.
Section 12.04 Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article XII or elsewhere in this Sup-
plemental Indenture shall prevent (i) any Guarantor, except under the con-
ditions described in Sections 12.02 and 12.03, from making payments at any
time for the purpose of making payments on Guarantee Obligations, or from
depositing with the Trustee any monies for such payments, or (ii) in the
absence of actual knowledge by the Trustee that a given payment would be
prohibited by Section 12.02 or 12.03, the application by the Trustee of any
monies deposited with it by or on behalf of a Guarantor for the purpose of
making such payments on Guarantee Obligations to the Holders entitled
thereto unless at least one Business Day prior to the date upon which such
payment would otherwise become due and payable the Trustee shall have actu-
ally received the written notice provided for in Section 12.13 and in the
first sentence of Section 10.02(b) or in the last sentence of this Section
12.04 (provided that, notwithstanding the foregoing, the Holders receiving
any payments made in contravention of Sections 12.02 and/or 12.03 (and the
respective such payments) shall otherwise be subject to the provisions of
Section 12.02 and Section 12.03). Each Guarantor shall give prompt written
notice to the Trustee of any dissolution, winding-up, liquidation or reor-
ganization of such Guarantor, although any delay or failure to give any
such notice shall have no effect on the subordination provisions contained
herein.
Section 12.05 Holders To Be Subrogated to Rights of Holders of
Guarantor Senior Debt.
Subject to the payment in full in cash or Cash Equivalents of
all Guarantor Senior Debt, the Holders shall be subrogated to the rights of
the holders of Guarantor Senior Debt of such Guarantor to receive payments
or distributions of cash, property or securities of such Guarantor applica-
ble to such Guarantor Senior Debt until all amounts owing on or in respect
of the Guarantee Obligations shall be paid in full; and, for the purposes
of such subrogation, no such payments or distributions to the holders of
such Guarantor Senior Debt by or on behalf of such Guarantor, or by or on
behalf of the Holders by virtue of this Article XII, which otherwise would
have been made to the Holders shall, as between such Guarantor and the
Holders, be deemed to be a payment by such Guarantor to or on account of
such Guarantor Senior Debt, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Guaran-
tor Senior Debt, on the other hand.
Section 12.06 Guarantee Obligations of the Guarantors
Unconditional.
Nothing contained in this Article XII or elsewhere in this Sup-
plemental Indenture or in the Guarantees is intended to or shall impair, as
among the Guarantors, their creditors other than the holders of Guarantor
Senior Debt, and the Holders, the obligation of the Guarantors, which is
absolute and unconditional, to pay to the Holders all amounts due and pay-
able under the Guarantees as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the rela-
tive rights of the Holders and creditors of the Guarantors other than the
holders of the Guarantor Senior Debt, nor shall anything herein or therein
prevent any Holder or the Trustee on its behalf from exercising all reme-
dies otherwise permitted by applicable law upon default under this Supple-
mental Indenture, subject to the rights, if any, under this Article XII, of
the holders of Guarantor Senior Debt in respect of cash, property or secu-
rities of the Guarantors received upon the exercise of any such remedy.
Section 12.07 Reliance on Judicial Order or Certificate of
Liquidating.
Whenever a distribution is to be made or a notice given to
holders of the Guarantor Senior Debt, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of a Guarantor re-
ferred to in this Article XII, the Trustee, subject to the provisions of
Article IX, and the Holders shall be entitled to rely upon any order or xx-
xxxx made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganiza-
tion or similar case or proceeding is pending, or upon a certificate of the
trustee in bankruptcy, liquidating trustee, receiver, assignee for the
benefit of creditors, agent or other person making such payment or distri-
bution, delivered to the Trustee or the Holders, for the purpose of ascer-
taining the Persons entitled to participate in such payment or distribu-
tion, the holders of the Guarantor Senior Debt and other Indebtedness of
such Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article XII. Nothing in this Article XII shall apply to the
claims of, or payments to, the Trustee in its capacity as such under or
pursuant to Section 9.06 of the Base Indenture. The Trustee shall be enti-
tled to rely on the delivery to it of a written notice by a Person repre-
senting himself or itself to be a holder of the Guarantor Senior Debt (or a
trustee on behalf of, or other representative of, such holder) to establish
that such notice has been given by a holder of such Guarantor Senior Debt
or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
the Guarantor Senior Debt to participate in any payment or distribution
pursuant to this Article XII, the Trustee may request such Person to fur-
nish evidence to the reasonable satisfaction of the Trustee as to the
amount of the Guarantor Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribu-
tion and any other facts pertinent to the rights of such Person under this
Article XII, and if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
Section 12.08 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Debt.
No right of any present or future holders of any Guarantor Sen-
ior Debt to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part
of any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by any Guarantor with the terms of
this Supplemental Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Guarantor Senior Debt may, at any time and from
time to time, without the consent of or notice to the Trustee, without in-
curring responsibility to the Trustee or the Holders and without impairing
or releasing the subordination provided in this Article XII or the obliga-
tions hereunder of the Holders to the holders of Guarantor Senior Debt, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Guarantor Sen-
ior Debt, or otherwise amend or supplement in any manner Guarantor Senior
Debt, or any instrument evidencing the same or any agreement under which
Guarantor Senior Debt is outstanding; (ii) sell, exchange, release or oth-
erwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (iii) release any Person liable in any manner for
the payment or collection of Guarantor Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Guarantors and any other
Person.
Section 12.09 Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations.
Each Holder, by its acceptance of the Guarantee Obligations,
authorizes and expressly directs the Trustee on its behalf to take such ac-
tion as may be necessary or appropriate to effectuate, as between the hold-
ers of Guarantor Senior Debt and the Holders, the subordination provided in
this Article XII, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquida-
tion or reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment
for the benefit of credits or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance under its Guarantee Obligations and accrued interest in the form
required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration
of the time to file such claim or claims, then the holders of the Guarantor
Senior Debt or their Representative shall have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders. Nothing herein contained shall be deemed to authorize the Trustee
or the holders of Guarantor Senior Debt or their Representative to author-
ize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Guar-
xxxxx Obligations or the rights of any Holder, or to authorize the Trustee
or the holders of Guarantor Senior Debt or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
Section 12.10 This Article XII Not To Prevent Events of Default.
The failure to make a payment on account of principal of or in-
terest on the Guarantee Obligations by reason of any provision of this Ar-
ticle XII will not be construed as preventing the occurrence of an Event of
Default.
Section 12.11 Amendments or Modifications to Article XII.
Notwithstanding anything to the contrary contained in this Sup-
plemental Indenture, no amendment or modification to any provision of this
Article XII or the related definitions used herein (other than to cure any
ambiguity, defect, mistake or inconsistency herein, so long as such amend-
ment or modification does not adversely affect the rights of any holder of
any Guarantor Senior Debt without the consent of such holder of Guarantor
Senior Debt) shall be permitted without the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding voting
as a single class (including consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes) or, if required by
Section 9.02(7), by each Holder affected.
Section 12.12 Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Guarantor Senior Debt
of the acceleration.
Section 12.13 Notice to Trustee; Rights of Trustee and Paying
Agent.
Each Guarantor shall give prompt written notice to the Trustee
of any fact known to such Guarantor which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantee Obligations or the
Notes pursuant to the provisions of this Article XII, although any delay or
failure to give any such notice shall have no effect on the subordination
provisions contained herein.
Notwithstanding the provisions of this Article XII or any other
provision of the Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and (in the absence of actual knowledge
that the respective payment will violate the applicable provisions of this
Article XII or Article X) the Trustee and the Paying Agent may continue to
make payments on the Notes, unless the Trustee shall have received at least
one Business Day prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to the Notes
to violate this Article XII (although the receipt of such payment shall
otherwise be subject to the applicable provisions of this Article XII) or
Article X (although receipt of such payment shall otherwise be subject to
the applicable provisions of Article X). Only the Company, a Guarantor, a
holder of Senior Debt or a Representative therefor may give the notice.
Nothing in this Article XII shall impair the claims of, or payments to, the
Trustee in its capacity as such under or pursuant to Section 9.06 of the
Base Indenture. Nothing in this Section 12.13 is intended to or shall re-
lieve any Holder of Notes from the obligations imposed under Sections
12.02(c) and 12.03(c) with respect to other distributions received in vio-
lation of the provisions hereof.
The Trustee in its individual or any other capacity may hold
the Guarantor Senior Debt with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
ARTICLE XIII
Miscellaneous
Section 13.01 Trust Indenture Act Controls.
If any provision of this Supplemental Indenture limits, quali-
fies or conflicts with another provision that is required or deemed to be
included in this Supplemental Indenture by the Trust Indenture Act, the re-
quired or deemed provision shall control.
Section 13.02 Notices.
Any notice or communication shall be in writing and delivered
in person or mailed by first-class mail or sent by facsimile (with a hard
copy delivered in person or by mail promptly thereafter) and addressed as
follows:
if to the Company or a Guarantor:
Hollywood Entertainment Corporation
0000 X.X. Xxxxxx Xxxx
Xxxxxxxxxxx, Oregon 97070
Attention: Executive Vice President of Legal Affairs
Facsimile: (000) 000-0000
with a copy to:
Stoel Rives LLP
000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Trustee:
BNY Western Trust Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
The Company, any Guarantor or the Trustee by notice to the oth-
ers may designate additional or different addresses for subsequent notices
or communications.
Section 13.03 Rules by Trustee, Paying Agent and Security
Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Security Registrar and the Paying Agent or co-
registrar may make reasonable rules for their functions.
If a payment date is not a Business Day, payment shall be made
on the next succeeding day that is a Business Day, and no interest shall
accrue for the intervening period. If a Regular Record Date is not a Busi-
ness Day, the Regular Record Date shall not be affected.
Section 13.04 Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 13.05 No Personal Liability of Directors, etc.
None of the Company's or any Guarantor's directors, officers,
employees, incorporators or stockholders, as such, shall have any liability
for any of the Company's obligations under the Notes, the Indenture, the
Guarantee Obligations, or for any claim based on, in respect of, or by rea-
son of, such obligations or their creation. Each Holder of Notes and Guar-
xxxxx Obligations by accepting a Note and Guarantee Obligations waives and
releases all such liability. The waiver and release are part of the con-
sideration for issuance of the Notes and Guarantee Obligations.
Section 13.06 Successors.
All agreements of the Company in the Indenture and the Notes
shall bind its successors. All agreements of any Guarantor in the Inden-
ture and its Guarantee Obligations shall bind its respective successors.
All agreements of the Trustee in the Indenture shall bind its respective
successors.
Section 13.07 Multiple Originals.
The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this Sup-
plemental Indenture.
Section 13.08 Table of Contents; Headings.
The table of contents and headings of the Articles and Sections
of this Supplemental Indenture have been inserted for convenience of refer-
ence only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
Section 13.09 Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the
Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their cor-
rectness. The Trustee makes no representation as to the validity, suffi-
ciency or priority of this Supplemental Indenture or of the Notes. The
Trustee shall not be accountable for the Company's use of the proceeds from
the Notes or for monies paid over to the Company pursuant to this Supple-
mental Indenture.
Section 13.10 Adoption, Ratification and Confirmation.
The Base Indenture, as supplemented and amended by this Supple-
mental Indenture, is in all respects hereby adopted, ratified and con-
firmed.
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed as of the date first written above.
HOLLYWOOD ENTERTAINMENT CORPORATION
By: /s/Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Executive Vice President
HOLLYWOOD MANAGEMENT COMPANY
By: /s/Xxxxx X Xxxxxx
Name: Xxxxx X Xxxxxx
Title: Executive Vice President, CFO
BNY WESTERN TRUST COMPANY
By: /s/Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Assistant Vice President
EXHIBIT A
[FORM OF NOTE]
HOLLYWOOD ENTERTAINMENT CORPORATION
9.625% Senior Subordinated Notes due 2011
No. [ ]
$[ ]
CUSIP:
[ ]
HOLLYWOOD ENTERTAINMENT CORPORATION, a corporation incorporated under
the laws of the State of Oregon, promises to pay to CEDE & CO. or their
registered assigns, the principal sum of
Dollars ($ ) on March 15,
2011.
Interest Payment Dates: March 15 and September 15, commencing
[ ].
Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at
this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed by its duly authorized officer.
HOLLYWOOD ENTERTAINMENT CORPORATION
Dated: _____________ By:
Name:
Title:
Attested as of the
date set forth above:
By:
Name:
Title:
Authentication of Trustee:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
BNY WESTERN TRUST COMPANY,
as Trustee
By Dated:
Name:
Title:
HOLLYWOOD ENTERTAINMENT CORPORATION
9.625% Senior Subordinated Notes due 2011
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest. Hollywood Entertainment Corporation, an Oregon
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 9.625% per annum. The Company shall pay interest
semi-annually on March 15 and September 15 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Inter-
est Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Pay-
ment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be
[ ]. The Company shall pay interest (including post-petition in-
terest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum
in excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on over-
due installments of interest, if any (without regard to any applicable
grace periods), from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. Method of Payment. The Company will pay interest on the
Notes to the Persons who are registered Holders of Notes at the close of
business on March 1 and September 1 immediately preceding the applicable
Interest Payment Date (each, a "Regular Record Date"), even if such Notes
are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 1.07 of the Supplemental Indenture re-
ferred to below with respect to defaulted interest. The Notes will be pay-
able as to principal and premium, if any, and interest at the office or
agency of the Company maintained for such purpose within or without the
City and State of New York, or, at the option of the Company, payments of
interest may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and provided that payment by wire trans-
fer of immediately available funds will be required with respect to princi-
pal of and interest and premium, if any, on all Global Notes. Such payment
shall be in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, BNY Western Trust
Company, the Trustee under the Indenture, will act as Paying Agent and Reg-
istrar. The Company may change any Paying Agent or Registrar without no-
xxxx to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
4. Indenture. This Note is one of a duly authorized issue
of securities of the Company (the "Securities") issued under an indenture,
dated as of January 25, 2002 (the "Base Indenture"), as amended by the Sup-
plemental Indenture dated as of December 18, 2002 (the "Supplemental Inden-
ture" and, together with the Base Indenture, the "Indenture"), between the
Company and BNY Western Trust Company, as trustee (the "Trustee"), and is
one of the "Notes" referred to in the Supplemental Indenture, to which the
Base Indenture, Supplemental Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, any
Guarantor, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. The Notes
shall be known and designated as the "9.625% Senior Subordinated Notes due
2011." The aggregate principal amount of the Initial Notes to be authenti-
cated and delivered by the Trustee shall be an amount up to $225,000,000
(except for Notes authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, Notes pursuant to Section 2.06,
2.07, 3.05 or 10.06 of the Base Indenture). The aggregate principal amount
of Additional Notes that may be authenticated and delivered under the In-
denture on one or more occasions is unlimited; provided the issuance of any
Additional Notes is subject to compliance with Section 5.01 of the Supple-
mental Indenture. Unless otherwise expressly specified, references in the
Note to specific Article or Section numbers refer to Articles and Sections
contained in the Supplemental Indenture, and not the Base Indenture or any
other document.
5. Subordination. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full in cash or Cash Equivalents of all Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed. The Guarantees of each of the
Guarantors are subordinated in right of payment, in the manner and to the
extent set forth in the Indenture, to the Guarantor Senior Debt of each
Guarantor on the same basis as the Notes are subordinated to the Senior
Debt of the Company. Each Holder by its acceptance hereof agrees to be
bound by such provisions and authorizes and expressly directs the Trustee,
on its behalf, to take such action as may be necessary or appropriate to
effectuate the subordination provided for in the Indenture.
6. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph
6, the Notes are not redeemable before March 15, 2007. Thereafter, the
Company may redeem the Notes at its option, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if re-
deemed during the twelve-month period commencing on March 15 of the years
indicated below:
Year
Percentage
2007
104.813%
2008
102.406%
2009 and thereafter
100.000%
In addition, the Company must pay accrued and unpaid interest
on the Notes redeemed.
(b) Notwithstanding the foregoing, at any time, or from time
to time, on or prior to March 15, 2006, the Company may, at its option, use
the net cash proceeds from one or more Public Equity Offerings to redeem up
to 35% of the principal amount of the Notes issued under the Indenture at a
redemption price of 109.625% of the principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the date of redemption; provided
that:
(i) at least 65% of the aggregate principal amount of Notes
issued under the Indenture remains outstanding immediately after any
such redemption; and
(ii) the Company makes such redemption not more than 90 days
after the consummation of any such Public Equity Offering.
7. Mandatory Redemption. The Company shall not be required
to make mandatory redemption payments with respect to the Notes.
8. Repurchase at Option of Holder.
(a) If a Change of Control occurs, each Holder will have the
right, subject to the terms and conditions set forth in the Indenture, to
require that the Company purchase all or a portion of such Holder's Notes
pursuant to the offer described in the Indenture (the "Change of Control
Offer") pursuant to Section 5.08, at a purchase price equal to 101% of the
principal amount thereof plus accrued interest to the date of purchase.
Within 30 days following the date upon which the Change of Control oc-
curred, the Company must send, by first-class mail, a notice to each
Holder, which notice shall govern the terms of the Change of Control Offer.
Such notice shall state, among other things, the purchase date, which must
be no earlier than 30 days nor later than 45 days from the date such notice
is mailed, other than as may be required by law (the "Change of Control
Payment Date").
(b) If the Company or a Subsidiary consummates any Asset
Sale, under certain circumstances the Company is required to commence an
offer to all Holders of Notes (an "Excess Proceeds Offer") pursuant to Sec-
tion 5.03. The offer price for the Notes (the "Excess Proceeds Offer
Amount") will be at a price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered pur-
suant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount,
the Company (or such Subsidiary) may use such remaining Net Proceeds Offer
Amount for general corporate purposes or for any other purpose not prohib-
ited by the Indenture. If the aggregate principal amount of Notes surren-
dered by Holders thereof exceeds the amount of Net Proceeds Offer Amount,
the Trustee shall select the Notes to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive
a Net Proceeds Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
9. Notice of Redemption. Notice of redemption will be
mailed, by first-class mail, at least 30 days but not more than 60 days be-
fore the redemption date to each Holder whose Notes are to be redeemed at
its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the redemption
date interest ceases to accrue on Notes or portions thereof called for re-
demption, unless the Company fails to make such payment.
10. Denominations, Transfer, Exchange. The Notes are in reg-
istered form without coupons in denominations of $1,000 and integral multi-
ples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. The Company
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note be-
ing redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the corre-
sponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note
may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain ex-
ceptions, the Indenture, the Guarantees or the Notes may be amended or sup-
plemented with the consent of the Holders of at least a majority in princi-
pal amount of the Notes then outstanding, if any, voting as a single class,
and any existing default or compliance with any provision of the Indenture,
the Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes, if any,
voting as a single class. Without the consent of any Holder of a Note, the
Indenture, the Guarantees or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or Guarantor's obligations to Holders of the
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust In-
denture Act, to allow any Guarantor to execute a supplemental indenture to
the Indenture and/or a Guarantee with respect to the Notes or to evidence
and provide for the acceptance of appointment under the Indenture of a suc-
cessor Trustee.
13. Defaults and Remedies. Events of Default are set forth
in the Indenture.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Notes may declare the principal of and accrued interest on all the Notes to
be due and payable. Notwithstanding the foregoing, in the case of an Event
of Default arising from certain events of bankruptcy with respect to the
Company, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes ex-
cept as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may with-
hold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Hold-
ers of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture except a continuing Default or Event
of Default in the payment of principal of, premium or additional interest,
if any, or interest on the Notes or in respect of a section of the Inden-
ture which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture,
and the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
14. Trustee Dealings with Company. The Trustee, in its indi-
vidual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. No past, present or future
director, officer, employee, incorporator or stockholder of the Company or
any of the Guarantors, as such, shall have any liability for any obliga-
tions of the Company or such Guarantor under the Notes, the Guarantees or
the Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in com-
mon), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian),
and U/G/M/A (= Uniform Gifts to Minors Act).
18. CUSIP Numbers. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Hollywood Entertainment Corporation
0000 X.X. Xxxxxx Xxxx
Xxxxxxxxxxx, Oregon 97070
Attention: Executive Vice President of Legal Affairs
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and trans-
fer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Company. The agent may substi-
tute another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
SIGNATURE GUARANTEE:
_______________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meet-
ing the requirements of the Registrar,
which requirements include membership
or participation in the Security Trans-
fer Agent Medallion Program ("STAMP")
or such other "signature guarantee pro-
gram" as may be determined by the Reg-
istrar in addition to, or in substitu-
tion for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as
amended.
Option of Holder To Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 5.03 or Section 5.08 of the Supplemental Indenture,
check the box below:
Section 5.03 Section 5.08
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 5.03 or Section 5.08 of the Supplemental
Indenture, state the amount you elect to have purchased: $________
Date:
Your Signature:
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No:
SIGNATURE GUARANTEE:
_________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meet-
ing the requirements of the Registrar,
which requirements include membership
or participation in the Security Trans-
fer Agent Medallion Program ("STAMP")
or such other "signature guarantee pro-
gram" as may be determined by the Reg-
istrar in addition to, or in substitu-
tion for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as
amended.
Schedule of Exchanges of Notes
The following exchanges, redemptions or repurchases of a part
of this Global Note have been made:
DATE OF
TRANSACTION
AMOUNT OF DE-
CREASE IN
PRINCIPAL
AMOUNT OF
GLOBAL
NOTE
AMOUNT OF IN-
CREASE IN
PRINCIPAL
AMOUNT OF
GLOBAL
NOTE
PRINCIPAL
AMOUNT OF
GLOBAL NOTE
FOLLOWING
SUCH DECREASE
(OR
INCREASE)
SIGNATURE OF
AUTHORIZED
OFFICER,
TRUSTEE OR
NOTE
CUSTODIAN
EXHIBIT B
[FORM OF SENIOR SUBORDINATED GUARANTEE]
Each undersigned Guarantor (as defined in the Indenture re-
ferred to in the Note upon which this notation is endorsed and each re-
ferred to as the "Guarantor," which term includes any successor person un-
der the Indenture) hereby unconditionally, jointly and severally, guaran-
tees (such guarantee to be referred to herein as the "Guarantee"), subject
to the subordination provisions of Article XII of the Supplemental Inden-
ture, to each of the Holders and to the Trustee and their respective suc-
cessors and assigns that (i) the principal of and interest on the Notes
will be promptly paid in full when due, subject to any applicable grace pe-
riod, whether at maturity, by acceleration or otherwise, and interest on
the overdue principal, if any, and interest on any interest, if any, to the
extent lawful, of the Notes and all other obligations of the Company to the
Holders or the Trustee under the Indenture or thereunder will be promptly
paid in full or performed, all in accordance with the terms under the In-
denture and thereof; and (ii) in case of any extension of time of payment
or renewal of any of the Notes or of any such other obligations, the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at Stated Maturity, by acceleration or otherwise, subject, however,
in the case of clauses (i) and (ii) above, to the limitations set forth in
Section 11.05 of the Supplemental Indenture. The obligations of the Guar-
antors to the Holders of Notes and to the Trustee pursuant to the Guarantee
and the Indenture are expressly set forth in Article XI of the Supplemental
Indenture and reference is hereby made to the Indenture for the precise
terms of the Guarantee and the subordination provisions thereof. Each
Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee, on behalf of
such Holder, to take such action as may be necessary or appropriate to ef-
fectuate the subordination as provided in the Indenture and (c) appoints
the Trustee attorney-in-fact of such Holder for such purpose.
No stockholder, officer, director or incorporator, as such,
past, present or future, of the Guarantor shall have any liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
This Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Notes upon which this Guar-
xxxxx is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
IN WITNESS WHEREOF, the undersigned Guarantor has caused this
Guarantee to be signed by its duly authorized officer.
HOLLYWOOD MANAGEMENT COMPANY
By:
Name:
Title:
EXHIBIT C
FORM OF CERTIFICATE OF TRANSFER
Hollywood Entertainment Corporation
0000 X.X. Xxxxxx Xxxx
Xxxxxxxxxxx, Oregon 97070
Attention: Executive Vice President of Legal Affairs
BNY Western Trust Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: 9.625% Senior Subordinated Notes due 2011
Reference is hereby made to the Indenture, dated as of Janu-
ary 25, 2002, as supplemented by the supplemental indenture, dated December
18, 2002 (the "Indenture"), among Hollywood Entertainment Corporation, as
issuer (the "Company"), Hollywood Management Company, as guarantor, and BNY
Western Trust Company, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to trans-
fer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in An-
nex A hereto. In connection with the Transfer, the Transferor hereby cer-
tifies that:
[CHECK ALL THAT APPLY]
1. Check if Transferee is a QIB in accordance with Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A un-
der the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Note for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institu-
tional buyer" within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A and such Transfer is in compliance with any ap-
plicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Global Note and/or the Definitive Note and in the In-
denture and the Securities Act.
2. Check if Transferee will take delivery pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Regula-
tion S under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee
was outside the United States or (y) the transaction was executed in, on or
through the facilities of a designated offshore securities market and nei-
ther such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no di-
rected selling efforts have been made in contravention of the requirements
of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act,
(iii) the transaction is not part of a plan or scheme to evade the regis-
tration requirements of the Securities Act and (iv) if the proposed trans-
fer is being made prior to the expiration of the Distribution Compliance
Period, the transfer is not being made to a U.S. Person or for the account
or benefit of a U.S. Person (other than an Initial Purchaser). Upon con-
summation of the proposed transfer in accordance with the terms of the In-
denture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Global Note and/or the Definitive Note and in the In-
denture and the Securities Act.
3. Check and complete if Transferee will take delivery pursuant to
any provision of the Securities Act other than Rule 144A or Regulation S.
The Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Re-
stricted Definitive Notes and pursuant to and in accordance with the Secu-
rities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) such Transfer is being effected pursuant to an effec-
tive registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration re-
quirements of the Securities Act other than Rule 144A, Rule 144 or Regula-
tion S, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions ap-
plicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which cer-
tification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit E to the Supplemental Indenture and (2) if such Trans-
fer is in respect of a principal amount of Notes at the time of transfer of
less than $500,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certifica-
tion), to the effect that such Transfer is in compliance with the Securi-
ties Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Defini-
tive Note will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Global Note and/or the Definitive
Notes and in the Indenture and the Securities Act.
4. Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) Check if Transfer is pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 un-
der the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any state of the United States and (ii) the restrictions on transfer con-
tained in the Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act. Upon consummation
of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be sub-
ject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive
Notes and in the Indenture.
(b) Check if Transfer is pursuant to Regulation S. (i)
The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable securities laws
of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not re-
quired in order to maintain compliance with the Securities Act. Upon con-
summation of the proposed Transfer in accordance with the terms of the In-
denture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted De-
finitive Notes and in the Indenture.
(c) Check if Transfer is Pursuant to Other Exemption.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144 or Regulation S and in compliance with the transfer restric-
tions contained in the Indenture and any applicable blue sky securities
laws of any State of the United States and (ii) the restrictions on trans-
fer contained in the Indenture and the Private Placement Legend are not re-
quired in order to maintain compliance with the Securities Act. Upon con-
summation of the proposed Transfer in accordance with the terms of the In-
denture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive
Notes and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ___________, ____
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP _______________); or
(ii) Regulation S Global Note (CUSIP
________________)
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ___________________);
or
(ii) Regulation S Global Note (CUSIP
__________________); or
(iii) Unrestricted Global Note (CUSIP
_________________); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT D
FORM OF CERTIFICATE OF EXCHANGE
Hollywood Entertainment Corporation
0000 X.X. Xxxxxx Xxxx
Xxxxxxxxxxx, Oregon 97070
Attention: Executive Vice President of Legal Affairs
BNY Western Trust Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: 9.625% Senior Subordinated Notes due 2011
(CUSIP ______________)
Reference is hereby made to the Indenture, dated as of Janu-
ary 25, 2002, as supplemented by the supplemental indenture, dated December
18, 2002 (collectively, the "Indenture"), among Hollywood Entertainment
Corporation, as issuer (the "Company"), Hollywood Management Company, as
guarantor, and BNY Western Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial In-
terests in an Unrestricted Global Note:
(a) Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global
Note. In connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a beneficial interest in an Unrestricted
Global Note in an equal principal amount, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account with-
out transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the In-
denture and the Private Placement Legend are not required in order to main-
tain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any appli-
cable blue sky securities laws of any state of the United States.
(b) Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note
for an Unrestricted Definitive Note, the Owner hereby certifies (i) the De-
finitive Note is being acquired for the Owner's own account without trans-
fer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and
in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not re-
quired in order to maintain compliance with the Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c) Check if Exchange is from Restricted Definitive
Note to beneficial interest in an Unrestricted Global Note. In connection
with the Owner's Exchange of a Restricted Definitive Note for a beneficial
interest in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursu-
ant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and
(iv) the beneficial interest is being acquired in compliance with any ap-
plicable blue sky securities laws of any state of the United States.
(d) Check if Exchange is from Restricted Definitive
Note to Unrestricted Definitive Note. In connection with the Owner's Ex-
change of a Restricted Definitive Note for an Unrestricted Definitive Note,
the Owner hereby certifies (i) the Unrestricted Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable
to Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Inden-
ture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive
Note is being acquired in compliance with any applicable blue sky securi-
ties laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial In-
terests in Restricted Global Notes
(a) Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for
the Owner's own account without transfer. Upon consummation of the pro-
posed Exchange in accordance with the terms of the Indenture, the Re-
stricted Definitive Note issued will continue to be subject to the restric-
tions on transfer enumerated in the Private Placement Legend printed on the
Restricted Definitive Note and in the Indenture and the Securities Act.
(b) Check if Exchange is from Restricted Definitive
Note to beneficial interest in a Restricted Global Note. In connection
with the Exchange of the Owner's Restricted Definitive Note for a benefi-
cial interest in the [CHECK ONE] 144A Global Note, Regulation S
Global Note, IAI Global Note with an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer and (ii) such Exchange has been ef-
fected in compliance with the transfer restrictions applicable to the Re-
stricted Global Notes and pursuant to and in accordance with the Securities
Act, and in compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
___________________________________
[Insert Name of Owner]
By:
Name:
Title:
Dated: __________, ____
EXHIBIT E
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Hollywood Entertainment Corporation
9275 S.W. Xxxxxx Xxxx
Xxxxxxxxxxx, Oregon 97070
Attention: Executive Vice President of Legal Affairs
BNY Western Trust Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: 9.625% Senior Subordinated Notes due 2011
Reference is hereby made to the Indenture, dated as of Janu-
ary 25, 2002, as supplemented by the supplemental indenture, dated December
18, 2002 (collectively, the "Indenture"), among Hollywood Entertainment
Corporation, as issuer (the "Company"), Hollywood Management Company, as
guarantor, and BNY Western Trust Company, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) a beneficial interest in a Global Note, or
(b) a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes
or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Notes or any interest
therein except in compliance with, such restrictions and conditions and the
United States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the fol-
lowing sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that if we should sell the
Notes or any interest therein, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (c) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-
dealer) to you and to the Company a signed letter substantially in the form
of this letter and, if such transfer is in respect of a principal amount of
Notes, at the time of transfer of less than $500,000, an Opinion of Counsel
in form reasonably acceptable to the Company and the Registrar to the ef-
fect that such transfer is in compliance with the Securities Act, (D) out-
side the United States in accordance with Rule 904 of Regulation S under
the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchas-
ing the Definitive Note or beneficial interest in a Global Note from us in
a transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are re-
stricted as stated herein.
3. We understand that, on any proposed resale of the Notes
or beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the proposed
sale complies with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect. We
further understand that any subsequent transfer by us of the Notes or bene-
ficial interest therein acquired by us must be effected through one of the
Placement Agents.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business mat-
ters as to be capable of evaluating the merits and risks of our investment
in the Notes, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we ex-
ercise sole investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official in-
quiry with respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
Name:
Title:
Dated: ______________, ____
Include applicable legends.
This Schedule should be included only if the Note is a Global Note.
