THIRD SUPPLEMENTAL INDENTURE
Dated as of February 12, 2002
between
HOLLYWOOD ENTERTAINMENT CORPORATION,
AS ISSUER,
HOLLYWOOD MANAGEMENT COMPANY,
AS SUBSIDIARY GUARANTOR,
and
BNY WESTERN TRUST COMPANY,
AS TRUSTEE
Amending the Indenture,
Dated as of August 13, 1997,
as Amended by
the First Supplemental Indenture,
Dated as of June 24, 1999,
and the Second Supplemental Indenture,
Dated as of January 20, 2000
THIRD SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of February 12, 2002, among Hollywood Management Company, an Oregon
corporation (the "Subsidiary Guarantor"), a subsidiary of Hollywood
Entertainment Corporation (or its successor), an Oregon corporation (the
"Company"), the Company and BNY Western Trust Company, as successor by merger
to U.S. Trust Company, National Association, as trustee under the Indenture
referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture, dated as of August 13, 1997, the First Supplemental
Indenture, dated as of June 24, 1999, and the Second Supplemental Indenture,
dated as of January 20, 2000 (collectively and as such may be amended from
time to time, the "Indenture"), providing for the issuance of an aggregate
principal amount of up to $250,000,000 of 10 5/8% Senior Subordinated Notes
due 2004 (the "Securities");
WHEREAS Section 4.14 of the Indenture provides that under certain
circumstances the Company is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Subsidiary Guarantor shall unconditionally guarantee all of the Company's
obligations under the Securities pursuant to a Subsidiary Guaranty on the
terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.1 of the Indenture, the Trustee and
the Company are authorized to execute and deliver this Supplemental
Indenture;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Subsidiary Guarantor, the Company and the Trustee mutually covenant and
agree for the equal and ratable benefit of the holders of the Securities as
follows:
1. Definitions. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture. For all purposes
of this Supplemental Indenture, except as otherwise herein expressly provided
or unless the context otherwise requires: (i) the terms and expressions used
herein shall have the same meanings as corresponding terms and expressions
used in the Indenture; and (ii) the words "herein," "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to
this Supplemental Indenture as a whole and not to any particular section
hereof.
2. Agreement to Guarantee. The Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Company's obligations under the Securities on the terms and
subject to the conditions set forth herein and to be bound by all other
applicable provisions of the Indenture. From and after the date hereof, the
Subsidiary Guarantor shall be a Subsidiary Guarantor for all purposes under
the Indenture and the Securities. The Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of, premium, if any, and interest on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the
Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Guaranteed Obligations"). The Subsidiary Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Supplemental Indenture notwithstanding any extension or renewal of any
Guaranteed Obligation.
The Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Guaranteed Obligations
and also waives notice of protest for nonpayment. The Subsidiary Guarantor
waives notice of any default under the Securities or the Guaranteed
Obligations. The obligations of the Subsidiary Guarantor hereunder shall not
be affected by (a) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Company or any
other Person under the Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of the
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or
any of them; (e) the failure of any Holder or the Trustee to exercise any
right or remedy against any other guarantor of the Guaranteed Obligations; or
(f) any change in the ownership of such Subsidiary Guarantor.
The Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waives any right
to require that any resort be had by any Holder or the Trustee to any
security held for payment of the Guaranteed Obligations.
The Subsidiary Guaranty is, to the extent and in the manner set
forth in this Supplemental Indenture, subordinated and subject in right of
payment to the prior payment in full of the principal of and premium, if any,
and interest on all Senior Indebtedness guaranteed by the Subsidiary
Guarantor ("Guarantor Senior Indebtedness") and each Subsidiary Guaranty is
made subject to such provisions of this Indenture.
Except as expressly set forth in Section 8.2 of the Indenture and
in this Supplemental Indenture, the obligations of the Subsidiary Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense
of setoff, counterclaim, recoupment or termination whatsoever or by reason of
the invalidity, illegality or unenforceability of the Guaranteed Obligations
or otherwise. Without limiting the generality of the foregoing, the
obligations of the Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of
law or equity.
The Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of,
premium, if any, or interest on any Guaranteed Obligation is rescinded or
must otherwise be restored by any Holder or the Trustee upon the bankruptcy
or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against
any Subsidiary Guarantor by virtue hereof, upon the failure of the Company to
pay the principal of, premium, if any, or interest on any Obligation when and
as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, the Subsidiary Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid,
in cash, to the Holders or the Trustee an amount equal to the sum of (i) the
unpaid amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Guaranteed Obligations of the
Company to the Holders and the Trustee.
The Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations and all
obligations to which the Guaranteed Obligations are subordinated as provided
in this Supplemental Indenture. The Subsidiary Guarantor further agrees
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Guaranteed Obligations hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes of
such Subsidiary Guarantor's Subsidiary Guaranty, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 of the Indenture,
such Obligations (whether or not due and payable) shall forthwith become due
and payable by such Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee
or any Holder in enforcing any rights under this Section.
3. Limitation on Liability. Any term or provision of the
Indenture to the contrary notwithstanding, the maximum aggregate amount of
the obligations guaranteed hereunder by the Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering the
Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally. To effectuate the
foregoing intention, the obligations of the Subsidiary Guarantor shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guaranty or pursuant to its
contribution obligations hereunder, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guaranty not constituting a
fraudulent conveyance or fraudulent transfer under federal, state or foreign
law. The Subsidiary Guarantor that makes a payment or distribution under a
Subsidiary Guaranty shall be entitled to a contribution from each other
Subsidiary Guarantor in an amount based on the consolidated net worth of each
Subsidiary Guarantor.
4. Successors and Assigns. This Supplemental Indenture shall be
binding upon the Subsidiary Guarantor and its successors and assigns and
shall inure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party in
the Indenture and this Supplemental Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of the Indenture.
5. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Supplemental Indenture shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits
of the Trustee and the Holders herein expressly specified are cumulative and
not exclusive of any other rights, remedies or benefits which either may have
under this Supplemental Indenture at law, in equity, by statute or otherwise.
6. Modification. No modification, amendment or waiver of any
provision of this Supplemental Indenture, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Trustee, and then such waiver
or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Subsidiary Guarantor
in any case shall entitle such Subsidiary Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
7. Release of Subsidiary Guarantor. A Subsidiary Guarantor shall
be released and discharged from its Guarantee automatically and
unconditionally upon either (i) the release or discharge of the guarantee or
similar obligation under the Senior Credit Facility giving rise to such
Subsidiary Guarantor's obligation to become a Subsidiary Guarantor hereunder,
except a discharge by or as a result of payment under such guarantee, or
(ii) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Company's Capital Stock in, or all or substantially
all the assets of, such Subsidiary Guarantor, which sale, exchange or
transfer is made in compliance with the applicable provisions of the
Indenture and this Supplemental Indenture.
8. Agreement to Subordinate. Notwithstanding any other provision
to the contrary in this Supplemental Indenture, the Subsidiary Guarantor
covenants and agrees, and each Holder by accepting a Security covenants and
agrees, that all payments by such Subsidiary Guarantor in respect of its
Subsidiary Guarantee are subordinated in right of payment, to the extent and
in the manner provided in this Supplemental Indenture, to the prior payment
in full of all Guarantor Senior Indebtedness, whether outstanding on the
Issue Date or thereafter incurred, including all Obligations of the Company
and such Subsidiary Guarantor under the Senior Credit Facility. The
subordination provisions set forth in this Supplemental Indenture, are for
the benefit of, and shall be enforceable directly by, the holders of
Guarantor Senior Indebtedness.
Each Holder authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate, in the sole
discretion of the Trustee, to acknowledge or effectuate the subordination
between the Holders and the holders of Guarantor Senior Indebtedness as
provided in this Supplemental Indenture, and appoints the Trustee as such
Holder's attorney-in-fact for any and all such purposes, including, in the
event of any voluntary or involuntary liquidation or dissolution of a
Subsidiary Guarantor, whether total or partial, or in a bankruptcy,
reorganization, insolvency, receivership, dissolution, assignment for the
benefit of creditors, marshalling of assets or similar proceeding relating to
a Subsidiary Guarantor or its property, the timely filing of a claim for the
unpaid balance of such Holder's Securities in the form required in said
proceeding and cause said claim to be approved. If the Trustee does not file
a property claim or proof to debt in the form required in such proceeding
prior to 20 days before the expiration of the time to exile such claim or
claims, then the Representative is hereby authorized to have the right to
file and is hereby authorized to file an appropriate claim for and on behalf
of the Holders; provided, however, that any such claim filed by such
Representative shall be superseded by the claim, if any, subsequently filed
by the Trustee. For purposes of this Supplemental Indenture,
"Representative" shall mean any trustee, agent or representative (if any) for
an issue of Guarantor Senior Indebtedness.
Each Holder by accepting a Security acknowledges and agrees that
the subordination provisions set forth in this Supplemental Indenture are,
and are intended to be,
an inducement and consideration to the holder of Guarantor Senior
Indebtedness, whether such Guarantor Senior Indebtedness was created before
or after the issuance of the Securities, to acquire and continue to hold, or
to continue to hold, such Guarantor Senior Indebtedness, and such holder of
Guarantor Senior Indebtedness shall be deemed conclusively to have relied
upon such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Guarantor Senior Indebtedness, and such holder is
made an obligee hereunder and may enforce directly such subordination
provisions.
9. Liquidation; Dissolution; Bankruptcy. Upon any payment or
distribution of the assets of the Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon a total
or partial liquidation or dissolution or reorganization or similar proceeding
relating to such Subsidiary Guarantor or its property or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding:
(a) the holders of Guarantor Senior Indebtedness shall be
entitled to receive payment in full in cash of such Guarantor Senior
Indebtedness before Holders are entitled to receive any payment; and
(b) until the Guarantor Senior Indebtedness is paid in
full, any payment or distribution to which Holders would otherwise be
entitled pursuant to this Supplemental Indenture shall be made to holders of
Guarantor Senior Indebtedness, as their interests may appear.
Upon any payment or distribution referred to in this Supplemental
Indenture, the Trustee and the Holders shall be entitled to rely upon any
order or decree of a court of competent jurisdiction in which such
proceedings are pending for the purpose of ascertaining the identity of
Persons entitled to participate in such payment or distribution, the holders
of Guarantor Senior Indebtedness, the amount thereof or payable thereon and
all other facts pertinent thereto or to this Supplemental Indenture, and the
Trustee and the Holders shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other Person (including any Representative of
holders of Guarantor Senior Indebtedness) making any payment or distribution
to the Trustee or to the Holders for the purpose of ascertaining the identity
of Persons entitled to participate in such payment or distribution, the
holders of Guarantor Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Supplemental Indenture. In the event that
the Trustee determines in good faith that further evidence is required with
respect to the right of any Person, as a holder of Guarantor Senior
Indebtedness, to participate in any payment or distribution pursuant to this
Section, the Trustee may request such Person (at the expense of the Holders)
to furnish evidence to the reasonable satisfaction of the Trustee, acting in
good faith, as to the amount of such Guarantor Senior Indebtedness held by
such Person, as to the extent to which such Person is entitled to participate
in such payment or distribution, and as to the other facts pertinent to the
rights of such Person under this Section, 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 payment.
The consolidation or merger of the Subsidiary Guarantor with or
into any Person, or the sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of such Subsidiary Guarantor's
assets to any Person, in compliance with the terms and conditions set forth
in Sections 5.1 and 5.2 of the Indenture, shall not be deemed to be a
liquidation, dissolution or reorganization or similar proceeding relating to
such Subsidiary Guarantor for purposes of this Section.
10. Default on Guarantor Senior Indebtedness.
(a) If any Guarantor Senior Indebtedness is not paid when
due, the Subsidiary Guarantor may not pay the Subordinated Debt unless the
default shall have been cured or waived or such Guarantor Senior Indebtedness
has been paid in full.
(b) If any default on any Guarantor Senior Indebtedness
(other than as set forth in Section 10(a) hereof occurs and such Guarantor
Senior Indebtedness is accelerated in accordance with its terms, the
Subsidiary Guarantor may not pay the Subordinated Debt unless the default
shall have been cured or waived and any such acceleration has been rescinded
or such Guarantor Senior Indebtedness has been paid in full in cash.
(c) Notwithstanding the foregoing Sections 10(a) and (b),
the Subsidiary Guarantor may pay the Subordinated Debt without regard to the
foregoing if the Subsidiary Guarantor and the Trustee receive written notice
approving such payment from the Representative of the Guarantor Senior
Indebtedness with respect to which either of the events set forth in
Sections 10(a) and (b) has occurred and is continuing. During the
continuance of any default (other than a default described in Sections 10(a)
and (b)) with respect to any Guarantor Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Subsidiary Guarantor may not
pay the Subordinated Debt for a period (the "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Subsidiary
Guarantor) of a written notice of such default (the "Blockage Notice") from
the Representative of the holders of such Designated Senior Indebtedness
guaranteed by the Subsidiary Guarantor specifying an election to effect a
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Subsidiary Guarantor from the Person or Persons who gave such
Blockage Notice, (ii) because the default giving rise to such Blockage Notice
has been waived in writing or (iii) because such Designated Senior
Indebtedness guaranteed by the Subsidiary Guarantor has been repaid in full
in cash). Notwithstanding the provisions described in the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness
or the Representative of such holders has accelerated the maturity of such
Designated Senior Indebtedness, the Subsidiary Guarantor may resume payments
on the Securities after the end of such Payment Blockage Period. The
Securities shall not be subject to more than one Payment Blockage Period in
any consecutive 365-day period, irrespective of the number of such nonpayment
defaults with respect to Designated Senior Indebtedness guaranteed by the
Subsidiary Guarantor during such period.
(d) The Subsidiary Guarantor covenants that it will, upon
request of the Trustee, deliver an Officers' Certificate (with copies thereof
to the Representative of each class of Guarantor Senior Indebtedness) showing
in reasonable detail the Guarantor Senior Indebtedness outstanding as of the
date of such Officers' Certificate and the Representative of each class of
such Guarantor Senior Indebtedness. The Trustee may conclusively rely
thereon except to the extent that it shall have received, from the
Representative of any class of such Guarantor Senior Indebtedness, notice in
writing controverting any of the statements made therein. Not less than 10
days prior to making any distribution in respect of Guarantor Senior
Indebtedness pursuant to this Section, the Trustee shall deliver to each
Representative of any class of such Guarantor Senior Indebtedness copies of
the most recent Officers' Certificate filed with it by such Subsidiary
Guarantor pursuant to this subsection (d).
(e) In the event that the Securities are declared due and
payable before their Stated Maturity in accordance with Article 6 of the
Indenture, then and in such event the holders of Guarantor Senior
Indebtedness outstanding at the time the Securities so become due and payable
shall be entitled to receive payment in full in cash of all amounts due or to
become due on or in respect of such Guarantor Senior Indebtedness (whether or
not an Event of Default has occurred thereunder or the Guarantor Senior
Indebtedness is, or has been declared to be, due and payable prior to the
date on which it otherwise would have become due and payable) before the
Holders shall be entitled to receive any payment in respect of the
Securities.
11. Payments of Subordinated Debt Permitted if No Default.
Nothing contained in this Supplemental Indenture or elsewhere in the
Indenture, or in any of the Securities, shall prevent the Subsidiary
Guarantor or any Person acting on behalf of the Subsidiary Guarantor, at any
time except as otherwise provided in Sections 9 and 10, from paying the
Subordinated Debt.
12. When Subordinated Debt Must Be Paid Over. In the event
that any payment is made on the Subordinated Debt to the Trustee or the
Holders that, because of the provisions of this Supplemental Indenture,
should not have been so made or may not be paid over to the Holders, such
payment shall be held by the Trustee or the Holders who receive such payment,
as the case may be, for the benefit of, and shall forthwith be paid over or
delivered to, the holders of the Guarantor Senior Indebtedness remaining
unpaid or their Representatives, as their interests may appear, to the extent
necessary to irrevocably and indefeasibly pay such Guarantor Senior
Indebtedness in full in cash or in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the holders of
such Guarantor Senior Indebtedness.
13. Notices by the Subsidiary Guarantor. The Subsidiary
Guarantor shall promptly notify the Trustee, each Paying Agent and the
Representative of any facts known to the Subsidiary Guarantor that would
cause a payment on the Subordinated Debt to violate the foregoing provisions
of this Supplemental Indenture, but failure to give such notice shall not
affect the subordination provided in this Supplemental Indenture of any
Subsidiary Guarantee to holders of Guarantor Senior Indebtedness. Without
limiting the foregoing, if payment of the Securities is accelerated because
of an Event of Default, the Subsidiary Guarantor shall promptly notify the
Representative of the acceleration.
14. Subrogation. After all Guarantor Senior Indebtedness is
irrevocably and indefeasibly paid in full in cash and until the Securities
are paid in full, Holders shall be subrogated to the rights of holders of
Guarantor Senior Indebtedness to receive distributions applicable to
Guarantor Senior Indebtedness to the extent that distributions otherwise
payable to Holders have been applied to the payment of Guarantor Senior
Indebtedness. A distribution made under this Supplemental Indenture to
holders of Guarantor Senior Indebtedness which otherwise should have been
made to Holders is not, as between the Subsidiary Guarantor and the Holders,
payment by the Subsidiary Guarantor on Guarantor Senior Indebtedness.
15. Relative Rights. This Supplemental Indenture defines the
relative rights of Holders and holders of Guarantor Senior Indebtedness.
Nothing in this Indenture shall:
(a) impair, as between a Subsidiary Guarantor and the
Holders, the obligation of a Subsidiary Guarantor, which is absolute and
unconditional, to make any payment in accordance with the terms of its
Subsidiary Guaranty;
(b) affect the relative rights of Holders and creditors
of a Subsidiary Guarantor other than holders of Guarantor Senior
Indebtedness; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights
of holders of Guarantor Senior Indebtedness to receive prepayment, payments
and distributions otherwise payable to Holders.
If the Subsidiary Guarantor fails because of the foregoing
provisions of this Supplemental Indenture to pay the principal of (or
premium, if any) or interest on a Security on the due date or upon the
acceleration thereof, the failure is still a Default or Event of Default.
16. Subordination May Not Be Impaired by the Subsidiary
Guarantor. No right of any holder of Guarantor Senior Indebtedness to
enforce the subordination of the Obligation of the Subsidiary Guarantor
pursuant to its Subsidiary Guaranty shall be impaired by (a) any act or
failure to act by the Subsidiary Guarantor or by its failure to comply with
this Supplemental Indenture or the Indenture, (b) any release of any
collateral or any guarantor or any Person or the Subsidiary Guarantor's
obligations under Guarantor Senior Indebtedness, (c) any amendment,
supplement, extension, renewal, restatement or other modification of any
Guarantor Senior Indebtedness, (d) any settlement or compromise of any
Guarantor Senior Indebtedness, (e) the unenforceability of any of the Senior
Indebtedness or (f) the failure of any holder of Guarantor Senior
Indebtedness to pursue claims against the Subsidiary Guarantor. The terms of
the subordination provisions contained in this Supplemental Indenture will
not apply to payments from money or the proceeds of U.S. Government
Obligations held in trust by the Trustee for the payment of principal of and
interest on the Securities pursuant to and in accordance with the provisions
described in Article 8 of the Indenture.
17. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
18. Rights of Trustee and Paying Agent. The Trustee or any
Paying Agent may continue to make payments in respect of the Securities and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payment unless, not less than three Business
Days prior to the date of any such payment, a Responsible Officer of the
Trustee receives written notice reasonably satisfactory to it that payments
in respect of the Securities may not be made under this Article. Only the
Subsidiary Guarantor, a Representative (satisfactorily identified to the
Trustee) or a holder of a class of Guarantor Senior Indebtedness that has no
Representative (satisfactorily identified to the Trustee) may give the
notice. Prior to the receipt of such notice, the Trustee and any Paying
Agent shall be entitled in all respects to assume that no such facts exist.
In any case, the Trustee shall have no responsibility to the holders of
Guarantor Senior Indebtedness for payments made to Holders by a Subsidiary
Guarantor or any Paying Agent unless such payments are made at the direction
of the Trustee after receipt of such notice referred to above.
Neither the Trustee nor any Paying Agent shall be deemed to owe
any fiduciary duty to the holders of Guarantor Senior Indebtedness. With
respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Supplemental Indenture, and
no implied covenants or obligations with respect to the holders of Guarantor
Senior Indebtedness shall be read into this Indenture against the Trustee.
The Trustee shall not be liable to any holders of Guarantor Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders, the
Company or any other Person moneys or assets to which any holder of Guarantor
Senior Indebtedness shall be entitled by virtue of this Supplemental
Indenture or otherwise.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were
not Trustee.
This Section is solely for the benefit of the Trustee and any
Paying Agents and shall not limit the obligations of the Holders under
Section 12 hereof.
19. Consent of Holders of Guarantor Senior Indebtedness. The
provisions of this Supplemental Indenture (including the definitions
contained in this Supplemental Indenture and references to this Supplemental
Indenture contained in the Indenture) shall not be amended, waived or
modified in a manner that would adversely affect the rights of the holders of
any Guarantor Senior Indebtedness, and no such amendment, waiver or
modification shall become effective, unless the holders of such Guarantor
Senior Indebtedness shall have consented in writing (in accordance with the
provisions of the Agreement governing such Guarantor Senior Indebtedness) to
such amendment, waiver or modification.
20. Contractual Subordination. This Supplemental Indenture
represents a bona fide agreement of contractual subordination pursuant to
Section 510(b) of the United States Bankruptcy Code.
21. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every holder of
Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.
22. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.
23. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
24. Counterparts. 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.
25. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction thereof.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above
written.
HOLLYWOOD MANAGEMENT COMPANY
By: /s/Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President and Treasurer
HOLLYWOOD ENTERTAINMENT CORPORATION
By: /s/Don Ekmam
Name: Xxx Xxxxx
Title: Executive Vice President of Legal Affairs
BNY WESTERN TRUST COMPANY,
as successor by merger to U.S. Trust Company, N.A.,
as Trustee
By: /s/Xxxxxxxxx X. Dedoro
Name: Xxxxxxxxx Dedoro
Title: Assistant Vice President
