HOLLYWOOD ENTERTAINMENT CORPORATION
____________________________________
CREDIT AGREEMENT
dated as of March 18, 2002
____________________________________
$175,000,000
Senior Secured Credit Facility
____________________________________
UBS WARBURG LLC,
as Lead Arranger,
UBS AG, STAMFORD BRANCH,
as Administrative Agent
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1. Defined Terms 1
1.2. Rules of Xxxxxxxxxxxx 00
XXXXXXX 0. XXXXXXX X TERM LOANS 34
2.1. Tranche B Term Loans 34
2.2. Repayment of Tranche B Term Loans 34
2.3. Use of Proceeds 34
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS 34
3.1. Revolving Credit Commitments 34
3.2. Commitment Fee 35
3.3. Proceeds of Revolving Credit Loans 35
3.4. Swing Line Commitment 35
3.5. Issuance of Letters of Credit 37
3.6. Participating Interests 37
3.7. Procedure for Opening Letters of Credit 38
3.8. Payments in Respect of Letters of Credit 38
3.9. Letter of Credit Fees 39
3.10. Letter of Credit Reserves 39
3.11. Further Assurances 41
3.12. Obligations Absolute 41
3.13. Participations 41
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS 42
4.1. Procedure for Borrowing 42
4.2. Conversion and Continuation Options 43
4.3. Changes of Commitment Amounts 43
4.4. Optional and Mandatory Prepayments; Repayments of
Tranche B Term Loans. 44
4.5. Interest Rates and Payment Dates 48
4.6. Computation of Interest and Fees 48
4.7. Certain Fees 49
4.8. Inability to Determine Interest Rate 49
4.9. Pro Rata Treatment and Payments 49
4.10. Illegality 52
4.11. Requirements of Law 52
4.12. Indemnity 56
4.13. Repayment of Loans; Evidence of Debt 56
4.14. Replacement of Lenders 58
SECTION 5. REPRESENTATIONS AND WARRANTIES 58
5.1. Financial Condition 58
5.2. No Change 59
5.3. Existence; Compliance with Law 59
5.4. Power; Authorization 59
5.5. Enforceable Obligations 60
5.6. No Legal Bar 60
5.7. No Material Litigation 60
5.8. Investment Company Act 61
5.9. Federal Regulation 61
5.10. No Default 61
5.11. Taxes 61
5.12. Subsidiaries 62
5.13. Ownership of Property; Liens 62
5.14. ERISA 62
5.15. Collateral Documents 63
5.16. Copyrights, Patents, Permits, Trademarks and
Licenses 64
5.17. Environmental Matters 64
5.18. Accuracy and Completeness of Information 65
5.19. Labor Matters 66
5.20. Solvency 66
5.21. Use of Proceeds 66
SECTION 6. CONDITIONS PRECEDENT 67
6.1. Conditions to Initial Loans and Letters of Credit 67
6.2. Conditions to All Loans and Letters of Credit 69
SECTION 7. AFFIRMATIVE COVENANTS 70
7.1. Financial Statements 70
7.2. Compliance Certificates; Other Information 71
7.3. Payment of Obligations 73
7.4. Conduct of Business and Maintenance of Existence 73
7.5. Maintenance of Property; Insurance 73
7.6. Inspection of Property; Books and Records;
Discussions 74
7.7. Notices 75
7.8. Environmental Laws 76
7.9. Additional Collateral and Guarantees 76
7.10. Post-Closing Collateral Matters; Control
Agreements 78
7.11. Compliance with Law 79
7.12. Security Interests; Further Assurances. 79
7.13. Unrestricted Subsidiary Financial Statements 79
SECTION 8. NEGATIVE COVENANTS 79
8.1. Indebtedness 80
8.2. Limitation on Liens 82
8.3. Limitation on Contingent Obligations 86
8.4. Prohibition of Fundamental Changes 87
8.5. Prohibition on Sale of Assets 87
8.6. Limitation on Investments 90
8.7. New Stores 92
8.8. Interest Rate Agreements 92
8.9. Leverage Ratio 92
8.10. Interest Coverage 93
8.11. Fixed Charge Coverage 94
8.12. Limitation on Dividends 94
8.13. Transactions with Affiliates 94
8.14. Limitation on Changes in Fiscal Year 95
8.15. Limitation on Lines of Business 95
8.16. Amendments to Certain Documents 95
8.17. Limitation on Prepayments and Amendments of
Certain Debt 95
8.18. No Further Negative Pledge 96
8.19. Maintenance of Corporate Separateness 96
8.20. Clauses Restricting Subsidiary Distributions 96
SECTION 9. EVENTS OF DEFAULT 97
SECTION 10. THE AGENTS AND THE ISSUING LENDER 100
10.1. Appointment 100
10.2. Delegation of Duties 100
10.3. Exculpatory Provisions 100
10.4. Reliance by Agents 101
10.5. Notice of Default 101
10.6. Non-Reliance on Agents and Other Lenders 101
10.7. Indemnification 102
10.8. Agent in Its Individual Capacity 102
10.9. Successor Administrative Agent 103
10.10. Issuing Lender as Issuer of Letters of Credit 103
10.11. Other Agents 103
SECTION 11. MISCELLANEOUS 104
11.1. Amendments and Waivers 104
11.2. Notices 106
11.3. No Waiver; Cumulative Remedies 107
11.4. Survival of Representations and Warranties 107
11.5. Indemnification; Payment of Expenses and Taxes 108
11.6. Successors and Assigns; Participations and
Assignments 109
11.7. Adjustments; Set-off 114
11.8. Counterparts 116
11.9. Governing Law; Third Party Rights 116
11.10. Submission to Jurisdiction; Waivers 116
11.11. Releases 117
11.12. Interest 117
11.13. Severability 118
11.14. Integration 118
11.15. Acknowledgments 118
SECTION 12. COLLATERAL ACCOUNT; APPLICATION
OF COLLATERAL PROCEEDS 119
12.1. Collateral Account 119
12.2. Proceeds of Destruction, Taking and Collateral
Dispositions 120
12.3. Application of Proceeds 121
SCHEDULES
Schedule I List of Addresses for Notices; Lending Offices;
Commitment Amounts
Schedule II Pricing Grid
Schedule 5.1(c) Certain Financial Items
Schedule 5.3 Existence; Compliance with Law
Schedule 5.7 Litigation
Schedule 5.10 No Default
Schedule 5.11 Taxes
Schedule 5.12 Subsidiaries
Schedule 5.13 Fee Properties, Leased Properties and Mortgaged
Properties
Schedule 5.15(b) UCC and Other Necessary Filings
Schedule 5.16 Patents; Trademarks and Copyrights
Schedule 5.17 Environmental Matters
Schedule 6.1(f)(i) UCC, Judgment and Tax Lien Searches
Schedule 6.1(f)(ii) Intellectual Property Licenses
Schedule 7.10 Post-Closing Collateral Matters
Schedule 8.1(a) Existing Indebtedness
Schedule 8.2(h) Existing Liens
Schedule 8.3(d) Existing Contingent Obligations
Schedule 8.6 Existing Investments
Schedule 8.13 Existing Affiliate Transactions
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Tranche B Term Note
Exhibit C Form of Swing Line Note
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Collateral Agreement
Exhibit F Form of L/C Participation Certificate
Exhibit G Form of Mortgage
Exhibit H Form of Non-Bank Certificate
Exhibit I Form of Subsidiary Guarantee
Exhibit J Form of Swing Line Loan Participation Certificate
Exhibit K Form of Opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Exhibit L Form of Closing Certificate
Exhibit M Form of Perfection Certificate
Exhibit N Form of Compliance Certificate
Exhibit O Form of Solvency Certificate
Exhibit P Form of Borrowing Request
CREDIT AGREEMENT, dated as of March 18, 2002, among Hollywood
Entertainment Corporation, an Oregon corporation ("Borrower"), the several
lenders from time to time party hereto (the "Lenders") and UBS AG, Stamford
Branch, as administrative agent for the Lenders (in such capacity, the "Ad-
ministrative Agent").
W I T N E S S E T H :
WHEREAS, Borrower will repay all amounts outstanding under the
Existing Credit Agreement and simultaneously therewith terminate such
agreement (the "Transactions");
WHEREAS, to finance a portion of the Transactions and to pay
fees and expenses in connection therewith, Borrower has requested that the
Lenders establish the credit facilities set forth herein;
NOW, THEREFORE, Borrower, the Administrative Agent and the
Lenders agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms de-
fined in the caption hereto shall have the meanings set forth therein, and
the following terms have the following meanings:
"Adjusted Consolidated EBITDA": for any period
(a) Consolidated EBITDA for such period minus (b) all costs of acquisition
of Rental Items for Stores for such period, to the extent that such costs
of acquisition:
(A) are accounted for as Capital Expenditures under GAAP,
(B) do not represent new product introductions or platforms (in-
cluding catalog DVD),
(C) relate to Rental Items that were acquired for a particular
Store after its opening, or
(D) in the case of a Store acquired during such period, relate
to Rental Items that were aquired for such Store after it
commenced to operate as a Store
(i.e., excluding the cost of acquisition of such Store's initial inventory,
the intent of the parties being to adjust Consolidated EBITDA for the re-
curring costs of keeping a Store in stock, but not for the initial cost of
equipping a Store with inventory or any new product introduction or plat-
form), plus (c) the cost of product transferred from rental inventory to
previously viewed merchandise inventory and sold.
"Adjusted Current Assets": in relation to any Person as at any
date, all amounts (other than cash and Cash Equivalents and amounts for de-
ferred taxes) which would be set forth opposite the caption "total current
assets" (or any like caption) on a balance sheet of such Person as at such
date, prepared in accordance with GAAP.
"Adjusted Current Liabilities": in relation to any Person as
at any date, all amounts (other than amounts for income taxes payable and
accrued interest) which would be set forth opposite the caption "total cur-
rent liabilities" (or any like caption) on a balance sheet of such Person
as at such date, prepared in accordance with GAAP.
"Adjustment Date": as defined in the definition of Applicable
Margin.
"Administrative Agent": as defined in the Preamble hereto.
"Affiliate": of any Person (a) any Person (other than a Sub-
sidiary) which, directly or indirectly, is in control of, is controlled by
or is under common control with such Person, or (b) any Person who is a xx-
xxxxxx or officer (i) of such Person, (ii) of any Subsidiary of such Person
or (iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect,
(x) to vote 20% or more of the securities having ordinary voting power for
the election of directors of such Person, whether by ownership of securi-
ties, contract, proxy or otherwise, or (y) to direct or cause the direction
of the management and policies of such Person, whether by ownership of se-
curities, contract, proxy or otherwise. Each Unrestricted Subsidiary shall
be deemed an Affiliate of Borrower and its Subsidiaries.
"Agents": the collective reference to the Administrative
Agent, the Lead Arranger and any other agent for the Lenders designated in
connection with the syndication and in accordance with Section 10 by the
Administrative Agent with respect to the Credit Documents in a written no-
xxxx to Borrower.
"Agreement": this Credit Agreement, as amended, supplemented
or modified from time to time.
"Alternate Base Rate": for any day, a rate per annum equal to
the higher of (a) the Administrative Agent's Base Rate in effect on such
day and (b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Base Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its
base rate in effect at its principal office in Stamford, Connecticut (the
Base Rate not being intended to be the lowest rate of interest charged by
the Administrative Agent in connection with extensions of credit to debt-
ors) (any change in such rate announced by the Administrative Agent shall
take effect at the opening of business on the day specified in the public
announcement of such change); and "Federal Funds Rate" shall mean, for any
day, the weighted average of the rates (rounded upwards, if necessary, to
the nearest 1/100th of 1%) on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York; provided that (a) if the day for which such rate is to be de-
termined is not a Business Day, the Federal Funds Rate for such day shall
be such rate for such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not
so published for any day which is a Business Day, the Federal Funds Rate
for such day shall be the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the Alternate
Base Rate due to a change in the Base Rate or the Federal Funds Rate shall
be effective as of the opening of business on the effective day of such
change in the Base Rate or the Federal Funds Rate, respectively.
"Alternate Base Rate Loans": Loans at such time as they are
made and/or being maintained at a rate of interest based upon the Alternate
Base Rate.
"Applicable Margin": for Tranche B Term Loans, Revolving
Credit Loans and Swing Line Loans of the Types set forth below, the rate
per annum set forth under the relevant column heading opposite such Loans:
Alternate
Base Rate
Loans
Eurodollar
Loans
Tranche B Term
Loans:
3.00%
4.00%
Revolving Credit
Loans:
2.50 %
3.50%
Swing Line Loans:
2.50%
Not applicable
provided that, from and after the date on which Borrower shall have deliv-
ered financial statements for the first fiscal quarter ending at least
three months after the Closing Date, the Applicable Margin with respect to
Revolving Credit Loans and Swing Line Loans will be adjusted on each Ad-
justment Date (as defined below) to the applicable rate per annum set forth
in the pricing grid attached hereto as Schedule II based on the Leverage
Ratio as determined from the most recently delivered financial statements
delivered pursuant to subsection 7.1. Changes in the Applicable Margin re-
sulting from changes in the Leverage Ratio shall become effective on the
date (the "Adjustment Date") on which such financial statements are deliv-
ered to the Lenders (but in any event not later than the 50th day after the
end of each of the first three quarterly periods of each fiscal year or the
95th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
definition; provided that (a) the Applicable Margin shall be initially the
rate per annum set forth under the relevant column heading above; (b) if
for any reason the financial statements required by subsection 7.1 are not
timely delivered to the Lenders, (i) during the period from the date upon
which such financial statements were required to be delivered until the
date upon which they actually are delivered, the Applicable Margin shall be
the Applicable Margin in effect immediately prior to the date such xxxxx-
cial statements were due, and (ii) if such financial statements, when actu-
ally delivered, would have required an increase or decrease from the Appli-
cable Margin in effect immediately prior to the date such financial state-
ments were due, then in the case of an increase, Borrower shall promptly
following the delivery of such financial statements pay to the Lenders and
the Administrative Agent any additional amounts of interest or fees which
would have been payable on any previous Interest Payment Date had such
higher Applicable Margin been in effect from the date such financial state-
ments were required to be delivered and, in the case of a decrease, the Ad-
ministrative Agent shall credit to Borrower the amount of any interest or
fees which were paid by Borrower on any previous Interest Payment Date to
amounts payable by Borrower on the next succeeding Interest Payment Date
had such lower Applicable Margin been in effect from the date such xxxxx-
cial statements were required to be delivered; (c) any change in the Appli-
cable Margin as a result of a change in the Leverage Ratio shall apply to
all Loans for each day during the period commencing on the effective date
of such change and ending on the date immediately preceding the effective
date of the next such change in the Applicable Margin; and (d) if an Event
of Default exists on any Adjustment Date or other date upon which the Ap-
plicable Margin would otherwise be adjusted hereunder, the Applicable Mar-
gin shall in no event be reduced on such Adjustment Date or other date from
the Applicable Margin in effect immediately prior to such Adjustment Date
or other date until such Event of Default is cured or waived.
"Approved Fund": with respect to any Lender that is a fund or
commingled investment vehicle that invests in loans, any other fund that
invests in loans and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
"Asset Sale": any sale, sale-leaseback, transfer, lease, con-
veyance or other disposition by Borrower or any of its Subsidiaries re-
stricted by subsection 8.5 of any of its property or assets, including the
Capital Stock of any Subsidiary (including Capital Stock of any Unre-
stricted Subsidiary), except (1) sales and dispositions permitted by sub-
section 8.5 (other than subsections 8.5(d), (e), (h) and (l)), and (2) any
such transaction or series of related transactions which, if an Asset Sale,
would not generate Net Proceeds in excess of $100,000 (or, when taken to-
gether with all other such transactions, in excess of $500,000 in any fis-
cal year).
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an assignment and acceptance sub-
stantially in the form of Exhibit D.
"Available Revolving Credit Commitment": as to any Lender, at
a particular time, an amount equal to (a) the amount of such Lender's Re-
volving Credit Commitment at such time less (b) the sum of (i) the aggre-
gate unpaid principal amount at such time of all Revolving Credit Loans
made by such Lender pursuant to subsection 3.1, (ii) such Lender's Revolv-
ing Credit Commitment Percentage of the aggregate unpaid principal amount
at such time of all Swing Line Loans; provided that, for purposes of calcu-
lating the Revolving Credit Commitments pursuant to subsection 3.2, the
amount referred to in this clause (ii) shall be zero, (iii) such Lender's
L/C Participating Interest in the aggregate amount available to be drawn at
such time under all outstanding Letters of Credit issued by the Issuing
Lender and (iv) such Lender's Revolving Credit Commitment Percentage of the
aggregate outstanding amount of L/C Obligations; collectively, as to all
the Lenders, the "Available Revolving Credit Commitments".
"Bank Account": as defined in the Collateral Agreement.
"Bankruptcy Code": Title I of the Bankruptcy Reform Act of
1978, as amended and codified at Title 11 of the United States Code.
"Board": the Board of Governors of the Federal Reserve System,
together with any successor.
"Borrower": as defined in the Preamble hereto.
"Borrowing Date": any Business Day specified in a notice pur-
suant to (a) subsection 3.4 or 4.1 as a date on which Borrower requests the
Swing Line Lender or the Lenders to make Loans hereunder or (b) subsection
3.5 as a date on which Borrower requests the Issuing Lender to issue a Let-
ter of Credit hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Portland, Oregon are
authorized or required by law to close.
"Capital Assets": all equipment, fixed assets and real prop-
erty or improvements of Borrower or any Restricted Subsidiary of Borrower,
or replacements or substitutions therefor or additions thereto, that, in
accordance with GAAP, have been capitalized on the books of Borrower or
such Restricted Subsidiary. Capital Assets shall also (a) include Rental
Items excluded from the calculation of Adjusted Consolidated EBITDA and (b)
exclude Rental Items included in the calculation of Adjusted Consolidated
EBITDA.
"Capital Expenditures": for any period, all expenditures
(other than expenditures (i) made from the proceeds of an Asset Sale in ac-
cordance with subsection 8.5(h), (ii) made with the proceeds of eminent do-
main or condemnation proceedings, to the extent such proceeds are not in-
cluded in the determination of Adjusted Consolidated EBITDA for such fiscal
year or (iii) funded with the proceeds of the incurrence of Indebtedness or
the issuance of Capital Stock) made directly or indirectly by Borrower or
any Restricted Subsidiary of Borrower during such period for Capital Assets
(including all expenditures for maintenance and repairs which are required,
in accordance with GAAP, to be capitalized on the books of Borrower or such
Restricted Subsidiary).
"Capital Lease Obligations": (a) any lease of property, real
or personal, the obligations under which are capitalized on a consolidated
balance sheet of Borrower and its Restricted Subsidiaries and (b) any other
such lease to the extent that the then present value of any rental commit-
ment thereunder should, in accordance with GAAP, be capitalized on a bal-
ance sheet of the lessee.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corpora-
tion, any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or is-
sued 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 ac-
quisition; (b) certificates of deposit, time deposits, eurodollar time de-
posits or overnight bank deposits having maturities of six months or less
from the date of acquisition issued by any Lender or by any commercial bank
organized under the laws of the United States or any state thereof having
combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an issuer rated at least A-1 by S&P or P-1 by Xxxxx'x, or carrying
an equivalent rating by a nationally recognized rating agency, if both of
the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisi-
tion; (d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days, with respect to securities issued or fully guar-
anteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state, common-
wealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
Xxxxx'x; (f) securities with maturities of six months or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this defi-
nition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition.
"CERCLA": as defined in subsection 5.17(g).
"Change in Law": with respect to any Lender, the adoption of,
or change in, any law, rule, regulation, policy, guideline or directive
(whether or not having the force of law) or any change in the interpreta-
tion or application thereof by any Governmental Authority having jurisdic-
tion over such Lender, in each case after the Closing Date.
"Change of Control": shall be considered to have occurred if
(i) if any Person (other than (a) any Person acting solely in
the capacity of an underwriter or (b) a Permitted Holder), whether
singly or in concert with one or more Persons, shall, directly or in-
directly, have acquired or acquire the power (x) to vote or direct
the voting of 35% or more, on a fully diluted basis, of the outstand-
ing voting power of the outstanding Capital Stock of Borrower or
(y) to elect or designate for election a majority of the board of di-
rectors of Borrower by voting power, contract or otherwise; or
(ii) Continuing Directors shall cease to consist of at least a
majority of the board of directors of Borrower.
"Closing Date": the date not later than March 31, 2002 on
which the Lenders make their initial Loans or the Issuing Lender issues the
initial Letter of Credit.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property and assets of the Credit Parties,
now owned or hereafter acquired, upon which a Lien is purported to be cre-
ated by any Security Document.
"Collateral Account": as defined in subsection 12.1.
"Collateral Agreement": the collateral agreement substantially
in the form of Exhibit E to be entered into by Borrower and its wholly
owned Subsidiaries (other than Foreign Subsidiaries and Unrestricted Sub-
sidiaries) from time to time party thereto in favor of the Administrative
Agent for the ratable benefit of the Lenders, as the same may be amended,
modified or supplemented from time to time.
"Commercial L/C": a commercial documentary Letter of Credit
under which the Issuing Lender agrees to make payments in Dollars for the
account of Borrower, on behalf of Borrower or a Restricted Subsidiary, in
respect of obligations of Borrower or such Restricted Subsidiary in connec-
tion with the purchase of goods or services in the ordinary course of busi-
ness.
"Commitment": as to any Lender at any time, such Lender's
Swing Line Commitment, Tranche B Term Loan Commitment and/or Revolving
Credit Commitment; collectively, as to all the Lenders from time to time,
the "Commitments".
"Commitment Fee Rate": 1/2 of 1% per annum calculated in ac-
cordance with subsection 4.6(a); provided, that from and after the Adjust-
ment Date, the Commitment Fee Rate will be determined pursuant to the pric-
ing grid attached hereto as Schedule II based upon the Leverage Ratio as
determined from the relevant financial statements delivered pursuant to
subsection 7.1.
"Commitment Percentage": as to any Lender at any time, its
Tranche B Term Loan Commitment Percentage or Revolving Credit Commitment
Percentage, as the context may require.
"Commodity Account": as defined in the Collateral Agreement.
"Commodity Hedging Agreements": any futures contract or other
similar agreement or arrangement designed to protect Borrower or any of its
Subsidiaries against fluctuations in commodities prices and not for pur-
poses of speculation.
"Common Stock": with respect to any Person, any and all
shares, interest or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such Person's common stock.
"Confidential Information Memorandum": as defined in subsec-
tion 5.18.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period, minus any reversal of any reserve to the extent included
in Consolidated Net Income, plus, without duplication and to the extent re-
flected as an expense, charge, loss or other deduction in the statement of
such Consolidated Net Income for such period (in each case other than to
the extent attributable to Unrestricted Subsidiaries), the sum of
(a) income tax expense, (b) Consolidated Interest Expense, amortization or
write-off of debt discount, debt issuance and net costs associated with In-
terest Rate Agreements to which Borrower or any Restricted Subsidiary is a
party (including commitment fees and other periodic bank charges),
(c) depreciation and amortization expense, (d) franchise taxes, and (e) all
other non-cash items deducted for purposes of determining net income (other
than items that will require cash payments and for which an accrual or re-
serve is required under GAAP) and (f) any deduction as a result of Minority
Interests in Subsidiaries of Borrower.
"Consolidated Interest Expense": for any period, cash interest
expense for or during such period on a consolidated basis for Borrower and
its Restricted Subsidiaries, determined in accordance with GAAP.
"Consolidated Net Income": for any period, net income (or net
loss) of Borrower and its Restricted Subsidiaries, determined on a xxxxxxx-
dated basis in accordance with GAAP; provided that there shall be excluded
therefrom:
(i) the net income (or loss) of any Person acquired which was
accrued prior to the date it became a Restricted Subsidiary of Bor-
rower or was merged or consolidated with Borrower or any Restricted
Subsidiary of Borrower;
(ii) the net income (but not loss) of any Restricted Subsidiary
of Borrower (other than a Guarantor) to the extent that the declara-
tion of dividends or similar distributions by the Restricted Subsidi-
ary of that income is restricted by a contract, operation of law or
otherwise;
(iii) the net income (or loss) of any other Person, other than a
Restricted Subsidiary of Borrower, except to the extent of cash divi-
dends or distributions paid to Borrower or to a wholly owned Re-
stricted Subsidiary of Borrower by such other Person;
(iv) the cumulative effect of changes in accounting principles;
(v) 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);
(vi) in the case of a successor to Borrower by consolidation or
merger, or as a transferee of Borrower's assets, any earnings of the
successor prior to such consolidation, merger or transfer of assets;
(vii) the impact of foreign currency and hedging translations
and transactions; and
(viii) all other extraordinary gains, losses or charges.
"Contested Collateral Lien Conditions": means, with respect to
any Permitted Lien of the type described in clauses (a), (b) and (d) of
subsection 8.2, the following conditions:
(i) any proceeding instituted contesting such Lien shall con-
clusively operate to stay the sale or forfeiture of any portion of
the Collateral on account of such Lien; and
(ii) such Lien shall in all respects be subject and subordinate
in priority to the Lien and security interest created and evidenced
by the Security Documents, except if and to the extent that the law
or regulation creating, permitting or authorizing such Lien provides
that such Lien is or must be superior to the Lien and security inter-
est created and evidenced by the Security Documents.
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness ("pri-
xxxx obligations") of any other Person (the "primary obligor") in any man-
ner, whether directly or indirectly, including, without limitation, any ob-
ligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect se-
curity therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase property, securi-
ties or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make pay-
ment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, that the term Contingent Obligation shall not include endorse-
ments of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount (based on the maximum
reasonably anticipated net liability in respect thereof as determined by
Borrower in good faith) of the primary obligation or portion thereof in re-
spect of which such Contingent Obligation is made or, if not stated or de-
terminable, the maximum reasonably anticipated net liability in respect
thereof (assuming such Person is required to perform thereunder) as deter-
mined by Borrower in good faith.
"Continuing Directors": the directors of Borrower on the Clos-
ing Date, and each other director of Borrower, if, in each case, such other
director's nomination for election to the board of directors of Borrower is
approved or recommended by at least a majority of the then Continuing Di-
rectors or by a nominations committee thereof.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or un-
dertaking to which such Person is a party or by which it or any of the
property or assets owned by it are bound.
"Control Agreement": as defined in the Collateral Agreement.
"Credit Documents": the collective reference to this Agree-
ment, the Notes, the Security Agreements, the Mortgages, the Guarantees and
all other documents delivered to any Agent and/or any Lender in connection
herewith or therewith and, solely for purposes of subsections 9(a) and (d)
and subsection 11.14, the Fee Letter.
"Credit Parties": the collective reference to Borrower and the
direct and indirect wholly owned Restricted Subsidiaries of Borrower (other
than Foreign Subsidiaries).
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Deposit Account": as defined in the Collateral Agreement.
"Destruction": any and all damage to, or loss or destruction
of, or loss of title to, all or any portion of the Collateral.
"Dividend Payments": dividends (in cash, property or obliga-
tions) on, or other payments or distributions on account of, or the setting
apart of money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any Capital Stock of Bor-
rower or any of its Subsidiaries, but excluding dividends paid through the
issuance of additional shares of Capital Stock and any redemption or ex-
change of any Capital Stock of such Person through the issuance of Capital
Stock of such Person.
"Dollars" and "$": lawful money of the United States.
"Employee Benefit Plan": an employee benefit plan (as defined
in Section 3(3) of ERISA) that is maintained or contributed to by any ERISA
Entity or with respect to which Borrower or a Subsidiary could incur li-
ability.
"Environmental Laws": any and all foreign, federal, state, lo-
cal or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority or Require-
ments of Law (including, without limitation, common law) relating to pollu-
tion or protection of the environment (including, without limitation, ambi-
ent air, soil, subsurface strata, surface water, groundwater and natural
resources such as flora, fauna and wetlands) or public or employee health,
including, without limitation, release or threatened release, manufacture,
storage, treatment, handling, transport or disposal of Hazardous Materials,
as now or may at any time hereafter be in effect.
"Environmental Permits": any and all permits, licenses, regis-
trations, notifications, exemptions and any other authorizations required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Entity": any member of an ERISA Group.
"ERISA Event": (a) any "reportable event," as defined in Sec-
tion 4043 of ERISA or the regulations issued thereunder, with respect to a
Pension Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Pension Plan of an "accumu-
lated funding deficiency" (as defined in Section 412 of the Code or Sec-
tion 302 of ERISA), whether or not waived, the failure to make by its due
date a required installment under Section 412(m) of the Code with respect
to any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (c) the filing pursuant to Section 412(d) of the Code
or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan; (d) the incurrence by
any ERISA Entity of any liability under Title IV of ERISA with respect to
the termination of any Pension Plan; (e) the receipt by any ERISA Entity
from the PBGC or a plan administrator of any notice relating to an inten-
tion to terminate any Pension Plan or to appoint a trustee to administer
any Pension Plan, or the occurrence of any event or condition which could
reasonably be expected to constitute grounds under ERISA for the termina-
tion of or the appointment of a trustee to administer any Pension Plan;
(f) the incurrence by any ERISA Entity of any liability with respect to the
withdrawal or partial withdrawal from any Pension Plan or Multiemployer
Plan; (g) the receipt by any ERISA Entity of any notice, or the receipt by
any Multiemployer Plan from any ERISA Entity of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA; (h) the making of any amendment to any Pen-
sion Plan which could result in the imposition of a lien or the posting of
a bond or other security; or (i) the occurrence of a nonexempt prohibited
transaction (within the meaning of Section 4975 of the Code or Section 406
of ERISA) which could result in liability to Borrower or any of the Sub-
sidiaries.
"ERISA Group": Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Code.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates (ex-
pressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and emer-
gency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum deter-
mined on the basis of the rate for deposits in Dollars for a period equal
to such Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate System Incorporated Service screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on Page
3750 of the Telerate System Incorporated Service screen (or such other page
as may replace such page on such service for the purpose of displaying the
rates at which dollar deposits are offered by leading banks in the London
interbank deposit market), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable pub-
licly available service for displaying eurodollar rates as may be selected
by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market
where its eurodollar and foreign currency and exchange operations are then
being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Lending Office": as to any Lender, the office of
such Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or
being maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Inter-
est Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Require-
ments
"Event of Default": any of the events specified in Section 9;
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of Borrower, commenc-
ing with the fiscal year ending on December 31, 2002, the excess of (a) the
sum of (i) Adjusted Consolidated EBITDA for such fiscal year plus (ii) any
negative change in Working Capital Deficit for such fiscal year over
(b) the sum, without duplication, of (i) the aggregate amount actually paid
by Borrower and its Restricted Subsidiaries in cash during such fiscal year
on account of Capital Expenditures or acquisitions, (ii) the aggregate
amount of payments of principal in respect of any Indebtedness during such
fiscal year (other than (A) pursuant to subsection 4.4(b), (B) payments of
principal in respect of any revolving credit facility to the extent that
there is not an equivalent reduction in the commitments in respect of such
facility and (C) any repayment of Indebtedness to the extent made with the
proceeds of the incurrence of Indebtedness or the issuance of Capital Stock
or the proceeds of any Asset Sale), (iii) cash interest expense (including
fees paid in connection with letters of credit and surety bonds and commit-
ment fees and other periodic bank charges) of Borrower and its Restricted
Subsidiaries for such fiscal year, (iv) the amount of taxes actually paid
in cash by Borrower and its Restricted Subsidiaries for such fiscal year
either during such fiscal year or within a normal payment period thereof,
(v) to the extent included in Adjusted Consolidated EBITDA for such fiscal
year, the net cash cost of Interest Rate Agreements and franchise taxes,
(vi) the amount of cash actually paid by Borrower and its Restricted Sub-
sidiaries during such fiscal year in connection with the matters described
in clause (viii) of the definition of "Consolidated Net Income," (vii) any
positive change in Working Capital Deficit for such fiscal year and (viii)
$10,000,000.
"Excluded Taxes": in the case of each Lender and Administra-
tive Agent, taxes (including franchise taxes) imposed on its overall net
income by (i) the jurisdiction under the laws of which such Lender or Ad-
ministrative Agent is incorporated or organized or (ii) the jurisdiction in
which Administrative Agent's or such Lender's principal executive office or
such Lender is located.
"Existing Credit Agreement": the revolving credit agreement,
dated as of August 4, 2000, as amended, among Borrower, as borrower, and
certain financial institutions, as lenders.
"Existing Indenture": the indenture relating to the Existing
Notes, by and between Borrower, as issuer, and U.S. Trust Company of Cali-
fornia, N.A., as trustee, dated as of August 13, 1997, as amended and sup-
plemented and as in effect on the Closing Date.
"Existing Notes": means the $250,000,000 in aggregate princi-
pal amount of the 10-5/8% senior subordinated notes due August 15, 2004 is-
sued by Borrower.
"Facility": each of (a) the extensions of credit made
hereunder in the form of Tranche B Term Loans (the "Term B Loan Facility")
and (b) the Revolving Credit Commitments and the extensions of credit made
thereunder (the "Revolving Credit Facility"), and "Facilities" means the
collective reference to the Term B Loan Facility and the Revolving Credit
Facility.
"Fee Letter": the letter between Borrower, UBS AG, Stamford
Branch and UBS Warburg LLC dated as of December 3, 2001 relating to the
payment of certain fees in respect of the Facilities.
"Fee Property": as defined in subsection 5.13.
"Fixed Charge Coverage Ratio": on the last day of any fiscal
quarter of Borrower, the ratio of (x) Adjusted Consolidated EBITDA, plus
aggregate rent expense for Borrower and its Restricted Subsidiaries, in
each case for the period of the four consecutive fiscal quarters ending on
such day to (y) Fixed Charges for the period of the four consecutive fiscal
quarters ending on such day, in the cases of each of (x) and (y) on a con-
solidated basis for Borrower and the Restricted Subsidiaries, which ratio
shall be calculated on a pro forma basis as if the Transactions had oc-
curred on the first day of such period with respect to any such measurement
prior to the first anniversary of the Closing Date.
"Fixed Charges": shall mean, for any period, the sum of (i)
Consolidated Interest Expense for such period, (ii) the sum of all sched-
uled principal payments on any Indebtedness of Borrower and the Restricted
Subsidiaries payable during such period (including without limitation the
principal component of Capital Lease Obligations paid during that period),
(iii) all dividends paid or payable (to a Person other than Borrower or a
Qualified Subsidiary) in cash on Preferred Stock of Borrower or its Re-
stricted Subsidiaries during such period, (iv) all cash income tax expense
actually paid to any Governmental Authority for such period by Borrower and
the Restricted Subsidiaries, (v) all Capital Expenditures made during such
period and (vi) aggregate rent expense for Borrower and the Restricted Sub-
sidiaries during such period. For purposes of calculating Fixed Charges,
Indebtedness shall only include items within the meaning of clauses (a),
(b), (c), (d), (e), (g), (h) (replacing the reference to clauses (a)
through (g) in such clause (h) to clauses (a), (b), (c), (d), (e) and (g))
and (i) (replacing the reference to clauses (a) through (h) in such clause
(i) to clauses (a), (b), (c), (d), (e), (g) and (h)) of the definition of
Indebtedness (for the avoidance of doubt, the calculation of Consolidated
Interest Expense for the purposes of determining Fixed Charges shall not be
affected by the provisions of this sentence).
"Foreign Plan": any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by Borrower or any of
its Subsidiaries with respect to employees employed outside the United
States.
"Foreign Restricted Subsidiary": each Foreign Subsidiary that
is a Restricted Subsidiary.
"Foreign Subsidiary": each Subsidiary of Borrower which is not
organized under the laws of the United States or any state thereof or the
District of Columbia.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or per-
taining to government.
"Granting Lender": as defined in subsection 11.6(i).
"Guarantees": the collective reference to the Subsidiary Guar-
xxxxx and any guarantee which may from time to time be executed and deliv-
ered by a Subsidiary pursuant to subsection 7.9.
"Hazardous Materials": any pollutants, contaminants, chemi-
cals, materials, constituents, wastes or substances that may give rise to
liability, or are subject to regulation, under any Environmental Law, in-
cluding, without limitation, asbestos, petroleum, any petroleum products
(including gasoline, crude oil or any fraction thereof), polychlorinated
biphenyls and urea-formaldehyde insulation.
"Highest Lawful Rate": as defined in subsection 11.12.
"Indebtedness": of any Person at any date, without duplica-
tion, (a) all indebtedness of such Person for borrowed money, (b) all obli-
gations of such Person for the deferred purchase price of property or serv-
ices (other than accounts payable, including accounts payable arising from
the participation by such Person in any floorplan financing program (or, to
the extent they are on the same terms (including as to due date and aggre-
gate liability) as such accounts payable, notes in exchange therefor), ac-
crued revenue sharing, accrued expenses and other trade payables incurred
in the ordinary course of such Person's business, in each case not overdue
by more than 120 days or, if overdue for more than 120 days, as to which
the vendor has consented (whether by written agreement or implied consent)
as to the extension of terms or a dispute exists and adequate reserves in
conformity with GAAP have been established), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments
(other than notes made in exchange for accounts payable that are not over-
due for more than 120 days, to the extent such notes are on the same terms
(including as to due date and aggregate liability) as such accounts pay-
able), (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or
sale of such property), (e) all Capital Lease Obligations of such Person
and the obligations (including contingent obligations) of such Person under
and in respect of synthetic lease transactions under which such Person or
any Affiliate of such Person is the lessee, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or
in respect of acceptances, letters of credit (whether drawn or undrawn),
surety bonds or similar arrangements, (g) the liquidation value of all re-
deemable preferred Capital Stock of such Person, (h) all guarantee Obliga-
tions of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to
in clauses (a) through (h) above secured by (or for which the holder of
such obligation has an existing right, contingent or otherwise, to be se-
cured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become li-
able for the payment of such obligation, but only to the extent of the
value of such property and (j) for the purposes of subsection 8.1 and sub-
section 9(e) only, all obligations of such Person in respect of Commodity
Hedging Agreements. The Indebtedness of any Person shall include the In-
debtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship
with such entity, except to the extent the terms of such Indebtedness ex-
pressly provide that such Person is not liable therefor.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or oth-
erwise, including copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Interest Coverage Ratio": on the last day of any fiscal quar-
ter of Borrower, the ratio of (a) Adjusted Consolidated EBITDA for the pe-
riod of the four consecutive fiscal quarters ending on such day to
(b) Consolidated Interest Expense for the period of the four consecutive
fiscal quarters ending on such day, in each case on a consolidated basis
for Borrower and the Restricted Subsidiaries, which such ratio shall be
calculated on a pro forma basis as if the Transactions had occurred on the
first day of such period with respect to any such measurement prior to the
first anniversary of the Closing Date.
"Interest Payment Date": (a) as to Alternate Base Rate Loans,
the last day of each March, June, September and December, commencing on the
first such day to occur after any Alternate Base Rate Loans are made or any
Eurodollar Loans are converted to Alternate Base Rate Loans, (b) as to any
Eurodollar Loan in respect of which Borrower has selected an Interest Pe-
riod of one, two or three months, the last day of such Interest Period and
(c) as to any Eurodollar Loan in respect of which Borrower has selected a
longer Interest Period than the periods described in clause (b), the last
day of each three calendar month interval during such Interest Period and,
in addition, the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be,
the Borrowing Date or conversion date with respect to such Eurodollar
Loan and ending (x) until the earlier of (1) the completion of the
syndication of the Term B Loan Facility as determined by the Lead Ar-
ranger and (2) 30 days after the Closing Date, seven days thereafter
and (y) in all other cases, one, two, three or six months thereafter
(or, with the consent of each applicable Lender, nine or twelve
months thereafter) as selected by Borrower in its notice of borrowing
as provided in subsection 4.1 or its notice of conversion as provided
in subsection 4.2; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending (x) until the earlier of (1) the completion of the syndication
of the Term B Loan Facility as determined by the Lead Arranger and
(2) 30 days after the Closing Date, seven days thereafter and (y) in
all other cases, one, two, three or six months thereafter (or, with
the consent of each applicable Lender, nine or twelve months thereaf-
ter) as selected by Borrower by irrevocable notice to the Administra-
tive Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect to such Eurodollar
Loan; provided, that if Borrower fails to deliver such notice by such
time, such period shall end one month thereafter;
provided that the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately pre-
ceding Business Day;
(B) any Interest Period that would otherwise extend beyond
(i) in the case of an Interest Period for a Tranche B Term Loan, the
final Tranche B Installment Payment Date shall end on such Tranche B
Installment Payment Date or, if such Tranche B Installment Payment
Date shall not be a Business Day, on the next preceding Business Day;
and (ii) in the case of any Interest Period for a Revolving Credit
Loan, the Revolving Credit Termination Date shall end on the Revolv-
ing Credit Termination Date, or if the Revolving Credit Termination
Date shall not be a Business Day, on the next preceding Business Day;
and
(C) any Interest Period that begins on the last day of a cal-
endar month (or on a day for which there is no numerically corre-
sponding day in the calendar month at the end of such Interest Pe-
riod) shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other simi-
lar agreement or arrangement.
"Investment": for any Person: (a) the acquisition (whether
for cash, property, services or securities or otherwise) of equity inter-
ests, bonds, notes, debentures or other securities of any other Person;
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of property from an-
other Person subject to an understanding or agreement, contingent or other-
wise, to resell such property to such Person); (c) any 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) any
other Person; and (d) the entering into, or direct or indirect incurrence,
of any Contingent Obligation with respect to Indebtedness or other liabil-
ity of any other Person.
"Investment Election Notice": as defined in subsection
12.2(a).
"Issuing Lender": collectively, UBS AG, Stamford Branch and
any of its Affiliates, as issuer of the Letters of Credit.
"Law": any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement
or other governmental restriction of the United States or Canada or any
state, province or political subdivision thereof or of any foreign country
or any department, province or other political subdivision thereof.
"L/C Application": as defined in subsection 3.5(a).
"L/C Obligations": the obligations of Borrower to reimburse
the Issuing Lender for any payments made by the Issuing Lender under any
Letter of Credit that have not been reimbursed by Borrower pursuant to sub-
section 3.8(a).
"L/C Participating Interest": an undivided participating in-
terest in the face amount of each issued and outstanding Letter of Credit
and the L/C Application relating thereto.
"L/C Participation Certificate": a certificate in substan-
tially the form of Exhibit F.
"L/C Sub-Account": as defined in subsection 12.1(d).
"Lead Arranger": UBS Warburg LLC.
"Leased Property": as defined in subsection 5.13.
"Lenders": as defined in the Preamble hereto.
"Letters of Credit": the collective reference to the Commer-
cial L/Cs and the Standby L/Cs; individually, a "Letter of Credit".
"Leverage Ratio": as of any date, the ratio of the aggregate
stated balance sheet amount of all Indebtedness of Borrower and its Re-
stricted Subsidiaries determined on a consolidated basis in accordance with
GAAP at such date to Adjusted Consolidated EBITDA for the period of the im-
mediately preceding four consecutive fiscal quarters ending at such date.
For purposes of calculating the Leverage Ratio (i) Adjusted Consolidated
EBITDA shall be calculated on a pro forma basis (giving effect to post-
acquisition cost savings in a manner reasonably agreed to by Borrower and
the Administrative Agent, but in any case such manner shall be no less fa-
vorable to Borrower and its Subsidiaries than analogous SEC regulations
governing the preparation of pro forma financial statements) adjusted from
time to time to give effect to any acquisition permitted by subsection
8.6(g) consummated in the relevant period as if such acquisition occurred
on the first day of such period, (ii) Indebtedness shall only include items
within the meaning of clauses (a), (b), (c), (d), (e), (g), (h) (replacing
the reference to clauses (a) through (g) in such clause (h) to clauses (a),
(b), (c), (d), (e) and (g)) and (i) (replacing the reference to clauses (a)
through (h) in such clause (i) to clauses (a), (b), (c), (d), (e), (g) and
(h)) of the definition of Indebtedness and (iii) for the purposes of sub-
section 8.7 only, Indebtedness shall only include Indebtedness described in
immediately preceding clause (ii) that is secured by a Lien.
"Lien": any mortgage, deed of trust, pledge, assignment, de-
posit arrangement, encumbrance, lien (statutory or other), claim, hypothe-
cation, charge or preference, priority or other security agreement or pref-
erential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the UCC or com-
parable law of any jurisdiction in respect of any of the foregoing).
"Loans": the collective reference to the Swing Line Loans, the
Tranche B Term Loans, and the Revolving Credit Loans; individually, a
"Loan".
"Majority Facility Lenders": with respect to each Facility,
the holders of in excess of 50% of the aggregate unpaid principal amount of
the Tranche B Term Loans or the Revolving Credit Exposure, as the case may
be, outstanding under such Facility (or, in the case of the Revolving
Credit Facility, prior to any termination of the Revolving Credit Commit-
ments, the holders of in excess of 50% of the aggregate amount of Revolving
Credit Commitments).
"Margin Stock" shall mean margin stock within the meaning of
Regulations U and X.
"Material Adverse Effect": a material adverse effect on
(i) the business, assets, results of operations, properties or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a
whole, (ii) the ability of Borrower or any of its Restricted Subsidiaries
to perform its respective obligations under any Credit Document, (iii) the
rights and remedies of the Lenders under any Credit Document, or (iv) the
value of the Collateral, taken as a whole, or the validity, enforceability,
perfection or priority of the Liens, taken as a whole, granted to the Ad-
ministrative Agent (for its benefit and for the benefit of the other Se-
cured Parties) on the Collateral pursuant to the Security Documents.
"Material Subsidiary": any Subsidiary that would be a "sig-
nificant subsidiary" of Borrower within the meaning of Rule 1-02(w) of
Regulation S-X under the Securities Act of 1933 (replacing references to 10
per cent therein with 5 per cent), or any group of Subsidiaries that to-
gether would constitute a Material Subsidiary.
"Maturity Date": (a) if the Notes Refinancing is consummated
on or before the Notes Refinancing Date, June 30, 2006, and (b) in all
other cases, March 31, 2004, or, in each case, if such date is not a Busi-
ness Day, the immediately preceding Business Day.
"Maximum Number": for each of the following years, the number
set forth opposite such year:
Year
Number
2002
50
2003
200
2004
225
2005
250
2006
125
; provided, that if in any year the Maximum Number (as the Maximum Number
may be increased pursuant to this proviso) exceeds the number of Stores ac-
tually opened or acquired in such year, then the Maximum Number for the
next succeeding year shall be increased by an amount equal to such excess.
"Minority Interest": an investment in any Person that is not a
Subsidiary (including any joint venture).
"Mortgaged Properties": any Real Property covered by a Xxxx-
xxxx delivered pursuant to subsection 7.9(d).
"Mortgages": each of the mortgages and deeds of trust in re-
spect of real property made by any Credit Party in favor of, or for the
benefit of, the Administrative Agent for its benefit and for the benefit of
the other Secured Parties, substantially in the form of Exhibit G (with
such changes thereto as shall be advisable under the law of the jurisdic-
tion in which such mortgage or deed of trust is to be recorded and other-
wise as shall be acceptable to the Administrative Agent), as the same may
be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA (i) to which any ERISA Entity is then making
or accruing an obligation to make contributions (ii) to which any ERISA En-
tity has within the preceding five plan years made contributions, including
any Person which ceased to be an ERISA Entity during such five year period,
or (iii) with respect to which Borrower or a Subsidiary could incur liabil-
ity.
"Net Proceeds": the aggregate cash proceeds received (subject
to the provisions of subsections 8.5(d), (h) and (l), to the extent appli-
cable) by Borrower or any of its Restricted Subsidiaries in respect of:
(a) (i) any issuance or borrowing of any debt securities (in-
cluding debt securities convertible into, or exchangeable or exercis-
able for, Capital Stock) or loans by Borrower or any of its Re-
stricted Subsidiaries other than debt or loans permitted to be in-
curred or borrowed pursuant to subsection 8.1 (other than subsection
8.1(k) hereof) or (ii) any issuance by Borrower or any of its Re-
stricted Subsidiaries of Capital Stock;
(b) any Asset Sale or any insurance recoveries in respect of
any Destruction or any proceeds or awards on account of any Taking;
provided that (i) so long as no Event of Default then exists, the net
proceeds of any such insurance recoveries in respect of any Destruc-
tion or net award of any such Taking shall constitute Net Proceeds
only to the extent such recoveries are not reinvested in properties
or assets owned (or to be owned) by Borrower and its Restricted Sub-
sidiaries within twelve months from the date of such sale, and
(ii) if the property subject to such Destruction or Taking consti-
tuted Collateral under the Security Documents, then any property pur-
chased with the net proceeds thereof or net awards shall be mortgaged
or pledged, as the case may be, to the Administrative Agent, for its
benefit and for the benefit of the other Secured Parties in accor-
dance with subsection 7.9;
(c) any cash received in respect of substantially like-kind
exchanges of property to the extent provided in the proviso to sub-
section 8.5(e); and
(d) any cash payments received in respect of promissory notes
delivered to Borrower or any of its Restricted Subsidiaries in re-
spect of an Asset Sale;
in each case net of (without duplication) (w) to the extent such Indebted-
ness and such Lien are permitted hereunder, the amount required to repay
any Indebtedness (other than the Loans) secured by a Lien on any assets of
Borrower or any of its Subsidiaries (that are collateral for any such debt
securities or loans) that are sold or otherwise disposed of in connection
with such Asset Sale or subject to the applicable Destruction or Taking,
(x) the reasonable expenses (including legal fees and brokers' and under-
writers' commissions, lenders fees or credit enhancement fees, in any case,
paid to third parties or, to the extent permitted hereby, Affiliates) in-
curred in effecting the applicable event or events described in clauses (a)
through (d) above, (y) any taxes (including any withholding) reasonably at-
tributable to the applicable event or events described in clauses (a)
through (d) above and reasonably estimated by Borrower or its Restricted
Subsidiaries to be actually payable and (z) in the case of any receipt of
proceeds by a Restricted Subsidiary, any amount required to be distributed
to the holders of any minority equity interest in such Subsidiary (or in
any other Subsidiary which directly or indirectly holds equity interests in
such Subsidiary).
"Non-Bank Certificate": a certificate substantially in the
form of Exhibit H.
"Non-Funding Lender": as defined in subsection 4.9(c).
"Notes": the collective reference to the Swing Line Note, the
Revolving Credit Notes and the Tranche B Term Loan Notes; each of the
Notes, a "Note".
"Notes Refinancing": the Refinancing of the entire principal
amount of the Existing Notes with the proceeds of the issuance of either
(a) Indebtedness solely comprised of Subordinated Indebtedness of Borrower,
(b) Capital Stock of Borrower or (c) a combination of clauses (a) and (b);
provided, that in each case, such proceeds (net of customary underwriting
discounts and commissions) are contributed directly to Borrower (in the
case of an issuance done by a Person other than Borrower).
"Notes Refinancing Date": February 29, 2004.
"Obligations": as defined in the Collateral Agreement.
"Officers' Certificate": as applied to any corporation, a cer-
tificate executed on behalf of such corporation by its Chief Executive Of-
ficer or its Chief Operating Officer or its President or one of its Vice
Presidents or by its Chief Financial Officer or its Treasurer or any Xxxxx-
xxxx Treasurer or, in the case of Foreign Subsidiaries, officers or persons
performing comparable functions.
"Other Taxes": as defined in subsection 4.11(d)(ii).
"Participants": as defined in subsection 11.6(b).
"Participating Lender": any Revolving Credit Lender (other
than the Issuing Lender) with respect to its L/C Participating Interest in
each Letter of Credit.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Pension Plan": an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code or Section 302 of
ERISA and is maintained or contributed to by any ERISA Entity or with re-
spect to which Borrower or a Subsidiary could incur liability.
"Permitted Encumbrances": with respect to any Mortgaged Prop-
erty, such exceptions to title as are set forth in the title insurance pol-
icy delivered with respect thereto.
"Permitted Holder": any of (i) Xxxx X. Xxxxxxx, (ii) an em-
ployee benefit plan of Borrower, or any Subsidiary of Borrower or any par-
ticipant therein, (iii) a trustee or other fiduciary holding securities un-
der an employee benefit plan of Borrower or any Subsidiary of Borrower or
(iv) any Permitted Transferee of any of the foregoing persons.
"Permitted Liens": Liens permitted to exist under subsection
8.2.
"Permitted Transferee": with respect to any Person (i) any Af-
filiate of such Person (for the purpose of this definition only, the refer-
ence to 20% in the second sentence of the definition of "Affiliate" shall
be 51%), (ii) the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any such Person, (iii) a trust, the benefici-
aries of which, or a corporation or partnership, the stockholders or gen-
eral or limited partners of which include only such Person or his or her
spouse, lineal descendants, heirs, legatees, or beneficiaries, in each case
to whom such Person has transferred the beneficial ownership of any securi-
ties of Borrower, (iv) any investment account whose investment managers and
investment advisors consist solely of such Person and/or Permitted Trans-
ferees of such Person, and (v) any investment fund or investment entity
that is a subsidiary of such Person or Permitted Transferee of such Person.
"Person": an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust, unincorpo-
rated association, joint venture, Governmental Authority or other entity of
whatever nature.
"Preferred Stock": with respect to any Person, any and all
preferred stock of such Person.
"Qualified Subsidiary": each wholly owned Subsidiary Guarantor
that is not an Unrestricted Subsidiary.
"Real Property": each Fee Property and Leased Property listed
on Schedule 5.13.
"Refinancing": the refinancing, renewal, extension, replace-
ment, defeasance or refunding, in whole or in part, of any Indebtedness of
Borrower or any of its Subsidiaries; provided that (i) any such Refinancing
is in an aggregate principal amount not greater than the aggregate princi-
pal amount of the Indebtedness being renewed or refinanced, plus the amount
of any accrued but unpaid interest or premiums required to be paid thereon
and reasonable fees and expenses associated therewith; and (ii) such Refi-
nancing has a later or equal final maturity and longer or equal weighted
average life than the Indebtedness being renewed or refinanced.
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
"Register": as defined in subsection 11.6(d).
"Regulation U": Regulation U (12 C.F.R. Part 221) of the Board
of Governors of the United States Federal Reserve System (or any succes-
sor), as the same may be modified and supplemented and in effect from time
to time.
"Regulation X": Regulation X (12 C.F.R. Part 224) of the Board
of Governors of the United States Federal Reserve System (or any succes-
sor), as the same may be modified and supplemented and in effect from time
to time.
"Rental Items": videotapes, video discs (regardless of for-
mat), video games, audiotapes and related equipment to the extent that such
items were acquired by Borrower or its Restricted Subsidiaries for sale or
rental to their customers or are held by Borrower or its Restricted Sub-
sidiaries for sale or rental to their customers.
"Required Lenders": at a particular time, the holders of in
excess of 50% of the sum of (i) the Tranche B Term Loans then outstanding
and (ii) the Revolving Credit Commitments, or if the Revolving Credit Com-
mitments have been terminated in full, the Revolving Credit Exposure. The
Tranche B Term Loans and the Revolving Credit Commitments of any Non-
Funding Lender shall be disregarded in determining Required Lenders at any
time.
"Requirement of Law": as to any Person, the Articles or Cer-
tificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, order or
determination of an arbitrator or a court or other Governmental Authority,
in each case, applicable to or binding upon such Person or any of its prop-
erty or to which such Person or any of its property is subject.
"Responsible Officer": with respect to any Person, the presi-
dent, chief executive officer, the chief operating officer, the chief fi-
nancial officer, treasurer, corporate controller, secretary or any vice
president of such Person.
"Restricted Subsidiary": each Subsidiary of Borrower that is
not an Unrestricted Subsidiary.
"Revolving Credit Commitment": as to any Lender, its obliga-
tions to (i) make Revolving Credit Loans to Borrower pursuant to subsection
3.1 and (ii) purchase its L/C Participating Interest in any Letter of
Credit, in an aggregate amount not to exceed the amount set forth under
such Lender's name in Schedule I opposite the caption "Revolving Credit
Commitment" or in Schedule I to the Assignment and Acceptance by which such
Lender acquired its Revolving Credit Commitment, as the same may be reduced
from time to time pursuant to subsection 4.3 or 4.4(b) or adjusted pursuant
to subsection 11.6(c); collectively, as to all the Lenders, the "Revolving
Credit Commitments".
"Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage of the aggregate Revolving Credit Commitments then
constituted by such Lender's Revolving Credit Commitment.
"Revolving Credit Commitment Period": the period from and in-
cluding the Closing Date to but not including the Revolving Credit Termina-
tion Date.
"Revolving Credit Exposure": the sum of (i) the aggregate un-
paid principal amount of the Revolving Credit Loans, (ii) participations in
Swing Line Loans, (iii) the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit and (iv) L/C Obligations.
"Revolving Credit Facility": as defined in the definition of
Facility.
"Revolving Credit Lender": any Lender with a Revolving Credit
Commitment.
"Revolving Credit Loans": as defined in subsection 3.1(a).
"Revolving Credit Note": as defined in subsection 4.13(e).
"Revolving Credit Termination Date": the earlier of (a) the
Maturity Date and (b) such other earlier date as the Revolving Credit Com-
mitments shall terminate hereunder.
"Sale and Leaseback Transaction": any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property
used or useful in its business, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property which it in-
tends to use for substantially the same purpose or purposes as the property
being sold or transferred.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Secured Parties": the collective reference to the Administra-
tive Agent, the Lenders and each party to an Interest Rate Agreement relat-
ing to the Loans if at the date of entering into such Interest Rate Agree-
ment such Person was a Lender or an Affiliate of a Lender.
"Securities Account": as defined in the Collateral Agreement.
"Security Agreements": the collective reference to the Collat-
eral Agreement and any security agreement which may from time to time be
executed and delivered by Borrower or a Subsidiary of Borrower pursuant to
subsection 7.9.
"Security Documents": the collective reference to the Security
Agreements, the Mortgages, all UCC or other financing statements and other
instruments of perfection required by this Agreement, the Security Agree-
ments or the Mortgages to be executed, delivered and/or filed or recorded,
and any other documents utilized to pledge to the Administrative Agent, for
its benefit and for the benefit of the other Secured Parties, any other
property or assets as collateral for the Obligations.
"Solvent" and "Solvency": when used with respect to any Per-
son, as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date, exceed
the amount of all "liabilities of such Person, contingent or otherwise", as
of such date, as such quoted terms are determined in accordance with appli-
cable federal and state laws governing determinations of the insolvency of
debtors, (b) the present fair saleable value of the assets of such Person
will, as of such date, be greater than the amount that will be required to
pay the liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an unreasona-
xxx small amount of capital with which to conduct its business, and (d)
such Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or (y) right
to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed, un-
disputed, secured or unsecured.
"SPV": as defined in subsection 11.6(i).
"Standby L/C": an irrevocable letter of credit under which the
Issuing Lender agrees to make payments in Dollars for the account of Bor-
rower, on behalf of Borrower or any Restricted Subsidiary in respect of ob-
ligations of Borrower or such Subsidiary incurred pursuant to contracts
made or performances undertaken or to be undertaken or like matters relat-
ing to contracts to which Borrower or such Restricted Subsidiary is or pro-
poses to become a party in Borrower's or such Restricted Subsidiary's busi-
ness, including, without limiting the foregoing, for insurance purposes or
in respect of advance payments or as bid or performance bonds or for any
other purpose for which a standby letter of credit might customarily be is-
sued.
"Store": each separate location at which Borrower or any Re-
stricted Subsidiary of Borrower engages in the rental of Rental Items to
the public.
"Subordinated Indebtedness": any Indebtedness of Borrower or
any Subsidiary of Borrower that (a) is subordinated to all Indebtedness un-
der the Facilities pursuant to subordination provisions substantially simi-
lar to (or more favorable to the Lenders than) those contained in the Ex-
isting Indenture, (b) matures after the Maturity Date and provides for no
amortization payments of principal until after the Maturity Date and (c) is
not secured by any Lien.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each
class or other interests having ordinary voting power (other than stock or
other interests having such power only by reason of the occurrence of a
contingency) to elect a majority of the board of directors or other manag-
ers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, by such Person or by
one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person. A Subsidiary shall be deemed wholly owned by
a Person who owns directly or indirectly all of the voting shares of stock
or other interests of such Subsidiary having voting power under ordinary
circumstances to vote for directors or other managers of such corporation,
partnership or other entity, except for directors' qualifying shares. Un-
less otherwise qualified, all references to a "Subsidiary" or to "Subsidi-
aries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Borrower; provided that any joint venture or Person in which an investment
is made pursuant to subsection 8.6(g) shall at the option of Borrower, so
long as such investment is maintained in reliance on such subsection, not
be a "Subsidiary" of Borrower for any purpose of this Agreement.
"Subsidiary Guarantee": the Subsidiary Guarantee, substan-
tially in the form of Exhibit I, to be made by Restricted Subsidiaries in
favor of the Administrative Agent for the ratable benefit of the Lenders,
as the same may be amended, modified or supplemented from time to time.
"Supermajority Facility Lenders": with respect to each Facil-
ity, the Lenders which would constitute the Majority Facility Lenders in
accordance with the definition thereof contained herein if the percentage
"50%" appearing therein were changed to "66-2/3%".
"Supermajority Lenders": at a particular time, the holders of
at least 66-2/3% of the sum of (i) the aggregate unpaid principal amount of
the Tranche B Term Loans, if any, and (ii) the Revolving Credit Commitments
or, if the Revolving Credit Commitments are terminated, the aggregate un-
paid principal amount of the Revolving Credit Loans, and participations in
Swing Line Loans and the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit and L/C Obligations. The
Tranche B Term Loans and the Revolving Credit Commitments of any Non-
Funding Lender shall be disregarded in determining Supermajority Lenders at
any time.
"Survey": a survey of any Mortgaged Property (and all improve-
ments thereon): (i) prepared by a surveyor or engineer licensed to perform
surveys in the state, province or country where such Mortgaged Property is
located, (ii) dated as of a recent date reasonably acceptable to the Admin-
istrative Agent, (iii) certified by the surveyor (in a manner reasonably
acceptable to the Administrative Agent) to the Administrative Agent and the
Title Company reasonably acceptable to the Administrative Agent, and (iv)
complying in all material respects with the minimum detail requirements of
the American Land Title Association as such requirements are in effect on
the date of preparation of such survey; provided, however, that such survey
is in a form sufficient for the Title Company to remove all standard survey
exceptions from the title insurance policy (or commitment) and issue a sur-
vey and comprehensive endorsement with respect to such Mortgaged Property.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to subsection 3.4.
"Swing Line Lender": UBS AG, Stamford Branch, in its capacity
as lender of the Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit J.
"Swing Line Loans": as defined in subsection 3.4(a).
"Swing Line Note": as defined in subsection 4.13(e).
"Taking": any taking of the Collateral or any portion thereof,
in or by condemnation or other eminent domain proceedings pursuant to any
law, general or special, or by reason of the temporary requisition of the
use of the Collateral or any portion thereof, by any Governmental Author-
ity, civil or military.
"Taxes": any and all present or future taxes, duties, levies,
fees, imposts, deductions, charges or withholdings, whether computed on a
separate, consolidated, unitary, combined or other basis and any and all
liabilities (including interest, fines, penalties or additions to tax) with
respect to the foregoing, but excluding Excluded Taxes.
"Term B Loan Facility": as defined in the definition of Facil-
ity.
"Title Company": such title insurance company as shall be re-
tained by Borrower and reasonably acceptable to the Administrative Agent.
"Title Policy": as defined in subsection 7.9(d).
"Total Revenues": for any period, aggregate revenues of Bor-
rower and the Restricted Subsidiaries for such period, determined in accor-
dance with GAAP.
"Tranche": the Tranche B Term Loans or the Revolving Credit
Commitment, as the case may be.
"Tranche B Installment Payment Date": as defined in subsection
4.4(c).
"Tranche B Lender": each Lender that has a Tranche B Term Loan
Commitment or is the holder of a Tranche B Term Loan.
"Tranche B Term Loan": as defined in subsection 2.1.
"Tranche B Term Loan Commitment": as to any Tranche B Lender,
its obligation to make a Tranche B Term Loan to Borrower pursuant to sub-
section 2.1 in an aggregate amount not to exceed the amount set forth under
such Lender's name in Schedule I opposite the caption "Tranche B Term Loan
Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant to
which a Lender acquires its Tranche B Term Loan Commitment, as the same may
be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche B Lenders, the "Tranche B Term Loan Commitments".
"Tranche B Term Loan Commitment Percentage": as to any Tranche
B Lender at any time, the percentage of the aggregate Tranche B Term Loan
Commitments then constituted by such Lender's Tranche B Term Loan Commit-
ment (or, after the Tranche B Term Loans are made, the percentage of the
aggregate outstanding principal amount of the Tranche B Term Loans then
constituted by the principal amount of such Tranche B Lender's Tranche B
Term Loan).
"Tranche B Term Note": as defined in subsection 4.13(e).
"Transaction Documents": the collective reference to each
document pursuant to which each of the Transactions will be consummated.
"Transactions": as defined in the Recitals hereto.
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an Alternate Base Rate
Loan or Eurodollar Loan.
"UCC": the Uniform Commercial Code as in effect in the appli-
cable jurisdiction.
"Uniform Customs": the Uniform Customs and Practice for Docu-
mentary Credits (1993 Revision), International Chamber of Commerce Publica-
tion No. 500, and any amendments thereof.
"United States": the United States of America.
"United States Person": any Person organized under the laws of
the United States or any state thereof or the District of Columbia.
"Unrestricted Subsidiary": any Subsidiary of Borrower that, at
the time of determination, shall be an Unrestricted Subsidiary (as desig-
nated by the board of directors of Borrower, as provided below). The board
of directors of Borrower may designate any Subsidiary of Borrower (includ-
ing any newly acquired or newly formed Subsidiary at or prior to the time
it is so formed or acquired) to be an Unrestricted Subsidiary if (a) no De-
fault is existing or will occur as a consequence thereof, (b) such Subsidi-
ary does not own any Capital Stock of, or own or hold any Lien on any prop-
erty of, Borrower or any of its Subsidiaries (other than Unrestricted Sub-
sidiaries), (c) such Subsidiary and each of its Subsidiaries has not at the
time of designation, and does not thereafter, create, incur, issue, assume,
guarantee, or otherwise become directly or indirectly liable with respect
any Indebtedness pursuant to which the lender has recourse to any property
of Borrower or any of its Subsidiaries (other than Unrestricted Subsidiar-
ies), (d) a default by such Person on any of its Indebtedness will not re-
xxxx in, or permit any holder of Indebtedness of Borrower or any of its
Subsidiaries (other than Unrestricted Subsidiaries) to declare, a default
on such Indebtedness of Borrower or any of its Subsidiaries (other than Un-
restricted Subsidiaries) or cause the payment thereof to be accelerated or
payable prior to its stated maturity, and (e) at the time of such designa-
tion such Subsidiary shall not have more than de minimis assets. Any Sub-
sidiary of an Unrestricted Subsidiary shall be an Unrestricted Subsidiary
for purposes of this Agreement. Each such designation shall be evidenced
by filing with the Administrative Agent a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying
that such designation complied with the foregoing conditions.
"Withdrawal Liability": liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
"Working Capital Deficit": in relation to any Person as at any
date, the sum derived by subtracting Adjusted Current Liabilities from Ad-
justed Current Assets of such Person as at such date.
1.2. Rules of Construction. (a) In this Agreement and each
other Credit Document, unless the context clearly requires otherwise (or
such other Credit Document clearly provides otherwise), references to
(i) the plural include the singular, the singular the plural and the part
the whole; (ii) Persons include their respective permitted successors and
assigns or, in the case of governmental Persons, Persons succeeding to the
relevant functions of such Persons; (iii) agreements (including this Agree-
ment), promissory notes and other contractual instruments include subse-
quent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments or other modifications thereto are
not prohibited by their terms or the terms of any Credit Document;
(iv) statutes and related regulations include any amendments of same and
any successor statutes and regulations; and (v) time shall be a reference
to New York, New York time. Where any provision herein refers to action to
be taken by any Person, or which such Person is prohibited from taking,
such provision shall be applicable whether such action is taken directly or
indirectly by such Person.
(b) In this Agreement and each other Credit Document, unless
the context clearly requires otherwise (or such other Credit Document
clearly provides otherwise), (i) "amend" shall mean "amend, restate, amend
and restate, supplement or modify"; and "amended," "amending," and "amend-
ment" shall have meanings correlative to the foregoing; (ii) in the compu-
tation of periods of time from a specified date to a later specified date,
"from" shall mean "from and including"; "to" and "until" shall mean "to but
excluding"; and "through" shall mean "to and including"; (iii) "hereof,"
"herein" and "hereunder" (and similar terms) in this Agreement or any other
Credit Document refer to this Agreement or such other Credit Document, as
the case may be, as a whole and not to any particular provision of this
Agreement or such other Credit Document; (iv) "including" (and similar
terms) shall mean "including without limitation" (and similarly for similar
terms); (v) "or" has the inclusive meaning represented by the phrase
"and/or"; (vi) "satisfactory to" the Administrative Agent shall mean in
form, scope and substance and on terms and conditions satisfactory to the
Administrative Agent; (vii) references to "the date hereof" shall mean the
date first set forth above; and (viii) "asset" and "property" shall have
the same meaning and effect and refer to all tangible and intangible assets
and property, whether real, personal or mixed and of every type and de-
scription.
(c) In this Agreement unless the context clearly requires oth-
erwise, any reference to (i) an Annex, Exhibit or Schedule is to an Annex,
Exhibit or Schedule, as the case may be, attached to this Agreement and
constituting a part hereof, and (ii) a Section or other subsection is to a
Section or such other subsection of this Agreement.
SECTION 2. TRANCHE B TERM LOANS
2.1. Tranche B Term Loans. Subject to the terms and condi-
tions hereof, each Tranche B Lender severally agrees to make a loan in Dol-
lars (individually, a "Tranche B Term Loan"; and collectively, the "Tranche
B Term Loans") to Borrower on the Closing Date, in an aggregate principal
amount equal to such Lender's Tranche B Term Loan Commitment.
2.2. Repayment of Tranche B Term Loans. Borrower may repay
Tranche B Term Loans as provided in subsection 4.4(a) and shall repay the
Tranche B Term Loans as provided in subsections 4.4(b) and (c).
2.3. Use of Proceeds. The proceeds of the Tranche B Term
Loans shall be used to finance a portion of the Transactions and to pay
fees, expenses and financing costs in connection therewith.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS
3.1. Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to the extent of its
Revolving Credit Commitment to extend credit to Borrower at any time and
from time to time on any Borrowing Date during the Revolving Credit Commit-
ment Period (i) by purchasing an L/C Participating Interest in each Letter
of Credit issued by the Issuing Lender and (ii) by making loans in Dollars
(individually, a "Revolving Credit Loan", and collectively, the "Revolving
Credit Loans") to Borrower from time to time. Notwithstanding the above,
in no event shall any Revolving Credit Loans be made, or Letter of Credit
be issued, if the aggregate amount of the Revolving Credit Loans to be made
or Letter of Credit to be issued would, after giving effect to the use of
proceeds, if any, thereof, exceed the aggregate Available Revolving Credit
Commitments nor shall any Letter of Credit be issued if after giving effect
thereto the sum of the undrawn amount of all outstanding Letters of Credit
and the amount of all L/C Obligations would exceed $10,000,000.
(b) During the Revolving Credit Commitment Period, Borrower
may use the Revolving Credit Commitments by borrowing, prepaying the Re-
volving Credit Loans in whole or in part, and reborrowing, all in accor-
dance with the terms and conditions hereof, and/or by having the Issuing
Lender issue Letters of Credit, having such Letters of Credit expire un-
drawn upon or if drawn upon, reimbursing the Issuing Lender for such draw-
ing, and having the Issuing Lender issue new Letters of Credit.
(c) Each borrowing of Revolving Credit Loans pursuant to the
Revolving Credit Commitments shall be in an aggregate principal amount of
the lesser of (i) $500,000 or a whole multiple of $100,000 in excess
thereof in the case of Alternate Base Rate Loans, and $1,000,000 or a whole
multiple of $100,000 in excess thereof, in the case of Eurodollar Loans,
and (ii) the Available Revolving Credit Commitments, except that any bor-
rowing of Revolving Credit Loans to be used solely to pay a like amount of
Swing Line Loans may be in the aggregate principal amount of such Swing
Line Loans.
3.2. Commitment Fee. Borrower agrees to pay to the Adminis-
trative Agent for the account of each Lender (other than any Non-Funding
Lender) a commitment fee from and including the Closing Date to but exclud-
ing the Revolving Credit Termination Date computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commit-
ment of such Lender during the period for which payment is made (whether or
not Borrower shall have satisfied the applicable conditions to borrow or
for the issuance of a Letter of Credit set forth in Section 6). Such com-
mitment fee shall be payable quarterly in arrears on the last day of each
March, June, September and December and on the Revolving Credit Termination
Date, commencing on the first such date to occur on or following the Clos-
ing Date (or, if earlier, the Revolving Credit Termination Date).
3.3. Proceeds of Revolving Credit Loans. Borrower shall use
the proceeds of Revolving Credit Loans to provide for the ongoing working
capital and general corporate purposes of Borrower and its Subsidiaries af-
ter the Closing Date (it being understood that no Revolving Credit Loans
shall be made on the Closing Date).
3.4. Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees, so long as the Administra-
tive Agent has not received notice that an Event of Default has occurred
and is continuing, to make swing line loans (individually, a "Swing Line
Loan"; collectively, the "Swing Line Loans") to Borrower at any time and
from time to time during the Revolving Credit Commitment Period in an ag-
gregate principal amount at any one time outstanding not to exceed
$10,000,000; provided that no Swing Line Loan may be made if the aggregate
principal amount of the Swing Line Loans to be made would exceed the aggre-
gate Available Revolving Credit Commitments at such time. Amounts borrowed
by Borrower under this subsection 3.4 may be repaid and, through but ex-
cluding the Revolving Credit Termination Date, reborrowed. All Swing Line
Loans shall be made as Alternate Base Rate Loans and shall not be entitled
to be converted into Eurodollar Loans. Borrower shall give the Swing Line
Lender irrevocable notice (which notice must be received by the Swing Line
Lender prior to 3:00 p.m., New York City time) on the requested Borrowing
Date specifying the amount of each requested Swing Line Loan, which shall
be in an aggregate minimum amount of $250,000 or a whole multiple of
$100,000 in excess thereof. The Swing Line Lender shall, before 5:00 p.m.
(New York City time) on such requested Borrowing Date, make available to
Borrower in same day funds, the proceeds of such Swing Line Loans by cred-
iting the account of Borrower at the office of the Swing Line Lender with
such proceeds. The proceeds of Swing Line Loans may be used solely for the
purposes referred to in subsection 3.3.
(b) If not repaid by Borrower prior to such time, including
without limitation, from the proceeds of a Revolving Credit Loan, the Swing
Line Lender at any time in its sole and absolute discretion may, and on the
fifteenth day (or if such day is not a Business Day, the next Business Day)
and last Business Day of each month shall, on behalf of Borrower (which
hereby irrevocably directs the Swing Line Lender to act on its behalf) re-
quest each Revolving Credit Lender, including the Swing Line Lender, to
make a Revolving Credit Loan in an amount equal to such Lender's Revolving
Credit Commitment Percentage of the amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 9 shall have
occurred and be continuing (in which event the procedures of paragraph
(c) of this subsection 3.4 shall apply), each such Lender shall make the
proceeds of its Revolving Credit Loan available to the Swing Line Lender
for the account of the Swing Line Lender at the office of the Swing Line
Lender specified in subsection 11.2 (or such other location as the Swing
Line Lender may direct) prior to 12:00 noon (New York City time) in funds
immediately available on the Business Day next succeeding the date such no-
xxxx is given. The proceeds of such Revolving Credit Loans shall be imme-
diately applied to repay the Refunded Swing Line Loans.
(c) If, prior to the making of a Revolving Credit Loan pursu-
ant to paragraph (b) of this subsection 3.4, one of the events described in
paragraph (f) of Section 9 shall have occurred and be continuing, each Re-
volving Credit Lender will, on the date such Loan was to have been made,
purchase an undivided participating interest in the Refunded Swing Line
Loan in an amount equal to its Revolving Credit Commitment Percentage of
such Refunded Swing Line Loan. Each such Lender will immediately transfer
to the Swing Line Lender in immediately available funds, the amount of its
participation and upon receipt thereof the Swing Line Lender will deliver
to such Lender a Swing Line Loan Participation Certificate dated the date
of receipt of such funds and in such amount.
(d) Whenever, at any time after the Swing Line Lender has re-
ceived from any Revolving Credit Lender such Lender's participating inter-
est in a Refunded Swing Line Loan, the Swing Line Lender receives any pay-
ment on account thereof, the Swing Line Lender will distribute to such
Lender its participating interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded) in
like funds as received; provided that, in the event that such payment re-
ceived by the Swing Line Lender is required to be returned, such Lender
will return to the Swing Line Lender any portion thereof previously dis-
tributed by the Swing Line Lender to it in like funds as such payment is
required to be returned by the Swing Line Lender.
(e) The obligation of each Revolving Credit Lender to purchase
participating interests pursuant to subsection 3.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, Bor-
rower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default; (iii) any adverse change in the condi-
tion (financial or otherwise) of Borrower; (iv) any breach of this Agree-
ment by Borrower or any other Lender; or (v) any other circumstance, hap-
pening or event whatsoever, whether or not similar to any of the foregoing.
3.5. Issuance of Letters of Credit. (a) Borrower may from
time to time request the Issuing Lender to issue a Standby L/C or a Commer-
cial L/C by delivering to the Administrative Agent at its address specified
in subsection 11.2 (or such other location as the Issuing Lender may di-
rect) a letter of credit application in the Issuing Lender's then customary
form (the "L/C Application") completed to the satisfaction of the Issuing
Lender, together with the proposed form of such Letter of Credit (which
shall comply with the applicable requirements of paragraph (b) below) and
such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request; provided that if the Issuing Lender
informs Borrower that it is for any reason unable to open such Letter of
Credit, Borrower may request any Lender to open such Letter of Credit upon
the same terms offered to the Issuing Lender and each reference to the Is-
suing Lender for purposes of subsections 3.5 through 3.13, 6.1 and 6.2
shall be deemed to be a reference to such Issuing Lender.
(b) Each Standby L/C and Commercial L/C issued hereunder shall
be issued for the account of Borrower and shall, among other things, (i) be
in such form requested by Borrower as shall be acceptable to the Issuing
Lender in its sole discretion and (ii) have an expiry date occurring not
later than (a) 365 days, in the case of a Standby L/C, or (b) 120 days, in
the case of a Commercial L/C, after the date of issuance of such Letter of
Credit, and, in the case of Standby L/Cs, may provide for the renewal
thereof on its expiry date for an additional period equal to the initial
term, but in no case shall any Letter of Credit have an expiry date occur-
ring later than the Revolving Credit Termination Date. Each L/C Applica-
tion and each Letter of Credit shall be subject to the International
Standby Practices (ISP 98) of the International Chamber of Commerce (in the
case of Standby L/Cs) or the Uniform Customs (in the case of Commercial
L/Cs) and, to the extent not inconsistent therewith, the laws of the State
of New York.
3.6. Participating Interests. Effective in the case of each
Standby L/C and Commercial L/C (if applicable) as of the date of the open-
ing thereof, the Issuing Lender agrees to allot and does allot, to itself
and each other Revolving Credit Lender, and each such Lender severally and
irrevocably agrees to take and does take in such Letter of Credit and the
related L/C Application (if applicable), an L/C Participating Interest in a
percentage equal to such Lender's Revolving Credit Commitment Percentage.
3.7. Procedure for Opening Letters of Credit. The Issuing
Lender will notify each Lender after the end of each calendar month of any
L/C Applications received by the Issuing Lender from Borrower during such
month. Upon receipt of any L/C Application from Borrower, the Issuing
Lender will process such L/C Application, and the other certificates, docu-
ments and other papers delivered to the Issuing Lender in connection there-
with, in accordance with its customary procedures and, subject to the terms
and conditions hereof, shall promptly open such Letter of Credit by issuing
the original of such Letter of Credit to the beneficiary thereof and by
furnishing a copy thereof to Borrower and, after the end of the calendar
month in which such Letter of Credit was opened, to the other Lenders; pro-
vided that no such Letter of Credit shall be issued if subsection 3.1 would
be violated thereby.
3.8. Payments in Respect of Letters of Credit. (a) Borrower
agrees forthwith upon demand by the Issuing Lender and otherwise in accor-
dance with the terms of the L/C Application relating thereto, (i) to xxxx-
xxxxx the Issuing Lender for any payment made by the Issuing Lender under
any Letter of Credit issued for the account of Borrower and (ii) to pay in-
terest on any unreimbursed portion of any such payment from the date of
such payment until reimbursement in full thereof at a rate per annum equal
to (a) on or prior to the date which is one Business Day after the day on
which the Issuing Lender demands reimbursement from Borrower for such pay-
ment, the Alternate Base Rate plus the Applicable Margin for the Revolving
Credit Loans and (b) thereafter, the Alternate Base Rate plus the Applica-
ble Margin for the Revolving Credit Loans plus 2%. Each drawing under any
Letter of Credit shall (unless an event of the type described in para-
graph (f) of Section 9 shall have occurred and be continuing, in which case
the procedures specified in this subsection 3.8 for payments in respect of
Letters of Credit shall apply) constitute a request by Borrower to the Ad-
ministrative Agent for a borrowing pursuant to subsection 3.1(a) of Alter-
nate Base Rate Loans in the amount of such drawing. The Borrowing Date
with respect to such borrowing shall be the date of payment of the relevant
drawing.
(b) In the event that the Issuing Lender makes a payment under
any Letter of Credit and is not reimbursed in full therefor pursuant to
subsection 3.8(a) forthwith upon demand of the Issuing Lender, and other-
wise in accordance with the terms of the L/C Application relating to such
Letter of Credit, the Issuing Lender will promptly notify each other Re-
volving Credit Lender. Forthwith upon its receipt of any such notice, each
such other Lender will transfer to the Issuing Lender, in immediately
available funds, an amount equal to such other Lender's pro rata share
(based on its Revolving Credit Commitment) of the L/C Obligation arising
from such unreimbursed payment. Promptly, upon its receipt from such other
Lender of such amount, the Issuing Lender will complete, execute and de-
liver to such other Lender an L/C Participation Certificate dated the date
of such receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a
payment under any Letter of Credit and has received from any other Revolv-
ing Credit Lender such other Lender's pro rata share of the L/C Obligation
arising therefrom, the Issuing Lender receives any reimbursement on account
of such L/C Obligation or any payment of interest on account thereof, the
Issuing Lender will promptly distribute to such other Lender its pro rata
share thereof in like funds as received; provided that in the event that
the receipt by the Issuing Lender of such reimbursement or such payment of
interest (as the case may be) is required to be returned, such other Lender
will return to the Issuing Lender any portion thereof previously distrib-
uted by the Issuing Lender to it in like funds as such reimbursement or
payment is required to be returned by the Issuing Lender.
3.9. Letter of Credit Fees. (a) In lieu of any letter of
credit commissions and fees provided for in any L/C Application relating to
Standby or Commercial L/Cs (other than standard issuance, amendment and ne-
gotiation fees), Borrower agrees to pay the Administrative Agent, (i) for
the account of the Issuing Lender and the Participating Lenders, with re-
spect to each Standby or Commercial L/C issued for the account of Borrower,
a Standby or Commercial L/C fee, as the case may be, equal to the Applica-
ble Margin for Revolving Credit Loans which are Eurodollar Loans per annum;
and (ii) in addition to the Standby or Commercial L/C fee referred to in
subsection 3.9(a)(i) above, for the account of the Issuing Lender and not
on account of its L/C Participating Interest therein, 0.25% per annum, each
on the daily average amount available to be drawn under each Standby L/C in
the case of a Standby L/C and on the maximum face amount of each Commercial
L/C in the case of a Commercial L/C, in either case, payable, in arrears,
on the last day of each fiscal quarter of Borrower. The Administrative
Agent will disburse any Standby or Commercial L/C fees received pursuant to
subsection 3.9(a)(i) to the respective Lenders promptly following the re-
ceipt of any such fees. Notwithstanding the foregoing, Borrower agrees to
pay standard issuance, amendment and negotiation fees to the Issuing
Lender.
(b) For purposes of any payment of fees required pursuant to
this subsection 3.9, the Administrative Agent agrees to provide to Borrower
a statement of any such fees to be so paid; provided that the failure by
the Administrative Agent to provide Borrower with any such invoice shall
not relieve Borrower of its obligation to pay such fees.
3.10. Letter of Credit Reserves. (a) If any Change in Law
shall either (i) impose, modify, deem or make applicable any reserve, spe-
cial deposit, assessment or similar requirement against letters of credit
issued by the Issuing Lender or (ii) impose on the Issuing Lender any other
condition regarding this Agreement (with respect to Letters of Credit) or
any Letter of Credit, and the result of any event referred to in clause
(i) or (ii) above shall be to increase the cost of the Issuing Lender of
issuing or maintaining any Letter of Credit (which increase in cost shall
be the result of the Issuing Lender's reasonable allocation of the aggre-
gate of such cost increases resulting from such events), then, upon demand
by the Issuing Lender, Borrower shall immediately pay to the Issuing
Lender, from time to time as specified by the Issuing Lender, additional
amounts which shall be sufficient to compensate the Issuing Lender for such
increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at a rate per annum equal to the
rate applicable to Alternate Base Rate Loans pursuant to subsection 4.5(b).
Borrower shall not be required to make any payments to the Issuing Lender
for any additional amounts pursuant to this subsection 3.10(a) unless the
Issuing Lender has given written notice to Borrower of its intent to re-
quest such payments prior to or within 60 days after the date on which the
Issuing Lender became entitled to claim such amounts. A certificate, set-
ting forth in reasonable detail the calculation of the amounts involved,
submitted by the Issuing Lender to Borrower concurrently with any such xx-
xxxx by the Issuing Lender, shall be conclusive, absent manifest error, as
to the amount thereof.
(b) In the event that any Change in Law with respect to the
Issuing Lender shall, in the opinion of the Issuing Lender, require that
any obligation under any Letter of Credit be treated as an asset or other-
wise be included for purposes of calculating the appropriate amount of
capital to be maintained by the Issuing Lender or any corporation control-
ling the Issuing Lender, and such Change in Law shall have the effect of
reducing the rate of return on the Issuing Lender's or such corporation's
capital, as the case may be, as a consequence of the Issuing Lender's obli-
gations under such Letter of Credit to a level below that which the Issuing
Lender or such corporation, as the case may be, could have achieved but for
such Change in Law (taking into account the Issuing Lender's or such corpo-
ration's policies, as the case may be, with respect to capital adequacy) by
an amount deemed by the Issuing Lender to be material, then from time to
time following notice by the Issuing Lender to Borrower of such Change in
Law, within 15 days after demand by the Issuing Lender, Borrower shall pay
to the Issuing Lender such additional amount or amounts as will compensate
the Issuing Lender or such corporation, as the case may be, for such reduc-
tion. The Issuing Lender agrees that, upon the occurrence of any event
giving rise to the operation of paragraph (a) or (b) of this subsection
3.10 with respect to the Issuing Lender, it will, if requested by Borrower
and to the extent permitted by law or by the relevant Governmental Author-
ity, endeavor in good faith to avoid or minimize the increase in costs or
reduction in payments resulting from such event; provided that such avoid-
ance or minimization can be made in such a manner that the Issuing Lender,
in its sole determination, suffers no economic, legal or regulatory disad-
vantage. Borrower shall not be required to make any payments to the Issu-
ing Lender for any additional amounts pursuant to this subsection
3.10(b) unless the Issuing Lender has given written notice to Borrower of
its intent to request such payments prior to or within 60 days after the
date on which the Issuing Lender became entitled to claim such amounts. A
certificate, in reasonable detail setting forth the calculation of the
amounts involved, submitted by the Issuing Lender to Borrower concurrently
with any such demand by the Issuing Lender, shall be conclusive, absent
manifest error, as to the amount thereof.
(c) Borrower and each Participating Lender agree that the pro-
visions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such
Letter of Credit, as if the references in such paragraphs and provisions
referred to, where applicable, such Participating Lender or, in the case of
paragraph (b), any corporation controlling such Participating Lender.
3.11. Further Assurances. Borrower hereby agrees, from time
to time, to do and perform any and all acts and to execute any and all fur-
ther instruments reasonably requested by the Issuing Lender more fully to
effect the purposes of this Agreement and the issuance of Letters of Credit
hereunder.
3.12. Obligations Absolute. The payment obligations of Bor-
rower under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) the existence of any claim, set-off, defense or other
right which Borrower or any of its Subsidiaries may have at any time
against any beneficiary, or any transferee, of any Letter of Credit
(or any Persons for whom any such beneficiary or any such transferee
may be acting), the Issuing Lender, the Administrative Agent or any
Lender, or any other Person, whether in connection with this Agree-
ment, any Credit Document, the transactions contemplated herein, or
any unrelated transaction;
(ii) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent or invalid or any
statement therein being untrue or inaccurate in any respect, except
arising from the gross negligence or willful misconduct on the part
of the Issuing Lender;
(iii) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate or other document
which does not comply with the terms of such Letter of Credit or is
insufficient in any respect, except where such payment constitutes
gross negligence or willful misconduct on the part of the Issuing
Lender; or
(iv) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, except for any such circum-
stances or happening constituting gross negligence or willful miscon-
duct on the part of the Issuing Lender.
3.13. Participations. The obligation of each Revolving Credit
Lender to purchase participating interests pursuant to subsection 3.6 shall
be absolute and unconditional and shall not be affected by any circum-
stance, including, without limitation, (i) any set-off, counterclaim, re-
coupment, defense or other right which such Lender may have against the Is-
suing Lender, Borrower or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of an Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of Borrower; (iv) any
breach of this Agreement by Borrower or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
4.1. Procedure for Borrowing. (a) Borrower may borrow under
the Commitments on any Business Day; provided that, with respect to any
borrowing, Borrower shall give the Administrative Agent irrevocable notice
in the form of Exhibit P (which notice must be received by the Administra-
tive Agent prior to (i) 1:00 p.m., New York City time, three Business Days
prior to the requested Borrowing Date if all or any part of the Loans are
to be Eurodollar Loans and (ii) 1:00 p.m. (or, with respect to Swing Line
Loans, 3:00 p.m.), New York City time, one Business Day prior to the re-
quested Borrowing Date (or, in the case of Swing Line Loans and, if the
Closing Date occurs on the date this Agreement is executed and delivered,
Loans made on the Closing Date, 3:00 p.m. on the requested Borrowing Date)
if the borrowing is to be solely of Alternate Base Rate Loans and specify-
ing (a) the amount of the borrowing, (b) whether such Loans are initially
to be Eurodollar Loans or Alternate Base Rate Loans or a combination
thereof, (c) if the borrowing is to be entirely or partly Eurodollar Loans,
the length of the Interest Period for such Eurodollar Loans and (d) whether
the Loan is a Tranche B Term Loan, a Swing Line Loan or Revolving Credit
Loan. Upon receipt of such notice the Administrative Agent shall promptly
notify each affected Lender thereof. Not later than 12:00 noon, New York
City time, on the Borrowing Date specified in such notice, each affected
Lender shall make available to the Administrative Agent at the office of
the Administrative Agent specified in subsection 11.2 (or at such other lo-
cation as the Administrative Agent may direct) an amount in immediately
available funds equal to the amount of the Loan to be made by such Lender
(except that proceeds of Swing Line Loans will be made available to Bor-
rower in accordance with subsection 3.4(a)). Loan proceeds received by the
Administrative Agent hereunder shall promptly be made available to Borrower
by the Administrative Agent's crediting the account of Borrower, at the of-
fice of the Administrative Agent specified in subsection 11.2, with the ag-
gregate amount actually received by the Administrative Agent from the Lend-
ers and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, (i) the aggregate principal amount of all Eurodollar Loans
having the same Interest Period shall not be less than $1,000,000 or a
whole multiple of $100,000 in excess thereof, and (ii) no more than six In-
terest Periods shall be in effect at any one time.
4.2. Conversion and Continuation Options. (a) Subject to
subsection 4.12, Borrower may elect from time to time to convert Eurodollar
Loans into Alternate Base Rate Loans by giving the Administrative Agent ir-
revocable notice of such election, to be received by the Administrative
Agent prior to 1:00 p.m., New York City time, at least three Business Days
prior to the proposed conversion date. Borrower may elect from time to
time to convert all or a portion of the Alternate Base Rate Loans (other
than Swing Line Loans) then outstanding to Eurodollar Loans by giving the
Administrative Agent irrevocable notice of such election, to be received by
the Administrative Agent prior to 1:00 p.m., New York City time, at least
three Business Days prior to the proposed conversion date, specifying the
Interest Period selected therefor. Such conversion shall be made on the
requested conversion date or, if such requested conversion date is not a
Business Day, on the next succeeding Business Day; provided that no such
conversion shall be made when any Event of Default has occurred and is con-
tinuing and the Required Lenders have, by written notice to Borrower, de-
termined that such conversion is not appropriate. Upon receipt of any no-
xxxx pursuant to this subsection 4.2, the Administrative Agent shall
promptly notify each affected Lender thereof. All or any part of the out-
standing Loans (other than Swing Line Loans) may be converted as provided
herein; provided that partial conversions of Alternate Base Rate Loans
shall be in the aggregate principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof and the aggregate principal amount of the re-
sulting Eurodollar Loans outstanding in respect of any one Interest Period
shall be at least $1,000,000 or a whole multiple of $100,000 in excess
thereof.
(b) Any Eurodollar Loans may be continued as such upon the ex-
piration of the then current Interest Period with respect thereto by Bor-
rower giving notice to the Administrative Agent, in accordance with the ap-
plicable provisions of the term "Interest Period" set forth in subsection
1.1, of the length of the next Interest Period to be applicable to such
Loans; provided that no Eurodollar Loan may be continued as such (i) when
any Event of Default has occurred and is continuing and the Required Lend-
ers have, by written notice to Borrower, determined that such a continua-
tion is not appropriate, (ii) if, after giving effect thereto, subsection
4.1(b) would be contravened or (iii) after the date that is one month prior
to the Revolving Credit Termination Date (in the case of continuations of
Revolving Credit Loans) or the final Tranche B Installment Payment Date in
the case of the Term Loans.
4.3. Changes of Commitment Amounts. (a) Borrower shall have
the right, upon not less than three Business Days' notice to the Adminis-
trative Agent, to terminate or from time to time to permanently reduce the
Revolving Credit Commitments, subject to the provisions of this subsection
4.3. To the extent, if any, that the sum of the amount of the Revolving
Credit Loans, Swing Line Loans and L/C Obligations then outstanding and the
amounts available to be drawn under outstanding Letters of Credit exceeds
the amount of the Revolving Credit Commitments as then reduced, Borrower
shall be required to make a prepayment equal to such excess amount, the
proceeds of which shall be applied, first, to payment of the Swing Line
Loans then outstanding, second, to payment of the Revolving Credit Loans
then outstanding, third, to payment of any L/C Obligations then outstand-
ing, and fourth, to cash collateralize any outstanding Letters of Credit on
terms reasonably satisfactory to the Administrative Agent. Any such termi-
nation of the Revolving Credit Commitments shall be accompanied by prepay-
ment in full of the Revolving Credit Loans, Swing Line Loans and L/C Obli-
gations then outstanding and by cash collateralization of any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative
Agent. Upon termination of the Revolving Credit Commitments, any Letter of
Credit then outstanding that has been so cash collateralized shall no
longer be considered a "Letter of Credit" as defined in subsection 1.1 and
any L/C Participating Interests heretofore granted by the Issuing Lender to
the Lenders in such Letter of Credit shall be deemed terminated (subject to
automatic reinstatement in the event that such cash collateral is returned
and the Issuing Lender is not fully reimbursed for any such L/C Obliga-
tions) but the Letter of Credit fees payable under subsection 3.9 shall
continue to accrue to the Issuing Lender and the Participating Lenders (or,
in the event of any such automatic reinstatement, as provided in subsection
3.9) with respect to such Letter of Credit until the expiry thereof (pro-
vided that in lieu of paying a Standby or Commercial L/C fee, as the case
may be, equal to the Applicable Margin for Revolving Credit Loans which are
Eurodollar Loans per annum, Borrower shall pay to the Administrative Agent
an amount equal to 0.25% per annum).
(b) In the case of termination of the Revolving Credit Commit-
ments, interest accrued on the amount of any prepayment relating thereto
and any unpaid commitment fee accrued hereunder shall be paid on the date
of such termination. Any such partial reduction of the Revolving Credit
Commitments shall be in an amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof and shall, in each case, reduce permanently the
amount of the Revolving Credit Commitments then in effect.
4.4. Optional and Mandatory Prepayments; Repayments of Tranche
B Term Loans. (a) Subject to subsection 4.12, Borrower may at any time
and from time to time prepay Loans, in whole or in part, without premium or
penalty, by irrevocable written notice to the Administrative Agent by 12:00
noon, New York City time, (i) on the same Business Day in the case of Al-
ternate Base Rate Loans, or (ii) on the immediately preceding Business Day
in the case of Eurodollar Loans, specifying the date and amount of prepay-
ment and whether the prepayment is of Revolving Credit Loans or Tranche B
Term Loans. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender thereof. If such notice is given, Borrower
shall make such prepayment, and the payment amount specified in such notice
shall be due and payable, on the date specified therein. Partial prepay-
ments of Tranche B Term Loans shall be in an aggregate principal amount
equal to the lesser of (a) (i) $1,000,000 or a whole multiple of $100,000
in excess thereof with respect to Eurodollar Loans or (ii) $500,000 or a
whole multiple of $100,000 in excess thereof with respect to Alternate Base
Rate Loans and (b) the aggregate unpaid principal amount of the Tranche B
Term Loans or the aggregate unpaid principal amount of Tranche B Loans
maintained as Alternate Base Rate Loans (in the case of a prepayment of
such Tranche B Loans) or as Eurodollar Loans with a single Interest Period
(in the case of a prepayment of such Tranche B Loans). Partial prepayments
of Revolving Credit Loans shall be in an aggregate principal amount equal
to the lesser of (a)(i) $1,000,000 or a whole multiple of $100,000 in ex-
cess thereof with respect to Eurodollar Loans or (ii) $500,000 or a whole
multiple of $100,000 in excess thereof with respect to Alternate Base Rate
Loans and (b) the aggregate unpaid principal amount of the Revolving Credit
Loans (or the aggregate unpaid principal amount of Revolving Credit Loans
maintained as Alternate Base Rate Loans (in the case of a prepayment of
such Revolving Credit Loans) or as Eurodollar Loans with a single Interest
Period (in the case of a prepayment of such Revolving Credit Loans), as the
case may be. Prepayments of the Tranche B Term Loans pursuant to this sub-
section 4.4(a) shall be applied in accordance with subsection 4.4(d) below.
(b) So long as any Tranche B Term Loans are outstanding, if,
subsequent to the Closing Date:
(i) Borrower or any of its Restricted Subsidiaries shall is-
xxx any Common Stock other than any to effect all or a portion of the
Notes Refinancing (it being understood that the issuance of Indebted-
ness or Preferred Stock convertible into, or exchangeable or exer-
ciseable for, Common Stock shall be governed by subsection 4.4(b)(ii)
and (iii) below), 50% of the Net Proceeds thereof shall be applied
within five Business Days of receipt thereof toward the prepayment of
the Tranche B Term Loans in accordance with subsection 4.4(d) below;
(ii) Borrower or any of the Restricted Subsidiaries shall in-
cur or permit the incurrence of any Indebtedness (other than Indebt-
edness permitted under subsection 8.1 (other than Indebtedness within
the meaning of subsection 8.1(k), which is covered by subsection
4.4(b)(iii))), 100% of the Net Proceeds thereof shall be applied
within five Business Days of receipt thereof toward the prepayment of
the Tranche B Term Loans in accordance with subsection 4.4(d) below;
(iii) Borrower or any of its Restricted Subsidiaries shall in-
cur or permit the incurrence of any Subordinated Indebtedness or is-
xxx any Preferred Stock (excluding an incurrence of Subordinated In-
debtedness and/or issuance of Preferred Stock in connection with the
Notes Refinancing, to the extent the gross proceeds of such Notes Re-
financing do not exceed an aggregate principal amount of
$300,000,000), 75% of the Net Proceeds thereof shall be applied
within five Business Days of receipt thereof toward the prepayment of
the Tranche B Term Loans in accordance with subsection 4.4(d) below;
(iv) Borrower or any of its Restricted Subsidiaries shall re-
ceive Net Proceeds from any Asset Sale, 100% of such Net Proceeds
shall be applied within five Business Days of receipt thereof (for
the avoidance of doubt, after giving effect to the provisions for re-
investment set forth in the definition of "Net Proceeds" and subsec-
tions 8.5(h) and 8.5(l)) toward the prepayment of the Tranche B Term
Loans in accordance with subsection 4.4(d) below; provided that such
Net Proceeds need not be applied to the prepayment of Tranche B Term
Loans until the date that the aggregate amount of Net Proceeds re-
ceived by Borrower or any of its Restricted Subsidiaries from any As-
set Sale exceeds $1,000,000 (and has not yet been applied to the pre-
payment of Tranche B Term Loans hereunder); or until the amount of
such prepayment shall equal or exceed $100,000; provided further that
the Net Proceeds from such Asset Sale shall be deposited in the Col-
lateral Account as long as any Default or Event of Default is in ex-
istence;
(v) Borrower or any of its Restricted Subsidiaries shall re-
ceive proceeds from insurance recoveries in respect of any Destruc-
tion in excess of $500,000 (but in any event excluding proceeds of
business interruption insurance) or any proceeds or awards in respect
of Taking, 100% of the Net Proceeds thereof shall be applied within
five Business Days of receipt thereof (after giving effect to the
provisions for reinvestment set forth in the definition of "Net Pro-
ceeds") toward the prepayment of the Tranche B Term Loans in accor-
dance with subsection 4.4(d) below; provided, however, that cash pro-
ceeds of any Taking or Destruction shall be deposited in the Collat-
eral Account as long as any Default or Event of Default is in exis-
tence; and
(vi) If, for any fiscal year of Borrower commencing with its
fiscal year ending on December 31, 2002, there shall be Excess Cash
Flow for such fiscal year, 50% of such Excess Cash Flow (or 20% of
such Excess Cash Flow if at the date of making such prepayment (or
prior thereto) the aggregate principal amount of the outstanding
Tranche B Term Loans is less than $75,000,000) shall be applied not
later than 120 days after the end of such fiscal year toward prepay-
ment of the Tranche B Term Loans in accordance with subsection 4.4(d)
below.
(c) The Tranche B Term Loans shall be repaid in consecutive
quarterly installments on the dates set forth below (each such day, a
"Tranche B Installment Payment Date"), commencing on March 31, 2002, in an
aggregate amount equal to the amount specified for each such Tranche B In-
stallment Payment Date (in each case subject to reduction as described in
subsections 4.4(a), (b) and (d)).
Tranche B Installment Payment Date
Installment Amount
March 31, 2002
$2,500,000
June 30, 2002
$7,500,000
September 30, 2002
$7,500,000
December 31, 2002
$7,500,000
March 31, 2003
$8,750,000
June 30, 2003
$8,750,000
September 30, 2003
$8,750,000
December 31, 2003
$8,750,000
March 31, 2004
$8,750,000
June 30, 2004
$8,750,000
September 30, 2004
$8,750,000
December 31, 2004
$8,750,000
March 31, 2005
$8,750,000
June 30, 2005
$8,750,000
September 30, 2005
$8,750,000
December 31, 2005
$8,750,000
March 31, 2006
$8,750,000
June 30, 2006
$11,250,000
; provided, that if the Notes Refinancing has not been consummated on or
before the Notes Refinancing Date, the aggregate principal amount of the
Tranche B Term Loans that have not been repaid on or before the Notes Refi-
nancing Date shall become immediately due and payable on the Maturity Date.
Amounts repaid on account of the Tranche B Term Loans pursuant
to this subsection or otherwise may not be reborrowed. Accrued interest on
the amount of any prepayments through the date of such prepayment shall be
paid on the Interest Payment Date next succeeding the date of any partial
prepayment and on the date of such prepayment in the case of a prepayment
in full of the Tranche B Term Loans.
(d) Prepayments of Tranche B Terms Loans pursuant to subsec-
tion 4.4(a) and 4.4(b) shall be applied to the remaining installments of
principal in direct order of maturity. Except as otherwise may be directed
by Borrower, any prepayment of Loans pursuant to this subsection 4.4 shall
be applied, first, to any Alternate Base Rate Loans then outstanding and
the balance of such prepayment, if any, to the Eurodollar Loans then out-
standing; provided that prepayments of Eurodollar Loans, if not on the last
day of the Interest Period with respect thereto, shall, at the option of
Borrower, be prepaid subject to the provisions of subsection 4.12 or the
amount of such prepayment (after application to any Alternate Base Rate
Loans) shall be deposited with the Administrative Agent as cash collateral
for the Loans on terms reasonably satisfactory to the Administrative Agent
and thereafter shall be applied in the order of the Interest Periods next
ending most closely to the date such prepayment is required to be made and
on the last day of each such Interest Period. After such application, un-
less an Event of Default shall have occurred and be continuing (in which
case such interest shall be held as cash collateral or applied by the Ad-
ministrative Agent to any Obligations then due and payable), any remaining
interest earned on such cash collateral shall be paid to Borrower.
4.5. Interest Rates and Payment Dates. (a) Eurodollar Loans
shall bear interest (calculated on the basis of the actual number of days
elapsed over a year of 360 days) for each day during each Interest Period
applicable thereto, commencing on (and including) the first day of such In-
terest Period to, but excluding, the last day of such Interest Period, on
the unpaid principal amount thereof at a rate per annum equal to the Euro-
dollar Rate determined for such Interest Period plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest (calculated
on the basis of the actual number of days elapsed over a year of 365 days)
for the period from and including the date such Loans are made to, but ex-
cluding, the maturity date thereof, or to, but excluding, the conversion
date if such Loans are earlier converted into Eurodollar Loans on the un-
paid principal amount thereof at a rate per annum equal to the Alternate
Base Rate plus the Applicable Margin.
(c) Upon the occurrence and during the continuance of an Event
of Default, at the request of the Required Lenders, the Loans shall, with-
out limiting the rights of the Lenders under Section 9, bear interest
(which shall be payable on demand) at the higher of (a) a rate per annum
(computed on the basis of the actual number of days elapsed over a year of
365 days) equal to the Alternate Base Rate and the Applicable Margin plus
2% and (b) the rate otherwise applicable to such Loan pursuant to this sub-
section 4.5 and the Applicable Margin plus 2%.
(d) Except as otherwise expressly provided for in this subsec-
tion 4.5, interest shall be payable in arrears (a) for Eurodollar Loans, at
the end of each Interest Period (or, if such Interest Period is greater
than three months, quarterly) and on the Maturity Date, and (b) for Alter-
nate Base Rate Loans, quarterly in arrears and on the Maturity Date.
4.6. Computation of Interest and Fees. (a) Interest in re-
spect of Alternate Base Rate Loans shall be calculated on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case
may be. Interest in respect of Eurodollar Loans (and all fees hereunder)
shall be calculated on the basis of the actual number of days elapsed over
a year of 360 days. The Administrative Agent shall as soon as practicable
notify Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change in
the Alternate Base Rate is announced or such change in the Eurocurrency Re-
serve Requirements becomes effective, as the case may be. The Administra-
tive Agent shall as soon as practicable notify Borrower and the Lenders of
the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administra-
tive Agent pursuant to any provision of this Agreement shall be conclusive
and binding on Borrower and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of Borrower or any Lender,
deliver to Borrower or such Lender a statement showing the quotations used
by the Administrative Agent in determining the Eurodollar Rate.
4.7. Certain Fees. Borrower agrees to pay to the Administra-
tive Agent, for its own account, a non-refundable agent's fee in an amount
previously agreed to with the Administrative Agent, payable annually in ad-
xxxxx on the Closing Date and on each anniversary thereof unless all Loans
have been (or are on such date) repaid and all Commitments hereunder have
been (or are on such date) terminated.
4.8. Inability to Determine Interest Rate. In the event that
the Administrative Agent or the Required Lenders shall have determined
(which determination shall be conclusive and binding upon Borrower) that
(a) by reason of circumstances affecting the interbank eurodollar market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for any Interest Period with respect to (i) proposed Loans that Bor-
rower has requested be made as Eurodollar Loans, (ii) any Eurodollar Loans
that will result from the requested conversion of all or part of the Alter-
nate Base Rate Loans into Eurodollar Loans or (iii) the continuation of any
Eurodollar Loan as such for an additional Interest Period, or (b) dollar
deposits in the relevant amount and for the relevant period with respect to
any such Eurodollar Loan are not generally available to the Lenders in
their respective Eurodollar Lending Offices' interbank eurodollar markets,
the Administrative Agent shall forthwith give telecopy notice of such de-
termination, confirmed in writing, to Borrower and the Lenders at least one
day prior to, as the case may be, the requested Borrowing Date, the conver-
sion date or the last day of such Interest Period. If such notice is given
(i) any requested Eurodollar Loans shall be made as Alternate Base Rate
Loans, (ii) any Alternate Base Rate Loans that were to have been converted
to Eurodollar Loans shall be continued as Alternate Base Rate Loans, and
(iii) any outstanding Eurodollar Loans shall be converted on the last day
of the then current Interest Period applicable thereto into Alternate Base
Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made and no Alternate Base Rate
Loans shall be converted to Eurodollar Loans.
4.9. Pro Rata Treatment and Payments. (a) Except to the ex-
tent otherwise provided herein, each borrowing of Loans by Borrower from
the Lenders and any reduction of the Commitments of the Lenders hereunder
shall be made pro rata according to the relevant Commitment Percentages of
the Lenders with respect to the Loans borrowed or the Commitments to be re-
duced.
(b) Whenever any payment received by the Administrative Agent
under this Agreement or any Note or any other Credit Document is insuffi-
cient to pay in full all amounts then due and payable to the Administrative
Agent and the Lenders under this Agreement, such payment shall be distrib-
uted by the Administrative Agent and applied by the Administrative Agent
and the Lenders in the following order: first, to the payment of fees and
expenses due and payable to the Administrative Agent under and in connec-
tion with this Agreement and the other Credit Documents; second, to the
payment of all expenses due and payable under subsection 11.5, ratably
among the Lenders in accordance with the aggregate amount of such payments
owed to each such Lender; third, to the payment of fees due and payable un-
der subsections 3.2 and 3.9, ratably among the Lenders in accordance with
the Commitment Percentage of each Lender of the Commitment for which such
payment is owed and, in the case of the Issuing Lender, the amount retained
by the Issuing Lender for its own account pursuant to subsection 3.9;
fourth, to the payment of interest then due and payable on the Loans and
the L/C Obligations ratably in accordance with the aggregate amount of in-
terest owed to each such Lender; and fifth, to the payment of the principal
amount of the Loans and the L/C Obligations which is then due and payable
ratably among the Lenders in accordance with the aggregate principal amount
owed to each such Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to
make a Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make
such Revolving Credit Loan or (y) given notice to Borrower or the Adminis-
trative Agent that it will not make, or that it has disaffirmed or repudi-
ated any obligation to make, any Revolving Credit Loan, in each case by
reason of the provisions of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, or otherwise, (i) any payment made on
account of the principal of the Revolving Credit Loans outstanding shall be
made as follows:
(A) in the case of any such payment made on any date when and
to the extent that in the determination of the Administrative Agent
Borrower would be able under the terms and conditions hereof to
reborrow the amount of such payment under the Commitments and to sat-
isfy any applicable conditions precedent set forth in Section 6 to
such reborrowing, such payment shall be made on account of the out-
standing Revolving Credit Loans held by the Lenders other than the
Non-Funding Lender pro rata according to the respective outstanding
principal amounts of the Revolving Credit Loans of such Lenders; and
(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders pro rata ac-
cording to the respective outstanding principal amounts of such Re-
volving Credit Loans; and
(ii) any payment made on account of interest on the Revolving Credit Loans
shall be made pro rata according to the respective amounts of accrued and
unpaid interest due and payable on the Revolving Credit Loans with respect
to which such payment is being made. Borrower agrees to give the Adminis-
trative Agent such assistance in making any determination pursuant to sub-
paragraph (i)(A) of this paragraph (c) as the Administrative Agent may rea-
sonably request. Any such determination by the Administrative Agent shall
be conclusive and binding on the Lenders.
(d) All payments (including prepayments) to be made by Bor-
rower on account of principal, interest and fees shall be made without set-
off, counterclaim or other defense and shall be made to the Administrative
Agent, for the account of the Lenders at the Administrative Agent's office
located at Stamford, Connecticut, in lawful money of the United States and
in immediately available funds. The Administrative Agent shall promptly
distribute such payments in accordance with the provisions of subsection
4.9(b) upon receipt in like funds as received. If any payment hereunder
(other than payments on Eurodollar Loans) would become due and payable on a
day other than a Business Day, such payment shall become due and payable on
the next succeeding Business Day and, with respect to payments of princi-
pal, interest thereon shall be payable at the then applicable rate during
such extension. If any payment on a Eurodollar Loan becomes due and pay-
able on a day other than a Business Day, the maturity thereof shall be ex-
tended to the next succeeding Business Day (and with respect to payments of
principal, interest thereon shall be payable at the then applicable rate
during such extension), unless the result of such extension would be to ex-
tend such payment into another calendar month in which event such payment
shall be made on the immediately preceding Business Day.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not
make the amount which would constitute its Commitment Percentage of such
borrowing available to the Administrative Agent, the Administrative Agent
may assume that such Lender is making such amount available to the Adminis-
trative Agent in accordance with subsection 4.1 and the Administrative
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If such amount is not made available to the Adminis-
trative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate
for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent sub-
mitted to any Lender with respect to any amounts owing under this subsec-
tion 4.9(e) shall be conclusive absent manifest error. If such Lender's
Commitment Percentage of such borrowing is not in fact made available to
the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to the
Loans comprising such borrowing, on demand, from Borrower, without preju-
dice to any rights which any such Borrower or the Administrative Agent may
have against such Lender hereunder. Nothing contained in this subsection
4.9 shall relieve any Lender which has failed to make available its ratable
portion of any borrowing hereunder from its obligation to do so in accor-
dance with the terms hereof.
(f) The failure of any Lender to make the Loan to be made by
it on any Borrowing Date shall not relieve any other Lender of its obliga-
tion, if any, hereunder to make its Loan on such Borrowing Date, but no
Lender shall be responsible for the failure of any other Lender to make the
Loan to be made by such other Lender on such Borrowing Date.
(g) All payments and optional prepayments (other than prepay-
ments as set forth in subsection 4.11 with respect to increased costs) of
Eurodollar Loans hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate princi-
pal amount of all Eurodollar Loans with the same Interest Period shall not
be less than $1,000,000 a whole multiple of $100,000 in excess thereof.
4.10. Illegality. Notwithstanding any other provision herein,
if (i) any Change in Law occurring after the date that any lender becomes a
Lender party to this Agreement, shall make it unlawful for such Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, the
commitment of such Lender hereunder to make Eurodollar Loans or to convert
all or a portion of Alternate Base Rate Loans into Eurodollar Loans shall
forthwith be suspended until such time, if any, as such illegality shall no
longer exist and such Lender's Loans then outstanding as Eurodollar Loans,
if any, shall be converted automatically to Alternate Base Rate Loans for
the duration of the respective Interest Periods (or, if permitted by appli-
cable law, at the end of such Interest Periods) and all payments of princi-
pal which would otherwise be applied to such Eurodollar Loans shall be ap-
plied instead to such Lender's Alternate Base Rate Loans. Borrower hereby
agrees to pay any Lender, promptly upon its demand, any amounts payable
pursuant to subsection 4.12 in connection with any conversion in accordance
with this subsection 4.10 (such Lender's notice of such costs, as certified
in reasonable detail as to such amounts to Borrower through the Administra-
tive Agent, to be conclusive absent manifest error).
4.11. Requirements of Law. (a) In the event that any Change
in Law or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority occurring after the date that any lender becomes a Lender party
to this Agreement:
(i) does or shall subject any such Lender or its Eurodollar
Lending Office to any tax of any kind whatsoever with respect to this
Agreement, any Note or any Eurodollar Loans made by it, or change the
basis of taxation of payments to such Lender or its Eurodollar Lend-
ing Office of principal, the commitment fee, interest or any other
amount payable hereunder (except for (x) net income and franchise
taxes imposed on the net income of such Lender or its Eurodollar
Lending Office by the United States or any political subdivision
thereof or therein, by the jurisdiction under the laws of which such
Lender is organized or any political subdivision or taxing authority
thereof or therein, or by any jurisdiction in which such Lender's
Eurodollar Lending Office is located or any political subdivision or
taxing authority thereof or therein, including changes in the rate of
tax on the overall net income of such Lender or such Eurodollar Lend-
ing Office, and (y) taxes resulting from the substitution of any such
system by another system of taxation; provided that the taxes payable
by Lenders subject to such other system of taxation are not generally
charged to borrowers from such Lenders having loans or advances bear-
ing interest at a rate similar to the Eurodollar Rate);
(ii) does or shall impose, modify or hold applicable any re-
serve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for
the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Lender which
are not otherwise included in the determination of the Eurodollar
Rate; or
(iii) does or shall impose on such Lender any other condition
which is applicable to lenders generally;
and the result of any of the foregoing is to increase the cost to such
Lender or its Eurodollar Lending Office of making, converting, renewing or
maintaining advances or extensions of credit or to reduce any amount re-
ceivable hereunder, in each case, in respect of its Eurodollar Loans, then,
in any such case, Borrower shall promptly pay such Lender, within 15 days
after its demand, any additional amounts necessary to compensate such
Lender for such additional cost or reduced amount receivable which such
Lender deems to be material as determined by such Lender with respect to
such Eurodollar Loans, together with interest on each such amount from the
date due until payment in full thereof at a rate per annum equal to the Al-
ternate Base Rate plus 1%.
(b) In the event that any Change in Law occurring after the
date that any lender becomes a Lender party to this Agreement with respect
to any such Lender shall, in the opinion of such Lender, require that any
Commitment of such Lender be treated as an asset or otherwise be included
for purposes of calculating the appropriate amount of capital to be main-
tained by such Lender or any corporation controlling such Lender, and such
Change in Law shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital, as the case may be, as a conse-
quence of such Lender's obligations hereunder to a level below that which
such Lender or such corporation, as the case may be, could have achieved
but for such Change in Law (taking into account such Lender's or such cor-
poration's policies, as the case may be, with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time
following notice by such Lender to Borrower of such Change in Law as pro-
vided in paragraph (c) of this subsection 4.11, within 15 days after demand
by such Lender, Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation on an after-tax
basis, as the case may be, for such reduction.
(c) Borrower shall not be required to make any payments to any
Lender for any additional amounts pursuant to this subsection 4.11 unless
such Lender has given written notice to Borrower, through the Administra-
tive Agent, of its intent to request such payments prior to or within 60
days after the date on which such Lender became entitled to claim such
amounts. If any Lender has notified Borrower through the Administrative
Agent of any increased costs pursuant to paragraph (a) of this subsection
4.11, Borrower at any time thereafter may, upon at least three Business
Days' notice to the Administrative Agent (which shall promptly notify the
Lenders thereof), and subject to subsection 4.12, prepay (or convert into
Alternate Base Rate Loans) all (but not a part) of the Eurodollar Loans of
the applicable Lender then outstanding. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of paragraph (a) of
this subsection 4.11 with respect to such Lender, it will, if requested by
Borrower and to the extent permitted by law or by the relevant Governmental
Authority, endeavor in good faith to avoid or minimize the increase in
costs or reduction in payments resulting from such event (including, with-
out limitation, endeavoring to change its Eurodollar Lending Office); pro-
vided that such avoidance or minimization can be made in such a manner that
such Lender, in its sole determination, suffers no economic, legal or regu-
latory disadvantage. If any Lender requests compensation from any Borrower
under this subsection 4.11, Borrower may, by notice to such Lender (with a
copy to the Administrative Agent), suspend the obligation of such Lender
thereafter to make or continue Loans of the Type with respect to which such
compensation is requested, or to convert Loans of any other Type into Loans
of such Type, until the Requirement of Law giving rise to such request
ceases to be in effect; provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(d) (i) All payments by Borrower to or for the account of any
Lender or Administrative Agent hereunder or under any Note shall be made
without setoff, counterclaim or other defense and free and clear of, and
without deduction or withholding for, any and all Taxes. If Borrower shall
be required by law to deduct or withhold any Taxes from or in respect of
any sum payable hereunder to any Lender or Administrative Agent, (a) the
sum payable shall be increased as necessary so that after making all re-
quired deductions or withholdings (including deductions or withholdings ap-
plicable to additional sums payable under this subsection 4.11(d)) such
Lender or Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions or withhold-
ings been made, (b) Borrower shall make such deductions or withholdings,
(c) Borrower shall pay the full amount deducted or withheld to the relevant
authority in accordance with applicable law and (d) Borrower shall furnish
to Administrative Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or
under any Note or from the execution, delivery or registration of, or oth-
erwise with respect to, this Agreement or any Note ("Other Taxes").
(iii) Borrower hereby agrees to indemnify Administrative Agent
and each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts payable un-
der this subsection 4.11(d)) paid by Administrative Agent or such Lender
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. Payments due under this indemnification
shall be made within 30 days of the date Administrative Agent or such
Lender makes demand therefor.
(iv) Each Lender (and in case of a Participant or an Assignee
on the date it becomes a Participant or Lender) that is not a United States
Person (as defined in Section 7701(a)(30) of the Code) for federal income
tax purposes either (1) in the case of a Participant or Lender that is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) agrees
to furnish to Borrower, with a copy to the Administrative Agent, either
U.S. Internal Revenue Service Form W-8ECI or U.S. Internal Revenue Service
Form W-8BEN (or successor form) (wherein such Participant or Lender claims
entitlement at the Closing Date (or, in the case of a Participant or an As-
signee, on the date it becomes a Participant or Lender, as the case may be)
to an exemption from U.S. federal withholding tax on all interest payments
hereunder (or, in the case of an assignee Lender, at least as extensive as
the assignor Lender)) and (ii) agrees (for the benefit of Borrower and the
Administrative Agent), to the extent it may lawfully do so at such times,
upon reasonable request by Borrower or the Administrative Agent, to provide
Borrower, with a copy to the Administrative Agent, a new Form W-8ECI or
Form W-8BEN (or successor form) upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with ap-
plicable U.S. laws and regulations duly executed and completed by such Par-
ticipant or Lender that establishes a complete exemption from, or a reduc-
tion in, U.S. federal withholding tax on any interest payment hereunder or
(2) in the case of a Participant or Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) agrees to furnish to Bor-
rower, with a copy to the Administrative Agent, (a) a Non-Bank Certificate
and (b) two accurate and complete original signed copies of Internal Reve-
nue Service Form W-8BEN (or successor form), certifying to such Partici-
pant's or Lender's legal entitlement at the Closing Date (or, in the case
of a Participant or an Assignee, on the date it becomes a Participant or
Lender, as the case may be) to an exemption from U.S. withholding tax under
the provisions of Section 881(c) of the Code with respect to all interest
payments to be made under this Agreement (or, in the case of an assignee
Lender, at least as extensive as the assignor Lender), and (ii) agrees, to
the extent legally entitled to do so, upon reasonable request by Borrower
or the Administrative Agent, to provide to Borrower (for the benefit of
Borrower and the Administrative Agent) such other forms as may be required
in order to establish the legal entitlement of such Participant or Lender
to an exemption from, or reduction in, withholding with respect to payments
under this Agreement. Notwithstanding any provision of this subsection
4.11 or subsection 4.9(d) to the contrary, Borrower shall have no obliga-
tion to pay any amount to or for the account of any Participant or Lender
(or the Eurodollar Lending Office of any Participant or Lender) on account
of any Taxes pursuant to this subsection 4.11, to the extent that such
amount results from the failure of any Participant or Lender to comply with
its obligations pursuant to this subsection 4.11(d)(iv).
(e) A certificate in reasonable detail as to any amounts sub-
mitted by such Lender, through the Administrative Agent, to Borrower, shall
be conclusive in the absence of manifest error. The covenants contained in
this subsection 4.11 shall survive the termination of this Agreement and
repayment of the Loans.
4.12. Indemnity. Borrower agrees to indemnify each Lender and
to hold such Lender harmless from any loss or expense (but (x) without du-
plication of any amounts payable as default interest and (y) excluding any
loss of anticipated profits) which such Lender may sustain or incur as a
consequence of (a) default by Borrower in making a borrowing after Borrower
has given a notice in accordance with subsection 4.1 or in making a conver-
sion of Alternate Base Rate Loans to Eurodollar Loans or in continuing
Eurodollar Loans as such, in either case, after Borrower has given notice
in accordance with subsection 4.2, (b) default by Borrower in making any
prepayment after Borrower has given a notice in accordance with subsection
4.4 or (c) a payment or prepayment of a Eurodollar Loan or conversion (in-
cluding without limitation, as a result of subsection 4.4 and/or a conver-
sion pursuant to subsection 4.10) of any Eurodollar Loan into an Alternate
Base Rate Loan, in either case on a day which is not the last day of an In-
terest Period with respect thereto, including, but not limited to, any such
loss or expense arising from interest or fees payable by such Lender to
lenders of funds obtained by it in order to maintain its Eurodollar Loans
hereunder (but excluding loss of profit). This covenant shall survive ter-
mination of this Agreement and repayment of the Loans.
4.13. Repayment of Loans; Evidence of Debt. (a) Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the then unpaid principal amount of each Revolv-
ing Credit Loan of such Lender on the Revolving Credit Termination Date,
(ii) the principal amount of the Tranche B Term Loan of such Lender, in in-
stallments, payable on each Tranche B Installment Payment Date, in accor-
dance with subsection 4.4(c) (or the then unpaid principal amount of such
Tranche B Term Loan on the date that the Tranche B Term Loans become due
and payable pursuant to Section 9 or has been reduced in accordance with
subsection 4.4(d)), and (iii) the then unpaid principal amount of the Swing
Line Loans of the Swing Line Lender on the Revolving Credit Termination
Date. Borrower hereby further agrees to pay interest on the unpaid princi-
pal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum and on the dates set
forth in subsection 4.4.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of Borrower to such
Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pur-
suant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Revolving Credit Loan and
Tranche B Term Loan made hereunder, the Type thereof and each Interest Pe-
riod applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administra-
tive Agent hereunder from Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 4.13(b) shall, to the extent per-
mitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of Borrower therein recorded; provided that the
failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect
the obligation of Borrower to repay (with applicable interest) the Loans
made to Borrower by such Lender or to repay any other obligations in accor-
dance with the terms of this Agreement.
(e) Borrower agrees that, upon the request to the Administra-
tive Agent by any Lender, Borrower will execute and deliver to such Lender
(i) a promissory note of Borrower evidencing the Revolving Credit Loans of
such Lender, substantially in the form of Exhibit A with appropriate inser-
tions as to date and principal amount (a "Revolving Credit Note"), (ii) a
promissory note of such Borrower evidencing the Tranche B Term Loan of such
Lender, substantially in the form of Exhibit B with appropriate insertions
as to date and principal amount (a "Tranche B Term Note"), and/or (iii) in
the case of the Swing Line Lender, a promissory note of Borrower evidencing
the Swing Line Loans of the Swing Line Lender, substantially in the form of
Exhibit C with appropriate insertions as to date and principal amount (the
"Swing Line Note").
4.14. Replacement of Lenders. In the event any Lender or the
Issuing Lender is a Non-Funding Lender, exercises its rights pursuant to
subsection 4.10 or requests payments pursuant to subsections 3.10 or 4.11,
Borrower may require, at Borrower's expense (including payment of any proc-
essing fees under subsection 11.6(e)) and subject to subsection 4.12, such
Lender or the Issuing Lender to assign, at par plus accrued interest and
fees, without recourse (in accordance with subsection 11.6) all of its in-
terests, rights and obligations hereunder (including all of its Commitments
and the Loans and other amounts at the time owing to it hereunder and its
Notes and its interest in the Letters of Credit) to a bank, financial in-
stitution or other entity specified by Borrower; provided that (i) such as-
signment shall not conflict with or violate any law, rule or regulation or
order of any court or other Governmental Authority, (ii) Borrower shall
have received the written consent of the Administrative Agent, which con-
sent shall not unreasonably be withheld, to such assignment, (iii) Borrower
shall have paid to the assigning Lender or the Issuing Lender all monies
other than principal, interest and fees accrued and owing hereunder to it
(including pursuant to subsections 3.10, 4.10, 4.11 and 4.12) and (iv) in
the case of a required assignment by the Issuing Lender, the Letters of
Credit shall be canceled and returned to the Issuing Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and
to make the Loans and to induce the Issuing Lender to issue, and the Par-
ticipating Lenders to participate in, the Letters of Credit, Borrower
hereby represents and warrants to each Lender and the Administrative Agent
as of the Closing Date and as of the date of the making of any extension of
credit hereunder:
5.1. Financial Condition. (a) The audited consolidated bal-
ance sheet of Borrower as of December 31, 1998, 1999 and 2000, and the re-
lated consolidated income statements and statements of cash flows and
stockholders' equity for the fiscal years ended on such dates, reported on
by and accompanied by an unqualified report from PricewaterhouseCoopers LLP
relating thereto, have been prepared by Borrower in accordance with GAAP
and present fairly, in all material respects, the financial condition of
Borrower as at such dates, and the results of operations and cash flows of
Borrower for the fiscal years then ended.
(b) The unaudited consolidated balance sheet of Borrower and
related consolidated income statements and statements of stockholders' eq-
uity and cash flows for the nine month period ended September 30, 2001 have
been prepared by Borrower in accordance with the same accounting principles
and procedures employed in connection with the financial statements de-
scribed in the preceding clause (a) and presents fairly, in all material
respects, the financial condition of Borrower at such date and the results
of operations and cash flow of Borrower for such nine month period, except
for the absence of footnotes and normal year-end adjustments.
(c) Except as set forth in Schedule 5.1(c), in the financial
statements or other information referred to in subsections 5.1(a) and (b),
as of the Closing Date, there are no material liabilities of Borrower or
any of its Subsidiaries of any kind (including, without limitation, li-
abilities for taxes, or any long-term leases or unusual forward or long-
term commitments, including any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives) re-
quired to be set forth on a balance sheet or in the notes thereto prepared
in accordance with GAAP, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or
set of circumstances which is reasonably likely to result in such a liabil-
ity.
5.2. No Change. Since December 31, 2000, there has been no
change, development or event which, individually or when taken together
with all other circumstances, changes or events, has had, or would reasona-
xxx be expected to have, a Material Adverse Effect.
5.3. Existence; Compliance with Law. Except as disclosed in
Schedule 5.3, each of Borrower and its Subsidiaries (a) is duly organized
and validly existing under the laws of the jurisdiction of its incorpora-
tion, (b) has full power and authority and possesses all governmental xxxx-
chises, licenses, permits, authorizations and approvals necessary to enable
it to use its corporate name and to own, lease or otherwise hold its prop-
erties and assets and to carry on its business as presently conducted other
than such franchises, licenses, permits, authorizations and approvals the
lack of which, individually or in the aggregate, would not have a Material
Adverse Effect, (c) is duly qualified and in good standing (to the extent
such concept is applicable in the applicable jurisdiction) to do business
in each jurisdiction in which the nature of its business or the ownership,
leasing or holding of its properties makes such qualification necessary,
except such jurisdictions where the failure so to qualify, individually or
in the aggregate, would not have a Material Adverse Effect and (d) is in
compliance with all applicable statutes, laws, ordinances, rules, orders,
permits and regulations of any Governmental Authority or instrumentality,
domestic or foreign (including, without limitation, those related to Haz-
ardous Materials and substances), except where noncompliance individually
or in the aggregate, would not have a Material Adverse Effect. Neither
Borrower nor any of its Subsidiaries has received any written communication
from a Governmental Authority that alleges that Borrower or any of its Sub-
sidiaries is not in compliance with federal, state, local or foreign laws,
ordinances, rules and regulations except to the extent such noncompliance,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
5.4. Power; Authorization. Each of Borrower and its Re-
stricted Subsidiaries has the power and authority to execute, deliver and
perform each of the Credit Documents to which it is a party, and Borrower
has the power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder. Each of Borrower and
its Restricted Subsidiaries has taken all necessary action to authorize the
execution, delivery and performance of each of the Credit Documents to
which it is or will be a party and Borrower has taken all necessary action
to authorize the borrowings hereunder and the issuance of Letters of Credit
for its account hereunder. No consent or authorization of, or filing with,
any Person (including, without limitation, any Governmental Authority) is
required in connection with the execution, delivery or performance by Bor-
rower or any of its Restricted Subsidiaries, or for the validity or en-
forceability in accordance with its terms against Borrower or any of its
Restricted Subsidiaries, of any Credit Document except for (i) consents,
authorizations and filings which have been obtained or made and are in full
force and effect, (ii) such consents, authorizations and filings which the
failure to obtain or perform, individually or in the aggregate, would not
have a Material Adverse Effect and (iii) such filings as are necessary to
perfect the Liens of the Lenders created pursuant to this Agreement and the
Security Documents.
5.5. Enforceable Obligations. This Agreement has been, and
each of the other Credit Documents and any other agreement to be entered
into by any Credit Party pursuant to each of the Transaction Documents will
be, duly executed and delivered on behalf of each Credit Party that is
party thereto. This Agreement and each of the Transaction Documents each
constitute, and each of the other Credit Documents and any other agreement
to be entered into by any Credit Party pursuant to the Transaction Docu-
ments will constitute upon execution and delivery thereof, the legal, valid
and binding obligation of each Credit Party that is party thereto, and is
or will be enforceable against each Credit Party that is party thereto in
accordance with its terms, except as may be limited by applicable bank-
ruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally and by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
5.6. No Legal Bar. The execution, delivery and performance of
each Credit Document and the incurrence or issuance of and use of the pro-
ceeds of the Loans and of drawings under the Letters of Credit and the
Transactions (a) will not violate any Requirement of Law or any Contractual
Obligation applicable to or binding upon Borrower or any of its Subsidiar-
ies or any of their respective properties or assets, in any manner which,
individually or in the aggregate, would have a Material Adverse Effect, and
(b) will not result in the creation or imposition of any Lien on any of its
properties or assets pursuant to any Requirement of Law applicable to it,
as the case may be, or any of its Contractual Obligations, except for the
Liens arising under the Security Documents and Permitted Liens.
5.7. No Material Litigation. Except as disclosed in Schedule
5.7, no lawsuits, claims, proceedings or investigations are pending or, to
the best knowledge of Borrower, threatened against or affecting Borrower or
any of its Subsidiaries or any of their respective properties, assets, op-
erations or businesses which have had, or are reasonably likely to have, a
Material Adverse Effect.
5.8. Investment Company Act. Neither Borrower nor any Sub-
sidiary of Borrower is an "investment company" or a company "controlled" by
an "investment company" (as each of the quoted terms is defined or used in
the Investment Company Act of 1940, as amended).
5.9. Federal Regulation. The extensions of credit hereunder
will not be used for "buying" or "carrying" any Margin Stock within the re-
spective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or
the Administrative Agent, Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U. Following application of the proceeds of each extension of
credit hereunder, not more than 25 percent of the value of the assets of
any Credit Party will be Margin Stock. None of Borrower or any of its Sub-
sidiaries is a "holding company", or an "affiliate" of a "holding company"
or a "subsidiary company" of a "holding company", within the meaning of the
United States Public Utility Holding Company Act of 1935, as amended. No
Credit Party is subject to regulation under any law or regulation which
limits its ability to incur Indebtedness, other than Regulation X of the
Board.
5.10. No Default. Except as disclosed in Schedule 5.10, Bor-
rower and each of its Subsidiaries have performed all material obligations
required to be performed by them under their respective Contractual Obliga-
tions (including after giving effect to the Transactions) and they are not
(with or without the lapse of time or the giving of notice, or both) in
breach or default in any respect thereunder, except to the extent that such
breach or default, individually or in the aggregate, would not have a Mate-
rial Adverse Effect. Neither Borrower nor any Subsidiary of Borrower (in-
cluding after giving effect to the Transactions) is in default under any
material judgment, order or decree of any Governmental Authority, domestic
or foreign, applicable to it or any of its respective properties, assets,
operations or business, except to the extent that any such defaults would
not, individually or in the aggregate, have a Material Adverse Effect.
5.11. Taxes. Except as disclosed in Schedule 5.11, each of
Borrower and its Restricted Subsidiaries (including after giving effect to
the Transactions) (i) has filed or caused to be filed all material tax re-
turns which are required to be filed (and all such tax returns were true
and correct in all material respects when and as filed) and (ii) has paid
all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than any (x) the amount of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves
(or other sufficient provisions) in conformity with GAAP have been provided
on the books of Borrower or its Subsidiaries (including after giving effect
to the Transactions), as the case may be, or (y) which would not, individu-
ally or in the aggregate, have a Material Adverse Effect).
5.12. Subsidiaries. After giving effect to the consummation
of the Transactions, the Subsidiaries of Borrower, their jurisdictions of
incorporation and their owners (by holder and parent interest) on the Clos-
ing Date shall be as set forth on Schedule 5.12.
5.13. Ownership of Property; Liens. As of the Closing Date
and as of the making of any extension of credit hereunder (subject to
transfers and dispositions of property permitted under subsection 8.5),
each of Borrower and its Subsidiaries has good and valid title to all of
its material assets (other than (x) real property or interests in real
property and (y) minor irregularities or deficiencies in title which, indi-
vidually or in the aggregate, would not have a Material Adverse Effect) in
each case free and clear of all Liens except Permitted Liens. With respect
to real property or interests in real property, as of the Closing Date,
each of Borrower and its Subsidiaries has (i) good and marketable fee title
to all of the real property owned by it, which real property is listed on
Schedule 5.13 under the heading "Fee Properties" (each, a "Fee Property"),
and (ii) good and valid title to the leasehold estates in all of the real
property leased by it, which leased real property is listed on Schedule
5.13 under the heading "Leased Properties" (each, a "Leased Property"), in
each case, free and clear of all Liens of any nature whatsoever, except
(a) Permitted Liens and (b) as to Leased Property, the terms and provisions
of the respective lease therefor, including, without limitation, the mat-
ters set forth on Schedule 5.13, and any matters affecting the fee title
and any estate superior to the leasehold estate related thereto. The Fee
Properties and the Leased Properties constitute, as of the Closing Date,
all of the real property owned in fee or leased by Borrower and its Sub-
sidiaries.
5.14. ERISA. (a) No ERISA Event has occurred or is reasona-
xxx expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasona-
xxx be expected to result in a Material Adverse Effect. The present value
of all accumulated benefit obligations of all underfunded Pension Plans
(based on the assumptions used for purposes of Statement of Financial Ac-
counting Standards No. 87) did not, as of the date of the most recent fi-
nancial statements reflecting such amounts, exceed by more than $1,000,000
the fair market value of the assets of all such underfunded Pension Plans.
Each ERISA Entity is in compliance in all material respects with the pres-
ently applicable provisions of ERISA and the Code with respect to each Em-
ployee Benefit Plan, other than failures to comply the liability for which
could not, taken as a whole, reasonably be expected to result in a Material
Adverse Effect. Using actuarial assumptions and computation methods con-
sistent with subpart 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of each ERISA Entity to all Multiemployer Plans in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal
year of each such Multiemployer Plan, would not reasonably be expected to
result in a Material Adverse Effect. As of the Closing Date, neither Bor-
rower nor any of its Subsidiaries maintain or contribute to any plan, pro-
gram, policy, arrangement or agreement with respect to employees (or former
employees) employed outside the United States.
(b) If applicable, each Foreign Plan has been maintained in
substantial compliance with its terms and with the requirements of any and
all applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities, other than failures to comply the liability for which could
not, taken as a whole, reasonably be expected to result in a Material Ad-
verse Effect. Neither Borrower nor any Subsidiary has incurred any mate-
rial obligation in connection with the termination of or withdrawal from
any Foreign Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Plan which is funded, determined
as of the end of the most recently ended fiscal year of Borrower or any
Subsidiary on the basis of actuarial assumptions, each of which is reason-
able, did not exceed the current value of the assets of such Foreign Plan
by more than $1,000,000, and for each Foreign Plan which is not funded, the
obligations of such Foreign Plan are properly accrued in all material re-
spects.
5.15. Collateral Documents. (a) Upon execution and delivery
thereof by the parties thereto, the Collateral Agreement will be effective
to create in favor of the Administrative Agent, for the ratable benefit of
the Lenders, a legal, valid and enforceable security interest in the
pledged stock described therein and, when stock certificates representing
or constituting the pledged stock described in the Collateral Agreement are
delivered to the Administrative Agent, such security interest shall consti-
tute a perfected first lien on, and security interest in, all right, title
and interest of the pledgor party thereto in the pledged stock described
therein (to the extent such matter is governed by the law of the United
States or a jurisdiction therein).
(b) Upon execution and delivery thereof by the parties
thereto, the Collateral Agreement will be effective to create in favor of
the Administrative Agent, for the ratable benefit of the Lenders, a legal,
valid and enforceable security interest in the collateral described therein
(to the extent such matter is governed by the law of the United States or a
jurisdiction therein), and UCC financing statements have been filed in each
of the jurisdictions listed on Schedule 5.15(b), or arrangements have been
made for such filing in such jurisdictions, and upon such filing, and upon
the taking of possession by the Administrative Agent of any such collateral
the security interests in which may be perfected only by possession (to the
extent possession by the Administrative Agent is required by the Collateral
Agreement), such security interests will, subject to the existence of Per-
mitted Liens, constitute perfected first priority liens on, and security
interests in, all right, title and interest of the debtor party thereto in
the collateral described therein, except to the extent that a security in-
terest cannot be perfected therein by the filing of a financing statement
or the taking of possession under the UCC of the relevant jurisdiction (or,
if a security interest can be perfected only by possession, to the extent
possession by the Administrative Agent is not required pursuant to the Col-
lateral Agreement).
(c) Upon execution and delivery thereof by the relevant Credit
Party, each Mortgage will be effective to create in favor of the Adminis-
trative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the collateral described therein, and upon
recording the Mortgages in the jurisdiction in which the property covered
by such Mortgage is located, such security interests will, subject to the
existence of Permitted Liens, constitute first priority liens on, and per-
fected security interests in, all rights, title and interest of the debtor
party thereto in the collateral described therein.
5.16. Copyrights, Patents, Permits, Trademarks and Licenses.
Schedule 5.16 sets forth a true and complete list as of the Closing Date of
all registered Intellectual Property and, with respect to registered trade-
marks (if any), contains a list of all jurisdictions in which such trade-
marks are registered or applied for and all registration and application
numbers. Except as disclosed in Schedule 5.16, Borrower or one of its Sub-
sidiaries owns or has the right to use, the Intellectual Property and ap-
plications therefor referred to in such Schedule. Except as disclosed in
Schedule 5.16, no claims are pending by any Person with respect to the own-
ership, validity, enforceability or Borrower's or any Subsidiary's use of
the Intellectual Property, or applications therefor, challenging or ques-
tioning the validity or effectiveness of any of the foregoing, in any ju-
risdiction, domestic or foreign, except to the extent such claims, indi-
vidually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
5.17. Environmental Matters. Except as disclosed in Schedule
5.17 and except for matters or circumstances that, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect:
(a) the properties owned, leased, or otherwise operated by
Borrower or any of its Subsidiaries do not contain, and have not pre-
viously contained, in, on or under, including, without limitation,
the soil and groundwater thereunder, any Hazardous Materials in
amounts or concentrations that constitute a violation by Borrower or
any of its Restricted Subsidiaries of, or could reasonably be ex-
pected to give rise to liability on the part of Borrower or any of
its Restricted Subsidiaries under, Environmental Laws;
(b) the properties owned or leased, or otherwise operated by
Borrower or any of its Restricted Subsidiaries and all operations and
facilities at such properties are in compliance with all Environ-
mental Laws, and there is no Hazardous Material at, on, under or ema-
nating from any such properties, or violation of any Environmental
Law which could interfere with the continued operation of, or impair
the otherwise fair saleable value of, such properties;
(c) neither Borrower nor any Restricted Subsidiary of Borrower
has received or is aware of any written complaint, notice of xxxxx-
tion, alleged violation, or notice of investigation or of potential
liability under Environmental Laws with regard to Borrower or its Re-
stricted Subsidiaries, or any properties owned, leased or otherwise
operated by any of them, nor does Borrower or any of its Restricted
Subsidiaries have knowledge that any such action is being contem-
plated, considered or threatened;
(d) Hazardous Materials have not been generated, treated,
stored or disposed of at, on or under any properties presently or
formerly owned, leased, or otherwise operated by Borrower or any of
its Restricted Subsidiaries, nor have any Hazardous Materials been
transported from any such property, or come to be located at any
other property, in violation of or in a manner that could reasonably
be expected to give rise to liability on the part of Borrower or any
of its Restricted Subsidiaries under any Environmental Laws;
(e) there are no administrative actions or judicial proceed-
ings pending or, to the best knowledge of Borrower, threatened under
any Environmental Law to which Borrower or any of its Restricted Sub-
sidiaries is or would be a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other or-
ders or agreements to which Borrower or any of its Restricted Sub-
sidiaries is a party which could reasonably be expected to result in
liability or costs on the part of Borrower or any of its Restricted
Subsidiaries under any Environmental Law;
(f) no Lien has been asserted or recorded, or to the knowledge
of Borrower threatened, under any Environmental Law with respect to
any Real Property or assets of Borrower or any of its Restricted Sub-
sidiaries;
(g) no Real Property is (x) listed or proposed for listing on
the National Priorities List under the United States Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or (y) listed on the Comprehensive Environmental
Response, Compensation and Liability Information System List promul-
gated pursuant to CERCLA, or (z) included on any similar list main-
tained by any Governmental Authority; and
(h) neither Borrower nor any of its Subsidiaries is currently
conducting any response or other corrective action pursuant to any
Environmental Law with respect to any Real Property or any other lo-
cation.
5.18. Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in subsection
5.1, the Confidential Memorandum dated January 2002 delivered to the Lend-
ers in connection with the syndication of the Loans and the Commitments
(the "Confidential Information Memorandum"), the Credit Documents (includ-
ing the schedules thereto), each of the Transaction Documents and any other
certificates or documents furnished or to be furnished to the Administra-
tive Agent or the Lenders as updated from time to time in connection with
this Agreement, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
such statements not misleading in light of the circumstances in which they
were made; provided that with respect to projected or pro forma financial
information, Borrower represents only that such information has been and
will be prepared in good faith based upon assumptions believed by Borrower
to be reasonable at the time. There is no fact known to any Credit Party
that could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Credit Documents, in
the Confidential Information Memorandum or in any other documents, certifi-
xxxxx and statements furnished to the Administrative Agent and the Lenders
for use in connection with the transactions contemplated hereby and by the
other Credit Documents. Borrower understands that all such statements,
representations and warranties shall be deemed to have been relied upon by
the Lenders as a material inducement to make each extension of credit
hereunder.
5.19. Labor Matters. Except as disclosed in public filings
with the SEC, there is (i) no unfair labor practice complaint pending
against Borrower or any of its Restricted Subsidiaries or, to the knowledge
of Borrower, threatened against Borrower or any of its Restricted Subsidi-
aries, before the National Labor Relations Board or any other Governmental
Authority, and no grievance or arbitration proceeding arising out of or un-
der any collective bargaining agreement is so pending against Borrower or
any of its Restricted Subsidiaries or, to the knowledge of Borrower,
threatened against Borrower or any of its Restricted Subsidiaries, (ii) no
strike, labor dispute, slowdown or stoppage pending against Borrower or any
of its Subsidiaries or, to the knowledge of Borrower, threatened against
Borrower or any of its Restricted Subsidiaries and (iii) to the knowledge
of Borrower, no union representation question existing with respect to the
employees of Borrower or any of its Restricted Subsidiaries and, to the
knowledge of Borrower, no union organizing activities are taking place, ex-
cept such as would not, with respect to any matter specified in clause (i),
(ii) or (iii) above, individually or in the aggregate, have a Material Ad-
verse Effect.
5.20. Solvency. Upon giving effect to the issuance of the
Notes, the execution of the Credit Documents by Borrower and its Subsidiar-
ies and the consummation of the transactions contemplated hereby and the
Transactions, each Credit Party will be Solvent as of the Closing Date.
5.21. Use of Proceeds. Borrower will use the proceeds of
(i) all Tranche B Term Loans to finance the Transactions and pay related
fees and expenses and (ii) Revolving Credit Loans after the Closing Date to
provide for the ongoing working capital and general corporate purposes of
Borrower and its Subsidiaries (it being understood that no Revolving Credit
Loans shall be made on the Closing Date).
SECTION 6. CONDITIONS PRECEDENT
6.1. Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender to make its Loans, and the obligation of the Is-
suing Lender to issue any Letter of Credit, on the Closing Date are subject
to the satisfaction, or waiver by such Lender, immediately prior to or con-
currently with the making of such Loans or the issuance of such Letters of
Credit, as the case may be, of the following conditions:
(a) Agreement; Notes. The Administrative Agent shall have re-
ceived (i) a counterpart of this Agreement for each Lender duly exe-
cuted and delivered by a duly authorized officer of Borrower, (ii)
for the account of each Revolving Credit Lender requesting the same
pursuant to subsection 4.13(e), a Revolving Credit Note of Borrower
conforming to the requirements of this Agreement and executed by a
duly authorized officer of Borrower, (iii) for the account of each
Tranche B Term Loan Lender requesting the same pursuant to subsection
4.13(e), a Tranche B Term Note, conforming to the requirements of
this Agreement and executed by a duly authorized officer of Borrower,
and (iv) if requested by Swing Line Lender, for the account of Swing
Line Lender, a Swing Line Note, conforming to the requirements of
this Agreement and executed by a duly authorized officer of Borrower.
(b) Transactions. The Lead Arranger shall have reviewed, and
be reasonably satisfied with, the final terms and conditions and the
documentation relating to the Transactions.
(c) [Reserved]
(d) Financial Statements. The Lead Arranger shall have re-
ceived the financial statements described in subsection 5.1 no later
than three Business Days before the Closing Date and such financial
statements shall be in form and scope reasonably satisfactory to the
Lead Arranger and shall not be materially inconsistent with the fi-
nancial statements previously provided to the Lead Arranger.
(e) Fees. The Administrative Agent and the Lead Arranger
shall have received all costs, fees, expenses (including, without
limitation, the invoiced fees and expenses of Xxxxxx Xxxxxx & Rein-
del, counsel for the Administrative Agent and the Lead Arranger and
of other legal counsel for the Administrative Agent) and other con-
sideration presented for payment required to be paid on or before the
Closing Date.
(f) Lien Searches; Lien Perfection. (i) The Administrative
Agent shall have received the results of a search of UCC, tax and
judgment filings made with respect to Borrower and its Subsidiaries
in the jurisdictions set forth on Schedule 6.1(f)(i), together with
copies of financing statements disclosed by such searches and such
searches shall disclose no Liens on any assets encumbered by any Se-
curity Document, except for Liens permitted hereunder or, if unper-
mitted Liens are disclosed, the Administrative Agent shall have re-
ceived satisfactory evidence of the release of such Liens, (ii) the
Administrative Agent shall have the results of intellectual property
searches described on Schedule 6.1(f)(ii), together with copies of
Liens disclosed thereby and such searches shall disclose no Liens on
any intellectual property encumbered by any Security Document except
for Liens permitted hereunder or if unpermitted Liens are disclosed,
the Administrative Agent shall have received satisfactory evidence of
the release of such Liens, and (iii) the Administrative Agent shall
have received duly executed financing statements on Form UCC-1 and
other instruments, necessary or, in the reasonable opinion of the Ad-
ministrative Agent, desirable to perfect the Liens created by the Se-
curity Documents.
(g) Collateral Agreement. The Administrative Agent shall have
received the Collateral Agreement executed and delivered by a duly
authorized officer of the parties thereto, together with (i) stock
certificates representing 100% of all issued and outstanding certifi-
cated shares of Capital Stock of each Subsidiary of Borrower, and un-
dated stock powers for each certificate, executed in blank and deliv-
ered by a duly authorized officer of the applicable pledgor and
(ii) all intercompany notes evidencing loans made by any Credit Party
to any other Credit Party or any other Subsidiary, together with in-
struments of transfer or assignment executed in blank with respect
thereto.
(h) [Reserved].
(i) Legal Opinions. The Administrative Agent shall have re-
ceived, dated the Closing Date and addressed to the Administrative
Agent, the Lead Arranger and the Lenders (i) an opinion of Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, New York counsel to the Credit Parties, in
the form of Exhibit K and (ii) an opinion of Stoel Rives LLP in form
and substance reasonably satisfactory to the Administrative Agent.
(j) Closing Certificate. The Administrative Agent shall have
received a Closing Certificate of each Credit Party dated the Closing
Date, in substantially the form of Exhibit L, with appropriate inser-
tions and attachments, in form and substance reasonably satisfactory
to the Administrative Agent and its counsel, executed by the Presi-
dent or any Vice President and the Secretary or any Assistant Secre-
tary (or other appropriate officers or representatives) of Borrower
and its Subsidiaries, respectively.
(k) Solvency Certificate. The Administrative Agent shall have
received an Officers' Certificate of Borrower, substantially in the
form of Exhibit O, together with such other evidence reasonably re-
quested by the Lenders, confirming the solvency of Borrower and its
Subsidiaries on a consolidated basis after giving effect to the con-
summation of the Transactions.
(l) Insurance. The Administrative Agent shall have received
(i) a schedule describing all insurance (including but not limited to
business interruption insurance) maintained by Borrower and its Sub-
sidiaries pursuant to subsection 7.5 and (ii) certificates (or other
customary evidence as to the obtaining and maintenance by Borrower of
such insurance at the Closing Date) for each policy set forth on such
schedule insuring against casualty and other customary risks.
(m) Perfection Certificate. The Administrative Agent shall
have received the Perfection Certificate, substantially in the form
of Exhibit M, duly authorized, executed and delivered by Borrower.
(n) Indebtedness. Other than as set forth on Schedule 8.1(a),
after giving effect to the Transactions, on the Closing Date, none of
Borrower or any of its Subsidiaries shall have (i) any issued and
outstanding Preferred Stock or (ii) any Indebtedness for borrowed
money other than (x) under the Credit Documents and (y) under the Ex-
isting Notes.
(o) Material Adverse Change. Since December 31, 2000, there
shall have been no change, event or development (whether or not cov-
ered by insurance) which has had, or would reasonably be expected to
have, individually or in the aggregate, a material adverse effect on
the business, assets, results of operations, properties, condition
(financial or otherwise) or prospects of Borrower and its Subsidiar-
ies, taken as a whole.
(p) Officers' Certificate. The Administrative Agent shall
have received an Officers' Certificate of Borrower, dated the Closing
Date, (i) to the effect set forth in subsections 6.2(a) and (b) and
(ii) to the effect that all conditions precedent to the making of
such initial Loans (except any such condition precedent the satisfac-
tion of which is to be satisfactory to, or subjectively determined
by, the Administrative Agent, the Lead Arranger or any other Agent or
Lender) have been satisfied or waived.
6.2. Conditions to All Loans and Letters of Credit. The obli-
gation of (x) each Lender to make any Loan (other than any Revolving Credit
Loan (i) the proceeds of which are to be used to repay Refunded Swing Line
Loans or (ii) to be made as contemplated by the last two sentences of sub-
section 3.8, which shall be made unless an event of the type described in
paragraph (f) of Section 9 has occurred and is continuing) and (y) the Is-
suing Lender to issue any Letter of Credit, is subject to the satisfaction
of the following conditions precedent on the relevant Borrowing Date:
(a) Representations and Warranties. Each of the representa-
tions and warranties made in or pursuant to Section 5 or which are
contained in any other Credit Document shall be true and correct in
all material respects (or if any representation or warranty is al-
ready qualified by materiality, in all respects) on and as of the
date of such Loan or of the issuance of such Letter of Credit as if
made on and as of such date (unless stated to relate to a specific
earlier date, in which case, such representations and warranties
shall be true and correct in all material respects (or respects, as
aforesaid) as of such earlier date).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such Borrowing Date
or after giving effect to such Loan to be made or such Letter of
Credit to be issued on such Borrowing Date.
Each borrowing by Borrower hereunder and the issuance of each Letter of
Credit by the Issuing Lender hereunder shall constitute a representation
and warranty by Borrower as of the date of such borrowing or issuance that
the conditions in clauses (a) and (b) and of this subsection 6.2 have been
satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
Borrower hereby agrees that, so long as the Commitments remain
in effect, any Loan, Note or L/C Obligation remains outstanding and unpaid,
any amount (unless cash in an amount equal to such amount has been depos-
ited to a cash collateral account established by the Administrative Agent)
remains available to be drawn under any Letter of Credit or any other
amount is owing to any Lender or the Administrative Agent hereunder or un-
der any of the other Credit Documents, it shall, and, in the case of the
agreements contained in subsections 7.3 through 7.6, and 7.8 through 7.11,
Borrower shall cause each of its Subsidiaries (other than Unrestricted Sub-
sidiaries, except as specified below) to:
7.1. Financial Statements. Furnish to the Administrative
Agent (which the Administrative Agent shall promptly furnish to each
Lender):
(a) as soon as available, but in any event within 95 days af-
ter the end of each fiscal year of Borrower to end after the Closing
Date, a copy of the consolidated balance sheet of Borrower and its
consolidated Restricted Subsidiaries and a similar consolidating fi-
nancial statement for Borrower and its Subsidiaries, in each case as
at the end of such fiscal year and the related consolidated state-
ments of stockholders' equity and cash flows and the consolidated
statements of income of Borrower and its Restricted Subsidiaries and
a similar consolidating financial statement for Borrower and its Sub-
sidiaries, in each case for such fiscal year, setting forth in the
case of the consolidated statements of income referred to above in
comparative form the figures for the previous year and, in the case
of the consolidated balance sheet referred to above, reported on,
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, or qualification
which would affect the computation of financial covenants, by inde-
pendent certified public accountants of nationally recognized stand-
ing; and
(b) as soon as available, but in any event not later than 50
days after the end of each of the first three quarterly periods of
each fiscal year of Borrower to end after the Closing Date, the unau-
dited consolidated balance sheet of Borrower and its Restricted Sub-
sidiaries and a similar consolidating financial statement for Bor-
rower and its Subsidiaries, in each case as at the end of each such
quarter and the related unaudited consolidated statements of income
and cash flows of Borrower and its Restricted Subsidiaries and a
similar consolidating financial statement for Borrower and its Sub-
sidiaries, in each case for such quarterly period and the portion of
the fiscal year of Borrower through such date, setting forth in the
case of the consolidated statements of income referred to above in
comparative form the figures for the corresponding quarter in, and
year to date portion of, the previous year, certified by the chief
financial officer, controller or treasurer of Borrower as being
fairly stated in all material respects;
all such financial statements described in this subsection 7.1 to be com-
plete and correct in all material respects (subject, in the case of interim
statements, to normal year-end audit adjustments and the absence of foot-
notes) and to be prepared in reasonable detail and in accordance with GAAP.
7.2. Compliance Certificates; Other Information. Furnish to
the Administrative Agent, which the Administrative Agent shall promptly de-
liver or distribute to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1, a certificate of the chief financial
officer or treasurer of Borrower stating that, to the best of such
officer's knowledge, during such period
(i) no Subsidiary has been formed or acquired (or, if
any such Subsidiary has been formed or acquired, Borrower has
complied with the requirements of subsection 7.9),
(ii) neither Borrower nor any of its Restricted Subsidi-
aries has changed its name or jurisdiction of organization
without complying with the requirements of this Agreement and
the Security Documents with respect thereto,
(iii) each of Borrower and its Restricted Subsidiaries
has observed or performed in all material respects all of the
covenants and other agreements, and satisfied every material
condition, contained in this Agreement, the Notes, the Security
Documents and the other Credit Documents to be observed, per-
formed or satisfied by it, and that such officer has obtained
no knowledge of any Default or Event of Default, in each case,
except as specified in such certificate, and
(iv) showing in detail as of the end of the related ac-
counting period the figures and calculations supporting such
statement in respect of subsection 8.1(d)(iii), subsections
8.3(b) and (c)(ii) and subsections 8.6(f), 8.6(g), 8.6(h), 8.7,
8.9, 8.10, 8.11 and 8.12(c);
(b) promptly upon receipt thereof, copies of all final reports
submitted to Borrower or to any of its Subsidiaries (including Unre-
stricted Subsidiaries) by independent certified public accountants in
connection with each annual, interim or special audit of the books of
Borrower or any of its Subsidiaries (including Unrestricted Subsidi-
aries) made by such accountants, and, upon the request of any Lender
(through the Administrative Agent), any final comment letter submit-
xxx by such accountants to management in connection with their annual
audit;
(c) promptly upon their becoming available, copies of all fi-
nancial statements, reports, notices and proxy statements sent or
made available to the public generally by Borrower or any of its Sub-
sidiaries (including Unrestricted Subsidiaries), if any, and all
regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by Borrower or any of its Sub-
sidiaries (including Unrestricted Subsidiaries) with any securities
exchange or with the SEC or any Governmental Authority succeeding to
any of its functions (excluding in each case any exhibits thereto,
which shall be promptly furnished to the Administrative Agent upon
its request);
(d) promptly, such additional financial and other information
(including in respect of any Unrestricted Subsidiary) as any Lender
may from time to time reasonably request (through the Administrative
Agent); and
(e) furnish to the Administrative Agent as soon as available,
but in any event not later than 50 days after the beginning of each
fiscal year of Borrower to end after the Closing Date to which such
budget relates, a preliminary consolidated operating budget for Bor-
rower and its Restricted Subsidiaries taken as a whole; and as soon
as available, any material revision to or any final revision of any
such preliminary annual operating budget or any such consolidated op-
erating budget.
7.3. Payment of Obligations. Pay, discharge or otherwise sat-
isfy at or before maturity or before they become delinquent, as the case
may be, all its obligations and liabilities of whatever nature, except
(a) when the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of Borrower or any of
its Subsidiaries, as the case may be, (b) for delinquent obligations which
do not have a Material Adverse Effect, (c) for trade payables, accounts
payable and other payables such as accrued revenue sharing payables in the
ordinary course of business which are not overdue for a period of more than
120 days or, if overdue for more than 120 days, as to which the vendor has
consented (whether by written agreement or by implied consent) as to the
extension of terms or a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of Borrower or any of its Sub-
sidiaries, as the case may be, and (d) in the event any failure to dis-
charge or otherwise satisfy any such obligation or liability results in the
incurrence of a Lien against any of the collateral, such Lien and the con-
test thereof shall satisfy the Contested Collateral Lien Conditions. This
covenant applies to Unrestricted Subsidiaries.
7.4. Conduct of Business and Maintenance of Existence. Except
as disclosed in Schedules 5.3 and 5.16 and as otherwise permitted by sub-
sections 8.4 and 8.5, preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all material
rights, material privileges, franchises, copyrights, patents, trademarks
and trade names necessary or desirable in the normal conduct of its busi-
ness except for rights, privileges, franchises, copyrights, patents, trade-
marks and trade names the loss of which would not, in the aggregate, have a
Material Adverse Effect; and comply with all applicable Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect.
7.5. Maintenance of Property; Insurance. (a) Keep all prop-
erty and assets useful and necessary in its business in good working order
and condition (ordinary wear and tear excepted);
(b) Subject to the other provisions of this subsection 7.5,
maintain with financially sound and reputable insurance companies insurance
on all its property and assets in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks
(but including, in any event, general liability and property insurance (in-
cluding business interruption) and such other insurance against such risks
as the Administrative Agent may from time to time reasonably require) as
are usually insured against in the same general area by, companies engaged
in the same or a similar business, and furnish to each Lender, upon written
request of any Lender (made through the Administrative Agent), full infor-
mation as to the insurance carried;
(c) Each insurance policy described in subsection 7.5(b) shall
provide that (i) it may not be materially modified, reduced, cancelled or
otherwise terminated without at least thirty (30) days' prior written no-
xxxx to the Administrative Agent; (ii) the Administrative Agent is permit-
xxx to pay any premium therefor within thirty (30) days after receipt of
any notice stating that such premium has not been paid when due; (iii) to
the extent such insurance policy constitutes property insurance, the Admin-
istrative Agent shall be named as loss payee, pursuant to a standard non-
contributory New York mortgagee endorsement and shall be in an amount at
least sufficient to prevent coinsurance liability; and (v) with respect to
liability insurance, the Administrative Agent shall be named as an addi-
tional insured;
(d) At least five (5) Business Days prior to the expiration
of any insurance policy or policies required by this subsection 7.5, the
applicable Credit Party shall deliver to the Administrative Agent such in-
surance policy or policies renewing or extending such expiring insurance
policy or policies, renewal or extension insurance certificates or other
reasonable evidence of renewal or extension providing that such insurance
policy or policies are in full force and effect, in each case, as shall be
reasonably satisfactory to the Administrative Agent;
(e) No Credit Party will purchase separate insurance policies
concurrent in form or contributing in the event of loss with the insurance
policies described in subsection 7.5(b), unless the Administrative Agent is
included thereon as an additional insured or, if applicable, as a loss
payee. The applicable Credit Party will promptly notify the Administrative
Agent whenever any such separate insurance policy is obtained and shall
promptly deliver to the Administrative Agent the insurance policy or insur-
ance certificate evidencing such insurance, in each case as shall be rea-
sonably satisfactory to the Administrative Agent; and
(f) In the event that the proceeds of any insurance claim are
paid after the Administrative Agent has exercised its right to foreclose
after an Event of Default such proceeds shall be paid to the Administrative
Agent to satisfy any deficiency remaining after such foreclosure.
7.6. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct en-
tries are made of all dealings and transactions in relation to its business
and activities which permit financial statements to be prepared in confor-
mity with GAAP and all Requirements of Law; and permit representatives of
the Administrative Agent or any Lender upon reasonable notice (made through
the Administration Agent and no more frequently than quarterly unless a De-
fault or Event of Default shall have occurred and be continuing) to visit
and inspect any of its properties or assets and examine and make abstracts
from any of its books and records at any reasonable time and upon reason-
able notice, and to discuss the business, operations, assets and financial
and other condition of Borrower and its Subsidiaries with officers and em-
ployees thereof and with their independent certified public accountants
with prior reasonable notice to, and coordination with, the chief financial
officer or the treasurer of Borrower.
7.7. Notices. Promptly give notice to the Administrative
Agent (to be distributed by the Administrative Agent to the Lenders):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instru-
ment or other agreement, guarantee or collateral document of Borrower
or any of its Subsidiaries (including Unrestricted Subsidiaries)
which default or event of default has not been waived and would have
a Material Adverse Effect, or (ii) litigation, investigation or pro-
ceeding which may exist at any time between Borrower or any of its
Subsidiaries (including Unrestricted Subsidiaries) and any Governmen-
tal Authority, or receipt of any notice of any environmental claim or
assessment against Borrower or any of its Subsidiaries (including Un-
restricted Subsidiaries) by Governmental Authority, which in any such
case would have a Material Adverse Effect;
(c) of any litigation or proceeding against or insolvency of
Borrower or any of its Subsidiaries (including Unrestricted Subsidi-
aries) (i) in which more than $5,000,000 of the amount claimed is not
covered by insurance, (ii) in which injunctive or similar relief is
sought which if obtained would have a Material Adverse Effect;
(d) promptly, upon the occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred,
could reasonably be expected to result in liability of Borrower or
any of its Subsidiaries (including Unrestricted Subsidiaries) in an
aggregate amount exceeding $5,000,000, a written notice specifying
the nature thereof, what action the Borrower, its Subsidiaries or
other ERISA Entity have taken, are taking or propose to take with re-
spect thereto, and, when known, any action taken or threatened by the
Internal Revenue Service, Department of Labor, PBGC or Multiemployer
Plan sponsor with respect thereto;
(e) upon request by the Administrative Agent, copies of:
(i) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by any ERISA Entity with the Internal Reve-
nue Service with respect to each Pension Plan; (ii) the most recent
actuarial valuation report for each Pension Plan; (iii) all notices
received by any ERISA Entity from a Multiemployer Plan sponsor or any
governmental agency concerning an ERISA Event; and (iv) such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as the Administrative Agent shall reasonably request;
(f) of a Material Adverse Effect known to Borrower or any of
its Subsidiaries (including Unrestricted Subsidiaries); and
(g) of the creation, formation or acquisition of, or material
Investment in, any Unrestricted Subsidiary.
Each notice pursuant to this subsection 7.7 shall be accompanied by a
statement of a Responsible Officer of Borrower setting forth in reasonable
detail the occurrence referred to therein and (in the cases of clauses
(a) through (d)) stating what action (if any) Borrower proposes to take
with respect thereto. It is understood that, in an effort to comply with
its covenants hereunder, Borrower may from time to time deliver notices of
events (including events of the types described above) to the Administra-
tive Agent and/or the Lenders, and that the notification of any event or
events shall not constitute an admission or determination by Borrower that
the event or events covered by such notice have resulted or will result in
a Material Adverse Effect.
7.8. Environmental Laws. (a) Except where non-compliance
would not reasonably be expected to result in a Material Adverse Effect
(i) comply with all Environmental Laws applicable to it, and obtain, comply
with and maintain any and all Environmental Permits necessary for its op-
erations as conducted and as planned; and (ii) use reasonable efforts to
cause all of its tenants, subtenants, contractors, subcontractors, and in-
vitees to comply with all Environmental Laws, and obtain, comply with and
maintain any and all Environmental Permits, applicable to any of them.
This covenant applies to Unrestricted Subsidiaries.
(b) Comply with all orders and lawful directives regarding En-
vironmental Laws issued to Borrower or any of its Subsidiaries by any Gov-
ernmental Authority, other than such orders and lawful directives (x) as to
which an appeal or other challenge has been timely and properly taken in
good faith or (y) which would not reasonably be expected to give rise to a
Material Adverse Effect. This covenant applies to Unrestricted Subsidiar-
ies.
7.9. Additional Collateral and Guarantees. (a) Subject to
subsection 7.9(d), with respect to any assets acquired after the Closing
Date by Borrower or any of its Restricted Subsidiaries that are intended to
be subject to the Lien created by any of the Security Documents but which
are not so subject (but in any event excluding any assets described in
paragraph (b) of this subsection promptly (and in any event within 45 days
after the acquisition thereof)): (x) execute and deliver to the Adminis-
trative Agent such amendments or supplements to the relevant Security Docu-
ments or such other documents as the Administrative Agent shall deem neces-
sary or advisable to grant to the Administrative Agent, for its benefit and
for the benefit of the other Secured Parties, a Lien on such properties or
assets subject to no Liens other than Permitted Liens, and (y) take all ac-
tions necessary to cause such Lien to be duly perfected to the extent re-
quired by such Security Document in accordance with all applicable Require-
ments of Law, including, without limitation, the filing of financing state-
ments in such jurisdictions as may be reasonably requested by the Adminis-
trative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Administrative Agent such documents as the Adminis-
trative Agent shall require to confirm the validity, perfection and prior-
ity of the Lien of Security Documents against such after-acquired proper-
ties or assets.
(b) With respect to any Person that is or becomes a wholly
owned Subsidiary (other than (A) any Foreign Subsidiary that is not a di-
rect Subsidiary of a Credit Party and (B) any Unrestricted Subsidiary that
is not a direct Subsidiary of a Credit Party) that has assets having either
book value or fair market value in excess of $2,000,000, promptly (and in
any event within 45 days after such Person becomes a Subsidiary or has such
assets) (i) deliver to the Administrative Agent the certificates represent-
ing the Capital Stock of such Subsidiary (provided that with respect to any
Foreign Subsidiary of the Borrower, in no event shall more than 65% of the
Capital Stock of any Foreign Subsidiary be subject to any Lien or pledged
under any Credit Document), together with undated stock powers executed and
delivered in blank by a duly authorized officer of Borrower or such Sub-
sidiary, as the case may be, and all intercompany notes owing from such
Subsidiary to any Credit Party, and (ii) cause such new Subsidiary (other
than any Foreign Subsidiary and other than any Unrestricted Subsidiary)
(x) to become a party to the Subsidiary Guarantee and the Collateral Agree-
ment or such comparable documentation which is in form and substance rea-
sonably satisfactory to the Administrative Agent, and (y) to take all ac-
tions necessary or advisable to cause the Lien created by the Collateral
Agreement to be duly perfected to the extent required by such agreement in
accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may
be reasonably requested by the Administrative Agent.
(c) If at any time any two or more wholly-owned Subsidiaries
in the aggregate not otherwise subject to subsection 7.9(b) have assets
having either a book value or fair market value in excess of $10,000,000,
then Borrower shall, and shall cause one or more of such Subsidiaries to,
comply with subsection 7.9(b) within the time frames set forth in such sub-
section so that no two or more such Subsidiaries hold assets having either
a book value or fair market value in excess of $10,000,000.
(d) Upon the written request of the Administrative Agent, Bor-
rower will, and will cause its wholly owned Restricted Subsidiaries to,
promptly grant to the Administrative Agent, within 60 days of such request,
security interests and Mortgages in such owned Real Property of Borrower
and its wholly owned Restricted Subsidiaries that, together with any im-
provements thereon, individually have a fair market value of at least
$5,000,000, as additional security for the Obligations (unless the subject
property is already mortgaged to a third party to the extent permitted by
subsection 8.2). In connection with any Mortgage required pursuant to this
subsection 7.9(d), the Administrative Agent shall have received within 60
days of the written request of the Administrative Agent (i) a Mortgage in
form and substance reasonably satisfactory to the Administrative Agent,
executed and delivered by a duly authorized officer of the appropriate
Credit Party, together with such certificates, affidavits, questionnaires,
instruments or returns as shall be required in connection with filing or
recordation thereof and to grant a perfected Lien on such Mortgaged Prop-
erty, (ii) such UCC-1 Financing Statements and other similar statements as
are contemplated by such Mortgage, (iii) policies or certificates of insur-
ance as required by the Mortgage relating thereto, which policies or cer-
tificates shall comply with the insurance requirements contained in subsec-
tion 7.5, (iv) evidence reasonably acceptable to the Administrative Agent
of payment by Borrower of all mortgage recording taxes, fees, charges,
costs and expenses required for the recording of such Mortgage, (v) a
Lender's title policy with respect to each such Mortgage paid for by Bor-
rower, issued by Title Company, together with such endorsements (including,
without limitation, "tie-in" or "cluster," first loss, last dollar, usury,
contiguity, revolving credit, doing business, non-imputation, public road
access, survey, variable rate, zoning (provided that with respect to zon-
ing, Borrower may, in lieu of such endorsement, deliver a zoning compliance
letter prepared by the appropriate Governmental Authority or a zoning and
site requirement summary report prepared by the Planning and Zoning Re-
source Corporation or other similar service reasonably acceptable to the
Administrative Agent) and so-called comprehensive coverage over covenants
and restrictions), coinsurance and reinsurance as may be reasonably re-
quested by the Administrative Agent, in form and substance reasonably ac-
ceptable to the Administrative Agent, insuring the Mortgage as a first Lien
on the relevant Mortgaged Property and subject only to Permitted Encum-
brances and such other Liens expressly agreed to by the Administrative
Agent, (vi) such consents, approvals, estoppels, tenant subordination
agreements or other instruments as shall be necessary or appropriate in the
reasonable judgment of the Administrative Agent in order for the owner or
holder of the Fee Property constituting such Mortgaged Property to grant
the Lien contemplated by the Mortgage with respect to such Mortgaged Prop-
erty and (vii) a Survey with respect to such Mortgaged Property. The Mort-
gages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish, per-
fect, preserve and protect the Liens in favor of the Administrative Agent
required to be granted pursuant to the Mortgages.
7.10. Post-Closing Collateral Matters; Control Agreements.
(a) Execute and deliver the documents and complete the tasks set forth on
Schedule 7.10, in each case within the time limits and in the manner speci-
fied on such schedule; and
(b) Each Credit Party hereby agrees that it shall within
ninety (90) days after the Closing Date enter into a duly authorized, exe-
cuted and delivered Control Agreement with respect to each Deposit Account,
Securities Account or Commodity Account listed in Schedule X-2 to the Col-
lateral Agreement and the Collateral Account.
7.11. Compliance with Law. Conduct its business and affairs
in compliance with all Laws applicable thereto except to the extent failure
to do so would not, in the aggregate, have a Material Adverse Effect.
7.12. Security Interests; Further Assurances. Promptly, upon
the reasonable request of Administrative Agent or any Lender, at Borrower's
expense, execute, acknowledge and deliver, or cause the execution, acknowl-
edgment and delivery of, and thereafter register, file or record, or cause
to be registered, filed or recorded, in an appropriate governmental office,
any document or instrument supplemental to or confirmatory of the Security
Documents or otherwise deemed by Administrative Agent reasonably necessary
or desirable for the continued validity, perfection and priority of the
Liens on the Collateral covered thereby superior to and prior to the rights
of all third Persons other than the holders of Permitted Liens and subject
to other Liens except as permitted by the Security Documents, or obtain any
consents. Deliver or cause to be delivered to Administrative Agent from
time to time such other documentation, consents, authorizations, approvals
and orders in form and substance reasonably satisfactory to Administrative
Agent as Administrative Agent shall reasonably deem necessary to perfect or
maintain the Liens on the Collateral pursuant to the Security Documents.
Upon the exercise by Administrative Agent or the Lenders of any power,
right, privilege or remedy pursuant to any Credit Document which requires
any consent, approval, registration, qualification or authorization of any
Governmental Authority execute and deliver all applications, certifica-
tions, instruments and other documents and papers that Administrative Agent
or the Lenders may be so required to obtain. If Administrative Agent or
the Required Lenders determine that they are required by law or regulation
to have appraisals prepared in respect of the Real Property of any Credit
Party constituting Collateral, Borrower shall provide to Administrative
Agent appraisals that satisfy the applicable requirements of the Real Es-
xxxx Appraisal Reform Amendments of FIRREA and are in form and substance
satisfactory to Administrative Agent.
7.13. Unrestricted Subsidiary Financial Statements. All fi-
nancial statements of each Unrestricted Subsidiary distributed to any
creditor of an Unrestricted Subsidiary shall clearly state the separateness
of such Unrestricted Subsidiary from the Credit Parties.
SECTION 8. NEGATIVE COVENANTS
Borrower hereby agrees that it shall not, and it shall not per-
mit any of its Subsidiaries (other than any Unrestricted Subsidiaries, ex-
cept as expressly specified below) to, directly or indirectly, so long as
the Commitments remain in effect or any Loan, Note or L/C Obligation re-
mains outstanding and unpaid, any amount remains available to be drawn un-
der any Letter of Credit (unless cash in an amount equal to such amount has
been deposited to a cash collateral account established by the Administra-
tive Agent) or any other amount is owing to any Lender or the Administra-
tive Agent hereunder or under any other Credit Document (it being under-
stood that each of the permitted exceptions to each of the covenants in
this Section 8 is in addition to, and not overlapping with, any other of
such permitted exceptions except to the extent expressly provided):
8.1. Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and dis-
closed in Schedule 8.1(a) and the Refinancing of any such Indebted-
ness on terms and conditions taken as a whole materially no less fa-
vorable to Borrower and its Restricted Subsidiaries or the Lenders
than the Indebtedness being Refinanced (except that the interest rate
and fees payable on any refinanced debt need only be on market terms
and provided that Indebtedness which Refinances Subordinated Indebt-
edness must be Subordinated Indebtedness);
(b) Indebtedness consisting of the Loans and in connection
with the Letters of Credit and this Agreement;
(c) Contingent Obligations, including Interest Rate Agree-
ments, permitted by subsection 8.3;
(d) Indebtedness
(i) of Borrower to any Subsidiary, and
(ii) of any Qualified Subsidiary to Borrower or to any
other Subsidiary, and
(iii) of any Foreign Subsidiary or any non-Qualified Sub-
sidiary to Borrower or any other Subsidiary in an aggregate
principal amount at any time outstanding not to exceed in the
aggregate for all Foreign Subsidiaries and non-Qualified Sub-
sidiaries $2,000,000 (plus the sum of any amounts dividended or
distributed by any Foreign Subsidiary or non-Qualified Subsidi-
ary to Borrower or any Qualified Subsidiary), minus the sum of
(x) the amount of any guarantees of obligations of Foreign Sub-
sidiaries or Non-Qualified Subsidiaries pursuant to subsection
8.3(c)(ii) and (y) the amount of other Investments made in For-
eign Subsidiaries or non-Qualified Subsidiaries pursuant to
subsection 8.6(b)(iii);
(e) other Indebtedness of Borrower and its Subsidiaries in an
aggregate principal amount at any one time outstanding not in excess
of $10,000,000;
(f) Indebtedness of Borrower and its Subsidiaries in respect
of Capital Lease Obligations to the extent subsection 8.9 would not
be contravened thereby;
(g) Indebtedness
(i) of Borrower or any of its Subsidiaries assumed in
connection with acquisitions permitted by subsection 8.6(g) (so
long as such Indebtedness was not incurred in anticipation of
such acquisition);
(ii) of newly acquired Subsidiaries of Borrower acquired
in such acquisitions (so long as such Indebtedness was not in-
curred in anticipation of such acquisition), and
(iii) of Borrower or any of its Subsidiaries owed to the
seller in any acquisition permitted by subsection
8.6(g) constituting part of the purchase price thereof,
all of which Indebtedness permitted by this subsection 8.1(g) shall
not exceed in the aggregate at any one time $10,000,000 outstanding,
and Refinancings of Indebtedness permitted under this subsection
8.1(g);
(h) Indebtedness in connection with surety bonds, letters of
credit and performance bonds obtained in connection with workers'
compensation obligations of Borrower and its Restricted Subsidiaries;
(i) Indebtedness of Foreign Subsidiaries in an aggregate prin-
cipal amount at any time outstanding not in excess of the equivalent
at the date of each incurrence thereof of $2,000,000;
(j) Indebtedness of Borrower and its Subsidiaries for indus-
trial revenue bonds or other similar governmental and municipal bonds
for the deferred purchase price of newly acquired property and to fi-
xxxxx equipment of Borrower and its Restricted Subsidiaries (pursuant
to purchase money mortgages or otherwise and whether owed to the
seller or a third party) used in the ordinary course of business
(provided that such financing is entered into within 180 days of the
acquisition of such property) of Borrower and its Subsidiaries in an
amount (based on the remaining balance of the obligations therefor on
the books of Borrower and its Subsidiaries) which shall not exceed
$5,000,000 in the aggregate at any one time outstanding, and Refi-
nancings of Indebtedness permitted under this subsection 8.1(j);
(k) Subordinated Indebtedness in an aggregate principal amount
not to exceed $350,000,000 minus the aggregate principal amount of
Indebtedness issued in connection with the Notes Refinancing; and
(l) Indebtedness of Borrower in connection with the financing
of Borrower's business insurance premiums, in an aggregate principal
amount at any one time not to exceed $3,000,000.
Borrower shall not designate, or permit or suffer to exist the
designation of, any Indebtedness or other obligation, other than the Obli-
gations, as "Designated Senior Indebtedness," as such term may be defined
in the Existing Notes or the Existing Indenture, or effect or permit or
suffer to exist any comparable designation that confers upon the holders of
such Indebtedness or other obligation (or any Person acting on their be-
half) the right to initiate payment blockage periods under the Existing
Notes or the Existing Indenture.
8.2. Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets, income or profits, whether
now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges
not yet delinquent or which are being contested in good faith and by
appropriate proceedings if (i) adequate reserves with respect thereto
are maintained on the books of Borrower or the relevant Subsidiary,
as the case may be, in accordance with GAAP and (ii) in the case of
any such charge which has or may become a Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Con-
tested Collateral Lien Conditions;
(b) carriers', warehousemen's, mechanics', landlords', xxxxxx-
xxxxx'x, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations which are not yet xxxxx-
xxxxx or which are bonded or which are being contested in good faith
and by appropriate proceedings if (i) adequate reserves with respect
thereto are maintained on the books of Borrower or the relevant Sub-
sidiary, as the case may be, in accordance with GAAP and (ii) in the
case of any such Lien against any of the Collateral, such Lien and
the contest thereof shall satisfy the Contested Collateral Lien Con-
ditions;
(c) pledges or deposits made in the ordinary course of busi-
ness in connection with workers' compensation, unemployment insurance
and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade
or government contracts, leases, licenses, statutory obligations,
surety and appeal bonds, performance bonds, obligations to utilities
for services provided in the ordinary course of business and other
obligations of a like nature (in each case, other than for borrowed
money) incurred in the ordinary course of business for amounts not
yet delinquent or, to the extent such amounts are so delinquent, such
amounts are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted if (i) adequate reserves
with respect thereto are maintained on the books of Borrower or the
relevant Subsidiary, as the case may be, in accordance with GAAP and
(ii) in the case of any such Lien against any of the Collateral such
Lien and the contest thereof shall satisfy the Contested Collateral
Lien Conditions;
(e) easements (including, without limitation, reciprocal ease-
ment agreements), rights-of-way, building, zoning and similar re-
strictions, utility agreements, covenants, reservations, restric-
tions, minor encroachments, and other similar minor encumbrances de-
fects or irregularities in title which do not, individually or in the
aggregate materially detract from the value of the Real Property to
which it relates or, individually or in the aggregate, materially in-
terfere with or adversely affect in any material respect the ordinary
conduct of the business of Borrower and its Subsidiaries on the Real
Property subject thereto;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents, including Liens pursuant to the
Credit Documents in respect of Interest Rate Agreements, and bankers'
liens arising by operation of law relating thereto;
(g) Liens on property of Borrower or any of its Subsidiaries
created solely for the purpose of securing
(i) Indebtedness permitted by subsection 8.1(g);
(ii) Indebtedness permitted by subsection 8.1(i);
(iii) Indebtedness permitted by subsection 8.1(j);
(iv) any Capital Lease Obligation permitted pursuant to
subsection 8.1(f), as long as such Liens do not extend to or
cover assets of Borrower or its Subsidiaries other than the as-
sets subject to such Capital Lease Obligation;
(v) purchase money indebtedness or floorplan financing
obligations that are incurred in connection with the acquisi-
tion of Rental Items and game products for resale, as long as
Liens are limited to the Rental Items and game products so ac-
quired and do not extend to or cover other property of Borrower
or its Subsidiaries; and
(vi) Liens on unearned insurance premiums to the extent
permitted by subsection 8.1(l);
provided that no such Lien incurred in connection with Indebtedness
pursuant to subsection 8.1(g) or 8.1(j) and any refinancing
thereof shall extend to or cover other property of Borrower or such
Subsidiary other than the respective property so acquired, and the
principal amount of Indebtedness secured by any such Lien shall at no
time exceed the original purchase price payable by Borrower or such
Subsidiary to acquire such property;
(h) Liens existing on the Closing Date after giving effect to
the consummation of the Transactions and described in subsection 5.13
or Schedule 8.2(h) and any refinancing thereof; provided that no such
Lien shall extend to or cover other assets or property of Borrower or
its Restricted Subsidiaries other than the respective assets or prop-
erty encumbered by such Lien on the Closing Date;
(i) Liens on documents of title and the property covered
thereby securing Indebtedness in respect of the Commercial L/Cs or
other commercial letters of credit;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matter of record that have been placed by
any developer, landlord or other third party on property over which
Borrower or any of its Subsidiaries has easement rights or on any
Leased Property and subordination or similar agreements relating
thereto and (ii) any condemnation or eminent domain proceedings af-
fecting any real property;
(k) leases or subleases or licenses or sublicenses with re-
spect to the assets or properties of Borrower or any of its Subsidi-
aries, in each case, entered into in the ordinary course of Bor-
rower's or such Subsidiary's business so long as such leases or sub-
leases (i) are subordinate in all respects to the Liens granted and
evidenced by the Security Documents and, in the case of any lease or
sublease affecting any Mortgaged Property, such lease or sublease
shall also be entered into in compliance with the provisions of the
applicable Mortgage and (ii) do not, individually or in the aggre-
gate, (A) interfere in any material respect with the ordinary conduct
of the business of Borrower or any of its Subsidiaries or
(B) materially impair the use (for its intended purposes) or the
value of the assets or property subject thereto;
(l) Liens on goods (and proceeds thereof) financed with draw-
ings under commercial letters of credit securing reimbursement obli-
gations in respect of such commercial letters of credit issued in ac-
cordance with the terms of this Agreement;
(m) [Reserved];
(n) Liens in respect of judgment or awards for which appeals
or proceedings for review are being prosecuted and in respect of
which a stay of execution upon any such appeal or proceeding for re-
view shall have been secured, provided that (i) Borrower shall have
established adequate reserves for such judgment or awards, (ii) such
judgment or awards shall be fully insured and the insurer shall not
have denied coverage or (iii) such judgment or awards shall have been
bonded to the satisfaction of the Required Lenders;
(o) Liens arising from UCC financing statement filings regard-
ing operating leases entered into by Borrower and its Restricted Sub-
sidiaries in the ordinary course of business;
(p) Liens arising from licenses of personal property which do
not materially interfere with the ordinary conduct of the business of
Borrower or any of its Restricted Subsidiaries;
(q) Liens consisting of rights of set-off of a customary na-
ture or bankers' liens on amount of deposit, whether arising by con-
tract or operation of law, incurred in the ordinary course of busi-
ness so long as such deposits are not intended as collateral for any
obligation;
(r) Liens granted in favor of a Lender (or any Person who, at
the date of entering into such agreement with Borrower, was an Af-
filiate of a Lender) to secure Obligations of Borrower and its Sub-
sidiaries in respect of Interest Rate Agreements otherwise permitted
under this Agreement;
(s) other Liens securing Indebtedness in an aggregate princi-
pal amount not to exceed $2,500,000; and
(t) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes, assess-
ments or governmental charges or levies being contested in good faith
and by appropriate proceedings, in each case for which adequate re-
serves have been established in accordance with GAAP in the United
States (or the equivalent thereof in any country in which a Foreign
Subsidiary is doing business).
8.3. Limitation on Contingent Obligations. Create, incur, as-
sume or suffer to exist any Contingent Obligation, except:
(a) the Guarantees;
(b) other guarantees by Borrower or any Restricted Subsidiary
incurred in the ordinary course of business for an aggregate amount
at any time outstanding not to exceed $2,000,000;
(c) guarantees by Borrower or any Subsidiary
(i) of obligations of Domestic Restricted Subsidiaries
or Borrower; and
(ii) of obligations of Foreign Restricted Subsidiaries
of Borrower in an aggregate principal amount not to exceed
$2,000,000 (plus the sum of any amounts dividended or distrib-
uted by such Foreign Subsidiaries to Borrower or any Qualified
Subsidiary), minus the sum of (A) the amount outstanding pursu-
ant to subsection 8.1(d)(iii) and (B) the amount of Investments
made in Foreign Subsidiaries or non-Qualified Subsidiaries pur-
suant to subsection 8.6(b)(iii);
provided that, in each case, if the primary obligation being xxxxxx-
xxxx is subordinated to the Loans, such guarantees are subordinated
to the Guarantees on substantially the same basis as such primary ob-
ligation is subordinated to the Loans;
(d) Contingent Obligations existing on the Closing Date and
described in Schedule 8.3(d) and Contingent Obligations relating to
any Indebtedness permitted under subsection 8.1(a);
(e) guarantees of obligations to third parties in connection
with relocation of employees of Borrower or any of its Restricted
Subsidiaries, in an amount which, together with all loans and ad-
vances made pursuant to subsection 8.6(f), shall not exceed
$5,000,000 at any time outstanding;
(f) Contingent Obligations in connection with workers' compen-
sation obligations, and in connection with performance, surety and
appeal bonds, and similar obligations incurred in the ordinary course
of business, of Borrower and its Restricted Subsidiaries;
(g) endorsements for collection in the ordinary course of busi-
ness;
(h) Interest Rate Agreements permitted by subsection 8.8;
(i) surety instruments entered into in the ordinary course of
business; and
(j) contingent obligations in respect of permitted Capital Lease
Obligations.
8.4. Prohibition of Fundamental Changes. Enter into any
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), except:
(a) for the transactions otherwise permitted pursuant to para-
graph (b), (g), (h), (i) or (l) of subsection 8.5 or pursuant to sub-
section 8.6,
(b) any Subsidiary may be merged with and into Borrower or a
Qualified Subsidiary,
(c) Subsidiaries with a net book value not greater than
$1,000,000 may be dissolved, and
(d) any Foreign Subsidiary may be merged with and into Bor-
rower or a Subsidiary of Borrower;
provided that in connection with any of the foregoing, the appropriate
Credit Parties shall take all actions necessary or reasonably requested by
the Administrative Agent to maintain the perfection or perfect, as the case
may be, protect and preserve the Liens on the Collateral granted to the Ad-
ministrative Agent pursuant to the Security Documents and otherwise comply
with the provisions of subsection 7.9 to the extent applicable.
8.5. Prohibition on Sale of Assets. Convey, sell, lease
(other than a sublease of real property), assign, transfer or otherwise
dispose of (including through a transaction of merger or consolidation of
any Subsidiary) any of its property, business or assets (including, without
limitation, accounts receivable but excluding leasehold interests), whether
now owned or hereafter acquired, except:
(a) sales or other dispositions of inventory (including Rental
Items) in the ordinary course of business;
(b) that Borrower or any Subsidiary of Borrower may sell,
lease, transfer, or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to Borrower or a Qualified
Subsidiary (or, in the case of any Foreign Subsidiary of Borrower, to
Borrower or any Restricted Subsidiary of Borrower), and Borrower or
any Subsidiary of Borrower may sell or otherwise dispose of, or part
with control of any or all of, the Capital Stock of any Subsidiary to
Borrower or a Qualified Subsidiary (or, if the Capital Stock of a
Foreign Subsidiary, to Borrower or any Restricted Subsidiary of Bor-
rower); provided that (i) Borrower shall not, directly or indirectly,
transfer any substantial part of its assets pursuant to this para-
graph and (ii) all actions necessary or reasonably requested by the
Administrative Agent shall be taken by the appropriate Credit Parties
to maintain the perfection or perfect, as the case may be, protect
and preserve the Liens on the Collateral granted to the Administra-
tive Agent pursuant to the Security Documents;
(c) leases of Fee Properties and other real property owned in
fee and subleases of Leased Property; provided that in the case of
any lease of Mortgaged Property, such lease shall be subject to the
provisions of the applicable Mortgage;
(d) any Taking or Destruction affecting any property or assets
subject, however, to the proviso set forth in clause (b) of the defi-
nition of Net Proceeds and provided that the cash proceeds thereof
shall be deposited in the Collateral Account so long as any Default
or Event of Default is in existence;
(e) substantially like-kind exchanges of real property or
equipment; provided that only any cash in excess of $1,000,000 re-
ceived by Borrower or any Subsidiary of Borrower in connection with
such an exchange (net of all costs and expenses incurred in connec-
tion with such transaction or with the commencement of operation of
real property or equipment received in such exchange and net of any
other amounts described in clauses (w) through (z) of the definition
of Net Proceeds) shall be deemed to be Net Proceeds and shall be ap-
plied in accordance with subsection 4.4(b)(iv) and, to the extent the
real property or equipment subject to such exchange constituted Col-
lateral under the Security Documents, then the property exchanged
therefor shall be mortgaged or pledged contemporaneously with such
exchange, as the case may be, for the benefit of the Secured Parties
in accordance with subsection 7.9;
(f) the sale or other disposition of any property or assets
(other than Mortgaged Property) that, in the reasonable judgment of
Borrower has become uneconomic, obsolete or worn out or, after rea-
sonable diligence on the part of Borrower or any Subsidiary of Bor-
rower, uncollectable and which is sold or disposed of in the ordinary
course of business; provided that, to the extent such properties or
assets constituted Collateral, the net proceeds thereof shall be re-
invested in properties or assets owned (or to be owned) by Borrower
or its Restricted Subsidiaries having a fair market value at least
equal to the amount of such net proceeds and any property or assets
purchased with such net proceeds shall be mortgaged or pledged, as
the case may be, to the Administrative Agent, for its benefit and for
the benefit of the other Secured Parties, in accordance with subsec-
tion 7.9;
(g) so long as no Default or Event of Default then exists or
would arise therefrom, the sale or other disposition of any property
or assets the aggregate amount of the net proceeds received in re-
spect of which shall not exceed $5,000,000 in any fiscal year;
(h) any sale or disposition of any interest in property or as-
sets; provided that (i) so long as no Event of Default then exists,
the net proceeds of any such sale shall constitute Net Proceeds only
to the extent such net proceeds are not reinvested in properties or
assets owned (or to be owned) by Borrower or its Restricted Subsidi-
aries having a fair market value at least equal to the amount of such
net proceeds within twelve months from the date of such sale, (ii)
any property purchased with the net proceeds thereof shall be mort-
gaged or pledged, as the case may be, to the Administrative Agent,
for its benefit and for the benefit of the other Secured Parties in
accordance with subsection 7.9, (iii) the aggregate outstanding
amount of net proceeds held by Borrower and its Subsidiaries at any
time for reinvestment in respect of any property sold pursuant to
this paragraph shall not exceed $10,000,000 and (iv) the Net Proceeds
therefrom shall be deposited in the Collateral Account so long as any
Default or Event of Default is in existence;
(i) Subsidiaries may (x) be dissolved in accordance with sub-
section 8.4 and (y) pay dividends in accordance with subsection 8.12;
(j) Investments permitted by subsection 8.6;
(k) licenses or sublicenses by Borrower or any of its Subsidi-
aries of software, Intellectual Property and general intangible and
leases, licenses or subleases of other property in the ordinary
course of business and which do not materially interfere with the
business of Borrower or any of its Subsidiaries; and
(l) any disposition or dispositions (in an aggregate amount
not to exceed $25,000,000 during the term of this Agreement) in con-
nection with a Sale and Leaseback Transaction; provided that (i) so
long as no Event of Default then exists, the net proceeds of any such
Sale and Leaseback Transaction shall constitute Net Proceeds only to
the extent such net proceeds are not reinvested in properties or as-
sets owned (or to be owned) by Borrower or its Restricted Subsidiar-
ies having a fair market value at least equal to the amount of such
net proceeds within twelve months from the date of such sale, (ii)
any property purchased with the net proceeds thereof shall be mort-
gaged or pledged, as the case may be, to the Administrative Agent,
for its benefit and for the benefit of the other Secured Parties in
accordance with subsection 7.9 and (iii) the Net Proceeds therefrom
shall be deposited in the Collateral Account so long as any Default
or Event of Default is in existence.
8.6. Limitation on Investments. Make any Investment in (in-
cluding, without limitation, any acquisition of all or any substantial por-
tion of the assets, and any acquisition of a business or a product line, of
other companies, other than the acquisition of inventory in the ordinary
course of business), any Person (except to the extent permitted by subsec-
tion 8.3 or 8.4 or 8.7), except:
(a) loans, advances or Indebtedness permitted by subsections
8.1(c) and 8.1(d);
(b) Investments
(i) by any Subsidiary in Borrower; and
(ii) by Borrower or by any Subsidiary in any Qualified
Subsidiary (including to create or acquire any Qualified Sub-
sidiary); provided that, in any such case, the requirements of
subsection 7.9 are satisfied; and
(iii) by Borrower or by any Subsidiary in any Foreign Re-
stricted Subsidiary (including to create any Foreign Restricted
Subsidiary); provided that (x) the requirements, if any, of
subsection 7.9 are satisfied and (y) the aggregate amount of
all investments in such Foreign Subsidiaries shall not exceed
(I) $2,000,000 (plus the sum of any amounts dividended or dis-
tributed by such Foreign Subsidiaries to Borrower or any Quali-
fied Subsidiary), minus (II) the sum of (x) the amount of any
guarantees of Obligations of Foreign Subsidiaries pursuant to
subsection 8.3(c)(ii) and (y) the amount of any Indebtedness of
any Foreign Subsidiary at any such time outstanding in accor-
dance with subsection 8.1(d)(iii);
(c) Borrower and its Subsidiaries may invest in, acquire and
hold Cash Equivalents;
(d) Borrower and its Subsidiaries may make payroll advances in
the ordinary course of business;
(e) Borrower and its Subsidiaries may acquire and hold receiv-
xxxxx or notes owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms or acquired as consideration for any asset sale
permitted under subsection 8.5; provided that nothing in this clause
(e) shall prevent Borrower or any of its Subsidiaries from offering
such concessionary trade terms, or from receiving such investments,
in connection with the bankruptcy or reorganization of their respec-
tive suppliers or customers or the settlement of disputes with such
customers or suppliers arising in the ordinary course of business, as
management deems reasonable in the circumstances;
(f) Borrower or any of its Subsidiaries may make travel and
entertainment advances and relocation and other loans to officers and
employees of Borrower or any of its Restricted Subsidiaries; provided
that the aggregate principal amount of all such loans and advances
outstanding at any one time, together with the guarantees of such
loans and advances made pursuant to subsection 8.3(e), shall not ex-
ceed $5,000,000 at any one time outstanding;
(g) Borrower or any of its Subsidiaries may make Investments
in joint ventures or other Persons engaged primarily in one or more
businesses in which Borrower and its Restricted Subsidiaries are en-
gaged or generally related thereto in an aggregate amount not to ex-
ceed $2,000,000 (plus the sum of any amounts dividended or distrib-
uted to Borrower or any Qualified Subsidiary by such joint ventures
or other Persons); provided that at the time of and after giving ef-
fect thereto no Default or Event of Default shall have occurred and
be continuing;
(h) Borrower may make loans to senior management of Borrower
and its Restricted Subsidiaries in an aggregate principal amount not
to exceed $1,000,000 for purposes of their purchasing Capital Stock
of Borrower;
(i) transactions effected in accordance with subsection 8.5;
(j) Borrower or any of the Restricted Subsidiaries may acquire
all or any substantial portion of the assets (other than Capital
Stock or Indebtedness), businesses or product lines of any Person;
provided that (a) the making of such acquisition would not contravene
subsection 8.7 or 8.15 and (b) such assets would be held by Borrower
or a Qualified Subsidiary;
(k) Borrower or any of its Subsidiaries may make any Invest-
ment; provided that (i) subsection 8.15 would not be contravened
thereby, (ii) such Investment is funded solely by the issuance of
Capital Stock or from the proceeds of a substantially contemporaneous
issuance of Capital Stock not required to be applied to the prepay-
ment of the Loans pursuant to subsection 4.4(b) and (iii) the aggre-
gate consideration expended for such Investment, together with all
other Investments made in reliance on this subsection 8.6(k), does
not exceed 5% of the Total Revenues for the most recently ended four
fiscal quarter period;
(l) Investments existing as of Closing Date and set forth on
Schedule 8.6, and
(m) deposits made to a utility company in the ordinary course
of business to secure performance to such utility company the obliga-
tions of Borrower and its Subsidiaries.
If any Subsidiary would be required to comply with subsec-
tion 7.9(b) immediately after giving effect to any investment permitted by
subsection 8.6(b), such Subsidiary shall comply with the requirements of
such subsection within 10 days of the transaction giving rise to such re-
quirement.
8.7. New Stores. In any calendar year, neither Borrower nor
any of its Subsidiaries shall make or commit to make any expenditures in
respect of the opening or the acquisition of any Store if after giving ef-
fect to such opening or acquisition, the total number of Stores acquired or
opened by Borrower and its Subsidiaries in such calendar year exceeds the
then applicable Maximum Number; provided, that, if at the time the first
commitment in respect of such opening or acquisition is made the Leverage
Ratio (as calculated in accordance with the provisions of clause (iii) of
the definition of Leverage Ratio), as set forth in a certificate of the
chief financial officer of Borrower delivered to the Administrative Agent
prior to such opening or acquisition, is less than 0.5:1.0, then such Store
may be opened or acquired, as the case may be, whether or not the Maximum
Number is so exceeded.
8.8. Interest Rate Agreements. Enter into, create, incur, as-
sume or suffer to exist any Interest Rate Agreements or obligations in re-
spect thereof except for non-speculative purposes and as permitted by sub-
section 8.1(n).
8.9. Leverage Ratio. At the last day of any fiscal quarter
set forth below, permit the Leverage Ratio to be greater than the ratio set
forth below for such fiscal quarter:
Fiscal Year Fiscal Quarter Ratio
2002
First 3.0:1.0
Second 3.0:1.0
Third 3.0:1.0
Fourth 2.75:1.0
2003
First 2.75:1.0
Second 2.75:1.0
Third 2.5:1.0
Fourth 2.5:1.0
2004
First 2.5:1.0
Second 2.25:1.0
Third 2.25:1.0
Fourth 2.25:1.0
2005
First 2.0:1.0
Second 2.0:1.0
Third 2.0:1.0
Fourth 2.0:1.0
2006
First 2.0:1.0
Second 2.0:1.0
8.10. Interest Coverage. At the last day of any fiscal quar-
ter set forth below, permit the Interest Coverage Ratio to be less than the
ratio set forth below for such fiscal quarter:
Fiscal Year Fiscal Quarter Ratio
2002
First 3.0:1.0
Second 3.0:1.0
Third 3.0:1.0
Fourth 3.5:1.0
2003
First 3.5:1.0
Second 3.5:1.0
Third 4.0:1.0
Fourth 4.0:1.0
2004
First 4.0:1.0
Second 5.0:1.0
Third 5.0:1.0
Fourth 5.0:1.0
2005
First 5.0:1.0
Second 5.0:1.0
Third 5.0:1.0
Fourth 5.0:1.0
2006
First 5.0:1.0
Second 5.0:1.0
8.11. Fixed Charge Coverage. At the last day of any fiscal
quarter, permit the Fixed Charge Coverage Ratio to be less than 1.0:1.0.
8.12. Limitation on Dividends. Declare, make or pay any Divi-
dend Payments on any shares of any class of Capital Stock, either directly
or indirectly, except that:
(a) Subsidiaries may pay Dividend Payments pro rata to the
holders of their Capital Stock (giving effect to relative preferences
and priorities);
(b) Borrower and its Subsidiaries may pay or make Dividend
Payments or distributions to any holder of its Capital Stock in the
form of additional shares of Capital Stock of the same class and
type;
(c) Borrower may repurchase shares of Capital Stock of Bor-
rower owned by former, present or future employees of Borrower or its
Restricted Subsidiaries or their assigns, estates and heirs; provided
that the aggregate amount expended by Borrower pursuant to this para-
graph (c) shall not in the aggregate exceed (i) $1,000,000 in any
fiscal year or (ii) $2,000,000 during the term of this Agreement,
plus any amounts contributed to Borrower as a result of resales of
such repurchased shares of Capital Stock; and
(d) So long as no Default or Event of Default then exists,
Borrower may redeem for a nominal price (not to exceed $.01 per
right) any share purchase rights issued on a one-for-one basis on any
outstanding or newly issued or delivered shares of Common Stock.
8.13. Transactions with Affiliates. Enter into any transac-
tion, including, without limitation, any purchase, sale, lease or exchange
of property or the rendering of any service, with any Affiliate except for
transactions which are otherwise permitted under this Agreement and which
are in the ordinary course of Borrower's or a Subsidiary's business and
which are upon fair and reasonable terms no less favorable to Borrower or
such Subsidiary than it would reasonably expect to obtain in a hypothetical
comparable arm's length transaction with a Person not an Affiliate; pro-
vided that nothing in this subsection 8.13 shall prohibit Borrower or its
Subsidiaries from engaging in the following transactions: (1) transactions
between or among Credit Parties, (2) the performance of Borrower's or any
Subsidiary's obligations under any employment contract, collective bargain-
ing agreement, employee benefit plan, related trust agreement or any other
similar arrangement heretofore or hereafter entered into in the ordinary
course of business, (3) the payment of compensation to employees, officers,
directors or consultants in the ordinary course of business, (4) the main-
tenance of benefit programs or arrangements for employees, officers or di-
rectors, including, without limitation, vacation plans, health and life in-
surance plans, deferred compensation plans, and retirement or savings plans
and similar plans, in each case, in the ordinary course of business,
(5) transactions existing as of the Closing Date and included on Schedule
8.13 on the terms then in effect on the Closing Date, and (6) transactions
between or among Borrower and its Subsidiaries permitted by subsections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7 and 8.12.
8.14. Limitation on Changes in Fiscal Year. Permit the fiscal
year of Borrower or any of its Subsidiaries to end on a day other than on
December 31 in any calendar year.
8.15. Limitation on Lines of Business. Enter into any busi-
ness, either directly or through any Subsidiary, except for those busi-
nesses in which Borrower and any of its Subsidiaries is engaged on the
Closing Date or which are substantially related thereto or are reasonable
extensions thereof (or in businesses that are primarily engaged in the sale
or rental of home videos, DVDs and video games, including but not limited
to the sale or rental of electronics equipment and related hardware and
software). This covenant applies to Unrestricted Subsidiaries.
8.16. Amendments to Certain Documents. Amend, modify, waive
or terminate any provisions of the documentation governing the organization
of Borrower or any of its Restricted Subsidiaries, in any such case in a
manner which is materially adverse to Borrower or any of its Restricted
Subsidiaries or the Lenders, without the consent of the Administrative
Agent, which consent shall not be unreasonably withheld.
8.17. Limitation on Prepayments and Amendments of Certain
Debt. (a) Optionally prepay, retire, redeem, purchase, defease or ex-
change, or make or arrange for any mandatory prepayment, retirement, re-
demption, purchase or defeasance of any outstanding Indebtedness (other
than (1) any refinancing of Indebtedness permitted by this Agreement,
(2) the Obligations, (3) the conversion or exchange of Indebtedness for or
into Capital Stock and (4) the prepayment of Capital Lease Obligations per-
mitted by subsection 8.1(f)), or (b) waive, amend, supplement, modify, ter-
minate or release any of the provisions with respect to any Indebtedness of
Borrower or any of its Subsidiaries (including Unrestricted Subsidiaries)
without the prior consent of the Administrative Agent, to the extent that
any such waiver, amendment, supplement, modification, termination or re-
lease would be materially adverse to Borrower or any of its Restricted Sub-
sidiaries or the Lenders.
8.18. No Further Negative Pledge. Except with respect to pro-
hibitions against other encumbrances on specific property encumbered to se-
cure payment of particular Indebtedness permitted hereunder or prohibitions
in license agreements under which Borrower or any of its Subsidiaries is
the licensee, enter into any agreement prohibiting the creation or assump-
tion of any Lien upon its properties or assets, whether now owned or here-
after acquired, except pursuant to (a) the Credit Documents, (b) any other
agreement that does not restrict in any manner (directly of indirectly)
Liens created pursuant to the Credit Documents on property or assets of
Borrower or any of its Subsidiaries (whether now owned or hereafter ac-
quired) securing the Loans or any Interest Rate Agreement and does not re-
quire the direct or indirect granting of any Lien securing any Indebtedness
or other obligation by virtue of the granting of Liens on or pledge of
property of Borrower or any of its Subsidiaries to secure the Loans or any
Interest Rate Agreement, and (c) any industrial revenue or development
bonds, acquisition agreement or operating leases of real property and
equipment entered into in the ordinary course of business.
8.19. Maintenance of Corporate Separateness. Permit any Unre-
stricted Subsidiary to (a) fail to satisfy customary corporate formalities,
including (i) the holding of regular board of directors' and shareholders'
meetings, (ii) the maintenance of separate corporate records and (iii) the
maintenance of separate bank accounts in its own name; (b) fail to act
solely in its own corporate name and through its authorized officers and
agents; (c) commingle any of its money or other assets with any money or
other assets of any Credit Party; or (d) take any action, or conduct its
affairs in a manner which is reasonably likely to result in the separate
corporate existence of the Credit Parties from the Unrestricted Subsidiar-
ies to be ignored or the assets and liabilities of any Unrestricted Sub-
sidiary being substantively consolidated with those of any Credit Party in
any bankruptcy, insolvency proceeding; or permit any Credit Party to make
any payment to any creditor of any Unrestricted Subsidiary or provide any
direct or indirect guarantee or other credit support for any Indebtedness
or other obligations of any Unrestricted Subsidiary.
8.20. Clauses Restricting Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of Borrower to (a) make Divi-
dend Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, Borrower or any other Subsidiary of Bor-
rower, (b) make loans or advances to, or other Investments in, Borrower or
any other Subsidiary of Borrower or (c) transfer any of its assets to Bor-
rower or any other Subsidiary of Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing
under the Credit Documents, (ii) any restrictions with respect to a Sub-
sidiary imposed pursuant to an agreement that has been entered into in con-
nection with the disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary and (iii) the Existing Indenture or any
other Indebtedness so long as such encumbrances or restrictions, taken as a
whole, are no more restrictive than those contained in the Existing Inden-
ture.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) Borrower shall fail to (i) pay any principal of any Loan
or Note when due in accordance with the terms hereof or thereof or to
reimburse the Issuing Lender in accordance with subsection 3.8 or
(ii) pay any interest on any Loan or Note or any other amount payable
under any Credit Document within three Business Days after any such
interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Credit Party in any Credit Document shall prove to have been incor-
rect in any material respect on or as of the date made or deemed
made; or
(c) Borrower shall default in the observance or performance of
any agreement contained in subsection 7.7(a), 7.8 or 7.9 or Section 8
of this Agreement; or
(d) Any Credit Party shall default in the observance or per-
formance of any other agreement contained in any Credit Document and
such default shall continue unremedied for a period of 30 days after
Borrower's receipt of written notice of such default from the Admin-
istrative Agent or any Lender; or
(e) Borrower or any of its Restricted Subsidiaries shall
(i) default in any payment of principal of or interest on or other
amounts in respect of any Indebtedness (other than the Loans, the L/C
Obligations and any intercompany debt) or Interest Rate Agreement or
in the payment of any Contingent Obligation, beyond the period of
grace, if any, provided in the instrument or agreement under which
such Indebtedness, Interest Rate Agreement or Contingent Obligation
was created; or (ii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness, In-
terest Rate Agreement or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness, the party or parties to such
Interest Rate Agreements or beneficiary or beneficiaries of such Con-
tingent Obligation (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its
stated maturity, any applicable grace period having expired, such In-
terest Rate Agreement to be terminated, any applicable grace period
having expired, or such Contingent Obligation to become payable, any
applicable grace period having expired; provided in each case that
the aggregate principal amount of all such Indebtedness, Interest
Rate Agreements and Contingent Obligations under which a default ex-
ists or which would then become due or payable equals or exceeds
$10,000,000; or
(f) (i) Borrower or any of its Material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, compo-
sition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its as-
sets, or Borrower or any of its Material Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Borrower or any of its Material Subsidiar-
ies any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for re-
lief or any such adjudication or appointment or (B) remains undis-
missed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Borrower or any of its Material Sub-
sidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) Borrower or any of its Material
Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) Borrower or any of
its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due;
or
(g) An ERISA Event or noncompliance with respect to Foreign
Plans shall have occurred that, when taken together with all other
ERISA Events and noncompliance with Foreign Plans that have occurred,
could reasonably be likely to result in a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Borrower or any of its Material Subsidiaries involving in the aggre-
gate a liability (not paid or fully covered by insurance as to which
the relevant insurance company has acknowledged coverage) of
$10,000,000 or more and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within the
time required by the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in
full force and effect or any Credit Party or any of its Subsidiaries
shall so assert in writing, or any Security Document shall cease to
give the Administrative Agent for the benefit of the Secured Parties
the rights, powers and privilege purported to be created thereby or
cease to be effective to grant a perfected Lien on the Collateral de-
scribed in such Security Document with the priority purported to be
created thereby, subject to such exceptions as may be permitted
therein or herein, and in the case of any Security Agreement, such
condition shall continue unremedied for 10 days after notice thereof
to Borrower by the Administrative Agent or any Lender; or
(j) There shall have occurred a Change of Control; or
(k) Any non-monetary judgment, order or decree is entered
against Borrower or any of its Subsidiaries which has a Material Ad-
verse Effect, and there shall be any period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by rea-
son of a pending appeal or otherwise, shall not be in effect;
then, and in any such event, (x) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to Bor-
rower, automatically (i) the Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the Notes shall immediately become due and
payable, and (ii) all obligations of Borrower in respect of the Letters of
Credit, although contingent and unmatured, shall become immediately due and
payable and the Issuing Lender's obligations to issue the Letters of Credit
shall immediately terminate and (y) if such event is any other Event of De-
fault, so long as any such Event of Default shall be continuing, either or
both of the following actions may be taken: (i) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to Borrower,
declare the Commitments and the Issuing Lender's obligations to issue the
Letters of Credit to be terminated forthwith, whereupon the Commitments and
such obligations shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by notice of default
to Borrower, (a) declare all or a portion of the Loans hereunder (with ac-
crued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable forthwith, whereupon the same shall im-
mediately become due and payable, and (b) declare all or a portion of the
obligations of Borrower in respect of the Letters of Credit, although con-
tingent and unmatured, to be due and payable forthwith, whereupon the same
shall immediately become due and payable. All payments under this Section
9 on account of undrawn Letters of Credit shall be made by Borrower di-
rectly to a cash collateral account established by the Administrative Agent
for such purpose for application to Borrower's reimbursement obligations
under subsection 3.8 as drafts are presented under the Letters of Credit,
(x) with the balance, if any, to be applied to Borrower's obligations under
this Agreement and the Notes as the Administrative Agent shall determine
with the approval of the Required Lenders and (y) after all Letters of
Credit have terminated in accordance with their terms (or been fully drawn
upon), and after all obligations under this Agreement and the Notes have
been paid in full (other than ongoing indemnity obligations where no demand
for payment has been made), any excess amounts on deposit shall be returned
to Borrower. Except as expressly provided above in this Section 9, pre-
sentment, demand, protest and all other notices of any kind are hereby ex-
pressly waived.
SECTION 10. THE AGENTS AND THE ISSUING LENDER
10.1. Appointment. Each Lender hereby irrevocably designates
and appoints UBS AG, Stamford Branch as the Administrative Agent under this
Agreement and irrevocably authorizes UBS AG, Stamford Branch, as Adminis-
trative Agent for such Lender, to take such action on its behalf under the
provisions of the Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the
terms of the Credit Documents, together with such other powers as are rea-
sonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsi-
bilities, except those expressly set forth herein, or any fiduciary rela-
tionship with any Lender, and no implied covenants, functions, responsi-
bilities, duties, obligations or liabilities shall be read into the Credit
Documents or otherwise exist against any Agent.
10.2. Delegation of Duties. The Administrative Agent may exe-
cute any of its duties under this Agreement and each of the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or miscon-
duct of any agents or attorneys-in-fact selected by it with reasonable
care, except as otherwise provided in subsection 10.3.
10.3. Exculpatory Provisions. No Agent nor any of its offi-
cers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with the Credit Documents (except for
its or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, state-
ments, representations or warranties made by any Credit Party or any offi-
cer thereof contained in the Credit Documents or in any certificate, re-
port, statement or other document referred to or provided for in, or re-
ceived by the Agents under or in connection with, the Credit Documents or
for the value, validity, effectiveness, genuineness, enforceability or suf-
ficiency of the Credit Documents or for any failure of any Credit Party to
perform its obligations thereunder. The Agents shall not be under any ob-
ligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any
Credit Document, or to inspect the properties, books or records of any
Credit Party.
10.4. Reliance by Agents. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
entries maintained in the Register, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation be-
lieved by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and statements of le-
gal counsel (including, without limitation, counsel to Borrower), independ-
ent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment, nego-
tiation or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent shall be fully justified in failing or re-
fusing to take any action under any Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under any Credit Document in accor-
dance with a request of the Required Lenders (unless a higher percentage of
Lenders is expressly required), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and
all future holders of the Notes.
10.5. Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received written notice from an Agent, a
Lender or Borrower or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall promptly give notice thereof
to the Lenders. The Administrative Agent shall take such action with re-
spect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders; provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may
(but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6. Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that no Agent nor any officers, directors, employ-
ees, agents, attorneys-in-fact or Affiliates thereof has made any represen-
tations or warranties to it and that no act by any Agent hereafter taken,
including any review of the affairs of the Credit Parties, shall be deemed
to constitute any representation or warranty by such Agent to any Lender.
Each Lender represents to the Agents that it has, independently and without
reliance upon any Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Borrower and its Subsidiaries and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reli-
ance upon any Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking ac-
tion under the Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, xxxxx-
cial and other condition and creditworthiness of Borrower and its Subsidi-
aries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, no
Agent shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Credit Parties
which may come into the possession of such Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
10.7. Indemnification. The Lenders agree to indemnify the
Agents in their capacity as such (to the extent not reimbursed by the
Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitments (or, to the extent such Commitments have been terminated, ac-
cording to the respective outstanding principal amounts of the Loans and
the L/C Obligations and the respective obligations, whether as Issuing
Lender or a Participating Lender, under the Letter of Credit), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (whether before or after the payment of
the Loans) be imposed on, incurred by or asserted against such Agent in any
way relating to or arising out of the Commitments, the Credit Documents or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by such Agent under or
in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Agent's gross negligence or will-
ful misconduct. The agreements in this subsection 10.7 shall survive the
repayment of the Loans and all other amounts payable hereunder.
10.8. Agent in Its Individual Capacity. Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with any Credit Party as though such Agent were not an
Agent hereunder. With respect to Loans made or renewed by it and with re-
spect to any Letter of Credit issued or participated in by it, each Agent
shall have the same rights and powers, duties and liabilities under the
Credit Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms "Lender" and "Lenders" shall include such Agent
in its individual capacity.
10.9. Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 30 days' notice to the Lend-
ers and Borrower. If the Administrative Agent shall resign as Administra-
tive Agent under the Credit Documents, then the Required Lenders shall ap-
point from among the Lenders a successor agent for the Lenders which suc-
cessor agent shall, so long as no Event of Default has occurred and is con-
tinuing, be approved by Borrower, which shall not unreasonably withhold or
delay its approval, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term "Admin-
istrative Agent" shall mean such successor agent effective upon such ap-
pointment and approval, and the former Administrative Agent's rights, pow-
ers and duties as Administrative Agent shall be terminated, without any
other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any holders of the Notes.
If no successor agent has accepted appointment as the applicable Adminis-
trative Agent by the date which is 30 days following the retiring Adminis-
trative Agent's notice of registration, the retiring Administrative Agent's
registration shall nevertheless thereupon become effective and the Lenders
shall perform all of the duties of such Administrative Agent hereunder un-
til such time, if any, as the Required Lenders appoint a successor agent as
provided for above. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under the Credit Documents.
10.10. Issuing Lender as Issuer of Letters of Credit. Each
Revolving Credit Lender hereby acknowledges that the provisions of this
Section 10 shall apply to the Issuing Lender, in its capacity as issuer of
the Letters of Credit, in the same manner as such provisions are expressly
stated to apply to the Administrative Agent, except that obligations to in-
demnify the Issuing Lender shall be ratable among the Revolving Credit
Lenders in accordance with their respective Revolving Credit Commitments
(or, if the Revolving Credit Commitments have been terminated, the out-
standing principal amount of their respective Revolving Credit Loans and
L/C Obligations and their respective participating interests in the out-
standing Letters of Credit).
10.11. Other Agents. Each Lender hereby acknowledges that
neither the Lead Arranger nor any other Lender designated as "Agent"
hereunder or herein or on any Credit Document hereof has any liability
hereunder other than its capacity as a Lender. Each party hereto agrees
that each Agent not a signatory hereto shall be a third party beneficiary
of the rights herein set forth applicable to such Agent.
SECTION 11. MISCELLANEOUS
11.1. Amendments and Waivers. Except as otherwise expressly
set forth in this Agreement, no Credit Document nor any terms thereof may
be amended, supplemented, waived or modified except in accordance with the
provisions of this subsection 11.1. With the written consent of the Re-
quired Lenders, the Administrative Agent (acting at the request of the Re-
quired Lenders) and the applicable Credit Parties or their Subsidiaries
may, from time to time, enter into written amendments, supplements or modi-
fications hereto for the purpose of adding any provisions to any Credit
Document to which they are parties or changing in any manner the rights of
the Lenders or of any such Credit Party or its Subsidiaries thereunder or
waiving, on such terms and conditions as the Administrative Agent may spec-
ify in such instrument, any of the requirements of any such Credit Document
or any Default or Event of Default and its consequences; provided that:
(a) no such waiver and no such amendment, supplement or modi-
fication shall (i) release all or substantially all of the Collateral
without the written consent of all Lenders or (ii) release Collateral
not required or permitted by any Credit Document to be released and
which, in the aggregate with all other Collateral released pursuant
to this clause (a)(ii) (other than Collateral released pursuant to
the proviso to this clause (a)) during the calendar year in which
such proposed release would be effected and the immediately preceding
calendar year, has fair market value on the proposed date of release
in excess of 20% of the fair market value of all Collateral (includ-
ing any Guarantee) on such date without the written consent of the
Supermajority Lenders; provided that, notwithstanding the foregoing,
this paragraph (a) shall not be applicable to and no consent of the
Lenders or the Administrative Agent shall be required for
(1) releases of Collateral in connection with any dispositions per-
mitted by subsection 8.5, (2) releases of Collateral in accordance
with subsection 11.11, (3) releases of Collateral constituting prop-
erty leased to Borrower or any Subsidiary of Borrower in a transac-
tion permitted under this Agreement, (4) releases of Collateral con-
sisting of an instrument evidencing Indebtedness or other debt in-
strument, if the Indebtedness evidenced thereby has been paid in full
or (5) upon the reincorporation of Borrower or any Subsidiary in a
new jurisdiction or the creation of a new Subsidiary of Borrower, any
release of Collateral in connection with the transfer of such re-
leased Collateral to such reincorporated entity or new Subsidiary in
compliance with subsection 8.4 so long as the Administrative Agent,
in its sole discretion, determines that such release and transfer,
together with any grant and perfection of a new Lien therein in favor
of the Administrative Agent, will cause no material impairment of the
value of the Collateral taken as a whole, after giving effect to such
release and transfer;
(b) no such waiver and no such amendment, supplement or modi-
fication shall forgive the principal amount or extend the final
scheduled date of maturity of any Loan or Note, or extend the stated
expiration date of any Letter of Credit beyond the Revolving Credit
Termination Date as then in effect, or reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder (ex-
cept in connection with the waiver of applicability of any post-
default increase in interests, fees or letter of credit commission,
and it being further understood and agreed that any amendment or
modification to the financial definitions in this Agreement shall not
constitute a reduction in the rate of interest, fees or letter of
credit commission for the purposes of this clause (b)) or extend the
scheduled date of any payment of any interest, fee or commitment com-
mission, or increase the amount of the Commitments (it being under-
stood that waivers or modifications of conditions precedent, cove-
nants, Defaults or Events of Default or of mandatory reductions in
the Commitments shall not constitute an increase in the Commitments
of any Lender), or modify subsection 11.7(a) or subsection 12.3, in
each case without the written consent of each Lender whose obliga-
tions or Revolving Credit Commitments, as the case may be, held
hereunder are being directly modified thereby;
(c) no such waiver and no such amendment, supplement or modi-
fication shall amend, modify or waive any provision of this subsec-
tion 11.1 (except for technical amendments with respect to additional
extensions of credit pursuant to this Agreement which afford the pro-
tections to such additional extensions of credit of the type provided
to the Loans and the Commitments on the Closing Date) or reduce any
percentage specified in the definition of Required Lenders or Super-
majority Facility Lenders (it being understood that, with the written
consent of the Required Lenders or Supermajority Facility Lenders, as
the case may be, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lend-
ers or Supermajority Facility Lenders, as the case may be, on sub-
stantially the same basis as the extensions of Loans and Revolving
Credit Commitments are included in the Closing Date), or consent to
the assignment or transfer by Borrower of any of its rights and obli-
gations under this Agreement and the other Credit Documents, in each
case without the written consent of all Lenders;
(d) no such waiver and no such amendment, supplement or modi-
fication shall reduce the percentage specified in the definition of
Majority Facility Lenders without the written consent of all Lenders
under each affected Facility;
(e) no such waiver and no such amendment, supplement or modi-
fication shall reduce the amount of, or extend the date of, any
scheduled amortization payment in respect of any Tranche B Term Loan
without the written consent of the Supermajority Facility Lenders
holding Tranche B Term Loans, or amend the definition of Supermajor-
ity Facility Lenders without the consent of the Supermajority Facil-
ity Lenders pursuant to each Facility which has scheduled amortiza-
tions at the time of such modification (it being understood that,
with the consent of the Required Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determina-
tion of the Supermajority Facility Lenders with respect to a given
Facility); and
(f) no such waiver and no such amendment, supplement or modi-
fication affecting the then Administrative Agent or Issuing Lender
shall amend, modify or waive any provision of Section 10 without the
written consent of such Administrative Agent or Issuing Lender, as
the case may be.
Any such waiver and any such amendment, supplement or modification de-
scribed in this subsection 11.1 shall apply equally to each of the Lenders
and shall be binding upon each Credit Party and its Subsidiaries, the Lend-
ers, the Administrative Agent and the Issuing Lender and all future holders
of the Notes and the Loans. Any extension of a Letter of Credit by the Is-
suing Lender shall be treated hereunder as a new Letter of Credit. In the
case of any waiver, the Credit Parties, the Lenders, the Administrative
Agent and Issuing Lender shall be restored to their former position and
rights hereunder and under the outstanding Notes, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of De-
fault, or impair any right consequent thereon unless specified in such
waiver.
11.2. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (includ-
ing by telecopy or telex, if one is listed), and, unless otherwise ex-
pressly provided herein, shall be deemed to have been duly given or made
when delivered by hand, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when sent, con-
firmation of receipt received, or, in the case of telex notice, when sent,
answerback received, addressed as follows in the case of Borrower or any
other Credit Party, the Administrative Agent, and as set forth in Schedule
I in the case of any Lender, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the
Notes:
Borrower: Hollywood Entertainment Corporation
0000 X.X. Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxx 00000
Attention: Treasurer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent
and Swing Line Lender: UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to subsections 3.4, 3.5, 4.1, 4.2, 4.3 and
4.4 shall not be effective until received and; provided, further, that the
failure to provide the copies of notices to Borrower provided for in this
subsection 11.2 shall not result in any liability to the Administrative
Agent.
11.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, rem-
edy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges provided
by law.
11.4. Survival of Representations and Warranties. All repre-
sentations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall sur-
vive the execution and delivery of this Agreement, the Letters of Credit
and the Notes and the making of the extensions of credit hereunder.
11.5. Indemnification; Payment of Expenses and Taxes.
(a) Borrower agrees to pay (i) all reasonable out-of-pocket expenses in-
curred by the Administrative Agent, the Lead Arranger and their respective
Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent and the Lead Arranger in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of the Credit Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated or any
such amendment, modification or waiver becomes effective), (ii) all reason-
able out-of-pocket expenses incurred by the Issuing Lenders in connection
with the issuance, amendment, renewal or extension of any Letter of Credit
or any demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Agents, the Lead Arranger, the Issuing Lenders or
any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Agents, the Lead Arranger, the Issuing Lenders or any
Lender, in connection with the enforcement or protection of their rights in
connection with the Credit Documents, including their rights under this
subsection 11.5, or in connection with the Loans made, or Letters of Credit
issued or drawn hereunder, including all such out-of-pocket expenses in-
curred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b) Borrower agrees to indemnify the Agents, the Lead Ar-
ranger, the Issuing Lender and each Lender, and each of their Affiliates,
officers, directors and controlled parties of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each In-
demnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including the reasonable fees, charges and disburse-
ments of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i)
the execution or delivery of any Credit Document or any other agreement or
instrument contemplated hereby, the performance by the parties to the
Credit Documents of their respective obligations thereunder or the consum-
mation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom (in-
cluding any refusal by an Issuing Lenders to honor a demand for payment un-
der a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on,
at, under or from any Mortgaged Property or any other property currently or
formerly owned, leased or otherwise operated by Borrower or any of its Sub-
sidiaries, or any liability under or violation of Environmental Laws re-
lated in any way to Borrower or any of its Subsidiaries, (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are deter-
mined by a court of competent jurisdiction by final and nonappealable judg-
ment to have resulted from the gross negligence or willful misconduct of
such Indemnitees or (v) any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes (other than withholding taxes), if
any, which may be payable or determined to be payable in connection with
the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, any Credit Document and any such
other documents.
(c) To the extent that Borrower fails to pay any amount re-
quired to be paid by it to an Agent or an Issuing Lender under paragraph
(a) or (b) of this subsection 11.5, each Lender severally agrees to pay to
such Agent or such Issuing Lender, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed ex-
pense or indemnity payment is sought) of such unpaid amount; provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against
such Agent or such Issuing Lender in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its
share of the sum of the aggregate amount of the total Loans and Commitments
at the time.
(d) To the extent permitted by applicable law, Borrower shall
not assert, and Borrower hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or puni-
tive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or in-
strument contemplated hereby, the Transactions, any Loan, Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this subsection 11.5 shall be pay-
able promptly after written demand therefor.
11.6. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of Bor-
rower, the Lenders, each Agent, all future holders of the Notes and the
Loans, and their respective successors and assigns, except that Borrower
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking, lending or investment business and in accordance with applicable
law, at any time sell to one or more banks or other entities ("Partici-
pants") participating interests in any Loan owing to such Lender, any par-
ticipating interest in the Letters of Credit of such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of such
Lender hereunder. In the event of any such sale by a Lender of participat-
ing interests to a Participant, such Lender's obligations under this Agree-
ment to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of any such Note for all purposes under this
Agreement and Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents.
Borrower agrees that if amounts outstanding under this Agreement and the
Notes are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Partici-
pant shall be deemed to have the right of setoff in respect of its partici-
pating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing di-
rectly to it as a Lender under this Agreement or any Note; provided that
such right of setoff shall be subject to the obligation of such Participant
to share with the Lenders, and the Lenders agree to share with such Par-
ticipant, as provided in subsection 11.7. Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 3.10, 4.11 and
4.12 with respect to its participation in the Letters of Credit and in the
Commitments and the Loans outstanding from time to time as if it were a
Lender; provided that no Participant shall be entitled to receive any
greater amount pursuant to any such subsection than the transferor Lender
would have been entitled to receive in respect of the amount of the par-
ticipation transferred by such transferor Lender to such Participant had no
such transfer occurred. Each Lender agrees that the participation agree-
ment pursuant to which any Participant acquires its participating interest
(or any other document) may afford voting rights to such Participant, or
any right to instruct such Lender with respect to voting hereunder, only
with respect to matters requiring the consent of either all of the Lenders
hereunder or all of the Lenders holding the relevant Tranche B Term Loans
or Revolving Credit Commitments subject to such participation.
(c) Subject to paragraph (g) of this subsection 11.6, any
Lender may at any time and from time to time, in the ordinary course of its
commercial banking, lending or investment business and in accordance with
applicable law,
(i) assign all or any part of its rights and obligations un-
der this Agreement relating to the Tranche B Term Loans and the
Tranche B Term Notes to any Lender or any Approved Fund or Affiliate
of any Lender pursuant to an Assignment and Acceptance executed by
such Assignee and such assigning Lender, and delivered to the Admin-
istrative Agent (for its acceptance and recording in the Register (as
defined below));
(ii) with the consent of the Administrative Agent (which con-
sent shall not be unreasonably withheld or delayed) assign all or any
part of its rights and obligations under this Agreement relating to
the Revolving Credit Loans or the Revolving Credit Commitment and the
Revolving Credit Notes to any Lender or any Affiliate thereof pursu-
ant to an Assignment and Acceptance executed by such Assignee and
such assigning Lender and the Administrative Agent, and delivered to
the Administrative Agent for its acceptance and recording in the Reg-
ister; and
(iii) with the consent of Borrower (which consent shall not be
unreasonably withheld or delayed and which consent shall not be
needed in connection with assignments by any Lender to any other
Lender or an Approved Fund or Affiliate of any Lender or by UBS AG,
Stamford Branch or any of its Affiliates in connection with the syn-
dication of the Loans and Commitments or at any time at which an
Event of Default shall have occurred and be continuing) and of the
Administrative Agent (which consent shall not be unreasonably with-
held or delayed) assign to one or more additional banks, mutual funds
or financial institutions or entities (each, an "Assignee"), all or
any part of its rights and obligations under this Agreement and the
Notes pursuant to an Assignment and Acceptance executed by such As-
signee and such assigning Lender (and, in the case of an Assignee
that is not then a Lender or an Approved Fund or Affiliate of any
Lender, by Borrower (to the extent such assignment is not in connec-
tion with assignments by UBS AG, Stamford Branch or any of its Af-
filiates in connection with the syndication of the Loans and Commit-
ments and so long as no Event of Default shall have occurred and be
continuing) and the Administrative Agent), and delivered to the Ad-
ministrative Agent for its acceptance and recording in the Register.
Each sale pursuant to clause (iii) of this subsection 11.6(c) shall be in a
principal amount of at least $1,000,000 (or such lesser amounts as the Ad-
ministrative Agent and Borrower may determine) unless the assigning Lender
is transferring all of its rights and obligations. In the event of a sale
of less than all of such rights and obligations, such Lender after any such
sale shall retain Commitments and/or Loans and/or L/C Participating Inter-
ests aggregating at least $1,000,000 (or in such lesser amount as the Ad-
ministrative Agent and Borrower may determine). Upon such execution, de-
livery, acceptance and recording, from and after the effective date deter-
mined pursuant to such Assignment and Acceptance, (x) the Assignee thereun-
der shall be a party hereto and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent of the interest transferred, as reflected in such As-
signment and Acceptance, be released from its obligations under this Agree-
ment (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of the indemnification provi-
sions set forth in subsection 11.5).
(d) The Administrative Agent, which for purposes of this sub-
section 11.6(d) only shall be deemed to be the agent of Borrower, shall
maintain at the address of the Administrative Agent referred to in subsec-
tion 11.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amounts of the Loans ow-
ing to, each Lender from time to time. The entries in the Register shall
be conclusive in the absence of manifest error, and Borrower, the Adminis-
trative Agent and the Lenders shall treat each Person whose name is re-
corded in the Register as the owner of a Loan or other obligation hereunder
as the owner thereof for all purposes of this Agreement and the other
Credit Documents, notwithstanding any notice to the contrary. Any assign-
ment of any Loan or other obligation hereunder shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and by Borrower and the Administra-
tive Agent to the extent required by paragraph (c) of this subsection
11.6), together with payment to the Administrative Agent of a registration
and processing fee of $3,500 if the Assignee is not a Lender prior to the
execution of such Assignment and Acceptance and $1,000 otherwise, the Ad-
ministrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the in-
formation contained therein in the Register and give notice of such accep-
tance and recordation to the Lenders and Borrower (and no such assignment
shall become effective unless and until so recorded); provided that, in the
case of contemporaneous assignments by a Lender to more than one fund man-
aged by the same investment advisor or an Affiliate of such investment ad-
visor (which funds are not then Lenders hereunder), only a single $3,500
fee shall be payable for all such contemporaneous assignments. On or prior
to such effective date, Borrower at its own expense, shall execute and de-
liver to the Administrative Agent (in exchange for any or all of the
Tranche B Term Loan Notes or Revolving Credit Notes of the assigning
Lender, if any (or if any Note is lost, an affidavit of such loss and in-
demnity satisfactory to Borrower)) new Term Loan Notes or Revolving Credit
Notes, as the case may be, to the order of such Assignee (if requested) in
an amount equal to the Revolving Credit Commitment or the Tranche B Term
Loans, as the case may be, assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment or any
Term Loans hereunder, new Tranche B Term Loan Notes or Revolving Credit
Notes, as the case may be, to the order of the assigning Lender in an
amount equal to the Commitment or such Tranche B Term Loans, as the case
may be, retained by it hereunder (if requested). Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes re-
placed thereby.
(f) Each Agent and the Lenders agree that they will use rea-
sonable efforts to protect the confidentiality of any confidential informa-
tion concerning Borrower and its Subsidiaries and Affiliates. Notwith-
standing the foregoing, Borrower authorizes each Lender to disclose (i) to
its employees, officers, Affiliates and advisors, who shall be bound by the
confidentiality provisions hereof, (ii) to any regulatory authority as re-
quired by law or to any quasi-regulatory authority (including the National
Association of Insurance Commissioners), (iii) in connection with any en-
forcement or other legal action, (iv) to any Participant or Assignee (each,
a "Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning Borrower and its Subsidiaries which has
been delivered to such Lender by or on behalf of Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of
Borrower in connection with such Lender's credit evaluation of Borrower and
its Subsidiaries prior to becoming a party to this Agreement; provided that
each Lender shall cause its respective prospective and actual Transferees
to agree in writing to protect the confidentiality of any confidential in-
formation concerning Borrower and its Subsidiaries and Affiliates, (v) as
has become generally available to the public, (vi) as may be required or
appropriate in any report, statement or testimony submitted to any munici-
pal, state or federal regulatory body having or claiming to have jurisdic-
tion over such party or to the Board or the Federal Deposit Insurance Cor-
poration or similar organizations (whether in the United States or else-
where) or their successors, and (vii) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation or
regulatory proceeding; provided, however, that Borrower acknowledges that
the Administrative Agent has disclosed and may continue to disclose such
information as the Administrative Agent in its sole discretion determines
is appropriate to the Lenders from time to time.
(g) If, pursuant to this subsection 11.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized
under the laws of any jurisdiction other than the United States or any
State thereof, the transferor Lender shall cause such Transferee, concur-
rently with the effectiveness of such transfer, to comply with the terms of
this Agreement including without limitation subsection 4.11(d).
(h) For avoidance of doubt, the parties to this Agreement ac-
knowledge that the provisions of this subsection 11.6 concerning assign-
ments of Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests, includ-
ing, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with applicable law; pro-
vided that no such pledge or assignment of a security interest shall re-
lease a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto. In the case of any
Lender that is a fund that invests in bank loans, such Lender may, without
the consent of the Borrower or Administrative Agent, collaterally assign or
pledge all or any portion of its rights under this Agreement, including the
Loans and Notes or any other instrument evidencing its rights as a Lender
under this Agreement, to any holder of, trustee for, or any other represen-
tative of holders of, obligations owed or securities issued, by such fund,
as security for such obligations or securities; provided that any foreclo-
sure or similar action by such trustee or representative shall be subject
to the provisions of this Section 11.6 concerning assignments and shall not
be effective to transfer any rights under this Agreement or in any Loan,
Note or other instrument evidencing its rights as a Lender under this
Agreement unless the requirements of Section 11.6 concerning assignments
are fully satisfied.
(i) Notwithstanding anything to the contrary contained herein,
any Lender (the "Granting Lender") may grant to a special purpose funding
vehicle (an "SPV"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and Borrower, the option to
provide to Borrower all or any part of any Loan that the Granting Lender
would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPV to make
any Loan, (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of an
Loan by an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPV shall be liable for
any indemnity or similar payment obligation under this Agreement (all li-
ability for which shall remain with the Granting Lender). In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall
survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commer-
cial paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceed-
ings under the laws of the United States or any State thereof. In addi-
tion, notwithstanding anything to the contrary contained in this subsection
11.6(i), any SPV may (i) with notice to, but without the prior written con-
sent of, Borrower and the Administrative Agent and without paying any proc-
essing fee therefor, assign all or a portion of its interests in any Loans
to the Granting Lender or to any financial institutions (consented to in
writing by the Borrower and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPV to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis,
subject to and in accordance with subsection 11.6(f), any information re-
lating to its Loans to any rating agency, commercial paper dealer or pro-
vider of any surety, guarantee or credit or liquidity enhancement to such
SPV. This section may not be amended without the written consent of the
SPV.
11.7. Adjustments; Set-off. (a) If any relevant Lender (a
"benefitted Lender") shall at any time receive any payment of all or part
of any of its Loans or L/C Participating Interests, as the case may be, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in clause (f) of Section 9, or otherwise) in a
greater proportion than any such payment to and collateral received by any
other relevant Lender (other than in accordance with any provision hereof
expressly providing for payments to be made only to an individual Lender or
to the Lenders of a particular Facility), if any, in respect of such other
relevant Lender's Loans or L/C Participating Interests, as the case may be,
or interest thereon, such benefitted Lender shall purchase for cash from
the other relevant Lenders such portion of each such other relevant
Lender's Loans or L/C Participating Interests, as the case may be, or shall
provide such other relevant Lenders with the benefits of any such collat-
eral, or the proceeds thereof, as shall be necessary to cause such benefit-
xxx Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the relevant Lenders; provided that if all or
any portion of such excess payment or benefits is thereafter recovered from
such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Borrower agrees that each Lender so purchasing a portion of an-
other Lender's Loans and/or L/C Participating Interests may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder
of such portion. The Administrative Agent shall promptly give Borrower no-
xxxx of any set-off; provided that the failure to give such notice shall
not affect the validity of such set-off.
(b) In addition to any rights and remedies of the Lenders pro-
vided by law, each Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon (i) the filing of a petition under any of
the provisions of the federal Bankruptcy Code or amendments thereto, by or
against; (ii) the making of an assignment for the benefit of creditors by;
(iii) the application for the appointment, or the appointment, of any re-
ceiver of, or of any substantial portion of the property of; (iv) the issu-
ance of any execution against any substantial portion of the property of;
(v) the issuance of a subpoena or order, in supplementary proceedings,
against or with respect to any substantial portion of the property of; or
(vi) the issuance of a warrant of attachment against any substantial por-
tion of the property of Borrower to set off and apply against any indebted-
ness, whether matured or unmatured, of Borrower to such Lender, any amount
owing from such Lender to Borrower, at or at any time after, the happening
of any of the above mentioned events. As security for such indebtedness,
Borrower hereby grants to each Lender a continuing security interest in any
and all deposits, accounts or moneys of Borrower then or thereafter main-
tained with such Lender, subject in each case to subsection 11.7(a) of this
Agreement. The aforesaid right of set-off may, to the extent permitted by
applicable law, be exercised by such Lender against Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of Bor-
rower, or against anyone else claiming through or against Borrower or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor, not-
withstanding the fact that such right of set-off shall not have been exer-
cised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition; assignment for the
benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each
Lender agrees promptly to notify Borrower and the Administrative Agent af-
ter any such set-off and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such set-off
and application.
11.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counter-
parts and all of said counterparts taken together shall be deemed to con-
stitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with Borrower and the Administra-
tive Agent. This Agreement shall become effective with respect to Bor-
rower, the Administrative Agent and the Lenders when the Administrative
Agent shall have received copies of this Agreement executed by Borrower,
the Administrative Agent and the Lenders, or, in the case of any Lender,
shall have received telephonic confirmation from such Lender stating that
such Lender has executed counterparts of this Agreement or the signature
pages hereto and sent the same to the Administrative Agent.
11.9. Governing Law; Third Party Rights. This Agreement and
the Notes and the rights and obligations of the parties under this Agree-
ment and the Notes shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York. This Agreement is
solely for the benefit of the parties hereto and their respective succes-
sors and assigns, and, except as set forth in subsection 11.9, no other
Persons shall have any right, benefit, priority or interest under, or be-
cause of the existence of, this Agreement. The designation of any Agent by
the Administrative Agent in connection with the syndication hereof shall
entitle such Agents to certain rights as third-party beneficiaries as pro-
vided herein, without any further act by any party hereto.
11.10. Submission to Jurisdiction; Waivers. (a) Each party
to this Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in re-
spect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an incon-
venient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or pro-
ceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in subsection 11.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to ef-
fect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in
any legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
11.11. Releases. The Administrative Agent and the Lenders
agree to cooperate with Borrower and its Subsidiaries with respect to any
sale or other disposition permitted by subsection 8.5 and promptly take
such action and execute and deliver such instruments and documents neces-
sary to release the Liens and security interests created by the Security
Documents relating to any of the assets or property affected by any such
sale permitted by subsection 8.5, including without limitation any UCC
amendment, release or termination or partial release or termination state-
ments subject, however, to the provisions of the applicable Security Docu-
ment.
11.12. Interest. Each provision in this Agreement and each
other Credit Document is expressly limited so that in no event whatsoever
shall the amount paid, or otherwise agreed to be paid, by Borrower for the
use, forbearance or detention of the money to be loaned under this Agree-
ment or any other Credit Document or otherwise (including any sums paid as
required by any covenant or obligation contained herein or in any other
Credit Document which is for the use, forbearance or detention of such
money), exceed that amount of money which would cause the effective rate of
interest to exceed the highest lawful rate permitted by applicable law (the
"Highest Lawful Rate"), and all amounts owed under this Agreement and each
other Credit Document shall be held to be subject to reduction to the ef-
fect that such amounts so paid or agreed to be paid which are for the use,
forbearance or detention of money under this Agreement or such other Credit
Document shall in no event exceed that amount of money which would cause
the effective rate of interest to exceed the Highest Lawful Rate. Notwith-
standing any provision in this Agreement or any other Credit Document to
the contrary, if the maturity of the Loans or the obligations in respect of
the other Credit Documents are accelerated for any reason, or in the event
of any prepayment of all or any portion of the Loans or the obligations in
respect of the other Credit Documents by Borrower or in any other event,
earned interest on the Loans and such other obligations of Borrower may
never exceed the Highest Lawful Rate, and any unearned interest otherwise
payable on the Loans or the obligations in respect of the other Credit
Documents that is in excess of the Highest Lawful Rate shall be canceled
automatically as of the date of such acceleration or prepayment or other
such event and (if theretofore paid) shall, at the option of the holder of
the Loans or such other obligations, be either refunded to Borrower or
credited on the principal of the Loans. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the High-
est Lawful Rate, Borrower and the Lenders shall, to the maximum extent per-
mitted by applicable law, amortize, prorate, allocate and spread, in equal
parts during the period of the actual term of this Agreement, all interest
at any time contracted for, charged, received or reserved in connection
with this Agreement.
11.13. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdic-
tion, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibi-
tion or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.14. Integration. This Agreement and the other Credit Docu-
ments (and those provisions of the commitment letter dated December 3, 2001
between Borrower and UBS AG, Stamford Branch and UBS Warburg LLC that ex-
pressly by its terms survive the execution and delivery of this Agreement)
represent the entire agreement of Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof
and thereof not expressly set forth or referred to herein or in the other
Credit Documents.
11.15. Acknowledgments. Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execu-
tion and delivery of this Agreement and the other Credit Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to Borrower arising out of or in
connection with this Agreement or any of the other Credit Documents,
and the relationship between the Administrative Agent and the Lend-
ers, on one hand, and Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contem-
plated hereby among the Lenders or among Borrower and the Lenders.
SECTION 12. COLLATERAL ACCOUNT; APPLICATION
OF COLLATERAL PROCEEDS
12.1. Collateral Account. (a) The Administrative Agent is
hereby authorized to establish and maintain at its office at Stamford, Con-
necticut, in the name of the Administrative Agent and pursuant to a Control
Agreement, a restricted deposit account (the "Collateral Account") desig-
nated Hollywood Entertainment Corporation Collateral Account". Each Credit
Party shall deposit into the Collateral Account from time to time (A) the
Net Proceeds of any Asset Sale (including pursuant to any disposition
thereof, but excluding pursuant to a Taking or Destruction, which is cov-
ered in next succeeding clause (B)) to the extent required by subsection
8.5(h) or (l), and (B) the cash proceeds of any Taking or Destruction to
the extent required by subsection 8.5(d).
(b) The balance from time to time in the Collateral Account
shall constitute part of the Collateral and shall not constitute payment of
the Obligations until applied as hereinafter provided. So long as no De-
fault or Event of Default has occurred and is continuing or will result
therefrom, the Administrative Agent shall within two Business Days of re-
ceiving a request of the applicable Credit Party for release of cash pro-
ceeds constituting (A) cash proceeds from any Taking or Destruction, remit
such cash proceeds on deposit in the Collateral Account to or upon the or-
der of such Credit Party, so long as such Credit Party has satisfied the
conditions relating thereto set forth in subsection 12.2, (B) Net Proceeds
from any Asset Sale, remit such cash proceeds on deposit in the Collateral
Account to or upon the order of such Credit Party, so long as such Credit
Party has satisfied the conditions relating thereto set forth in subsection
12.2 and (C) with respect to the L/C Sub-Account at such time as all Let-
ters of Credit shall have been terminated and all of the liabilities in re-
spect of the Letters of Credit have been paid in full. At any time follow-
ing the occurrence and during the continuance of an Event of Default, the
Administrative Agent may (and, if instructed by the Lenders as specified
herein, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the
credit of the Collateral Account to the payment of the Obligations in the
manner specified in subsection 12.3 hereof subject, however, in the case of
amounts deposited in the L/C Sub-Account, to the provisions of subsection
12.1(d). The Credit Parties shall have no right to withdraw, transfer or
otherwise receive any fund deposited in the Collateral Account except to
the extent specifically provided herein.
(c) Amounts on deposit in the Collateral Account shall be in-
vested from time to time in Cash Equivalents as the applicable Credit Party
(or, after the occurrence and during the continuance of a Default or Event
of Default, the Administrative Agent) shall determine, which Cash Equiva-
xxxxx shall be held in the name and be under the control of the Administra-
tive Agent (or any sub-agent); provided that at any time after the occur-
rence and during the continuance of a Default or Event of Default, the Ad-
ministrative Agent may (and, if instructed by the Lenders as specified
herein, shall) in its (or their) discretion at any time and from time to
time elect to liquidate any such Cash Equivalents and to apply or cause to
be applied the proceeds thereof to the payment of the Obligations in the
manner specified in subsection 12.3 hereof.
(d) Amounts deposited into the Collateral Account as cover for
liabilities in respect of Letters of Credit under any provision of this
Agreement requiring such cover shall be held by the Administrative Agent in
a separate sub-account designated as the L/C Sub-Account (the "L/C Sub-
Account") and, notwithstanding any other provision hereof to the contrary,
all amounts held in the L/C Sub-Account shall constitute collateral secu-
rity first for the liabilities in respect of Letters of Credit outstanding
from time to time and second as collateral security for the other Obliga-
tions hereunder until such time as all Letters of Credit shall have been
terminated and all of the liabilities in respect of Letters of Credit have
been paid in full.
12.2. Proceeds of Destruction, Taking and Collateral Disposi-
tions. (a) So long as no Default or Event of Default shall have occurred
and be continuing, in the event there shall be any cash proceeds from a
Taking (to the extent such amount is required to be deposited in the Col-
lateral Account pursuant to subsection 12.1(a)(B)) or Destruction (to the
extent such amount is required to be deposited in the Collateral Account
pursuant to subsection 12.1(a)(B)) or Net Proceeds from any Asset Sale (to
the extent such amount is required to be deposited pursuant to subsection
12.1(a)(A)), the applicable Credit Party shall have the right, at such
Credit Party's option, to apply such amounts within twelve months from the
date of the applicable Destruction, Taking or Asset Sale to reinvest in
properties or assets owned (or to be owned) by Borrower or its Restricted
Subsidiaries having a fair market value at least equal to the amount of
such cash proceeds, in accordance with the applicable provisions of this
Agreement. In the event such Credit Party elects so to reinvest such cash
proceeds, such Credit Party shall deliver to the Administrative Agent (A) a
written notice of such election and (B) an Officers' Certificate stating
that (1) the cash proceeds shall be utilized so to reinvest in Collateral
in the manner contemplated by the proviso set forth in clause (b) of the
definition of Net Proceeds, or the net cash proceeds shall be utilized so
to reinvest in Collateral in the manner contemplated by the proviso set
forth in subsection 8.5(h) or (l), as the case may be, and (2) no Default
or Event of Default has occurred and is continuing (the items described in
clauses (1) and (2) of this sentence, collectively, the "Investment Elec-
tion Notice"). In the event such cash proceeds shall be in an amount less
than $2,000,000, upon receipt of an Investment Election Notice, the Admin-
istrative Agent shall release such net insurance proceeds or net awards or
Net Proceeds to such Credit Party in accordance with the provisions of sub-
section 12.1(b) hereof.
(b) In the event that an amount equal to or greater than
$2,000,000 is on deposit in the Collateral Account, the Administrative
Agent shall not release any part of such amount in excess of $2,000,000,
until the applicable Credit Party has furnished to the Administrative Agent
(i) an Officers' Certificate setting forth: (1) a brief description of the
reinvestment to be made, (2) the dollar amount of the expenditures to be
made, or costs incurred by such Credit Party in connection with such rein-
vestment and (3) each request for payment shall be made on at least ten
(10) days' prior notice to the Administrative Agent and such request shall
state that the properties or assets acquired in connection with such rein-
vestment have a fair market value at least equal to the amount of such net
awards or net insurance proceeds or Net Proceeds, as the case may be, re-
quested to be released from the Collateral Account and (ii) all security
agreements and Mortgages and other items required by the provisions of sub-
section 7.9 to, among other things, subject such reinvestment properties or
assets to the Lien of the Security Documents in favor of the Administrative
Agent, for its benefit and for the benefit of the other Secured Parties.
12.3. Application of Proceeds. The proceeds received by the
Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise
by the Administrative Agent of its remedies shall be applied, together with
any other sums then held by the Administrative Agent pursuant to this
Agreement, promptly by the Administrative Agent as follows:
FIRST, to the payment of all reasonable costs and expenses,
fees, commissions and taxes of such sale, collection or other reali-
zation including, without limitation, compensation to the Administra-
tive Agent and its agents and counsel, and all expenses, liabilities
and advances made or incurred by the Administrative Agent in connec-
tion therewith, together with interest on each such amount at the
highest rate then in effect under this Agreement from and after the
date such amount is due, owing or unpaid until paid in full;
SECOND, to the payment of all other reasonable costs and ex-
penses of such sale, collection or other realization including, with-
out limitation, compensation to the other Secured Parties and their
agents and counsel and all costs, liabilities and advances made or
incurred by the other Secured Parties in connection therewith, to-
gether with interest on each such amount at the highest rate then in
effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;
THIRD, without duplication of amounts applied pursuant to
clauses FIRST and SECOND above, to the indefeasible payment in full
in cash, pro rata, of (i) interest, principal and other amounts con-
stituting Obligations (other than the obligations arising under the
Interest Rate Agreements) in each case equally and ratably in accor-
dance with the respective amounts thereof then due and owing and
(ii) the obligations arising under the Interest Rate Agreements in
accordance with the terms of the Interest Rate Agreements; and
FOURTH, the balance, if any, to the Person lawfully entitled
thereto (including the applicable Credit Party or its successors or
assigns).
In the event that any such proceeds are insufficient to pay in
full the items described in clauses FIRST through THIRD of this sub-
section 12.3, the Credit Parties shall remain liable for any defi-
ciency.
[This space intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agree-
ment to be duly executed and delivered by their respective authorized offi-
cers as of the day and year first above written.
HOLLYWOOD ENTERTAINMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President of
Legal Affairs
UBS AG, STAMFORD BRANCH
By: /s/ Xxxxxxxx X'Xxxxx
Name: Xxxxxxxx X'Xxxxx
Title: Director
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Associate Director
LAGUNA FUNDING TRUST
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Authorized Agent
THE PROVIDENT BANK
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Senior Vice President
XXXXXXXXXXX SENIOR FLOATING RATE FUND
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Manager
Schedule I to the Credit Agreement
Lender Commitment Address
UBS AG, Stamford Branch
$144,100,000 Tranche B
Term Loan
$23,500,000 Revolving
Credit Loan
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
The Provident Bank
$1,000,000 Tranche B
Term Loan
$1,500,000 Revolving
Credit Loan
Xxx Xxxx 0xx Xxxxxx,
000X
Xxxxxxxxxx, XX 00000
Laguna Funding Trust
$2,500,000 Tranche B
Term Loan
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, XX 00000
Xxxxxxxxxxx Senior
Floating Rate Fund
$2,400,000 Tranche B
Term Loan
0000 Xxxxx Xxxxxx Xxx
Xxxxxxxxx, XX 00000-0000
TOTAL
$150,000,000 Tranche B
Term Loan
$25,000,000 Revolving
Credit Loan
Schedule II to the Credit Agreement
PRICING GRID
Applicable Margin
for Eurodollar
Loans
Applicable Margin
for Alternate Base
Rate Loans
Commitment
Fee Rate
Leverage Revolving Revolving
Ratio Credit Credit
Loans Loans
>or= 1.0:1.0 3.50% 2.50% 0.50%
< 1.0:1.0 3.25% 2.25% 0.50%
Footnote continued from previous page.
Footnote continued on next page.
Execution Copy
Page
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