Exhibit
10.1


 























 





 


AMENDED AND RESTATED CREDIT AGREEMENT


 


Dated as of April 8, 2004


 


among


 


WMG ACQUISITION CORP.

THE OVERSEAS BORROWERS PARTY HERETO

as Borrowers


 


WMG HOLDINGS CORP.


 


BANK OF AMERICA, N.A.


as Administrative Agent,
Swing Line Lender and L/C Issuer


 


THE OTHER LENDERS PARTY
HERETO


 


BANC OF AMERICA SECURITIES
LLC

DEUTSCHE BANK SECURITIES INC.

as Joint Lead Arrangers and Joint Book Managers


 


LEHMAN BROTHERS INC.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Co-Arrangers and Joint Book Managers


 


DEUTSCHE BANK SECURITIES
INC.

LEHMAN COMMERCIAL PAPER INC.

as Co-Syndication Agents


 


and


 


MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Documentation Agent


 




 





























 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  	
   

  
	
  DEFINITIONS AND
  ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  
	
  Section 1.01. Defined Terms

  	
   

  
	
  Section 1.02. Other Interpretive Provisions

  	
   

  
	
  Section 1.03.
  Accounting Terms

  	
   

  
	
  Section 1.04.
  Rounding

  	
   

  
	
  Section 1.05.
  References to Agreements And Laws

  	
   

  
	
  Section 1.06.
  Times of Day

  	
   

  
	
  Section 1.07. Timing of Payment of Performance

  	
   

  
	
  Section 1.08. Currency Equivalents Generally

  	
   

  
	
  Section
  1.09. Change Of Currency

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  THE COMMITMENTS
  AND CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  
	
  Section 2.01.
  The Loans

  	
   

  
	
  Section 2.02. Borrowings,
  Conversions and Continuations of Loans

  	
   

  
	
  Section 2.03. Letters
  of Credit

  	
   

  
	
  Section 2.04. Swing
  Line Loans

  	
   

  
	
  Section 2.05. Prepayments

  	
   

  
	
  Section 2.06. Termination
  or Reduction of Commitments

  	
   

  
	
  Section 2.07. Repayment
  of Loans

  	
   

  
	
  Section 2.08. Interest

  	
   

  
	
  Section 2.09. Fees

  	
   

  
	
  Section
  2.10. Computation of Interest and Fees

  	
   

  
	
  Section 2.11. Evidence
  of Indebtedness

  	
   

  
	
  Section
  2.12. Payments Generally

  	
   

  
	
  Section 2.13. Sharing
  of Payments

  	
   

  
	
  Section
  2.14. Designation of Overseas Borrower;
  Termination of Designations

  	
   

  
	
  Section
  2.15. Increase in Revolving Credit
  Commitments

  	
   

  
	
  Section
  2.16. Overseas Borrower Costs

  	
   

  
	
  Section
  2.17. Currency Equivalents

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  TAXES,
  INCREASED COSTS PROTECTION AND ILLEGALITY

  	
   

  
	
   

  	
   

  
	
  Section
  3.01. Taxes

  	
   

  
	
  Section 3.02. Illegality

  	
   

  
	
  Section
  3.03. Inability to Determine Rates

  	
   

  



 


i





















 


	
  Section
  3.04. Increased Cost and Reduced Return;
  Capital Adequacy; Reserves on Eurodollar Rate Loans

  	
   

  
	
  Section
  3.05. Funding Losses

  	
   

  
	
  Section
  3.06. Matters Applicable to All Requests
  for Compensation

  	
   

  
	
  Section
  3.07. Replacement of Lenders under Certain
  Circumstances

  	
   

  
	
  Section
  3.08. Survival

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  
	
  Section
  4.01. Conditions to Effectiveness

  	
   

  
	
  Section
  4.02. Consequence of Effectiveness

  	
   

  
	
  Section
  4.03. Conditions to All Credit Extensions

  	
   

  
	
  Section
  4.04. First Credit Extension to an
  Overseas Borrowers

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  
	
  Section
  5.01. Existence, Qualification and Power;
  Compliance with Laws

  	
   

  
	
  Section
  5.02. Authorization; No Contravention

  	
   

  
	
  Section
  5.03. Governmental Authorization; Other
  Consents

  	
   

  
	
  Section
  5.04. Binding Effect

  	
   

  
	
  Section
  5.05. Financial Statements; No Material
  Adverse Effect

  	
   

  
	
  Section
  5.06. Litigation

  	
   

  
	
  Section
  5.07. No Default

  	
   

  
	
  Section
  5.08. Ownership of Property; Liens

  	
   

  
	
  Section
  5.09. Environmental Compliance

  	
   

  
	
  Section
  5.10. Taxes

  	
   

  
	
  Section
  5.11. ERISA Compliance

  	
   

  
	
  Section
  5.12. Subsidiaries; Equity Interests

  	
   

  
	
  Section
  5.13. Margin Regulations; Investment
  Company Act; Public Utility Holding Company Act

  	
   

  
	
  Section
  5.14. Disclosure

  	
   

  
	
  Section
  5.15. Intellectual Property; Licenses, Etc

  	
   

  
	
  Section
  5.16. Solvency

  	
   

  
	
  Section
  5.17. Perfection, Etc

  	
   

  
	
  Section
  5.18. Representations and Warranties of
  Overseas Borrowers

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section
  6.01. Financial Statements

  	
   

  
	
  Section
  6.02. Certificates; Other Information

  	
   

  
	
  Section
  6.03. Notices

  	
   

  
	
  Section
  6.04. Payment of Obligations

  	
   

  



 


ii





















 


	
  Section
  6.05. Preservation of Existence, Etc

  	
   

  
	
  Section
  6.06. Maintenance of Properties

  	
   

  
	
  Section
  6.07. Maintenance of Insurance

  	
   

  
	
  Section
  6.08. Compliance with Laws

  	
   

  
	
  Section
  6.09. Books and Records

  	
   

  
	
  Section
  6.10. Inspection Rights

  	
   

  
	
  Section
  6.11. Use of Proceeds

  	
   

  
	
  Section
  6.12. Covenant to Guarantee Obligations
  and Give Security

  	
   

  
	
  Section
  6.13. Compliance with Environmental Laws

  	
   

  
	
  Section
  6.14. Further Assurances

  	
   

  
	
  Section
  6.15. Interest Rate Hedging

  	
   

  
	
  Section
  6.16. Ownership of Overseas Borrowers

  	
   

  
	
  Section
  6.17. Designation of Subsidiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  NEGATIVE
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section
  7.01. Liens

  	
   

  
	
  Section
  7.02. Investments

  	
   

  
	
  Section
  7.03. Indebtedness

  	
   

  
	
  Section
  7.04. Fundamental Changes

  	
   

  
	
  Section
  7.05. Dispositions

  	
   

  
	
  Section
  7.06. Restricted Payments

  	
   

  
	
  Section
  7.07. Change in Nature of Business

  	
   

  
	
  Section
  7.08. Transactions with Affiliates

  	
   

  
	
  Section
  7.09. Burdensome Agreements

  	
   

  
	
  Section
  7.10. Use of Proceeds

  	
   

  
	
  Section
  7.11. Financial Covenants

  	
   

  
	
  Section
  7.12. Amendments of Organization Documents

  	
   

  
	
  Section 7.13.
  Accounting Changes

  	
   

  
	
  Section
  7.14. Prepayments, Etc. of Indebtedness

  	
   

  
	
  Section
  7.15. Amendment of Purchase Agreement

  	
   

  
	
  Section
  7.16. Equity Interests of the Company and
  Restricted Subsidiaries

  	
   

  
	
  Section
  7.17. Holding Company

  	
   

  
	
  Section
  7.18. Designated Senior Debt

  	
   

  
	
  Section
  7.19. Capital Expenditures

  	
   

  
	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  EVENTS OF DEFAULT AND
  REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section
  8.01. Events of Default

  	
   

  
	
  Section
  8.02. Remedies Upon Event of Default

  	
   

  
	
  Section
  8.03. Application of Funds

  	
   

  



 


iii





















 


	
  ARTICLE 9

  	
   

  
	
  ADMINISTRATIVE
  AGENT AND OTHER AGENTS

  	
   

  
	
   

  	
   

  
	
  Section
  9.01. Appointment and Authorization of
  Agents

  	
   

  
	
  Section
  9.02. Delegation of Duties

  	
   

  
	
  Section
  9.03. Liability of Agents

  	
   

  
	
  Section
  9.04. Reliance by Agents

  	
   

  
	
  Section
  9.05. Notice of Default

  	
   

  
	
  Section
  9.06. Credit Decision; Disclosure of
  Information by Agents

  	
   

  
	
  Section
  9.07. Indemnification of Agents

  	
   

  
	
  Section
  9.08. Agents in their Individual
  Capacities

  	
   

  
	
  Section
  9.09. Successor Agents

  	
   

  
	
  Section
  9.10. Administrative Agent May File Proofs
  of Claim

  	
   

  
	
  Section
  9.11. Collateral and Guaranty Matters

  	
   

  
	
  Section
  9.12. Other Agents; Arrangers and Managers

  	
   

  
	
  Section
  9.13. Appointment of Supplemental
  Administrative Agents

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section
  10.01. Amendments, Etc

  	
   

  
	
  Section
  10.02. Notices and Other Communications;
  Facsimile Copies

  	
   

  
	
  Section
  10.03. No Waiver; Cumulative Remedies

  	
   

  
	
  Section
  10.04. Attorney Costs, Expenses and Taxes

  	
   

  
	
  Section
  10.05. Indemnification by the Company

  	
   

  
	
  Section
  10.06. Payments Set Aside

  	
   

  
	
  Section
  10.07. Successors and Assigns

  	
   

  
	
  Section
  10.08. Confidentiality

  	
   

  
	
  Section
  10.09. Setoff 

  	
   

  
	
  Section
  10.10. Interest Rate Limitation

  	
   

  
	
  Section
  10.11. Counterparts

  	
   

  
	
  Section
  10.12. Integration

  	
   

  
	
  Section
  10.13. Survival of Representations and
  Warranties

  	
   

  
	
  Section
  10.14. Severability

  	
   

  
	
  Section
  10.15. Tax Forms

  	
   

  
	
  Section
  10.16. Governing Law

  	
   

  
	
  Section
  10.17. Waiver of Right to Trial by Jury

  	
   

  
	
  Section
  10.18. Binding Effect

  	
   

  
	
  Section
  10.19. Judgment Currency

  	
   

  
	
  Section
  10.20. Lender Action

  	
   

  



 


iv





















 


	
  SIGNATURES

  	
   

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  I

  	
  Guarantors

  	
   

  
	
  1.01A

  	
  Non-Recurring
  Cash Charges

  	
   

  
	
  1.01B

  	
  Real
  Properties

  	
   

  
	
  1.01C

  	
  Unrestricted
  Subsidiaries

  	
   

  
	
  1.01D

  	
  Mandatory
  Cost Formula

  	
   

  
	
  2.01

  	
  Commitments

  	
   

  
	
  5.08(b)

  	
  Owned
  Real Property

  	
   

  
	
  5.09

  	
  Environmental
  Matters

  	
   

  
	
  5.12

  	
  Subsidiaries
  and Other Equity Investments

  	
   

  
	
  7.01(b)

  	
  Existing
  Liens

  	
   

  
	
  7.02(f)

  	
  Existing
  Investments

  	
   

  
	
  7.03(b)

  	
  Existing
  Indebtedness

  	
   

  
	
  7.05(o)

  	
  Dispositions

  	
   

  
	
  7.08

  	
  Transactions
  with Affiliates

  	
   

  
	
  7.09

  	
  Existing
  Restrictions

  	
   

  
	
  10.02

  	
  Administrative
  Agent’s Office, Certain Addresses for Notices

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Form of

  	
   

  
	
   

  	
   

  
	
  A

  	
  Committed Loan
  Notice

  	
   

  
	
  B

  	
  Swing
  Line Loan Notice

  	
   

  
	
  C-1

  	
  Term Note

  	
   

  
	
  C-2

  	
  Tranche A
  Revolving Credit Note

  	
   

  
	
  C-3

  	
  Tranche B
  Revolving Credit Note

  	
   

  
	
  D

  	
  Compliance
  Certificate

  	
   

  
	
  E

  	
  Assignment
  and Assumption

  	
   

  
	
  F-1

  	
  Parent
  Guaranty

  	
   

  
	
  F-2

  	
  Subsidiary
  Guaranty

  	
   

  
	
  F-3

  	
  Company
  Guaranty

  	
   

  
	
  G

  	
  Security Agreement

  	
   

  
	
  H

  	
  Mortgage

  	
   

  
	
  I

  	
  Opinion Matters
  - Counsel to each additional Overseas Borrower

  	
   

  
	
  J

  	
  Election to
  Participate

  	
   

  
	
  K

  	
  Election
  to Terminate

  	
   

  



 





















 


AMENDED AND RESTATED CREDIT AGREEMENT


 


This AMENDED AND RESTATED
CREDIT AGREEMENT (“Agreement”) is entered into as of
April 8, 2004, among WMG ACQUISITION CORP., a Delaware corporation (the “Company”), the Overseas Borrowers from time to time party hereto, WMG
HOLDINGS CORP., a Delaware corporation (“Holdings”), each lender from time
to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), BANC OF AMERICA SECURITIES LLC and
DEUTSCHE BANK SECURITIES INC., as Joint Lead Arrangers and Joint Book Managers,
LEHMAN BROTHERS INC. and MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as Co-Arrangers and Joint Book Managers, DEUTSCHE BANK SECURITIES
INC. and LEHMAN COMMERCIAL PAPER INC., as Co-Syndication Agents, MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED, as Documentation Agent, and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.


 


PRELIMINARY
STATEMENTS


 


Pursuant to the Purchase
Agreement (as this and other capitalized terms used in these Preliminary
Statements are defined in the Section 1.01 below), the Company agreed to
purchase, directly or indirectly, the securities and assets comprising the
Warner Recorded Music Business and the Warner Music Publishing Business from
the Seller and its subsidiaries. The Acquisition was consummated on March 1,
2004.


 


Certain of the parties
hereto have heretofore entered into a Credit Agreement dated as of February 29,
2004 (as amended prior to the ARCA Effective Date, the “Existing Credit Agreement”) pursuant to which, (a)
simultaneously with the consummation of the Acquisition, the Initial Lenders
made term loans to the Borrowers in an aggregate Dollar Amount of
$1,150,000,000 to pay, among other things, the cash consideration for the
Acquisition, to pre-fund certain restructuring charges and to pay fees and
expenses incurred in connection with the Transaction and (b) the Initial
Lenders agreed, from time to time, to lend to the Borrowers and the L/C Issuer
agreed, from time to time, to issue Letters of Credit for the account of the
Borrowers under a $250,000,000 multi-currency revolving credit facility for the
Company and its Subsidiaries. Certain of the parties hereto have also
heretofore entered into the Bridge Loan Agreement, pursuant to which the
Initial Lenders agreed to make Bridge Loans in an aggregate principal amount of
$500,000,000 to finance the Acquisition and to pay related fees, costs and
expenses.


 


On the ARCA Effective Date,
the Company shall (a) consummate the issuance of Senior Subordinated Notes, (b)
prepay in full the Tranche B Term Loans outstanding under the Existing Credit
Agreement, (c) prepay in full the Bridge Loans and (d) make certain Restricted
Payments to Equity Investors (the “Refinancing”).


 


The parties hereto wish to
modify the Existing Credit Agreement in a number of respects, including to
reflect the Refinancing.


 





















 


In consideration of the
mutual covenants and agreements herein contained, the parties hereto hereby
agree that, on and as of the ARCA Effective Date, the Existing Credit Agreement
is hereby amended and restated in its entirety as follows:


 


ARTICLE 1


DEFINITIONS AND ACCOUNTING
TERMS


 


Section 1.01. Defined
Terms. As used in this Agreement, the following terms shall have the
meanings set forth below:


 


“Acquisition”
means the acquisition
by the Company of the Warner Business from the Seller, pursuant to, and in
accordance with, the Purchase Agreement.


 


“Adjusted
Consolidated Funded Indebtedness” means, on any day, the sum of (a) with respect to Consolidated Funded
Indebtedness consisting of revolving borrowings, the average daily outstanding
amount of such Consolidated Funded Indebtedness for the four fiscal quarters
most recently ended on or prior to such day (or, if fewer than four full fiscal
quarters have elapsed since the Closing Date, for the period commencing on the
Closing Date and ending on the last day of the fiscal quarter most recently
ended on or prior to such day) plus (b)
with respect to all other Consolidated Funded Indebtedness, the outstanding
amount thereof on such day.


 


“Administrative
Agent” means Bank of
America in its capacity as administrative agent under any of the Loan
Documents, or any successor administrative agent.


 


“Administrative
Agent’s Office” means,
with respect to any currency, the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 10.02 with respect to such currency, or such
other address or account with respect to such currency as the Administrative
Agent may from time to time notify the Company and the Lenders.


 


“Administrative
Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent.


 


“Affiliate”
means, with respect
to any Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified. “Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative
thereto. In no event shall any Lender or Agent be deemed to be an “Affiliate”
of any Loan Party.


 


“Agent-Related Persons” means the Administrative Agent, together with
its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.


 


2





















 


“Agents” means, collectively, the Administrative Agent, the Co-Syndication
Agents, the Documentation Agent and the Supplemental Administrative Agents (if
any).


 


“Aggregate Commitments” means the Commitments of all the Lenders.


 


“Alternative Currency” means Sterling, Yen or Euros.


 


“Alternative Currency Loan” means a Loan that is a Eurodollar Rate Loan
and that is made in an Alternative Currency pursuant to the applicable
Committed Loan Notice.


 


“Applicable Rate” means a percentage per annum equal to:


 


(a)                                       with respect to Term Loans, the following
percentages per annum, based upon the Leverage Ratio as set forth in the most
recent Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(b):


 




	
  Applicable
  Rate

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Leverage
  Ratio

  	
   

  	
  Eurodollar

  Rate

  	
   

  	
  Base
  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  <3.75:1

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
  2

  	
   

  	
  >3.75:1

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  






 


(b)                                      with respect to the Revolving Credit Loans,
unused Revolving Credit Commitments and Letter of Credit fees, (i) until July
20, 2004, (A) for Eurodollar Rate Loans, 2.75%, (B) for Base Rate Loans, 1.75%,
(C) for Letter of Credit fees, 2.75% and (D) for commitment fees, 0.50% and
(ii) thereafter, the following percentages per annum, based upon the Leverage
Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(b):


 




	
  Applicable
  Rate

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Leverage
  Ratio

  	
   

  	
  Eurodollar

  Rate and

  Letter of

  Credit Fees

  	
   

  	
  Base
  Rate

  	
   

  	
  Commitment

  Fee

  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  <3.25:1

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.25

  	
  %

  
	
  2

  	
   

  	
  >3.25:1 but <3.75:1

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.375

  	
  %

  
	
  3

  	
   

  	
  >3.75:1 but <4.25:1

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  0.375

  	
  %

  
	
  4

  	
   

  	
  >4.25:1 but <4.75:1

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  






 


3





















 




	
  Pricing

  Level

  	
   

  	
  Leverage
  Ratio

  	
   

  	
  Eurodollar

  Rate and

  Letter of

  Credit Fees

  	
   

  	
  Base
  Rate

  	
   

  	
  Commitment

  Fee

  Rate

  	
   

  
	
  5

  	
   

  	
  >4.75:1

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  0.50

  	
  %

  






 


Any increase or decrease in the Applicable
Rate resulting from a change in the Leverage Ratio shall become effective as of
the first Business Day immediately following the date a Compliance Certificate
is delivered pursuant to Section 6.02(b); provided
that at the option of the Administrative Agent or the Required
Lenders, Pricing Level 5 shall apply (x) as of the first Business Day after the
date on which a Compliance Certificate was required to have been delivered but
was not delivered, and shall continue to so apply to and including the date on
which such Compliance Certificate is so delivered (and thereafter the Pricing
Level otherwise determined in accordance with this definition shall apply) and
(y) as of the first Business Day after an Event of Default shall have occurred
and be continuing, and shall continue to so apply to but excluding the date on
which such Event of Default is cured or waived (and thereafter the Pricing
Level otherwise determined in accordance with this definition shall apply).


 


“Applicable
Time” means, with
respect to any Borrowings and payments in any Alternative Currency, the local
time in the place of settlement for such Alternative Currency as may be
reasonably determined by the Administrative Agent or the L/C Issuer, as the
case may be, to be necessary for timely settlement on the relevant date in
accordance with normal banking procedures in the place of payment.


 


“Appropriate
Lender” means, at any
time, (a) with respect to Loans of any Class, the Lenders of such Class, (b)
with respect to the Letter of Credit Sublimit, (i) the L/C Issuer and (ii) if
any Letters of Credit have been issued pursuant to Section 2.03(a), the
Revolving Credit Lenders and (c) with respect to the Swing Line Facility, (i)
the Swing Line Lender and (ii) if any Swing Line Loans are outstanding pursuant
to Section 2.04(a), the Revolving Credit Lenders.


 


“Approved
Domestic Bank” has
the meaning specified in clause (b) of the definition of “Cash Equivalents”.


 


“Approved Foreign Bank” has the meaning specified in clause (f) of
the definition of “Cash Equivalents”.


 


“Approved Fund” means any Fund that is administered, advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers, advises or manages a Lender.


 


“ARCA Effective
Date” means the first
date on which all of the conditions precedent in Section 4.01 are satisfied or
waived in accordance with Section 10.01.


 


“Arrangers” means, collectively, the Joint Lead Arrangers and the Co-Arrangers.


 


4





















 


“Assignment
and Assumption” means
an Assignment and Assumption substantially in the form of Exhibit E.


 


“Attorney
Costs” means and
includes all reasonable fees, expenses and disbursements of any law firm or
other external counsel.


 


“Attributable
Indebtedness” means,
on any date, in respect of any Capitalized Lease of any Person, the capitalized
amount thereof that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP.


 


“Audited
Financial Statements” means,
collectively, the Warner Recorded Music Audited Financial Statements and the
Warner Music Publishing Audited Financial Statements.


 


“Auto-Renewal Letter of Credit” has the meaning specified in Section
2.03(b)(iii).


 


“Average
Cash on Hand” means,
on any day, the sum of the amounts of cash and Cash Equivalents on hand on the
last day of each calendar month ending during the four fiscal quarters most
recently ended on or prior to such day, divided by twelve (12); provided that the Company may, by notice
in writing to the Administrative Agent, elect to determine Average Cash on Hand
on a (a) weekly basis, in which case “Average
Cash on Hand” shall mean the sum of the amounts of cash and Cash
Equivalents on hand on the last Business Day of each week ending during the
four fiscal quarters most recently ended on or prior to such day, divided by
the number of weeks ending during such period (provided that no
election shall be made pursuant to this clause (a) if an election shall
previously have been made pursuant to clause (b) of this definition); or (b)
daily basis, in which case “Average Cash on
Hand” shall mean the average daily outstanding amount of cash and
Cash Equivalents on hand for the four fiscal quarters most recently ended on or
prior to such date; provided further that
if fewer than four full fiscal quarters have elapsed since the Closing Date,
Average Cash on Hand shall be determined as set forth above with reference to
the period commencing on (and including) the Closing Date and ending on the
last day of the fiscal quarter most recently ended on or prior to such day.


 


“Bank of America” means Bank of America, N.A. and its successors.


 


“Base Rate”
means for any day a
fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.” The “prime
rate” is a rate set by Bank of America based upon various factors including
Bank of America’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, of below such announced rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business on
the day specified in the public announcement of such change.


 


“Base Rate Loan” means a Loan that bears interest based on the Base Rate.


 


“Borrower Parties” means the collective reference to the Company and its Restricted
Subsidiaries, and “Borrower Party” means any one of them.


 


5





















 


“Borrowers” means the Company and the Overseas Borrowers.


 


“Borrowing”
means a Revolving
Credit Borrowing, a Swing Line Borrowing or a Term Borrowing, as the context
may require.


 


“Bridge
Loan Agreement” means
the Senior Subordinated Bridge Loan Agreement dated as of the Closing Date
among the Company, Holdings, Deutsche Bank AG Cayman Island Branch, as
administrative agent, and the other agents and lenders party thereto.


 


“Bridge
Loans” means (i) the
senior subordinated unsecured term loans of the Company in an aggregate
principal amount of $500,000,000 made on the Closing Date under the Bridge Loan
Agreement and (ii) any “Term Loans” or “Exchange Notes” referred to therein for
which or into which such loans may be converted, replaced or exchanged at the
option of the Company or the holders thereof pursuant to the terms of the
Bridge Loan Agreement.


 


“Business
Day” means any day
other than a Saturday, Sunday or other day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office with respect to Obligations denominated
in Dollars is located and:


 


(a)                                       if such day relates to any interest rate
settings as to a Eurodollar Rate Loan denominated in Dollars, any fundings,
disbursements, settlements and payments in Dollars in respect of any such
Eurodollar Rate Loan, or any other dealings in Dollars to be carried out pursuant
to this Agreement in respect of any such Eurodollar Rate Loan, means any such
day on which dealings in deposits in Dollars are conducted by and between banks
in the London interbank eurodollar market;


 


(b)                                      if such day relates to any interest rate
settings as to a Eurodollar Rate Loan denominated in Euro, any fundings,
disbursements, settlements and payments in Euro in respect of any such
Eurodollar Rate Loan, or any other dealings in Euro to be carried out pursuant
to this Agreement in respect of any such Eurodollar Rate Loan, means a TARGET
Day;


 


(c)                                       if such day relates to any interest rate
settings as to a Eurodollar Rate Loan denominated in a currency other than
Dollars or Euro, means any such day on which dealings in deposits in the
relevant currency are conducted by and between banks in the London or other
applicable offshore interbank market for such currency; and


 


(d)                                      if such day relates to any fundings,
disbursements, settlements and payments in a currency other than Dollars or
Euro in respect of a Eurodollar Rate Loan denominated in a currency other than
Dollars or Euro, or any other dealings in any currency other than Dollars or
Euro to be carried out pursuant to this Agreement in respect of any such
Eurodollar Rate Loan (other than any interest rate settings), means any such
day on which banks are open for foreign exchange business in the principal
financial center of the country of such currency.


 


6





















 


“Capital Expenditures” means, as of any date for the applicable
period then ended, all capital expenditures of the Borrower Parties on a
consolidated basis for such period, as determined in accordance with GAAP; provided that Capital Expenditures shall
not include any such expenditures which constitute (a) a Permitted Acquisition,
(b) capital expenditures relating to the construction or acquisition of any
property which has been transferred to a Person that is not a Borrower Party
pursuant to a sale-leaseback transaction permitted under Section 7.05(f), (c)
to the extent permitted by this Agreement, a reinvestment of the Net Cash
Proceeds of any Disposition in accordance with Section 2.05(b)(ii), Casualty
Event or Equity Issuance by any Consolidated Party, (d) expenditures of
proceeds of insurance settlements, condemnation awards and other settlements in
respect of lost, destroyed, damaged or condemned assets, equipment or other
property to the extent such expenditures are made to replace or repair such
lost, destroyed, damaged or condemned assets, equipment or other property or
otherwise to acquire, maintain, develop, construct, improve, upgrade or repair
assets or properties useful in the business of the Company and the Restricted
Subsidiaries within 12 months of receipt of such proceeds, (e) interest capitalized
during such period, (f) expenditures that are accounted for as capital
expenditures of such person and that actually are paid for by a third party
(excluding Holdings, the Company or any Restricted Subsidiary thereof) and for
which neither Holdings, the Company nor any Restricted Subsidiary thereof has
provided or is required to provide or incur, directly or indirectly, any
consideration or obligation to such third party or any other person (whether
before, during or after such period), (g) the book value of any asset owned by
such person prior to or during such period to the extent that such book value
is included as a capital expenditure during such period as a result of such
person reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period; provided that (i) any expenditure
necessary in order to permit such asset to be reused shall be included as a
Capital Expenditure during the period that such expenditure actually is made
and (ii) such book value shall have been included in Capital Expenditures when
such asset was originally acquired, (h) the purchase price of equipment
purchased during such period to the extent the consideration therefor consists
of any combination of (i) used or surplus equipment traded in at the time of
such purchase and (ii) the proceeds of a concurrent sale of used or surplus
equipment, in each case, in the ordinary course of business, or (i) the
purchase price of equipment that is purchased substantially contemporaneously
with the trade-in of existing equipment to the extent that the gross amount of
such purchase price is reduced by the credit granted by the seller of such
equipment for the equipment being traded in at such time.


 


“Capitalized Leases” means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.


 


“Cash Collateral” has the meaning specified in Section 2.03(g).


 


“Cash Collateral Account” means a blocked, non-interest bearing deposit
account at Bank of America (or another commercial bank selected in compliance
with Section 9.09) in the name of the Administrative Agent and under the sole
dominion and control of the Administrative Agent, and otherwise established in
a manner satisfactory to the Administrative Agent.


 


“Cash Collateralize” has the meaning specified in Section 2.03(g).


 


7





















 


“Cash Equivalents” means any of the following types of Investments, to the extent owned by
the Company or any of its Restricted Subsidiaries free and clear of all Liens:


 


(a)                                       readily marketable obligations issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof having maturities of not more than three hundred and
sixty (360) days from the date of acquisition thereof; provided that the full faith and credit of
the United States is pledged in support thereof;


 


(b)                                      time deposits with, or insured certificates
of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a
Lender or (B) is organized under the laws of the United States, any state
thereof or the District of Columbia or is the principal banking subsidiary of a
bank holding company organized under the laws of the United States, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated at
least P 1 (or the then equivalent grade) by Moody’s or at least “A 1” (or the
then equivalent grade) by S&P, and (iii) has combined capital and surplus
of at least $500,000,000 (any such bank being an “Approved Domestic Bank”), in each case with
maturities of not more than three hundred and sixty (360) days from the date of
acquisition thereof;


 


(c)                                       commercial paper and variable or fixed rate
notes issued by an Approved Domestic Bank (or by the parent company thereof) or
any variable rate note issued by, or guaranteed by a domestic corporation rated
A 1 (or the equivalent thereof) or better by S&P or P 1 (or the equivalent
thereof) or better by Moody’s, in each case with maturities of not more than
three hundred and sixty (360) days from the date of acquisition thereof;


 


(d)                                      repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations;


 


(e)                                       Investments, classified in accordance with
GAAP as Current Assets of the Company or any of its Restricted Subsidiaries, in
money market investment programs registered under the Investment Company Act of
1940, which are administered by financial institutions having capital of at
least $500,000,000, and the portfolios of which are limited such that 95% of such
investments are of the character, quality and maturity described in clauses
(a), (b), (c) and (d) of this definition; and


 


(f)                                         solely with respect to any Foreign
Subsidiary, non-Dollar denominated (i) certificates of deposit of, bankers
acceptances of, or time deposits with, any commercial bank which is organized
and existing under the laws of the country in which such Foreign Subsidiary
maintains its chief executive office and principal place of business provided
such country is a member of the Organization for Economic


 


8





















 


Cooperation and Development,
and whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody’s is at least P-1 or the equivalent
thereof (any such bank being an “Approved
Foreign Bank”) and
maturing within twelve (12) months of the date of acquisition and (ii)
equivalents of demand deposit accounts which are maintained with an Approved
Foreign Bank.


 


“Cash Management Obligations” means obligations owed by Holdings, the
Company or any of its Restricted Subsidiary to any Lender or any Affiliate of a
Lender in respect of any overdraft and related liabilities arising from
treasury, depository and cash management services or any automated clearing house
transfers of funds.


 


“Casualty
Event” means any
event that gives rise to the receipt by Holdings, the Company or any of its
Restricted Subsidiaries of any insurance proceeds or condemnation awards in
respect of any equipment, fixed assets or real property (including any
improvements thereon) to replace or repair such equipment, fixed assets or real
property.


 


“CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980.


 


“CERCLIS” means the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.


 


“Change of
Control” means the
earlier to occur of (a) the Permitted Holders ceasing to have the power,
directly or indirectly, to vote or direct the voting of securities having a
majority of the ordinary voting power for the election of directors of
Holdings; provided that the
occurrence of the foregoing event shall not be deemed a Change of Control if,


 


(i)                                any time prior to the consummation of a
Qualifying IPO, and for any reason whatever, (A) the Permitted Holders
otherwise have the right, directly or indirectly, to designate (and do so
designate) a majority of the board of directors of Holdings or (B) the
Permitted Holders own, directly or indirectly, of record and beneficially an
amount of common stock of Holdings equal to an amount more than fifty percent
(50%) of the amount of common stock of Holdings owned, directly or indirectly,
by the Permitted Holders of record and beneficially as of the Closing Date and
such ownership by the Permitted Holders represents the largest single block of
voting securities of Holdings held by any Person or related group for purposes
of Section 13(d) of the Securities and Exchange Act of 1934, as amended, or


 


(ii)                             at any time after the consummation of a
Qualifying IPO, and for any reason whatsoever, (A) no “person” or “group” (as
such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended, but excluding any employee benefit plan of such person and
its subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan), excluding the
Permitted Holders, shall become the “beneficial owner” (as defined in Rules 13(d)-3
and 13(d)-5 under such Act), directly or indirectly, of more than the greater


 


9





















 


of (x) thirty-five percent
(35%) of the shares outstanding of Holdings and (y) the percentage of the then
outstanding voting stock of Holdings owned, directly or indirectly,
beneficially by the Permitted Holders, and (B) during any period of twelve (12)
consecutive months, the board of directors of Holdings shall consist of a
majority of the Continuing Directors; or


 


(b)                                      any “Change of Control” (or any comparable
term) in any document pertaining to any Junior Financing with an aggregate
outstanding principal amount in excess of the Threshold Amount; or


 


(c)                                       at any time prior to a Qualifying IPO of the
Company, the Company ceasing to be a directly or indirectly wholly owned
Subsidiary of Holdings.


 


“Cinram Disposition” means the Disposition by the Warner Business
of its DVD and CD manufacturing, printing, packaging, physical distribution and
merchandising businesses to Cinram International, Inc., which was consummated
on October 24, 2003.


 


“Class” (a) when used with respect to Lenders, refers to whether such Lenders
are Tranche A Revolving Credit Lenders, Tranche B Revolving Credit Lenders or
Term Lenders, (b) when used with respect to Commitments, refers to whether such
Commitments are Tranche A Revolving Credit Commitments, Tranche B Revolving
Credit Commitments or Term Commitments, (c) when used with respect to Loans or
a Borrowing, refers to whether such Loans, or the Loans comprising such
Borrowing, are Tranche A Revolving Credit Loans, Tranche B Revolving Credit
Loans or Term Loans and (d) when used with respect to Letters of Credit, refers
to whether such Letters of Credit are Tranche A Letters of Credit or Tranche B
Letters of Credit.


 


“Closing Date” means the first date all the conditions precedent in Section 4.01 of
the Existing Credit Agreement were satisfied or waived in accordance with
Section 10.01.(1)


 


“Co-Arrangers” means Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as Co-Arrangers under this Agreement.


 


“Co-Syndication Agents” means Deutsche Bank Securities Inc. and
Lehman Commercial Paper Inc., as Co-Syndication Agents under the Loan
Documents.


 


“Code” means the U.S. Internal Revenue Code of 1986.


 


“Collateral” means all of the “Collateral” referred to in the Collateral Documents
and all of the other property and assets that are or are required under the
terms hereof or of the Collateral Documents to be subject to Liens in favor of
the Administrative Agent for the benefit of the Secured Parties.


 










(1)  March 1, 2004.


 


10





















 


“Collateral
Documents” means,
collectively, the Security Agreement, the Intellectual Property Security
Agreement, the Mortgages, each of the mortgages, collateral assignments,
Security Agreement Supplements, security agreements, pledge agreements or other
similar agreements delivered to the Administrative Agent and the Lenders
pursuant to Section 6.12, and each of the other agreements, instruments or
documents that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.


 


“Commitment”
means a Term
Commitment or a Revolving Credit Commitment, as the context may require.


 


“Committed
Loan Notice” means a
notice of (a) a Term Borrowing, (b) a Revolving Credit Borrowing, (c) a
conversion of Loans from one Type to the other, or (d) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit A.


 


“Company” has the meaning specified in the introductory paragraph to this
Agreement.


 


“Company
Guaranty” means the
Company Guaranty made by the Company in favor of the Administrative Agent on
behalf of the Lenders, substantially in the form of Exhibit F-3.


 


“Compensation
Period” has the meaning specified in Section
2.12(c)(ii).


 


“Compliance
Certificate” means
a certificate substantially in the form of Exhibit D.


 


“Consolidated
Cash Taxes” means, as
of any date for the applicable period ending on such date with respect to the
Borrower Parties on a consolidated basis, the aggregate of all income,
franchise and similar taxes, as determined in accordance with GAAP, to the
extent the same are payable in cash with respect to such period.


 


“Consolidated
EBITDA” means, as of
any date for the applicable period ending on such date with respect to any
Person and its Subsidiaries on a consolidated basis, the sum of (a)
Consolidated Net Income, plus (b)
an amount which, in the determination of Consolidated Net Income for such
period, has been deducted for, without duplication,


 


(i)                                     total interest expense,


 


(ii)                                  income, franchise and similar taxes and any
tax distributions permitted to be made pursuant to Section 7.06(h)(i) and
(iii),


 


(iii)                               depreciation and amortization expense,


 


(iv)                              letter of credit fees,


 


(v)                                 non-cash expenses resulting from any employee
benefit or management compensation plan or the grant of stock and stock options
to employees of Holdings, the


 


11





















 


Company or any of their
respective Subsidiaries pursuant to a written plan or agreement or the
treatment of such options under variable plan accounting,


 


(vi)                                   all extraordinary charges,


 


(vii)                                non-cash amortization of financing costs of
such Person and its Subsidiaries,


 


(viii)                             cash expenses incurred in connection with the
Transaction or, to the extent permitted hereunder, any Investment permitted
under Section 7.02, Equity Issuance or Debt Issuance (in each case, whether or
not consummated),


 


(ix)                                     any losses (or minus any gains) realized upon
the disposition of property or assets outside of the ordinary course of
business,


 


(x)                                        to the extent actually reimbursed, expenses
incurred to the extent covered by indemnification provisions in any agreement
in connection with a Permitted Acquisition,


 


(xi)                                     to the extent covered by insurance, expenses
with respect to liability or casualty events, business interruption,


 


(xii)                                  management fees permitted under Section
7.08(d),


 


(xiii)                               any non-cash purchase accounting adjustment
and any step-ups with respect to re-valuing assets and liabilities in
connection with the Transaction or any Investment permitted under Section 7.02,


 


(xiv)                              non-cash losses from Joint Ventures and
non-cash minority interest reductions,


 


(xv)                                 fees and expenses in connection with the
issuance of the Senior Subordinated Notes or exchanges or refinancings
permitted by Section 7.14,


 


(xvi)                              (A) non-cash, non-recurring charges with
respect to employee severance and (B) other non-cash, non-recurring charges so
long as such charges described in this clause (B) do not result in a cash
charge in a future period,


 


(xvii)                           non-recurring cash charges of the types set
forth in Schedule 1.01A incurred in an amount not greater than the applicable
amount set forth in Schedule 1.01A,


 


(xviii)                        (A) non-recurring cash restructuring charges
incurred after the Closing Date and on or prior to the date which is 30 months
after the Closing Date in connection with the implementation of the Company’s
business plan, in an aggregate amount not to exceed $325,000,000 and (B) other
non-recurring cash charges incurred after the Closing Date and on or prior to
the date which is 30 months after the Closing Date in connection


 


12





















 


with the restructuring of
the Company’s artist portfolio, in an aggregate amount not to exceed
$50,000,000,


 


(xix)                           other expenses of such Person and its
Subsidiaries reducing Consolidated Net Income which do not represent a cash
item in such period or any future period,


 


(xx)                              with respect to any Event of Default under
any covenant set forth in Section 7.11, the Net Cash Proceeds of any Permitted
Equity Issuance to the Equity Investors solely to the extent that such Net Cash
Proceeds (A) are actually received by the Borrowers (including through capital
contribution of such Net Cash Proceeds by Holdings to the Company) no later
than fifteen (15) Business Days after the delivery of a Notice of Intent to
Cure, (B) are Not Otherwise Applied and (C) do not exceed the aggregate amount
necessary to cure such Event of Default under Section 7.11 for any applicable
period; provided that in each
period of four fiscal quarters, there shall be at least two (2) fiscal quarters
in which no such cure is made; it being understood that this clause (xx) may
not be relied on for purposes of calculating any financial ratios other than as
applicable to Section 7.11,


 


(xxi)                           Securitization Fees to the extent deducted in
calculating Consolidated Net Income for such period, and


 


(xxii)                        without duplication, pension curtailment expenses, transaction costs
and executive contract expenses incurred by Affiliates of Holdings (other than
Holdings and its Subsidiaries) on behalf of Holdings or any of its Subsidiaries
and reflected in the combined financial statements of Holdings and its
Subsidiaries as capital contributions; minus


 


(c)                                         an amount which, in the determination of
Consolidated Net Income, has been included for


 


(i)                                     (x) non-cash income during such period (other
than with respect to cash actually received) and (y) all extraordinary gains,
and


 


(ii)                                  any gains realized upon the disposition of
property outside of the ordinary course of business, plus/minus


 


(d)                                        unrealized losses/gains in respect of Swap
Contracts, all as determined in accordance with GAAP;


 


provided that, notwithstanding any other provision to
the contrary contained in this Agreement, for purposes of any calculation made
under the financial covenants set forth in Section 7.11 (including for purposes
of the definition of “Pro Forma Basis”, but excluding for purposes of the
definition of “Applicable Rate”), (1) Consolidated EBITDA for any period shall
be calculated after giving Pro Forma Effect to the Cinram Disposition and (2)
to the extent the receipt of any Net Cash Proceeds of any Permitted Equity
Issuance are an effective addition to Consolidated EBITDA as contemplated by,
and in accordance with, the provisions of clause (b)(xx) above and,


 


13





















 


as a result thereof, any Event of Default of
the covenants set forth in Section 7.11 shall have been cured for any
applicable period, such cure shall be deemed to be effective as of the last day
of such applicable period.


 


“Consolidated Funded Indebtedness” means, with respect to any Person and its
Subsidiaries on a consolidated basis, without duplication,


 


(a)                                       all obligations of such Person for borrowed
money,


 


(b)                                      all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments,


 


(c)                                       all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business),


 


(d)                                      all obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person (other than accrued expenses and trade debt incurred in the
ordinary course of business) which would appear as liabilities on a balance
sheet of such Person and to the extent constituting contingent obligations,


 


(e)                                       all Consolidated Funded Indebtedness of
others secured by (or for which the holder of such Consolidated Funded
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed,


 


(f)                                         all Guarantees of such Person with respect to
Consolidated Funded Indebtedness of another Person,


 


(g)                                      the implied principal component of all
obligations of such Person under Capitalized Leases,


 


(h)                                      all drafts drawn (to the extent unreimbursed)
under standby letters of credit issued or bankers’ acceptances facilities
created for the account of such Person,


 


(i)                                          unless the holder thereof is a Loan Party or,
if the issuer thereof is a Subsidiary of Holdings which is not a Loan Party,
any other Subsidiary of Holdings, all Disqualified Equity Interests issued by
such Person, and


 


(j)                                          the Consolidated Funded Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer to the extent such Consolidated Funded Indebtedness
is recourse to such Person.


 


14





















 


Notwithstanding any other provision of this
Agreement to the contrary, (i) the term “Consolidated Funded Indebtedness”
shall not be deemed to include (x) any earn-out obligation until such
obligation becomes a liability on the balance sheet of the applicable Person,
(y) any deferred compensation arrangements or (z) any non compete or consulting
obligations incurred in connection with Permitted Acquisitions and (ii) the
amount of Consolidated Funded Indebtedness for which recourse is limited either
to a specified amount or to an identified asset of such Person shall be deemed
to be equal to such specified amount or the fair market value of such
identified asset, as the case may be.


 


“Consolidated Interest Charges” means, as of any date for the applicable
period ending on such date with respect to any Person and its Subsidiaries on a
consolidated basis, the amount by which (x) interest expense (including the
amortization of debt discount and premium, the interest component under
Capitalized Leases, but excluding, to the extent included in interest expense,
(i) fees and expenses associated with the consummation of the Transaction, (ii)
annual agency fees paid to the Administrative Agent, (iii) costs associated
with obtaining Swap Contracts, (iv) fees and expenses associated with any
Investment permitted under Section 7.02, Equity Issuance or Debt Issuance
(whether or not consummated), (v) pay-in-kind interest expense or other noncash
interest expense (including as a result of the effects of purchase accounting)
and (vi) commissions, discounts, yield and other fees and charges incurred in
connection with any Qualified Securitization Financing which are payable to any
Person other than Holdings or a Subsidiary), exceeds (y) interest income, in
each case as determined in accordance with GAAP, to the extent the same are
payable (or receivable) in cash with respect to such period.


 


“Consolidated Net Income” means, as of any date for the applicable
period ending on such date with respect to any Person and its Subsidiaries on a
consolidated basis, net income (excluding, without duplication, (i)
extraordinary items and (ii) any amounts attributable to Investments in any
Joint Venture to the extent that either (x) such amounts have not been
distributed in cash to such Person and its Subsidiaries during the applicable
period, (y) such amounts were not earned by such Joint Venture during the
applicable period or (z) there exists in respect of any future period any
encumbrance or restriction on the ability of such Joint Venture to pay
dividends or make any other distributions in cash on the Equity Interests of
such Joint Venture held by such Person and its Subsidiaries), as determined in
accordance with GAAP; provided that
Consolidated Net Income for any such period shall not include (A) the
cumulative effect of a change in accounting principles during such period, (B)
any net after-tax income or loss (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness, (C)
any non-cash charges resulting from mark-to-market accounting relating to
warrants and (D) any non-cash impairment charges resulting from the application
of Statement of Financial Accounting Standards No. 142 – Goodwill and Other
Intangibles and No. 144 – Accounting for the Impairment or Disposal of
Long-Lived Assets and the amortization of intangibles including arising
pursuant to Statement of Financial Accounting Standards No. 141 – Business
Combinations.


 


“Consolidated Parties” means the collective reference to Holdings,
the Company and its Restricted Subsidiaries, and “Consolidated Party” means any one of them.


 


15





















 


“Consolidated Scheduled Funded Debt Payments” means, as of any date for the applicable
period ending on such date with respect to the Borrower Parties on a
consolidated basis, the sum of all scheduled payments of principal on
Consolidated Funded Indebtedness made during such period (including the implied
principal component of payments made on Capitalized Leases during such period)
as determined in accordance with GAAP.


 


“Continuing
Directors” shall mean
the directors of Holdings on the Closing Date, after giving effect to the Acquisition
and the other transactions contemplated hereby, and each other director, if, in
each case, such other directors’ nomination for election to the board of
directors of Holdings (or the Company after a Qualifying IPO of the Company) is
recommended by a majority of the then Continuing Directors or such other
director receives the vote of the Permitted Holders in his or her election by
the stockholders of Holdings (or the Company after a Qualifying IPO of the
Company).


 


“Contractual
Obligation” means, as
to any Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.


 


“Control” has the meaning specified in the definition of “Affiliate.”


 


“Credit
Extension” means each
of the following: (a) a Borrowing and (b) an L/C Credit Extension.


 


“Current
Assets” means, with
respect to any Person, all assets of such Person that, in accordance with GAAP,
would be classified as current assets on the balance sheet of a company
conducting a business the same as or similar to that of such Person, after
deducting appropriate and adequate reserves therefrom in each case in which a
reserve is proper in accordance with GAAP.


 


“Debt Issuance” means the issuance by any Person and its Subsidiaries of any
Indebtedness for borrowed money.


 


“Debtor
Relief Laws” means
the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally
(including, in the case of Loan Parties incorporated or organized in England or
Wales, administration, administrative receivership, voluntary arrangement and
schemes of arrangement).


 


“Default” means any event or condition that constitutes
an Event of Default or that, with the giving of any notice, the passage of
time, or both, would be an Event of Default.


 


“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per annum;
provided that with respect to a
Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the
interest rate


 


16





















 


(including any Applicable Rate and any
Mandatory Cost) otherwise applicable to such Loan plus 2.0% per annum, in each
case, to the fullest extent permitted by applicable Laws.


 


“Defaulting
Lender” means any
Lender that (a) has failed to fund any portion of the Term Loans, Revolving
Credit Loans, participations in L/C Obligations or participations in Swing Line
Loans required to be funded by it hereunder within one (1) Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required
to be paid by it hereunder within one (1) Business Day of the date when due,
unless the subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.


 


“Disposition”
or “Dispose” means the sale, transfer,
license, lease or other disposition (including any sale and leaseback
transaction and any sale of Equity Interests) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith; provided that
“Disposition” and “Dispose” shall not be deemed to include any issuance by
Holdings of any of its Equity Interests to another Person.


 


“Disqualified
Equity Interests” means
any Equity Interest which, by its terms (or by the terms of any security or
other Equity Interests into which it is convertible or for which it is
exchangeable), or upon the happening of any event or condition (a) matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
(b) is redeemable at the option of the holder thereof, in whole or in part, (c)
provides for the scheduled payments of dividends in cash, or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Equity Interests
that would constitute Disqualified Equity Interests, in each case, prior to the
date that is ninety-one (91) days after the Maturity Date (determined in
accordance with clause (b)(i) of the definition thereof) of the Term Loans.


 


“Documentation
Agent” means Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as Documentation Agent under
this Agreement.


 


“Dollar” and “$” mean lawful money of the United
States.


 


“Dollar Amount” means, at any time:


 


(a)                                  with respect to any Loan denominated in
Dollars (including, with respect to any Swing Line Loan, any funded
participation therein), the principal amount thereof then outstanding (or in
which such participation is held);


 


(b)                                 with respect to any Alternative Currency
Loan, the principal amount thereof then outstanding in the relevant Alternative
Currency, converted to Dollars in accordance with Section 2.17(a); and


 


(c)                                  with respect to any L/C Obligation (or any
risk participation therein), (A) if denominated in Dollars, the amount thereof
and (B) if denominated in an Alternative Currency, the amount thereof converted
to Dollars in accordance with Section 2.17(b).


 


17





















 


“Domestic
Subsidiary” means any
Subsidiary that is organized under the laws of the United States, any state
thereof or the District of Columbia and any other Subsidiary that is not a “controlled
foreign corporation” under Section 957 of the Code.


 


“Election
to Participate” means
an Election to Participate substantially in the form of Exhibit J hereto.


 


“Election
to Terminate” means
an Election to Terminate substantially in the form of Exhibit K hereto.


 


“Eligible
Assignee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent,
(ii) in the case of any assignment of a Revolving Commitment, the L/C Issuer
and the Swing Line Lender, and (iii) unless an Event of Default has occurred
and is continuing under Section 8.01(a) or 8.01(f), the Company (each such
approval not to be unreasonably withheld or delayed).


 


“EMU” means the economic and monetary union in
accordance with the Treaty of Rome 1957, as amended by the Single European Act
1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.


 


“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.


 


“Environmental
Laws” means any and
all Federal, state, local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.


 


“Environmental
Liability” means any
liability, contingent or otherwise (including any liability for damages, costs
of environmental remediation, fines, penalties or indemnities), of the Company,
any other Loan Party or any of their respective Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.


 


“Environmental
Permit” means any
permit, approval, identification number, license or other authorization
required under any Environmental Law.


 


“Equity
Contributions” means,
collectively, (a) the contribution by the Equity Investors on the Closing Date
of an aggregate amount of cash not less than $1,250,000,000 to Holdings,


 


18





















 


and (b) the further contribution by Holdings
on the Closing Date of all such cash contribution proceeds to the Company in
order to consummate the Acquisition.


 


“Equity Interests” means, with respect to any Person, all of the shares, interests,
rights, participations or other equivalents (however designated) of capital
stock of (or other ownership or profit interests or units in) such Person and
all of the warrants, options or other rights for the purchase, acquisition or
exchange from such Person of any of the foregoing (including through
convertible securities).


 


“Equity Investors” means the Sponsors, Edgar Bronfman Jr., the Seller and the Management
Shareholders.


 


“Equity
Issuance” means any
issuance for cash by any Person and its Subsidiaries to any other Person of (a)
its Equity Interests, (b) any of its Equity Interests pursuant to the exercise
of options or warrants, (c) any of its Equity Interests pursuant to the
conversion of any debt securities to equity or (d) any options or warrants
relating to its Equity Interests. A Disposition shall not be deemed to be an
Equity Issuance.


 


“ERISA” means the Employee Retirement Income Security Act of 1974.


 


“ERISA
Affiliate” means any
trade or business (whether or not incorporated) under common control with any
Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to Section 412
of the Code).


 


“ERISA
Event” means (a) a
Reportable Event with respect to a Pension Plan; (b) a withdrawal by any
Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon any Borrower or any ERISA Affiliate.


 


“Euro” and “EUR” means the lawful
currency of the Participating Member States introduced in accordance with EMU
Legislation.


 


“Eurodollar
Rate” means, for any
Interest Period with respect to any Eurodollar Rate Loan:


 


19





















 


(a)                                       the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate that appears on
the page of the Telerate screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars or the relevant Alternative Currency (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period, or


 


(b)                                      if the rate referenced in the preceding
clause (a) does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars or the relevant Alternative Currency (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period, or


 


(c)                                       if the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in Dollars or
the relevant Alternative Currency for delivery on the first day of such
Interest Period in Same Day Funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their
request at approximately 4:00 p.m. (London time) two (2) Business Days prior to
the first day of such Interest Period.


 


“Eurodollar Rate Loan” means a Loan, whether denominated in Dollars
or in an Alternative Currency, that bears interest at a rate based on the
Eurodollar Rate.


 


“Event of Default” has the meaning specified in Section 8.01.


 


“Excess Cash Flow” means, with respect to any fiscal year period of the Borrower Parties
on a consolidated basis, an amount equal to (a) Consolidated EBITDA minus (b) without duplication,


 


(i)                                     Capital Expenditures permitted to be made
under Section 7.19 to the extent not financed with the proceeds of long-term
Indebtedness other than the Obligations,


 


(ii)                                  Consolidated Interest Charges with respect to
Indebtedness permitted under Section 7.03,


 


(iii)                               Consolidated Cash Taxes, including cash
payments for Federal, state and other income tax liabilities incurred prior to
the Closing Date,


 


20





















 


(iv)                                   Consolidated Scheduled Funded Debt Payments
with respect to Indebtedness permitted under Section 7.03,


 


(v)                                      Restricted Payments made by the Borrower
Parties to the extent that such Restricted Payments are permitted to be made
under Section 7.06(h),


 


(vi)                                   voluntary prepayments of any Indebtedness; provided that (1) such prepayments are
otherwise permitted hereunder and (2) if such Indebtedness consists of a
revolving line of credit, the commitments under such line of credit are permanently
reduced by the amount of such prepayment,


 


(vii)                                letter of credit fees,


 


(viii)                             proceeds received by the Borrower Parties
from insurance claims with respect to casualty events, business interruption or
product recalls which reimburse prior business expenses,


 


(ix)                                     all extraordinary cash charges,


 


(x)                                        cash payments made in satisfaction of non
current liabilities,


 


(xi)                                     cash expenses incurred in connection with the
Transaction or, to the extent permitted hereunder, any Investment permitted
under Section 7.02, Equity Issuance or Debt Issuance (whether or not
consummated),


 


(xii)                                  fees and expenses in connection with the
issuance of Senior Subordinated Notes or exchanges or refinancings permitted by
Section 7.14,


 


(xiii)                               cash indemnity payments received pursuant to
indemnification provisions in any agreement in connection with the Acquisition,
any Permitted Acquisition or any other Investment permitted hereunder (or in
any similar agreement related to any other Acquisition consummated prior to the
Closing Date),


 


(xiv)                              non-recurring cash charges to the extent
included in determining Consolidated EBITDA,


 


(xv)                                 other non-recurring cash charges in an
aggregate amount not to exceed $20,000,000 during any four (4) consecutive
fiscal quarter period,


 


(xvi)                              expenses incurred in connection with deferred
compensation arrangements in connection with the Transaction,


 


(xvii)                           management fees permitted to be made under
Section 7.08(d),


 


(xviii)                        cash from operations used to consummate a
Permitted Acquisition,


 


21





















 


(xix)                                to the extent added to Consolidated Net
Income in determining Consolidated EBITDA, losses from discontinued operations
for such period,


 


(xx)                                   to the extent added to Consolidated Net
Income in determining Consolidated EBITDA, Net Cash Proceeds of Permitted
Equity Issuances,


 


(xxi)                                cash expenditures made in respect of Swap
Contracts during such fiscal year to the extent not reflected in the
computation of Consolidated EBITDA or Consolidated Interest Charges,


 


(xxii)                             to the extent not deducted in the computation
of Net Proceeds in respect of any asset disposition or condemnation giving rise
thereto, the amount of any mandatory prepayment of Indebtedness (other than
Indebtedness hereunder or under any other Loan Document), together with any
interest, premium or penalties required to be paid (and actually paid) in
connection therewith, an


 


(xxiii)   payments with respect to contingent
contractual obligations required to be paid in the six (6) months after the end
of such fiscal year (which payments would have been deducted in calculating
Excess Cash Flow for such fiscal year had they been made during such fiscal
year); provided that (x) the
Company shall deliver a certificate to the Administrative Agent not later than
90 days after the end of such fiscal year, signed by a Responsible Officer of
the Company, describing the nature and amount of such contingent contractual
obligation and certifying that such contingent contractual obligation will be
paid within six (6) months after the end of such fiscal year, (y) if such
payment is not made within six (6) months after the close of such fiscal year,
then the Borrowers shall promptly make an optional prepayment of Term Loans in
accordance with Section 2.05(a) in an amount, if positive, equal to (A) the
amount that would have been paid pursuant to Section 2.05(b)(i) with respect to
such fiscal year but for this clause (xxiii) minus
(B) the amount of the payment made pursuant to Section 2.05(b)(i)
with respect to such fiscal period and (z) any deduction from Excess Cash Flow
made with respect to contingent contractual obligations pursuant to this clause
(xxiii) in such fiscal year shall not be deducted in computing Excess Cash Flow
for the fiscal year in which such contingent obligations are paid; plus (or minus)


 


(c) changes in working capital.


 


“Excluded Consideration” means consideration consisting of (a) any
Equity Interests (other than Disqualified Equity Interests) of Holdings issued
to the seller of the Equity Interests, property or assets acquired in such
Permitted Acquisition and (b) consideration in an amount equal to the sum of
(i) the Net Cash Proceeds of (w) any Permitted Equity Issuance consummated
subsequent to the Closing Date, (x) any Disposition by Holdings, the Company or
any of its Restricted Subsidiaries of the type described in Section 7.05(a),
(c), (f), (j), (k) and (m), (y) any Casualty Event that occurs subsequent to
the Closing Date and (z) the incurrence or issuance of any Permitted
Subordinated Indebtedness permitted by Section 7.03(a)(iii) plus (ii) the
amount of Excess Cash Flow for any fiscal year (commencing with the fiscal year
ended


 


22





















 


November 30, 2004, which fiscal year shall be
for the period from the Closing Date through November 30, 2004), but only to
the extent the amounts described in clauses (i) and (ii) above are Not
Otherwise Applied.


 


“Existing Credit Agreement” has the meaning set forth in the Preliminary
Statements.


 


“Facility” means the Term Loans, the Revolving Credit
Commitments, the Swing Line Sublimit or the Letter of Credit Sublimit, as the
context may require.


 


“Federal
Funds Rate” means,
for any day, the rate per annum equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.


 


“Fee Letter”
means the letter
agreement, dated November 23, 2003, among Holdings, the Initial Lenders and the
Arrangers.


 


“Foreign Lender” has the meaning specified in Section 10.15(a)(i).


 


“Foreign Subsidiary” means any direct or indirect Restricted
Subsidiary of the Company which is not a Domestic Subsidiary.


 


“FRB” means
the Board of Governors of the Federal Reserve System of the United States.


 


“Fund” means any Person (other than a natural
person) that is engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary course of
its business.


 


“Funded
Debt” of any Person
means Indebtedness of such Person that by its terms matures more than one (1)
year after the date of its creation or matures within one (1) year from any
date of determination but is renewable or extendible, at the option of such
Person, to a date more than one (1) year after such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one (1) year after such date.


 


“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the


 


23





















 


accounting profession in the United States,
that are applicable to the circumstances as of the date of determination,
consistently applied.


 


“Governmental Authority” means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.


 


“Granting Lender” has the meaning specified in Section 10.07(g).


 


“Guarantee” means, as to any Person, without duplication, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall
not include indorsements for collection or deposit, in either case in the
ordinary course of business, or customary and reasonable indemnity obligations
in effect on the Closing Date or entered into in connection with any acquisition
or disposition of assets permitted under this Agreement (other than such
obligations with respect to Indebtedness). The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the
related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.


 


“Guarantors” means, collectively, Holdings, the Company in its capacity as a
guarantor under the Company Guaranty and the Restricted Subsidiaries of the
Company listed on Schedule I and each other Restricted Subsidiary of the
Company that shall be required to execute and deliver a guaranty or guaranty
supplement pursuant to Section 6.12.


 


“Guaranty” means, collectively, the Parent Guaranty, the Company Guaranty and the
Subsidiary Guaranty.


 


24





















 


“Hazardous Materials” means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.


 


“Hedge Bank” means any Person that is a Lender or an Affiliate of a Lender, in its
capacity as a party to a Secured Hedge Agreement.


 


“Holdings” has the meaning specified in the introductory paragraph to this
Agreement.


 


“Holdings Consolidated Leverage Ratio” means, with respect to the Consolidated
Parties on a consolidated basis, as of the end of any fiscal quarter of
Holdings for the four (4) fiscal quarter period ending on such date, the ratio
of (a) the sum, without duplication, of (i) Adjusted Consolidated Funded
Indebtedness (net of Average Cash on Hand) of the Consolidated Parties and (ii)
Total Securitization Financing, in each case on the last day of such period to
(b) Consolidated EBITDA of the Consolidated Parties for such period.


 


“Honor Date” has the meaning specified in Section 2.03(c)(i).


 


“ICC” has the meaning specified in Section
2.03(h).


 


“Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in
accordance with GAAP:


 


(a)                                  all obligations of such Person for borrowed
money and all obligations of such Person evidenced by bonds, debentures, notes,
loan agreements or other similar instruments;


 


(b)                                 the maximum amount of all letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds, performance bonds and similar instruments issued or created by or
for the account of such Person;


 


(c)                                  net obligations of such Person under any Swap
Contract;


 


(d)                                 all obligations of such Person to pay the
deferred purchase price of property or services (other than (i) trade accounts
payable in the ordinary course of business and (ii) any earn-out obligation
until such obligation becomes a liability on the balance sheet of such Person);


 


(e)                                  indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements and mortgage, industrial revenue bond, industrial
development bond and similar financings), whether or not such indebtedness
shall have been assumed by such Person or is limited in recourse;


 


25





















 


(f)                                           all Attributable Indebtedness;


 


(g)                                        all obligations of such Person in respect of
Disqualified Equity Interests; and


 


(h)                                        all Guarantees of such Person in respect of
any of the foregoing. For all purposes hereof, the Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture (other than
a joint venture that is itself a corporation or limited liability company) in
which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any
net obligation under any Swap Contract on any date shall be deemed to be the
Swap Termination Value thereof as of such date. The amount of Indebtedness of
any Person for purposes of clause (e) shall be deemed to be equal to the lesser
of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair
market value of the property encumbered thereby as determined by such Person in
good faith.


 


“Indemnified Liabilities” has the meaning set forth in Section 10.05.


 


“Indemnitees” has the meaning set forth in Section 10.05.


 


“Information” has the meaning specified in Section 10.08.


 


“Initial Lenders” means, at any date, collectively, Bank of America, Deutsche Bank Trust
Company Americas, Lehman Commercial Paper Inc. and Merrill Lynch Capital
Corporation, each in its capacity as, and so long as it is, a “Lender”
hereunder.


 


“Intellectual Property Security Agreement” means, collectively, the Copyright Security
Agreement, the Trademark Security Agreement and the Patent Security Agreement,
substantially in the forms attached to the Security Agreement together with
each other intellectual property security agreement executed and delivered
pursuant to Section 6.12 or the Security Agreement.


 


“Interest Coverage Ratio” means, with respect to the Borrower Parties
on a consolidated basis, as of the end of any fiscal quarter of the Company for
the four (4) fiscal quarter period ending on such date with respect to the
Borrower Parties on a consolidated basis, the ratio of (a) Consolidated EBITDA
of the Borrower Parties to (b) Consolidated Interest Charges of the Borrower
Parties; provided that for the
purpose of calculating the Interest Coverage Ratio on any day prior to the
expiration of four full fiscal quarters since the Closing Date, Consolidated
Interest Charges shall be determined for the period commencing on the Closing
Date and ending on the last day of the most recently ended fiscal quarter,
annualized on a simple arithmetic basis.


 


“Interest Payment Date” means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date of the applicable Facility; provided
that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning
of such Interest Period shall


 


26





















 


also be Interest Payment Dates; and (b) as to
any Base Rate Loan (including a Swing Line Loan), the last Business Day of each
March, June, September and December and the Maturity Date of the applicable
Facility.


 


“Interest
Period” means, as to
each Eurodollar Rate Loan, the period commencing on the date such Eurodollar
Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, or to the
extent available to each applicable Lender, nine or twelve months thereafter,
as selected by the relevant Borrower in its Committed Loan Notice; provided that:


 


(a)                                       any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;


 


(b)                                      any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and


 


(c)                                       no Interest Period shall extend beyond the
Maturity Date of the applicable Facility.


 


“Investment”
means, as to any
Person, any direct or indirect acquisition or investment by such Person,
whether by means of (a) the purchase or other acquisition of Equity Interests
or debt or other securities of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other Person
and any arrangement pursuant to which the investor incurs debt of the type
referred to in clause (h) of the definition of “Indebtedness” set forth in this
Section 1.01 in respect of such Person or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of all or substantially all of
the property and assets or business of another Person or assets constituting a
business unit, line of business or division of such Person. For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment.


 


“IP
Collateral” means all
“Intellectual Property Collateral” referred to in the Collateral Documents and
all of the other IP Rights that are or are required by the terms hereof or of
the Collateral Documents to be subject to Liens in favor of the Administrative
Agent for the benefit of the Secured Parties.


 


“IP Rights” has the meaning set forth in Section 5.15.


 


“IRS” means the United States Internal Revenue
Service.


 


27





















 


“Joint Lead
Arrangers” means Banc
of America Securities LLC and Deutsche Bank Securities Inc, each in its
capacity as a Joint Lead Arranger under this Agreement.


 


“Joint
Venture” means (a)
any Person which would constitute an “equity method investee” of the Company or
any of its Subsidiaries, (b) any other Person designated by the Company in
writing to the Administrative Agent (which designation shall be irrevocable) as
a “Joint Venture” for purposes of this Credit Agreement and at least 50% but
less than 100% of whose Equity Interests are directly owned by the Company or
any of its Subsidiaries, and (c) any Person in whom the Company or any of its
Subsidiaries beneficially owns any Equity Interest that is not a Subsidiary.


 


“Junior
Financing” has the
meaning specified in Section 7.14.


 


“Junior
Financing Documentation” means any documentation governing any Junior Financing.


 


“Laws” means, collectively, all international,
foreign, Federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case whether or not having the force of
law.


 


“L/C
Advance means a
Tranche A L/C Advance or a Tranche B L/C Advance (as the context requires).


 


“L/C
Borrowing” means a
Tranche A L/C Borrowing or a Tranche B L/C Borrowing (as the context requires).


 


“L/C Credit
Extension” means a
Tranche A L/C Credit Extension or a Tranche B L/C Credit Extension (as the
context requires).


 


“L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.


 


“L/C
Obligations” means
Tranche A L/C Obligations or Tranche B L/C Obligations, or any combination
thereof (as the context requires).


 


“Lender” has the meaning specified in the introductory
paragraph to this Agreement and, as the context requires, includes the L/C
Issuer and the Swing Line Lender.


 


“Lending
Office” means, as to
any Lender, the office or offices of such Lender described as such in such
Lender’s Administrative Questionnaire, or such other office or offices as a
Lender may from time to time notify the Company and the Administrative Agent.


 


28





















 


“Letter of
Credit” means a
Tranche A Letter of Credit or a Tranche B Letter of Credit (as the context
requires).


 


“Letter of
Credit Application” means
an application and agreement for the issuance or amendment of a Letter of
Credit in the form from time to time in use by the L/C Issuer.


 


“Letter of Credit Expiration Date” means, with respect to a Letter of Credit of
any Class, the day that is five (5) days prior to the scheduled Maturity Date
then in effect for the Revolving Credit Commitments of such Class (or, if such
day is not a Business Day, the next preceding Business Day).


 


“Letter of
Credit Sublimit” means
an amount equal to $100,000,000. The Letter of Credit Sublimit is part of, and
not in addition to, the Revolving Credit Commitments.


 


“Leverage
Ratio” means, with
respect to the Borrower Parties on a consolidated basis, as of the end of any
fiscal quarter of the Company for the four (4) fiscal quarter period ending on
such date, the ratio of (a) the sum, without duplication, of (i) Adjusted
Consolidated Funded Indebtedness (net of Average Cash on Hand) of the Borrower
Parties and (ii) Total Securitization Financing, in each case on the last day
of such period to (b) Consolidated EBITDA of the Borrower Parties for such
period.


 


“Lien” means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any Capitalized Lease having
substantially the same economic effect as any of the foregoing).


 


“Loan” means an extension of credit by a Lender to a
Borrower under Article 2 in the form of a Term Loan, a Revolving Credit Loan or
a Swing Line Loan.


 


“Loan
Documents” means,
collectively, (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the
Collateral Documents, (v) the Fee Letter and (vi) each Letter of Credit
Application.


 


“Loan
Parties” means,
collectively, each Borrower and each Guarantor.


 


“Management
Shareholders” means
the members of management of the Company or its Subsidiaries who are investors
in Holdings.


 


“Mandatory
Cost” means, with
respect to any period, the percentage rate per annum determined in accordance
with Schedule 1.01D.


 


“Master
Agreement” has the
meaning specified in the definition of “Swap Contract.”


 


29





















 


“Material
Adverse Effect” means
(a) a material adverse effect on the business, operations, assets, liabilities
(actual or contingent) or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole, (b) a material adverse effect on the
ability of the Borrowers or the Loan Parties (taken as a whole) to perform
their respective obligations under any Loan Document to which any Borrower or
any of the Loan Parties is a party or (c) a material adverse effect on the
rights and remedies of the Lenders under any Loan Document.


 


“Maturity
Date” means (a) with
respect to the Revolving Credit Commitments of either Class, the earlier of (i)
February 28, 2010 and (ii) the date of termination in whole of the Revolving
Credit Commitments of such Class pursuant to Section 2.06(a) or 8.02 and (b)
with respect to the Term Loans, the earlier of (i) February 28, 2011 and (ii)
the date of termination in whole of the Term Commitments pursuant to Section
2.06(a) or 8.02.


 


“Maximum
Rate” has the meaning
specified in Section 10.10.


 


“Moody’s” means Moody’s Investors Service, Inc. and any
successor thereto.


 


“Mortgage” means, collectively, the deeds of trust,
trust deeds and mortgages made by the Loan Parties in favor or for the benefit
of the Administrative Agent on behalf of the Lenders substantially in the form
of Exhibit H (with such changes as may be customary to account for local law
matters), together with each other mortgage executed and delivered pursuant to
Section 6.12.


 


“Mortgage
Policies” has the
meaning specified in Section 6.14(b)(ii).


 


“Multiemployer
Plan” means any
employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to
which any Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


“Net Cash Proceeds” means:


 


(a)                                       with respect to the Disposition of any asset
by Holdings or any of its Subsidiaries or any Casualty Event, the excess, if
any, of (i) the sum of cash and Cash Equivalents received in connection with
such Disposition or Casualty Event (including any cash or Cash Equivalents
received by way of deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, but only as and when so received and, with respect to
any Casualty Event, any insurance proceeds or condemnation awards in respect of
such Casualty Event actually received by or paid to or for the account of
Holdings or any of its Subsidiaries) over (ii) the sum of (A) the principal
amount of any Indebtedness that is secured by the asset subject to such
Disposition or Casualty Event and that is repaid in connection with such
Disposition or Casualty Event (other than Indebtedness under the Loan
Documents), (B) the out-of-pocket expenses (including, without limitation,
attorneys’ fees, investment banking fees, survey costs, title insurance
premiums, and related search and recording charges, transfer taxes, deed or
mortgage recording taxes, other customary expenses and brokerage, consultant
and other customary fees) actually


 


30





















 


incurred by Holdings or such Subsidiary in
connection with such Disposition or Casualty Event, (C) taxes paid or
reasonably estimated to be actually payable, and (D) any reserve for adjustment
in respect of (x) the sale price of such asset or assets established in
accordance with GAAP and (y) any liabilities associated with such asset or
assets and retained by the Company or any of its Subsidiaries after such sale
or other disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
transaction and it being understood that “Net Cash Proceeds” shall include,
without limitation, any cash or Cash Equivalents (i) received upon the
Disposition of any non-cash consideration received by the Company or any of its
Subsidiaries in any such Disposition and (ii) upon the reversal (without the
satisfaction of any applicable liabilities in cash in a corresponding amount)
of any reserve described in clause (D) of the preceding sentence or, if such
liabilities have not been satisfied in cash and such reserve not reversed
within three hundred and sixty-five (365) days after such Disposition or
Casualty Event, the amount of such reserve; provided
that (x) no proceeds realized in a single transaction or series of
related transactions shall constitute Net Cash Proceeds unless such proceeds
shall exceed $5,000,000 and (y) no proceeds shall constitute Net Cash Proceeds
under this clause (a) in any fiscal year until the aggregate amount of all such
proceeds in such fiscal year shall exceed $15,000,000 (and thereafter only
proceeds in excess of such amount shall constitute Net Cash Proceeds under this
clause (a)).


 


(b)                                      with respect to the issuance of any Equity
Interest by Holdings or any of its Subsidiaries, the excess of (i) the sum of
the cash and Cash Equivalents received in connection with such issuance over
(ii) all taxes and fees (including investment banking fees, underwriting
discounts, commissions, costs and other out-of-pocket expenses and other customary
expenses) incurred by Holdings or such Subsidiary in connection with such
issuance; and


 


(c)                                       with respect to the incurrence or issuance of
any Indebtedness by Holdings or any of its Subsidiaries, the excess, if any, of
(i) the sum of the cash received in connection with such sale over (ii) the
investment banking fees, underwriting discounts, commissions, costs and other
out-of-pocket expenses and other customary expenses, incurred by Holdings or
such Subsidiary in connection with such incurrence or issuance.


 


“Non-Consenting Lender” has the meaning specified in Section 3.07(d).


 


“Non-Recourse
Acquisition Financing Indebtedness” means any Indebtedness incurred by the Company or any Restricted
Subsidiary to finance the acquisition, exploitation or development of assets
(including directly or through the acquisition of entities holding such assets)
not owned by the Company or any of its Restricted Subsidiaries prior to such
acquisition, exploitation or development, which assets are used for the creation
or development of Product for the benefit of the Company, and in respect of
which the Person to whom such Indebtedness is owed has no recourse whatsoever
to the Company or any of its Restricted Subsidiaries for the repayment of or
payment of such Indebtedness other than recourse to the acquired assets or
assets that are the subject of such exploitation or development for the purpose
of enforcing any Lien given by the Company or such Restricted Subsidiary over
such assets, including the


 


31





















 


receivables, inventory, intangibles and other
rights associated with such assets and the proceeds thereof.


 


“Non-Recourse
Product Financing Indebtedness” means any Indebtedness incurred by any Restricted Subsidiary solely for
the purpose of financing (whether directly or through a partially-owned joint
venture) the production, acquisition, exploitation, creation or development of
items of Product produced, acquired, exploited, created or developed after the
Closing Date (including any Indebtedness assumed in connection with the
production, acquisition, creation or development of any such items of Product
or secured by a Lien on any such items of Product prior to the production,
acquisition, creation or development thereof) where the recourse of the
creditor in respect of that Indebtedness is limited to Product revenues
generated by such items of Product or any rights pertaining thereto and where
the Indebtedness is unsecured save for Liens over such items of Product or
revenues and such rights, and any extension, renewal, replacement or
refinancing of such Indebtedness but excluding, for the avoidance of doubt, any
Indebtedness raised or secured against Products where the proceeds are used for
any other purposes.


 


“Nonrenewal
Notice Date” has the
meaning specified in Section 2.03(b)(iii).


 


“Note” means a Term Note or a Revolving Credit Note,
as the context may require.


 


“Notice of
Intent to Cure” has
the meaning specified in Section 6.02(b).


 


“Not
Otherwise Applied” means,
with reference to any amount of Net Cash Proceeds of any transaction or event
or of Excess Cash Flow, that such amount (a) was not required to be applied to
prepay the Loans pursuant to Section 2.05(b), (b) was not previously included
in a calculation of “Consolidated EBITDA” pursuant to clause (b)(xx) of the
definition thereof and (c) was not previously applied in determining the
permissibility of a transaction under the Loan Documents where such
permissibility was (or may have been) contingent on receipt of such amount. The
Company shall promptly notify the Administrative Agent of any application of
such amount as contemplated by (c) above.


 


“NPL” means
the National Priorities List under CERCLA.


 


“Obligations”
means all (x)
advances to, and debts, liabilities, obligations, covenants and duties of, any
Loan Party arising under any Loan Document or otherwise with respect to any
Loan or Letter of Credit, whether direct or indirect (including those acquired
by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding, (y)
obligations of any Loan Party arising under any Secured Hedge Agreement and (z)
Cash Management Obligations. Without limiting the generality of the foregoing,
the Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, Attorney Costs, indemnities and other amounts payable by any
Loan Party under any Loan Document and (b) the obligation of any


 


32





















 


Loan Party to reimburse any amount in respect
of any of the foregoing that any Lender, in its sole discretion, may elect to
pay or advance on behalf of such Loan Party.


 


“Organization
Documents” means, (a)
with respect to any corporation, the certificate or articles of incorporation
and the bylaws (or equivalent or comparable constitutive documents with respect
to any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any certificate
or articles of formation or organization of such entity.


 


“Other Taxes” has the meaning specified in Section 3.01(b).


 


“Outstanding
Amount” means (a)
with respect to the Term Loans, Revolving Credit Loans and Swing Line Loans on
any date, the Dollar Amount thereof after giving effect to any borrowings and
prepayments or repayments of Term Loans, Revolving Credit Loans (including any
refinancing of outstanding unpaid drawings under Letters of Credit or L/C
Credit Extensions as a Revolving Credit Borrowing) and Swing Line Loans, as the
case may be, occurring on such date; and (b) with respect to any L/C
Obligations on any date, the Dollar Amount thereof on such date after giving
effect to any L/C Credit Extension occurring on such date and any other changes
thereto as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit (including any
refinancing of outstanding unpaid drawings under Letters of Credit or L/C
Credit Extensions as a Revolving Credit Borrowing) or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.


 


“Overnight
Rate” means, for any
day, (a) with respect to any amount denominated in Dollars, the Federal Funds
Rate, and (b) with respect to any amount denominated in an Alternative
Currency, the rate of interest per annum at which overnight deposits in the
applicable Alternative Currency, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for such
day by a branch or Affiliate of Bank of America in the applicable offshore
interbank market for such currency to major banks in such interbank market.


 


“Overseas Borrowers” means any Qualified Foreign Subsidiary as to
which an Election to Participate shall have been delivered to the
Administrative Agent in accordance with Section 2.14; provided that
the status of any of the foregoing as an Overseas Borrower shall terminate if
and when an Election to Terminate is delivered to the Administrative Agent in
accordance with Section 2.14.


 


“Parent Guaranty” means the Parent Guaranty made by Holdings in favor of the
Administrative Agent on behalf of the Lenders, substantially in the form of
Exhibit F-1.


 


33





















 


“Participant”
has the meaning
specified in Section 10.07(d).


 


“Participating
Member State” means
each state so described in any EMU Legislation.


 


“PBGC” means the Pension Benefit Guaranty
Corporation.


 


“Pension
Plan” means any “employee
pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other
than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by any Borrower or any ERISA Affiliate or to which any
Borrower or any ERISA Affiliate contributes or has an obligation to contribute,
or in the case of a multiple employer or other plan described in Section
4064(a) of ERISA, has made contributions at any time during the immediately
preceding five (5) plan years.


 


“Permitted
Acquisition” has the
meaning specified in Section 7.02(i).


 


“Permitted
Encumbrances” has the
meaning specified in the Mortgages.


 


“Permitted
Equity Issuance” means
any sale or issuance of any Equity Interests (other than Disqualified Equity
Interests) of Holdings (and, after a Qualifying IPO, of the Company) to the
extent (a) permitted hereunder and (b) the Net Cash Proceeds of which are not
required to be applied to the prepayment of the Loans pursuant to Section
2.05(b).


 


“Permitted
Holdco Debt” has the
meaning specified in Section 7.03(c)(iii).


 


“Permitted
Holders” means the
Equity Investors other than (a) any portfolio company of the Sponsors, (b)
Management Shareholders to the extent that such Management Shareholders in the
aggregate own beneficially or of record more than five percent (5%) of the
outstanding voting stock of Holdings and (c) the Seller if, at such time as the
Seller owns 50% or more of the total voting power of the Equity Interests of
the Company or any direct or indirect parent company of the Company and after
giving pro forma effect to the acquisition of such Equity Interests and the
incurrence of any Indebtedness used to finance the acquisition thereof, (x) the
Seller has a rating of less than “investment grade” status from S&P or
Moody’s or (y) either S&P, Moody’s or any other nationally recognized
rating agency shall have downgraded, or indicated an intention to downgrade,
the corporate rating of the Seller to a level below its then existing corporate
rating by any such agency.


 


“Permitted
Refinancing” means,
with respect to any Person, any modification, refinancing, refunding, renewal
or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value,
if applicable) thereof does not exceed the principal amount (or accreted value,
if applicable) of the Indebtedness so modified, refinanced, refunded, renewed
or extended except by an amount equal to unpaid accrued interest and premium
thereon plus other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such modification, refinancing, refunding, renewal
or extension and by an amount equal to any existing commitments unutilized
thereunder or as otherwise permitted pursuant to Section 7.03, (b) such
modification, refinancing, refunding, renewal or extension has a final maturity
date equal to or later than the final maturity date of, and has a Weighted
Average Life to


 


34





















 


Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being modified,
refinanced, refunded, renewed or extended, (c) if the Indebtedness being
modified, refinanced, refunded, renewed or extended is subordinated in right of
payment to the Obligations, such modification, refinancing, refunding, renewal
or extension is subordinated in right of payment to the Obligations on terms at
least as favorable to the Lenders as those contained in the documentation
governing the Indebtedness being modified, refinanced, refunded, renewed or
extended, (d) the terms and conditions (including, if applicable, as to
collateral) of any such modified, refinanced, refunded, renewed or extended
Indebtedness are not materially less favorable to the Loan Parties or the
Lenders than the terms and conditions of the Indebtedness being modified,
refinanced, refunded, renewed or extended, (e) such modification, refinancing,
refunding, renewal or extension is incurred by the Person who is the obligor on
the Indebtedness being modified, refinanced, refunded, renewed or extended, and
(f) at the time thereof, no Event of Default shall have occurred and be
continuing.


 


“Permitted
Subordinated Indebtedness” means any unsecured Indebtedness of the Company that (a) is expressly
subordinated to the prior payment in full in cash of the Obligations on terms
and conditions no less favorable to the Lenders than the terms and conditions
set forth in the Senior Subordinated Notes Indenture, (b) will not mature prior
to the date that is ninety-one (91) days after the Maturity Date of the Term
Loans, (c) has no scheduled amortization or payments of principal prior to the
date which is ninety-one (91) days after the Maturity Date of the Term Loans,
and (d) has covenant, default and remedy provisions no more restrictive, or
mandatory prepayment, repurchase or redemption provisions no more onerous or
expansive in scope, taken as a whole, than those set forth in the Senior
Subordinated Notes Indenture.


 


“Person” means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.


 


“Plan” means any “employee benefit plan” (as such
term is defined in Section 3(3) of ERISA) established by any Borrower or, with
respect to any such plan that is subject to Section 412 of the Code or Title IV
of ERISA, any ERISA Affiliate.


 


“Pledged
Debt” has the meaning
specified in the Security Agreement.


 


“Pledged
Equity” has the
meaning specified in the Security Agreement.


 


“Post-Increase
Revolving Lenders” has
the meaning specified in Section 2.15(b).


 


“Pre-Increase
Revolving Lenders” has
the meaning specified in Section 2.15(b).


 


“Pro Forma
Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means,
for purposes of calculating compliance with each of the financial covenants set
forth in Section 7.11 in respect of a Specified Transaction, that such
Specified Transaction and the following transactions in connection therewith
shall be deemed to have occurred as of the first day of the applicable period
of measurement in such covenant: (a) income statement items (whether positive
or negative) attributable to the property or Person subject to such Specified
Transaction,


 


35





















 


(i) in the case of the
Cinram Disposition or a Disposition of all or substantially all Equity
Interests in any Subsidiary of the Company or any division, product line, or
facility used for operations of the Company or any of its Subsidiaries, shall
be excluded, and (ii) in the case of a Permitted Acquisition or Investment
described in the definition of “Specified Transaction”, shall be included, (b)
any retirement of Indebtedness, and (c) any Indebtedness incurred or assumed by
the Company or any of its Restricted Subsidiaries in connection therewith and
if such Indebtedness has a floating or formula rate, shall have an implied rate
of interest for the applicable period for purposes of this definition
determined by utilizing the rate which is or would be in effect with respect to
such Indebtedness as at the relevant date of determination; provided that the foregoing pro forma
adjustments may be applied to the financial covenants set forth in Section 7.11
solely to the extent that such adjustments are consistent with the definition
of Consolidated EBITDA and give effect to events that are (x) directly
attributable to such transaction, (y) expected to have a continuing impact on
the Company and its Restricted Subsidiaries and (z) factually supportable.


 


“Pro Rata
Share” means, with
respect to each Lender of each Class at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is
the amount of such Lender’s Commitments of such Class at such time and the
denominator of which is the aggregate amount of all Lenders’ Commitments of
such Class at such time; provided that
if the Commitments of such Class have been terminated, then the Pro Rata Share
of each Lender of such Class shall be determined based on the Pro Rata Share of
such Lender immediately prior to such termination and after giving effect to
any subsequent assignments made pursuant to the terms hereof.


 


“Product” means any music (including musical and audio
visual recordings, musical performance, songs and compositions and also
includes mail order music and activities relating or incidental to music such
as touring, merchandising and artist management), music copyright, motion
picture, television programming, film, videotape, digital file, video clubs,
DVD manufactured or distributed or any other product produced for theatrical,
non-theatrical or television release or for release in any other medium in each
case whether recorded on film, videotape, cassette, cartridge, disc or on or by
any other means, method, process or device, whether now known or hereafter
developed, with respect to which the Company or any Restricted Subsidiary (a)
is an initial copyright owner or (b) acquires (or will acquire upon delivery)
an equity interest, license, sublicense or administration or distribution
right.


 


“Purchase
Agreement” means the
Purchase Agreement dated as of November 24, 2003 between Holdings and the
Seller, as modified from time to time in accordance with Section 7.15.


 


“Purchase
Money Note” means a
promissory note of a Securitization Subsidiary evidencing a line of credit,
which may be irrevocable, from Holdings or any Subsidiary of Holdings to such
Securitization Subsidiary in connection with a Qualified Securitization
Financing, which note is intended to finance that portion of the purchase price
that is not paid in cash or a contribution of equity and which (a) shall be
repaid from cash available to the Securitization Subsidiary, other than (i)
amounts required to be established as reserves, (ii) amounts paid to investors
in respect of interest, (iii) principal and other amounts owing to such


 


36





















 


investors and (iv) amounts paid in connection
with the purchase of newly generated receivables and (b) may be subordinated to
the payments described in clause (a).


 


“Qualified
Foreign Subsidiary” means
any Restricted Subsidiary of the Company that satisfies the following criteria:
(a) the principal place of business and jurisdiction of organization or
incorporation of such Subsidiary is located outside the United States, and (b)
all of the shares of capital stock or other ownership interests of such
Subsidiary (except directors’ qualifying shares) are at the time directly or
indirectly owned by the Company.


 


“Qualified
Securitization Financing” means any Securitization Financing of a Securitization Subsidiary that
meets the following conditions: (i) the board of directors of Holdings shall
have determined in good faith that such Securitization Financing (including
financing terms, covenants, termination events and other provisions) is in the
aggregate economically fair and reasonable to the Company and the
Securitization Subsidiary, (ii) all sales of Securitization Assets and related
assets to the Securitization Subsidiary are made at fair market value (as determined
in good faith by the Company) and (iii) the financing terms, covenants,
termination events and other provisions thereof shall be market terms (as
determined in good faith by the Company) and may include Standard
Securitization Undertakings.


 


“Qualifying
IPO” means the
issuance by Holdings or the Company of its common Equity Interests in an
underwritten primary public offering (other than a public offering pursuant to
a registration statement on Form S-8) pursuant to an effective registration
statement filed with the SEC in accordance with the United States Securities
Act of 1933 (whether alone or in connection with a secondary public offering).


 


“Real
Properties” means
those properties listed on Schedule 1.01B hereto.


 


“Register” has the meaning set forth in Section
10.07(c).


 


“Reportable
Event” means any of
the events set forth in Section 4043(c) of ERISA, other than events for which
the thirty (30) day notice period has been waived.


 


“Request
for Credit Extension” means
(a) with respect to a Borrowing, conversion or continuation of Term Loans or
Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C
Credit Extension, a Letter of Credit Application, and (c) with respect to a
Swing Line Loan, a Swing Line Loan Notice.


 


“Required
Lenders” means, as of
any date of determination, Lenders having more than 50% of the sum of the (a)
Total Outstandings (with the aggregate Dollar Amount of each Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans
being deemed “held” by such Lender for purposes of this definition), (b)
aggregate unused Term Commitments and (c) aggregate unused Revolving Credit
Commitments; provided that the
unused Term Commitment, unused Revolving Credit Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall
be excluded for purposes of making a determination of Required Lenders.


 


37





















 


“Responsible Officer” means the chief executive officer, president,
vice president, chief financial officer, treasurer or assistant treasurer or
other similar officer of a Loan Party and, as to any document delivered on the
Closing Date, any vice president, secretary or assistant secretary. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.


 


“Restricted
Payment” means any
dividend or other distribution (whether in cash, securities or other property)
with respect to any Equity Interest of Holdings, the Company or any Restricted
Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, defeasance, acquisition, cancellation or termination of
any such Equity Interest, or on account of any return of capital to Holdings or
the Company’s stockholders, partners or members (or the equivalent Persons
thereof).


 


“Restricted Subsidiary” means any Subsidiary of the Company other
than an Unrestricted Subsidiary.


 


“Revolving
Credit Borrowing” means
a Tranche A Revolving Credit Borrowing or a Tranche B Revolving Credit
Borrowing (as the context requires).


 


“Revolving
Credit Commitment” means
a Tranche A Revolving Credit Commitment or a Tranche B Revolving Credit
Commitment (as the context requires).


 


“Revolving
Credit Commitments Increase Effective Date” has the meaning specified in Section 2.15(b).


 


“Revolving
Credit Lender” means
a Tranche A Revolving Credit Lender or a Tranche B Revolving Credit Lender (as
the context requires).


 


“Revolving
Credit Loan” means a
Tranche A Revolving Credit Loan or a Tranche B Revolving Credit Loan (as the
context requires).


 


“Revolving
Credit Note” means a
Tranche A Revolving Credit Note or a Tranche B Revolving Credit Note (as the
context requires).


 


“Rollover Amount” has the meaning set forth in Section 7.19(b).


 


“S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.


 


“Same Day
Funds” means (a) with
respect to disbursements and payments in Dollars, immediately available funds,
and (b) with respect to disbursements and payments in an Alternative Currency,
same day or other funds as may be determined by the Administrative Agent or the
L/C Issuer, as the case may be, to be customary in the place of disbursement or


 


38





















 


payment for the settlement
of international banking transactions in the relevant Alternative Currency.


 


“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.


 


“Secured Hedge Agreement” means any Swap Contract required or permitted
under Article 6 or 7 that is entered into by and between any Loan Party and any
Hedge Bank.


 


“Secured Obligations” has the meaning specified in the Security
Agreement.


 


“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the Hedge
Banks, the Supplemental Administrative Agent and each co-agent or sub-agent
appointed by the Administrative Agent from time to time pursuant to Section
9.01(c).


 


“Securitization
Assets” means any
accounts receivable, royalty or revenue streams from sales of Product subject
to a Qualified Securitization Financing.


 


“Securitization Fees” means reasonable distributions or payments
made directly or by means of discounts with respect to any participation
interest issued or sold in connection with, and other reasonable and customary
fees paid to a Person that is not a Securitization Subsidiary in connection
with, any Qualified Securitization Financing.


 


“Securitization
Financing” means any
transaction or series of transactions that may be entered into by the Company
or any of its Subsidiaries pursuant to which the Company or any of its
Subsidiaries may sell, convey or otherwise transfer to (a) a Securitization
Subsidiary (in the case of a transfer by the Company or any of its
Subsidiaries) and (b) any other Person (in the case of a transfer by a
Securitization Subsidiary), or may grant a security interest in, any
Securitization Assets (whether now existing or arising in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such Securitization Assets, all
contracts and guarantees or other obligations in respect of such Securitization
Assets, proceeds of such Securitization Assets and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving Securitization Assets and any Swap Contracts entered into by the
Company or any such Subsidiary in connection with such Securitization Assets.


 


“Securitization
Repurchase Obligation” means
any obligation of a seller of Securitization Assets in a Qualified Securitization
Financing to repurchase Securitization Assets arising as a result of a breach
of a representation, warranty or covenant or otherwise, including as a result
of a receivable or portion thereof becoming subject to any asserted defense,
dispute, off-set or counterclaim of any kind as a result of any action taken
by, any failure to take action by or any other event relating to the seller.


 


“Securitization
Subsidiary” means a
wholly owned Subsidiary of the Company (or another Person formed for the purposes
of engaging in a Qualified Securitization Financing in


 


39





















 


which the Company or any Subsidiary of the
Company makes an Investment and to which Holdings or any Subsidiary of Holdings
transfers Securitization Assets and related assets) which engages in no
activities other than in connection with the financing of Securitization Assets
of the Company or its Subsidiaries, all proceeds thereof and all rights
(contractual and other), collateral and other assets relating thereto, and any
business or activities incidental or related to such business, and which is
designated as a Securitization Subsidiary by the Company in a written notice
delivered to the Administrative Agent (as described below) and (a) no portion
of the Indebtedness or any other obligations (contingent or otherwise) of which
(i) is guaranteed by Holdings, the Company or any Restricted Subsidiary
(excluding guarantees of obligations (other than the principal of, and interest
on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates Holdings, the Company or any Restricted Subsidiary in
any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of Holdings, the Company or any Restricted
Subsidiary directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) with which neither Holdings, the Company nor any Restricted
Subsidiary has any material contract, agreement, arrangement or understanding
other than on terms which Holdings reasonably believes to be no less favorable
to Holdings, the Company or such Subsidiary than those that might be obtained
at the time from Persons that are not Affiliates of Holdings and (c) to which
neither Holdings, the Company nor any Restricted Subsidiary has any obligation
to maintain or preserve such entity’s financial condition or cause such entity
to achieve certain levels of operation results. Any such written designation by
the Company shall (x) be accompanied by a certified copy of the resolutions of
the board of directors of Holdings setting forth the board’s approval of such
designation and (y) certify that such designation complies with the foregoing
conditions.


 


“Security
Agreement” means,
collectively, the Security Agreement executed by the Loan Parties,
substantially in the form of Exhibit G, together with each other security
agreement supplement executed and delivered pursuant to Section 6.12.


 


“Security
Agreement Supplement” has
the meaning specified in the Security Agreement.


 


“Seller”
means Time Warner Inc., a Delaware corporation.


 


“Senior
Subordinated Notes” means
(a) the 8.125% unsecured Sterling-denominated senior subordinated notes of the
Company due 2014 and (b) the 7.375% unsecured Dollar-denominated senior
subordinated notes of the Company due 2014.


 


“Senior
Subordinated Notes Indenture” means the Indenture dated as of the ARCA Effective Date among Wells
Fargo Bank, National Bank, as trustee, the Company, as issuer, and the
Guarantors, together with all instruments and other agreements in connection
therewith.


 


“Solvent” and “Solvency”
mean, with respect to any Person on any date of determination, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present


 


40





















 


fair salable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person’s ability to pay such debts and liabilities
as they mature and (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.


 


“SPC” has the meaning specified in Section
10.07(g).


 


“Specified Equity Issuances” means the sale or issuance by Holdings, the
Company or any of its Restricted Subsidiaries of any of its Equity Interests in
a public offering or in a private placement or sale that is underwritten,
managed, arranged, placed or initially purchased by an investment bank (it
being understood that no Sponsor is an investment bank), which, for the
avoidance of doubt, does not include the sale or issuance of any such Equity
Interests (a) to the Equity Investors, their Affiliates, related funds and
limited partners (b) to other Persons making additional equity investments
together with the Equity Investors after the Closing Date, (c) the proceeds of
which are used to fund Investments permitted by Section 7.02, (d) issued as
compensation to employees of Holdings, the Company or any of its Subsidiaries
or to management of Holdings or any of its Subsidiaries in the ordinary course
of business or (e) used to cure Events of Default as contemplated by clause
(b)(xx) of the definition of Consolidated EBITDA.


 


“Specified
Transaction” means,
any Disposition, Investment or incurrence of Indebtedness in respect of which
compliance with the financial covenants set forth in Section 7.11 is by the
terms of this Agreement required to be calculated on a Pro Forma Basis.


 


“Sponsors” means, collectively, Thomas H. Lee Equity
Fund V, L.P., Music Capital Partners, L.P., Bain Capital Fund VII, L.P.,
Providence Equity Partners IV, L.P. and their respective Affiliates (including,
as applicable, related funds and general partners thereof).


 


“Sponsor
Management Agreement” means
the Management Agreement between the Sponsors and the Company.


 


“Spot Rate”
means, for any
Alternative Currency on any day, the average of the Administrative Agent’s spot
buying and selling rates for the exchange of such Alternative Currency and
Dollars as of approximately 11:00 a.m. (London, England time) two (2) Business
Days prior to such day.


 


“Sterling” and “£” means the
lawful currency of the United Kingdom.


 


“Standard Securitization Undertakings” means representations, warranties, covenants
and indemnities entered into by the Company or any Subsidiary of Holdings which
the Company


 


41





















 


has determined in good faith to be customary
in a Securitization Financing, including, without limitation, those relating to
the servicing of the assets of a Securitization Subsidiary, it being understood
that any Securitization Repurchase Obligation shall be deemed to be a Standard
Securitization Undertaking.


 


“Subsidiary”
of a Person means a
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of Holdings.


 


“Subsidiary
Guarantor” means,
collectively, the Subsidiaries of the Company that are Guarantors.


 


“Subsidiary Guaranty” means, collectively, the Subsidiary Guaranty
made by the Subsidiary Guarantors in favor of the Administrative Agent on behalf
of the Lenders, substantially in the form of Exhibit F-2, together with each
other guaranty and guaranty supplement delivered pursuant to Section 6.12.


 


“Supplemental
Administrative Agent” has
the meaning specified in Section 9.13 and “Supplemental Administrative Agents”
shall have the corresponding meaning.


 


“Swap
Contract” means (a)
any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Swap
Termination Value” means,
in respect of any one or more Swap Contracts, after taking into account the
effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been
closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for


 


42


















 


any
date prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).


 


“Swing Line Borrowing” means a borrowing of a Swing Line Loan
pursuant to Section 2.04.


 


“Swing Line Facility” means the revolving credit facility made
available by the Swing Line Lender pursuant to Section 2.04.


 


“Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans,
or any successor swing line lender hereunder.


 


“Swing Line Loan” has the meaning specified in Section 2.04(a).


 


“Swing Line Loan Notice” means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially
in the form of Exhibit B.


 


“Swing Line Sublimit” means an amount equal to the lesser of (a)
$10,000,000 and (b) the Tranche A Revolving Credit Commitments. The Swing Line
Sublimit is part of, and not in addition to, the Tranche A Revolving Credit
Commitments.


 


“Syndication Date” means the earlier of (i) April 30, 2004 and (ii) the date of
completion of the primary syndication of the Facilities, as specified by the
Joint Lead Arrangers in a written notice to the Company.


 


“TARGET Day” means any day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer (TARGET) payment system
(or, if such payment system ceases to be operative, such other payment system
(if any) determined by the Administrative Agent to be a suitable replacement)
is open for the settlement of payments in Euro.


 


“Taxes” has
the meaning specified in Section 3.01(a).


 


“Term Borrowing” means a borrowing consisting of simultaneous
Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having
the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a).


 


“Term Commitment” means, as to each Term Lender, its obligation to make a Term Loan to
the Company pursuant to Section 2.01(a) in an aggregate Dollar Amount not
to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Term Commitment” or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement. On the ARCA
Effective Date, the aggregate amount of the Term Commitments is $1,200,000,000.


 


43





















 


“Term Lender” means, at any time, any Lender that has a
Term Commitment or a Term Loan at such time.


 


“Term Loan” means a Loan made pursuant to Section 2.01(a).


 


“Term Note” means a promissory note of the Company payable to any Term Lender or
its registered assigns, in substantially the form of Exhibit C-1 hereto,
evidencing the aggregate indebtedness of the Company to such Term Lender
resulting from the Term Loans made by such Term Lender.


 


“Threshold Amount” means $25,000,000.


 


“Total Outstandings” means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.


 


“Total Securitization Financing” means, at any date, the aggregate principal
(or equivalent) amount of financing raised through Securitization Financings by
the Company and its Restricted Subsidiaries and outstanding on such date to the
extent the same does not give rise to Indebtedness of a Restricted Subsidiary.


 


“Tranche A L/C Advance” means, with respect to each Tranche A
Revolving Credit Lender, such Lender’s funding of its participation in any
Tranche A L/C Borrowing in accordance with its Pro Rata Share.


 


“Tranche A L/C Borrowing” means an extension of credit resulting from a
drawing under any Tranche A Letter of Credit which has not been reimbursed on
the date when made or refinanced as a Tranche A Revolving Credit Borrowing.


 


“Tranche A L/C Credit Extension” means, with respect to any Tranche A Letter
of Credit, the issuance thereof or extension of the expiry date thereof, or the
renewal or increase of the amount thereof.


 


“Tranche A L/C Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Tranche A Letters of Credit plus
the aggregate of all Unreimbursed Amounts with respect to Tranche A Letters of
Credit, including all Tranche A L/C Borrowings.


 


“Tranche A Letter of Credit” means any letter of credit issued pursuant to
Section 2.03 and designated as a Tranche A Letter of Credit in the
applicable Letter of Credit Application. A Tranche A Letter of Credit may be a
commercial letter of credit or a standby letter of credit; provided that a Tranche A Letter of Credit
issued for the account of any Overseas Borrower may only be a standby letter of
credit unless otherwise agreed by the L/C Issuer in its sole discretion.


 


“Tranche A Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Tranche A Revolving Credit Loans of the same Type and, in the case of
Eurodollar


 


44





















 


Rate
Loans, having the same Interest Period made by each of the Tranche A Revolving
Credit Lenders pursuant to 2.01(b)(i).


 


“Tranche A Revolving Credit Commitment” means, as to each Tranche A Revolving Credit
Lender, its obligation to (a) make Tranche A Revolving Credit Loans to the
Borrowers pursuant to 2.01(b)(i), (b) purchase participations in Tranche A L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 under the caption “Tranche
A Revolving Credit Commitment” or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement. The aggregate
Tranche A Revolving Credit Commitments of all Tranche A Revolving Credit
Lenders shall be $100,000,000 on the ARCA Effective Date, as such amount may be
adjusted from time to time in accordance with the terms of this Agreement.


 


“Tranche A Revolving Credit Lender” means, at any time, any Lender that has a
Tranche A Revolving Credit Commitment at such time.


 


“Tranche A Revolving Credit Loan” has the meaning specified in 2.01(b)(i).


 


“Tranche A Revolving Credit Note” means a promissory note of a Borrower payable
to any Tranche A Revolving Credit Lender or its registered assigns, in
substantially the form of Exhibit C-2 hereto, evidencing the aggregate
indebtedness of such Borrower to such Tranche A Revolving Credit Lender
resulting from the Tranche A Revolving Credit Loans made by such Tranche A
Revolving Credit Lender.


 


“Tranche A Term Loan” means a Loan made pursuant to Section 2.01(a)(i)
of the Existing Credit Agreement.


 


“Tranche B L/C Advance” means, with respect to each Tranche B
Revolving Credit Lender, such Lender’s funding of its participation in any
Tranche B L/C Borrowing in accordance with its Pro Rata Share.


 


“Tranche B L/C Borrowing” means an extension of credit resulting from a
drawing under any Tranche B Letter of Credit which has not been reimbursed on
the date when made or refinanced as a Tranche B Revolving Credit Borrowing.


 


“Tranche B L/C Credit Extension” means, with respect to any Tranche B Letter
of Credit, the issuance thereof or extension of the expiry date thereof, or the
renewal or increase of the amount thereof.


 


“Tranche B L/C Obligations” means, as at any date of determination, the
aggregate undrawn amount of all outstanding Tranche B Letters of Credit plus
the aggregate of all Unreimbursed Amounts with respect to Tranche B Letters of
Credit, including all Tranche B L/C Borrowings.


 


45





















 


“Tranche B Letter of Credit” means any letter of credit issued pursuant to
Section 2.03 and designated as a Tranche B Letter of Credit in the
applicable Letter of Credit Application. A Tranche B Letter of Credit may be a
commercial letter of credit or a standby letter of credit; provided that a Tranche B Letter of Credit
issued for the account of any Overseas Borrower may only be a standby letter of
credit unless otherwise agreed by the L/C Issuer in its sole discretion.


 


“Tranche B Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Tranche B Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Tranche B Revolving Credit Lenders pursuant to Section 2.01(b)(ii).


 


“Tranche B Revolving Credit Commitment” means, as to each Tranche B Revolving Credit
Lender, its obligation to (a) make Tranche B Revolving Credit Loans to the
Borrowers pursuant to Section 2.01(b)(ii) and (b) purchase participations
in Tranche B L/C Obligations, in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
under the caption “Tranche B Revolving Credit Commitment” or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable, as such amount may be adjusted from time to time in accordance with
this Agreement. The aggregate Tranche B Revolving Credit Commitments of all
Tranche B Revolving Credit Lenders shall be $150,000,000 on the ARCA Effective
Date, as such amount may be adjusted from time to time in accordance with the
terms of this Agreement.


 


“Tranche B Revolving Credit Lender” means, at any time, any Lender that has a
Tranche B Revolving Credit Commitment at such time.


 


“Tranche B Revolving Credit Loan” has the meaning specified in 2.01(b)(ii).


 


“Tranche B Revolving Credit Note” means a promissory note of a Borrower payable
to any Tranche B Revolving Credit Lender or its registered assigns, in
substantially the form of Exhibit C-3 hereto, evidencing the aggregate
indebtedness of such Borrower to such Tranche B Revolving Credit Lender
resulting from the Tranche B Revolving Credit Loans made by such Tranche B
Revolving Credit Lender.


 


“Tranche B Term Loan” means a Loan made pursuant to Section 2.01(a)(i)
of the Existing Credit Agreement.


 


“Transaction” means, collectively, (a) the Equity
Contributions, (b) the Acquisition, (c) the funding of the Bridge Loans, (d)
the funding of the Term Loans, (e) the consummation of any other transactions
in connection with the foregoing, and (f) the payment of the fees and expenses incurred
in connection with any of the foregoing.


 


“Type” means, with respect to a Loan denominated in Dollars, its character as
a Base Rate Loan or a Eurodollar Rate Loan.


 


“Uniform Commercial Code” means the Uniform Commercial Code as the same may from time to time be
in effect in the State of New York or the Uniform Commercial Code (or


 


46





















 


similar
code or statute) of another jurisdiction, to the extent it may be required to
apply to any item or items of Collateral.


 


“United States” and “U.S.” mean the United States of America.


 


“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).


 


“Unrestricted Subsidiary” means (i) each Subsidiary of the Company
listed on Schedule 1.01C, (ii) each Securitization Subsidiary and (iii)
any Subsidiary of the Company designated by the board of directors of Holdings
as an Unrestricted Subsidiary pursuant to Section 6.17 subsequent to the
date hereof.


 


“U.S. Lender” has the meaning set forth in Section 10.15(b).


 


“Warner Business” means, collectively, the Warner Music Publishing Business and the
Warner Recorded Music Business.


 


“Warner Music Publishing Audited Financial Statements” the audited combined balance sheets of the
Warner Music Publishing Business as of November 30, 2002, and the related
audited combined statements of income and cash flows for the Warner Music
Publishing Business for the fiscal year ended November 30, 2002.


 


“Warner Music Publishing Business” means the Music Publishing Business conducted
by the Seller and its Subsidiaries prior to the Acquisition under the overall
divisional name “Warner Music Group,” which is the Music Business the financial
performance of which is summarized under the line items and captions “Warner
Music Group”, “Music Group” and “Music” in the Seller’s most recent Form 10-K
and 10-Q’s filed by the Seller with the SEC.


 


“Warner Recorded Music Audited Financial Statements” means the audited combined balance sheets of
the Warner Recorded Music Business as of November 30, 2002, and the
related audited combined statements of income and cash flows for the Warner
Recorded Music Business for the fiscal year ended November 30, 2002.


 


“Warner Recorded Music Business” means the Recorded Music Business conducted
by the Seller and its Subsidiaries prior to the Acquisition under the overall
divisional name “Warner Music Group”, which is the Music Business the financial
performance of which is summarized under the line items and captions “Warner
Music Group”, “Music Group” and “Music” in the Seller’s most recent Form 10-K
and 10-Q’s filed by the Seller with the SEC.


 


“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing: (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.


 


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“Yen” and “¥” means the
lawful currency of Japan.


 


Section 1.02.  Other Interpretive Provisions.  With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such
other Loan Document:


 


(a)                                       The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.


 


(b)                                      (i)  The
words “herein,” “hereto,” “hereof’ and “hereunder” and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and
not to any particular provision thereof.


 


(ii)                                       Article, Section, Exhibit and Schedule references
are to the Loan Document in which such reference appears.


 


(iii)                                    The term “including” is by way of example and
not limitation.


 


(iv)                                   The term “documents” includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.


 


(c)                                       In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but excluding;” and the
word “through” means “to and including.”


 


(d)                                      Section headings herein and in the other
Loan Documents are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan Document.


 


Section 1.03.  Accounting Terms. 
(a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with,
GAAP, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise specifically
prescribed herein.


 


(b)                                      If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Company or the Required Lenders shall so request,
the Administrative Agent and the Company shall negotiate in good faith to amend
such ratio or requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Company shall provide to the
Administrative Agent and the Lenders a written reconciliation in form and
substance reasonably satisfactory to the Administrative Agent, between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP.


 


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Section 1.04.  Rounding.  Any
financial ratios required to be maintained by the Company pursuant to this
Agreement (or required to be satisfied in order for a specific action to be
permitted under this Agreement) shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than
the number of places by which such ratio is expressed herein and rounding the
result up or down to the nearest number (with a rounding-up if there is no
nearest number).


 


Section 1.05.  References to Agreements And Laws.  Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the
Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are permitted by
any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.


 


Section 1.06.  Times of Day.  Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).


 


Section 1.07.  Timing of Payment of Performance.  When the payment of any obligation
or the performance of any covenant, duty or obligation is stated to be due or
performance required on a day which is not a Business Day, the date of such
payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.


 


Section 1.08.  Currency Equivalents Generally.  Any amount specified in this
Agreement (other than in Articles 2, 9 and 10) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by Bank of America in Charlotte, North Carolina at the
close of business on the Business Day immediately preceding any date of
determination thereof, to prime banks in New York, New York for the spot
purchase in the New York foreign exchange market of such amount in Dollars with
such other currency; provided that
the determination of any Dollar Amount shall be made in accordance with Section 2.17.


 


Section 1.09.  Change Of Currency. 
(a) Each obligation of the Borrowers to make a payment
denominated in the national currency unit of any member state of the European
Union that adopts the Euro as its lawful currency after the date hereof shall
be redenominated into Euro at the time of such adoption (in accordance with the
EMU Legislation). If, in relation to the currency of any such member state, the
basis of accrual of interest expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the London
interbank market for the basis of accrual of interest in respect of the Euro,
such expressed basis shall be replaced by such convention or practice with
effect from the date on which such member state adopts the Euro as its lawful
currency; provided that if any
Borrowing in the currency of such member state is outstanding immediately prior
to such date, such replacement shall take effect, with respect to such
Borrowing, at the end of the then current Interest Period.


 


49





















 


(b)                            Each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time after consultation with the Company specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.


 


(c)                             Each provision of this Agreement also shall
be subject to such reasonable changes of construction as the Administrative
Agent may from time to time specify after consultation with the Company to be
appropriate to reflect a change in currency of any other country and any
relevant market conventions or practices relating to such change in currency.


 


ARTICLE 2


THE COMMITMENTS AND CREDIT
EXTENSIONS


 


Section 2.01.  The Loans.  (a)
The Term Borrowings. Subject to the terms and conditions set forth
herein, each Term Lender severally agrees to make to the Company a single loan
denominated in Dollars in a Dollar Amount equal to such Term Lender’s Term
Commitment on the ARCA Effective Date. Amounts borrowed under this Section 2.01(a)
and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans
or Eurodollar Rate Loans, as further provided herein.


 


(b)                                 The Revolving Credit
Borrowings.  Subject to the terms and conditions set forth
herein:


 


(i)                  Each Tranche A Revolving Credit Lender
severally agrees to make loans to any Borrower denominated in Dollars or (each
such loan, a “Tranche A Revolving Credit Loan”) from time to time, on any Business
Day until the Maturity Date, in an aggregate Dollar Amount not to exceed at any
time outstanding the amount of such Lender’s Tranche A Revolving Credit
Commitment; and


 


(ii)               each Tranche B Revolving Credit Lender
severally agrees to make loans to any Borrower denominated in Dollars or in an
Alternative Currency as elected by such Borrower pursuant to Section 2.02
(each such loan, a “Tranche B Revolving
Credit Loan”) from
time to time, on any Business Day until the Maturity Date, in an aggregate
Dollar Amount not to exceed at any time outstanding the amount of such Lender’s
Tranche B Revolving Credit Commitment;


 


provided that (A) after giving effect to any Tranche A Revolving Credit
Borrowing, the aggregate Outstanding Amount of the Tranche A Revolving Credit
Loans of any Tranche A Revolving Credit Lender, plus such Lender’s Pro Rata
Share of the Outstanding Amount of all Tranche A L/C Obligations, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Tranche A Revolving Credit Commitment, (B) after
giving effect to any Tranche B Revolving Credit Borrowing, the aggregate
Outstanding Amount of the Tranche B Revolving Credit Loans of any Tranche B
Revolving Credit Lender, plus such Lender’s Pro Rata Share of the Outstanding
Amount of all Tranche B L/C Obligations


 


50





















 


shall
not exceed such Lender’s Tranche B Revolving Credit Commitment and (C) after
giving effect to any Tranche B Revolving Credit Borrowing denominated in
Dollars, the aggregate Outstanding Amount of the Tranche A Revolving Credit
Loans of all Tranche A Revolving Credit Lenders, plus the Outstanding Amount of
all Tranche A L/C Obligations, plus the Outstanding Amount of all Swing Line
Loans is equal to the aggregate amount of Tranche A Revolving Credit
Commitments for all Lenders. Within the limits of each Lender’s Revolving Credit
Commitment, and subject to the other terms and conditions hereof, the Borrowers
may borrow under this Section 2.01(b), prepay under Section 2.05, and
reborrow under this Section 2.01(b). Revolving Credit Loans denominated in
Dollars may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.


 


Section 2.02.  Borrowings, Conversions and Continuations of Loans.  (a) Each Term Borrowing, each
Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit
Loans from one Type to the other, and each continuation of Eurodollar Rate
Loans shall be made upon the relevant Borrower’s irrevocable notice to the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Administrative Agent not later than 12:30 p.m. (Charlotte,
North Carolina time, or London, England time in the case of any Borrowing
denominated in an Alternative Currency) (i) three (3) Business Days prior to
the requested date of any Borrowing of, continuation of Eurodollar Rate Loans or
any conversion of Base Rate Loans to Eurodollar Rate Loans, and (ii) one (1)
Business Day before the requested date of any Borrowing of Base Rate Loans.
Each telephonic notice by the relevant Borrower pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of such Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole
multiple of $1,000,000 in excess thereof (or comparable amounts determined by
the Administrative Agent in the case of Alternative Currency Loans). Except as
provided in Section 2.03(c) and 2.04(c), each Borrowing of or conversion
to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether the relevant Borrower is
requesting a Term Borrowing, a Tranche A Revolving Credit Borrowing, a Tranche
B Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit
Loans from one Type to the other, or a continuation of Eurodollar Rate Loans,
(ii) the requested date of the Borrowing, conversion or continuation, as the
case may be (which shall be a Business Day), (iii) the principal amount of
Loans to be borrowed, converted or continued, (iv) the currency in which the
Loans to be borrowed are to be denominated, (v) the Type of Loans to be borrowed
or to which existing Term Loans or Revolving Credit Loans are to be converted,
and (vi) if applicable, the duration of the Interest Period with respect
thereto; provided that prior to
the Syndication Date, the Borrower may only select 1 month Interest Periods. If
with respect to Loans denominated in Dollars the relevant Borrower fails to
specify a Type of Loan in a Committed Loan Notice or fails to give a timely
notice requesting a conversion or continuation, then the applicable Term Loans
or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans.
Any such automatic conversion to Base Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the relevant Borrower requests a


 


51





















 


Borrowing
of, conversion to, or continuation of Eurodollar Rate Loans in any such
Committed Loan Notice, but fails to specify an Interest Period (or fails to
give a timely notice requesting a continuation of Eurodollar Rate Loans
denominated in an Alternative Currency), it will be deemed to have specified an
Interest Period of one (1) month. If no currency is specified, the requested
Borrowing shall be in Dollars.


 


(b)                            Following receipt of a Committed Loan Notice,
the Administrative Agent shall promptly notify each Lender of the amount of its
Pro Rata Share of the applicable Class of Loans, and if no timely notice of a
conversion or continuation is provided by the relevant Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans or continuation described in Section 2.02(a).
In the case of each Borrowing, each Appropriate Lender shall make the amount of
its Loan available to the Administrative Agent in Same Day Funds at the
Administrative Agent’s Office for the applicable currency not later than 1:00
p.m., in the case of any Loan denominated in Dollars, and not later than the
Applicable Time specified by the Administrative Agent in the case of any Loan
in an Alternative Currency, in each case on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable
conditions set forth in Section 4.03 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Administrative Agent shall make all
funds so received available to the relevant Borrower in like funds as received
by the Administrative Agent either by (i) crediting the account of such
Borrower on the books of Bank of America with the amount of such funds or (ii)
wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by such
Borrower; provided that if, on
the date the Committed Loan Notice with respect to such Borrowing is given by
the relevant Borrower, there are Swing Line Loans or L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to
the payment in full of any such L/C Borrowings, second, to the payment in full
of any such Swing Line Loans, and third, to the relevant Borrower as provided
above.


 


(c)                             Except as otherwise provided herein, a
Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan unless the Company pays the
amount due, if any, under Section 3.05 in connection therewith. During the
existence of an Event of Default, the Administrative Agent or the Required
Lenders may require that no Loans denominated in Dollars may be converted to or
continued as Eurodollar Rate Loans.


 


(d)                            The Administrative Agent shall promptly
notify the relevant Borrower and the Lenders of the interest rate applicable to
any Interest Period for Eurodollar Rate Loans upon determination of such interest
rate. The determination of the Eurodollar Rate by the Administrative Agent
shall be conclusive in the absence of manifest error. At any time that Base
Rate Loans are outstanding, the Administrative Agent shall notify the relevant
Borrower and the Lenders of any change in Bank of America’s prime rate used in
determining the Base Rate promptly following the public announcement of such
change.


 


(e)                             After giving effect to all Term Borrowings,
all Revolving Credit Borrowings, all conversions of Term Loans or Revolving
Credit Loans from one Type to the other, and all


 


52





















 


continuations
of Term Loans or Revolving Credit Loans as the same Type, there shall not be
more than twenty (20) Interest Periods in effect.


 


(f)                                    The failure of any Lender to make the Loan to
be made by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Loan on the date of such
Borrowing, 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 the date of any
Borrowing.


 


Section 2.03.  Letters of Credit. 
(a) The Letter of Credit Commitment.  (i) Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Revolving Credit Lenders set forth in
this Section 2.03, (1) from time to time on any Business Day during the
period from the Closing Date until the applicable Letter of Credit Expiration
Date, to issue (x) Tranche A Letters of Credit denominated in Dollars and (y)
Tranche B Letters of Credit denominated in Dollars or in an Alternative
Currency, in each case for the account of any Borrower and to amend or renew
Letters of Credit previously issued by it, in accordance with Section 2.03(b),
and (2) to honor drafts under the Letters of Credit; and (B) the Revolving
Credit Lenders of each Class severally agree to participate in Letters of
Credit of such Class issued for the account of any Borrower; provided that (A) after giving effect to
any Tranche A L/C Credit Extension, the aggregate Outstanding Amount of the
Tranche A Revolving Credit Loans of any Tranche A Revolving Credit Lender, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all Tranche A L/C
Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all
Swing Line Loans shall not exceed such Lender’s Tranche A Revolving Credit
Commitment, (B) after giving effect to any Tranche B L/C Credit Extension, the
aggregate Outstanding Amount of the Tranche B Revolving Credit Loans of any
Tranche B Revolving Credit Lender, plus such Lender’s Pro Rata Share of the
Outstanding Amount of all Tranche B L/C Obligations shall not exceed such
Lender’s Tranche B Revolving Credit Commitment, (C) after giving effect to any
Tranche B L/C Credit Extension denominated in Dollars, the aggregate
Outstanding Amount of the Tranche A Revolving Credit Loans of all Tranche A
Revolving Credit Lenders, plus the Outstanding Amount of all Tranche A L/C Obligations,
plus the Outstanding Amount of all Swing Line Loans is equal to the aggregate
amount of Tranche A Revolving Credit Commitments for all Lenders and (D) after
giving effect to any L/C Credit Extension, the Outstanding Amount of the L/C
Obligations shall not exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, each Borrower’s
ability to obtain Letters of Credit shall be fully revolving, and accordingly each Borrower may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit that have expired or that have been drawn upon and reimbursed.


 


(ii)                                  The L/C Issuer shall be under no obligation
to issue any Letter of Credit if:


 


(A)                         any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the
L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C
Issuer or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters
of credit generally


 


53





















 


or such Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which, in each case, the L/C Issuer in good
faith deems material to it;


 


(B)                           subject to Section 2.03(b)(iii), the
expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance or last renewal, unless the Required Lenders
have approved such expiry date;


 


(C)                           the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date;


 


(D)                          the issuance of such Letter of Credit would
violate any Laws or one or more policies of the L/C Issuer;


 


(E)                            such Letter of Credit is in an initial amount
less than $50,000, in the case of a commercial Letter of Credit, or $50,000, in
the case of a standby Letter of Credit; or


 


(F)                            the L/C Issuer does not, as of the issuance
date of such requested Letter of Credit, issue Letters of Credit in the
requested currency.


 


(iii)                               The L/C Issuer shall be under no obligation
to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.


 


(b)                                 Procedures for Issuance and
Amendment of Letters of Credit; Auto-Renewal Letters of Credit.  (i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the relevant Borrower delivered to the L/C Issuer (with
a copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
such Borrower. Such Letter of Credit Application must be received by the L/C
Issuer and the Administrative Agent (A) not later than 12:30 p.m. at least two
(2) Business Days prior to the proposed issuance date or date of amendment, as
the case may be, of any Letter of Credit denominated in Dollars, and (B) not
later than 11:00 a.m. at least three (3) Business Days prior to the proposed
issuance date or date of amendment, as the case may be, of any Letter of Credit
denominated in an Alternative Currency; or, in each case, such later date and
time as the L/C Issuer may agree in a particular instance in its sole
discretion. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
reasonably satisfactory to the L/C Issuer: (A) whether the relevant Borrower is
requesting a Tranche A Letter of Credit or a Tranche B Letter of Credit; (B)
the proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (C) the amount and currency thereof; (D) the expiry date
thereof; (E) the name and address of the


 


54





















 


beneficiary
thereof; (F) the documents to be presented by such beneficiary in case of any
drawing thereunder; (G) the full text of any certificate to be presented by
such beneficiary in case of any drawing thereunder; and (H) such other matters
as the L/C Issuer may reasonably request. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail reasonably satisfactory to the L/C
Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may reasonably
request.


 


(ii)                                       Promptly after receipt of any Letter of
Credit Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received a copy
of such Letter of Credit Application from the relevant Borrower and, if not,
the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon
receipt by the L/C Issuer of confirmation from the Administrative Agent that
the requested issuance or amendment is permitted in accordance with the terms
hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall,
on the requested date, issue a Letter of Credit for the account of the relevant
Borrower or enter into the applicable amendment, as the case may be.
Immediately upon the issuance of (A) each Tranche A Letter of Credit, each
Tranche A Revolving Credit Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Tranche A Letter of Credit in an amount equal to the
product of such Tranche A Revolving Credit Lenders’ Pro Rata Share times the
amount of such Tranche A Letter of Credit and (B) each Tranche B Letter of
Credit, each Tranche B Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Tranche B Letter of Credit in an amount equal to the
product of such Tranche B Revolving Credit Lenders’ Pro Rata Share times the
amount of such Tranche B Letter of Credit.


 


(iii)                                    If the relevant Borrower so requests in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an “Auto-Renewal
Letter of Credit”); provided that any such Auto-Renewal Letter
of Credit must permit the L/C Issuer to prevent any such renewal at least once
in each twelve month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the “Nonrenewal Notice Date”) in each such twelve month period to
be agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the L/C Issuer, no Borrower shall be required to make a specific
request to the L/C Issuer for any such renewal. Once an Auto-Renewal Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer to permit the renewal of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date;
provided that the L/C Issuer
shall not permit any such renewal if (A) the L/C Issuer has determined that it
would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii)
or otherwise), or (B) it has


 


55





















 


received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the
Nonrenewal Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such renewal or (2) from the Administrative
Agent, any Revolving Credit Lender or any Borrower that one or more of the
applicable conditions specified in Section 4.03 is not then satisfied.


 


(iv)                         Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the
relevant Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.


 


(c)                                       Drawings and
Reimbursements; Funding of Participations.  (i) Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of Credit, the
L/C Issuer shall notify the relevant Borrower and the Administrative Agent
thereof. In the case of a Letter of Credit denominated in an Alternative
Currency, the applicable Borrower shall reimburse the L/C Issuer in such
Alternative Currency, unless (A) the L/C Issuer (at its option) shall have
specified in such notice that it will require reimbursement in Dollars, or (B)
in the absence of any such requirement for reimbursement in Dollars, the
Company shall have notified the L/C Issuer promptly following receipt of the
notice of drawing that the Company will reimburse the L/C Issuer in Dollars. In
the case of any such reimbursement in Dollars of a drawing under a Letter of
Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Company
of the Dollar Amount of the drawing promptly following the determination
thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer
under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on
the date of any payment by the L/C Issuer under a Letter of Credit to be
reimbursed in an Alternative Currency (each such date, an “Honor Date”), such Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing; provided that if such notice is not
provided to such Borrower prior to such time on the Honor Date, then such
Borrower shall reimburse the L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing in such currency on the next
succeeding Business Day and such extension of time shall be reflected in
computing fees in respect of any such Letter of Credit. If such Borrower fails
to reimburse the L/C Issuer by such time with respect to a Letter of Credit of
any Class, the Administrative Agent shall promptly notify each Revolving Credit
Lender of such Class of the Honor Date, the amount of the unreimbursed drawing
(expressed in Dollars in the Dollar Amount thereof in the case of a Letter of
Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”),
and the amount of such Revolving Credit Lender’s Pro Rata Share thereof.
In such event, the relevant Borrower shall be deemed to have requested a
Revolving Credit Borrowing of the applicable Class consisting of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans but subject to the amount of the
unutilized portion of the Revolving Credit Commitments of such Class and the
conditions set forth in Section 4.03 (other than the delivery of a
Committed Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided
that the lack


 


56





















 


of
such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.


 


(ii)                                  Upon any notice pursuant to Section 2.03(c)(i)
with respect to a Letter of Credit of any Class, each Revolving Credit Lender
of such Class (including the Lender acting as L/C Issuer) shall make funds
available to the Administrative Agent for the account of the L/C Issuer, in
Dollars, at the Administrative Agent’s Office for Dollar-denominated payments
in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii),
each Revolving Credit Lender that so makes funds available shall be deemed to
have made a Revolving Credit Loan of such Class (which shall be a Base Rate
Loan) to the relevant Borrower in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer, or if requested by the L/C
Issuer, the equivalent amount thereof in an Alternative Currency as determined
by the Administrative Agent at such time on the basis of the Spot Rate
(determined as of such funding date) for the purchase of such Alternative
Currency with Dollars.


 


(iii)                               With respect to any Unreimbursed Amount under a Letter of Credit of any
Class that is not fully refinanced by a Revolving Credit Borrowing of such Class
because the conditions set forth in Section 4.03 cannot be satisfied or
for any other reason, the relevant Borrower shall be deemed to have incurred
from the L/C Issuer (x) with respect to any Unreimbursed Amounts under a
Tranche A Letter of Credit, a Tranche A L/C Borrowing and (y) with respect to
any Unreimbursed Amounts under a Tranche B Letter of Credit, a Tranche B L/C
Borrowing, in each case in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate. In such event, each
Revolving Credit Lender’s payment to the Administrative Agent for the account
of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment
in respect of its participation in such L/C Borrowing and shall constitute (x)
in the case of payments with respect to Tranche A L/C Borrowings, a Tranche A
L/C Advance and (y) in the case of payments with respect to Tranche B L/C
Borrowings, a Tranche B L/C Advance, in each case from such Lender in
satisfaction of its participation obligation under this Section 2.03.


 


(iv)                              Until each Revolving Credit Lender funds its Revolving Credit Loan or
L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer
for any amount drawn under any Letter of Credit, interest in respect of such
Lender’s Pro Rata Share of such amount shall be solely for the account of the
L/C Issuer.


 


(v)                                 Each Revolving Credit Lender’s obligation to
make Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for
amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the L/C Issuer,


 


57





















 


any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided that each Revolving
Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c)
is subject to the conditions set forth in Section 4.03 (other than
delivery by the relevant Borrower of a Committed Loan Notice ). No such making
of an L/C Advance shall relieve or otherwise impair the obligation of the
relevant Borrower to reimburse the L/C Issuer for the amount of any payment
made by the L/C Issuer under any Letter of Credit, together with interest as
provided herein.


 


(vi)                              If any Revolving Credit Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
applicable Overnight Rate from time to time in effect. A certificate of the L/C
Issuer submitted to any Revolving Credit Lender (through the Administrative
Agent) with respect to any amounts owing under this Section 2.03(c)(vi)
shall be conclusive absent manifest error.


 


(d)                            Repayment of Participations.  (i) If, at any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Revolving Credit Lender such Lender’s
L/C Advance in respect of such payment in accordance with Section 2.03(c),
the Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the relevant Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender’s L/C Advance was outstanding) in the same funds as
those received by the Administrative Agent.


 


(ii)                                  If any payment received by the Administrative
Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Credit Lender shall pay to the Administrative Agent
for the account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
applicable Overnight Rate from time to time in effect.


 


(e)                             Obligations Absolute.  The obligation of any Borrower to reimburse the L/C Issuer for each
drawing under each Letter of Credit and to repay each L/C Borrowing shall be
absolute,


 


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unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including the following:


 


(i)                                     any lack of validity or enforceability of
such Letter of Credit, this Agreement, or any other agreement or instrument
relating thereto;


 


(ii)                                  the existence of any claim, counterclaim,
setoff, defense or other right that the relevant Borrower may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
L/C Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;


 


(iii)                               any draft, demand, certificate or other
document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit;


 


(iv)                              any payment by the L/C Issuer under such
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law;


 


(v)                                 any exchange, release or nonperfection of any
Collateral, or any release or amendment or waiver of or consent to departure
from the Guaranty or any other guarantee, for all or any of the Obligations of
the relevant Borrower in respect of such Letter of Credit; or


 


(vi)                              any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the relevant Borrower;


 


provided that the foregoing shall not excuse the L/C Issuer from liability to
such Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are waived by such Borrower to the extent
permitted by applicable law) suffered by such Borrower that are caused by the
L/C Issuer’s gross negligence or willful misconduct when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. Each Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with such Borrower’s instructions or other
irregularity, such Borrower will promptly notify the


 


59





















 


L/C
Issuer. Each Borrower shall be conclusively deemed to have waived any such
claim against the L/C Issuer and its correspondents unless such notice is given
as aforesaid.


 


(f)                               Role of L/C Issuer.  Each Lender and each Borrower agree that, in paying any drawing under a
Letter of Credit, the L/C Issuer shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly required
by the Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person executing or
delivering any such document. None of the L/C Issuer, any Agent-Related Person
nor any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. Each Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall
not, preclude such Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, any Agent-Related Person, nor any of the respective
correspondents, participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(e);
provided that anything in such
clauses to the contrary notwithstanding, each Borrower may have a claim against
the L/C Issuer, and the L/C Issuer may be liable to such Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by such Borrower which such Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful or grossly negligent failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.


 


(g)                            Cash Collateral. Upon the request of the Administrative Agent,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing and the
conditions set forth in Section 4.03 to a Revolving Credit Borrowing
cannot then be met, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or wholly
undrawn, the relevant Borrower shall immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations (in an amount equal to such
Outstanding Amount determined as of the date of such L/C Borrowing or the
Letter of Credit Expiration Date, as the case may be). For purposes hereof, “Cash Collateralize” means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances (“Cash Collateral”) pursuant
to documentation in


 


60





















 


form
and substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer (which documents are hereby consented to by the Lenders). Derivatives of
such term have corresponding meanings. Each Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America. If at any
time the Administrative Agent determines that any funds held as Cash Collateral
are subject to any right or claim of any Person other than the Administrative
Agent or that the total amount of such funds is less than the aggregate
Outstanding Amount of all L/C Obligations, the relevant Borrower will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited and held in the deposit accounts at
Bank of America as aforesaid, an amount equal to the excess of (a) such
aggregate Outstanding Amount over (b) the total amount of funds, if any, then
held as Cash Collateral that the Administrative Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit for
which funds are on deposit as Cash Collateral, such funds shall be applied, to
the extent permitted under applicable law, to reimburse the L/C Issuer. To the
extent the amount of any Cash Collateral exceeds the then Outstanding Amount of
such L/C Obligations and so long as no Event of Default has occurred and is
continuing, the excess shall be refunded to the relevant Borrower.


 


(h)                            Applicability of ISP98 and
UCP.  Unless otherwise expressly agreed by the L/C Issuer and the relevant
Borrower when a Letter of Credit is issued, (i) the rules of the “International
Standby Practices 1998” published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time
of issuance) shall apply to each standby Letter of Credit, and (ii) the rules
of the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce (the “ICC”)
at the time of issuance shall apply to each commercial Letter of Credit.


 


(i)                                Letter of Credit Fees.  Each Borrower shall pay to the Administrative Agent for the account of
each Revolving Credit Lender of any Class in accordance with its Pro Rata Share
a Letter of Credit fee for each Letter of Credit of such Class issued for the
account of such Borrower equal to the Applicable Rate times the daily maximum
amount then available to be drawn under such Letter of Credit (whether or not
such maximum amount is then in effect under such Letter of Credit if such
maximum amount increases periodically pursuant to the terms of such Letter of
Credit). Such letter of credit fees shall be computed on a quarterly basis in
arrears. Such letter of credit fees shall be due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If
there is any change in the Applicable Rate during any quarter, the daily
maximum amount of each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.


 


(j)                                Fronting Fee and
Documentary and Processing Charges Payable to L/C Issuer.  Each Borrower shall pay directly to the L/C Issuer for its own account
a fronting fee with respect to each Letter of Credit issued for the account of
such Borrower equal to 0.125% per annum of


 


61





















 


the
daily maximum amount then available to be drawn under such Letter of Credit
(whether or not such maximum amount is then in effect under such Letter of
Credit if such maximum amount increases periodically pursuant to the terms of
such Letter of Credit). Such fronting fees shall be computed on a quarterly
basis in arrears. Such fronting fees shall be due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. In
addition, each Borrower shall pay directly to the L/C Issuer for its own
account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable within five (5) Business Days of
demand and are nonrefundable.


 


(k)                                  Conflict with Letter of
Credit Application.  In the event of any conflict between the
terms hereof and the terms of any Letter of Credit Application, the terms
hereof shall control.


 


Section 2.04.  Swing Line Loans. 
(a) The Swing Line. 
Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees to make loans (each such loan, a “Swing Line Loan”) to any Borrower
from time to time on any Business Day (other than the Closing Date) until the
Maturity Date in an aggregate amount not to exceed at any time outstanding the
amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount
of Loans and L/C Obligations of the Lender acting as Swing Line Lender, may
exceed the amount of such Lender’s Commitment; provided
that after giving effect to any Swing Line Loan, the aggregate
Outstanding Amount of the Tranche A Revolving Credit Loans of any Lender, plus
such Lender’s Pro Rata Share of the Outstanding Amount of all Tranche A L/C
Obligations, plus such Lender’s Pro Rata Share of the Outstanding Amount of all
Swing Line Loans shall not exceed such Lender’s Tranche A Revolving Credit
Commitment; provided further that
the Borrowers shall not use the proceeds of any Swing Line Loan to refinance
any outstanding Swing Line Loan. Within the foregoing limits, and subject to
the other terms and conditions hereof, any Borrower may borrow under this Section 2.04,
prepay under Section 2.05, and reborrow under this Section 2.04. Each
Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a
Swing Line Loan, each Tranche A Revolving Credit Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing Line
Lender a risk participation in such Swing Line Loan in an amount equal to the
product of such Lender’s Pro Rata Share times the amount of such Swing Line
Loan.


 


(b)                                 Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the relevant Borrower’s
irrevocable notice to the Swing Line Lender and the Administrative Agent, which
may be given by telephone. Each such notice must be received by the Swing Line
Lender and the Administrative Agent not later than 1:00 p.m. on the requested
borrowing date, and shall specify (i) the amount to be borrowed, which shall be
a minimum of $100,000, and (ii) the requested borrowing date, which shall be a
Business Day. Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the relevant Borrower. Promptly after receipt by the Swing Line Lender
of any telephonic


 


62





















 


Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Administrative Agent (including at the request of any Tranche
A Revolving Credit Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable
conditions specified in Section 4.03 is not then satisfied, then, subject
to the terms and conditions hereof, the Swing Line Lender will, not later than
3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make
the amount of its Swing Line Loan available to the relevant Borrower.


 


(c)                                       Refinancing of Swing Line
Loans.  (i) The Swing Line Lender at any time in its
sole and absolute discretion may request, on behalf of the relevant Borrower
(which hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Tranche A Revolving Credit Lender make a Tranche A Revolving
Credit Loan (which shall be a Base Rate Loan) in an amount equal to such Lender’s
Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request
shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the aggregate Tranche A Revolving Credit Commitments
and the conditions set forth in Section 4.03. The Swing Line Lender shall
furnish the relevant Borrower with a copy of the applicable Committed Loan
Notice promptly after delivering such notice to the Administrative Agent. Each
Tranche A Revolving Credit Lender shall make an amount equal to its Pro Rata
Share of the amount specified in such Committed Loan Notice available to the
Administrative Agent in Same Day Funds for the account of the Swing Line Lender
at the Administrative Agent’s Office for Dollar denominated payments not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Tranche A Revolving Credit Lender
that so makes funds available shall be deemed to have made a Base Rate Loan to
the relevant Borrower in such amount. The Administrative Agent shall remit the
funds so received to the Swing Line Lender.


 


(ii)                                  If for any reason any Swing Line Loan cannot
be refinanced by such a Tranche A Revolving Credit Borrowing in accordance with
Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing
Line Lender as set forth herein shall be deemed to be a request by the Swing
Line Lender that each of the Tranche A Revolving Credit Lenders fund its risk
participation in the relevant Swing Line Loan and each Tranche A Revolving
Credit Lender’s payment to the Administrative Agent for the account of the
Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment
in respect of such participation.


 


(iii)                               If any Tranche A Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to


 


63





















 


be paid by such Lender pursuant to the foregoing
provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i),
the Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per annum
equal to the applicable Overnight Rate from time to time in effect. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.


 


(iv)                              Each Tranche A Revolving Credit Lender’s
obligation to make Tranche A Revolving Credit Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the relevant
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided that each Tranche A Revolving Credit Lender’s
obligation to make Tranche A Revolving Credit Loans pursuant to this Section 2.04(c)
is subject to the conditions set forth in Section 4.03. No such funding of
risk participations shall relieve or otherwise impair the obligation of the
relevant Borrower to repay Swing Line Loans, together with interest as provided
herein.


 


(d)                                 Repayment of Participations.  (i) At any time after any Tranche A Revolving
Credit Lender has purchased and funded a risk participation in a Swing Line
Loan, if the Swing Line Lender receives any payment on account of such Swing
Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata
Share of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s risk
participation was funded) in the same funds as those received by the Swing Line
Lender.


 


(ii)                                  If any payment received by the Swing Line
Lender in respect of principal or interest on any Swing Line Loan is required
to be returned by the Swing Line Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered
into by the Swing Line Lender in its discretion), each Tranche A Revolving
Credit Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned, at a rate per annum equal to the
applicable Overnight Rate. The Administrative Agent will make such demand upon
the request of the Swing Line Lender.


 


(e)                                  Interest for Account of
Swing Line Lender.  The Swing Line Lender shall be responsible
for invoicing the Borrowers for interest on the Swing Line Loans. Until each
Tranche A Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender’s Pro
Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share
shall be solely for the account of the Swing Line Lender.


 


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(f)                                    Payments Directly to Swing
Line Lender.  The Borrowers shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing
Line Lender.


 


Section 2.05.  Prepayments.  (a)
Optional.  (i) Any Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Loans in whole or in part without premium or penalty; provided that (1) such notice must be
received by the Administrative Agent not later than 12:30 p.m. (Charlotte,
North Carolina time, or London, England time in the case of Loans denominated
in an Alternative Currency) (A) three (3) Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base
Rate Loans; (2) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $2,000,000 or a whole multiple of $500,000 in excess thereof (or
comparable amounts determined by the Administrative Agent in the case of
Alternative Currency Loans); and (3) any prepayment of Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof or, in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount of such
prepayment and the Class(es) and Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Appropriate Lender of its
receipt of each such notice, and of the amount of such Lender’s Pro Rata Share
of such prepayment. If such notice is given by a Borrower, such Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to Section 3.05. Each prepayment
of principal of, and interest on, Alternative Currency Loans shall be made in
the relevant Alternative Currency. Each prepayment of the Loans pursuant to
this Section 2.05(a) shall be paid to the Appropriate Lenders in
accordance with their respective Pro Rata Shares.


 


(ii)                                  Any Borrower may, upon notice to the Swing
Line Lender (with a copy to the Administrative Agent), at any time or from time
to time, voluntarily prepay Swing Line Loans in whole or in part without
premium or penalty; provided that
(1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment,
and (2) any such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by any Borrower, such Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein.


 


(iii)                               Notwithstanding anything to the contrary
contained in this Agreement, the relevant Borrower may rescind any notice of
prepayment under Section 2.05(a)(i) or 2.05(a)(ii) if such prepayment
would have resulted from a refinancing of all of the Facilities, which
refinancing shall not be consummated or shall otherwise be delayed.


 


(b)                                 Mandatory.  (i) Within five (5) Business Days after financial
statements have been delivered pursuant to Section 6.01(a) and the related
Compliance Certificate has been delivered pursuant to Section 6.02(b), the
Company shall cause to be prepaid an aggregate Dollar Amount of Term Loans in
an amount equal to 50% of Excess Cash Flow, if any, for the fiscal year


 


65





















 


covered
by such financial statements (commencing with the fiscal year ended November 30,
2004, which fiscal year shall be for the period from the Closing Date through November 30,
2004); provided that such
percentage shall be reduced to (x) 25% if the Leverage Ratio as of the last day
of the immediately preceding four fiscal quarters was less than 4.0:1 and (y)
0% if the Leverage Ratio as of the last day of the immediately preceding four
fiscal quarters was less than 3.5:1.


 


(ii)                                       (A) If (x) Holdings, the Company or any of
its Restricted Subsidiaries Disposes of any property or assets (other than any
Disposition of any property or assets permitted by Section 7.05(a), (b),
(c), (d) (to the extent constituting a Disposition by any Restricted Subsidiary
that is not a Loan Party to a Loan Party), (e), (g), (h), (i), or (j)) or (y)
any Casualty Event occurs, which in the aggregate results in the realization or
receipt by Holdings, the Company or such Restricted Subsidiary of Net Cash
Proceeds, in excess of $1,000,000 in any fiscal year, the Company shall cause
to be prepaid on or prior to the date which is ten (10) Business Days after the
date of the realization or receipt of such Net Cash Proceeds an aggregate
Dollar Amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds
received; provided that no such
prepayment shall be required pursuant to this Section 2.05(b)(ii)(A) if,
on or prior to such date, the Company shall have given written notice to the
Administrative Agent of its intention to reinvest all or a portion of such Net
Cash Proceeds in accordance with Section 2.05(b)(ii)(B) (which election
may only be made if no Event of Default has occurred and is then continuing);


 


(B)                      With respect to any Net Cash Proceeds
realized or received with respect to any Disposition (other than (x) any
Disposition specifically excluded from the application of Section 2.05(b)(ii)(A)
and (y) any Disposition of Securitization Assets permitted by Section 7.05(1))
or any Casualty Event, at the option of the Company, and so long as no Event of
Default shall have occurred and be continuing, the Company may reinvest all or
any portion of such Net Cash Proceeds in assets useful for its business within
(x) three hundred and sixty-five (365) days following receipt of such Net Cash
Proceeds or (y) if the Company enters into a contract to reinvest such Net Cash
Proceeds within three hundred and sixty-five (365) days following receipt
thereof, within one hundred and eighty (180) days of the date of such contract;
provided that if any Net Cash
Proceeds are no longer intended to be so reinvested at any time after delivery
of a notice of reinvestment election, an amount equal to any such Net Cash
Proceeds shall be immediately applied to the prepayment of the Term Loans as
set forth in this Section 2.05.


 


(iii)                                    On or prior to the date which is five (5)
Business Days after the receipt of such Net Cash Proceeds, the Company shall
cause to be prepaid an aggregate Dollar Amount of Term Loans in an amount equal
to 50% of all Net Cash Proceeds received from any Specified Equity Issuance; provided that such percentage shall be
reduced to 25% if the Leverage Ratio as of the last day of the prior fiscal
quarter was less than 3.5:1.00.


 


66





















 


(iv)                                   If Holdings, the Company or any of its
Restricted Subsidiaries incurs or issues (A) any Indebtedness not expressly
permitted to be incurred or issued pursuant to Section 7.03, (B) any
Permitted Subordinated Indebtedness permitted to be incurred under Section 7.03(a)(iii)(B),
or (C) Indebtedness permitted to be incurred under Section 7.03(b)(vi)(B),
the Company shall cause to be prepaid an aggregate Dollar Amount of Term Loans
in an amount equal to 100% of all Net Cash Proceeds received therefrom on or
prior to the date which is five (5) Business Days after the receipt of such Net
Cash Proceeds; provided that such
percentage shall be reduced to 75% if the Leverage Ratio as of the last day of
the prior fiscal quarter was less than 3.0:1.00.


 


(v)                                      If for any reason the aggregate Outstanding
Amount of the Revolving Credit Loans of any Class and the L/C Obligations of
such Class and, in the case of the Tranche A Revolving Credit Commitments, the
Swing Line Loans, at any time exceeds the aggregate Revolving Credit
Commitments of such Class then in effect (other than as a result of the
determination of the Dollar Amount pursuant to Section 2.17, in which case
the provisions of Section 2.17(c) shall apply), the Borrowers shall
immediately prepay Revolving Credit Loans of such Class and/or Cash
Collateralize the L/C Obligations of such Class and/or, in the case of an
excess over the Tranche A Revolving Credit Commitments, prepay Swing Line Loans
in an aggregate amount equal to such excess; provided
that the Borrowers shall not be required to Cash Collateralize the
L/C Obligations of any Class pursuant to this Section 2.05(b)(v) unless
after the prepayment in full of the Revolving Credit Loans of such Class and
(in the case of Tranche A L/C Obligations) Swing Line Loans such aggregate
Outstanding Amount exceeds the aggregate Revolving Credit Commitments of such
Class then in effect.


 


(vi)                                   Each prepayment of Term Loans pursuant to
this Section 2.05(b) shall be applied, first, in direct order of
maturities, to any principal repayment installments of the Term Loans that are
due within twelve (12) months after the date of such prepayment, second, on a
pro-rata basis, to the other principal repayment installments of the Term Loans;
and each such prepayment shall be paid to the Lenders in accordance with their
respective Pro Rata Shares (prior to giving effect to any rejection by any Term
Lender of any such prepayment pursuant to clause (vii) below), subject to
clause (vii) of this Section 2.05(b).


 


(vii)                                The Company shall notify the Administrative
Agent in writing of any mandatory prepayment of Term Loans required to be made
pursuant to clauses (i) through (iv) of this Section 2.05(b) at least (x)
in the case of prepayments of Term Loans which are Base Rate Loans, three (3)
Business Days and (y) in the case of prepayments of Term Loans which are
Eurodollar Rate Loans, five (5) Business Days, in each case prior to the date
of such prepayment. Each such notice shall specify the date of such prepayment
and provide a reasonably detailed calculation of the amount of such prepayment.
The Administrative Agent will promptly notify each Appropriate Lender of the
contents of the Company’s prepayment notice and of such Appropriate Lender’s
Pro Rata Share of the prepayment. Any Term Lender (a “Declining Lender”, and any Term Lender which is not a
Declining Lender, an “Accepting Lender”) may elect, by


 


67





















 


delivering, not less than (x) in the case of
prepayments of Term Loans which are Base Rate Loans, one (1) Business Day and
(y) in the case of prepayments of Term Loans which are Eurodollar Loans, three
(3) Business Days, in each case prior to the proposed prepayment date, a
written notice that any mandatory prepayment otherwise required to be made with
respect to the Term Loans held by such Term Lender pursuant to clauses (i)
through (iv) of this Section 2.05(b) not be made, in which event the
portion of such prepayment which would otherwise have been applied to the Term
Loans of the Declining Lenders shall instead be retained by the Borrowers.


 


(viii)                             Funding Losses, Etc. All prepayments under this Section 2.05
shall be made together with, in the case of any such prepayment of a Eurodollar
Rate Loan on a date other than the last day of an Interest Period therefor, any
amounts owing in respect of such Eurodollar Rate Loan pursuant to Section 3.05.
Notwithstanding any of the other provisions of Section 2.05(b), so long as
no Event of Default shall have occurred and be continuing, if any prepayment of
Eurodollar Rate Loans is required to be made under this Section 2.05(b),
other than on the last day of the Interest Period therefor, the relevant
Borrower may, in its sole discretion, deposit the amount of any such prepayment
otherwise required to be made thereunder into a Cash Collateral Account until
the last day of such Interest Period, at which time the Administrative Agent
shall be authorized (without any further action by or notice to or from any Borrower
or any other Loan Party) to apply such amount to the prepayment of such Loans
in accordance with this Section 2.05(b). Upon the occurrence and during
the continuance of any Event of Default, the Administrative Agent shall also be
authorized (without any further action by or notice to or from any Borrower or
any other Loan Party) to apply such amount to the prepayment of the outstanding
Loans in accordance with this Section 2.05(b).


 


Section 2.06.  Termination or Reduction of Commitments.  (a) Optional.  The Borrowers may, upon written
notice to the Administrative Agent, terminate the unused Commitments of any
Class, or from time to time permanently reduce the unused Commitments of any
Class; provided that (i) any such
notice shall be received by the Administrative Agent three (3) Business Days
prior to the date of termination or reduction, (ii) any such partial reduction
shall be in an aggregate amount of $500,000 or any whole multiple of $100,000
in excess thereof and (iii) if, after giving effect to any reduction of the
Commitments (x) the Letter of Credit Sublimit exceeds the aggregate amount of
the Revolving Credit Commitments or (y) the Swing Line Sublimit exceeds the
amount of the Tranche A Revolving Credit Commitments, such sublimit shall be
automatically reduced by the amount of such excess. The amount of any such
Commitment reduction shall not be applied to the Letter of Credit Sublimit
unless otherwise specified by the Company. Notwithstanding the foregoing, the
Company may rescind or postpone any notice of termination of the Commitments if
such termination would have resulted from a refinancing of all of the
Facilities, which refinancing shall not be consummated or otherwise shall be
delayed.


 


(b)                                 Mandatory. The Term Commitment of each Term Lender shall
be automatically and permanently reduced to $0 on the ARCA Effective Date.


 


68





















 


(c)                                  Application of Commitment
Reductions; Payment of Fees.  The Administrative Agent will promptly notify
the Lenders of any termination or reduction of unused portions of the Letter of
Credit Sublimit, or the unused Commitments of any Class under this Section 2.06.
Upon any reduction of unused Commitments of any Class, the Commitment of each
Lender of such Class shall be reduced by such Lender’s Pro Rata Share of the
amount by which such Commitments are reduced (other than the termination of the
Commitment of any Lender as provided in Section 3.07). All commitment fees
accrued until the effective date of any termination of the Aggregate
Commitments shall be paid on the effective date of such termination.


 


Section 2.07.  Repayment of Loans. 
(a) Term Loans.  The
Borrowers shall repay to the Administrative Agent for the ratable account of
the Term Lenders the aggregate Dollar Amount of all Term Loans outstanding in
twenty-eight (28) consecutive quarterly installments as follows (which
installments shall (i) be reduced as a result of the application of prepayments
in accordance with the order of priority set forth in Section 2.05 and
(ii) be payable on the last Business Day of each month set forth below):


 




	
  Date

  	
   

  	
  Aggregate Term Loan

  Principal

  Amortization Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 2004,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2004,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2004

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2005,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May 2005,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2005,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2005

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2006,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May 2006,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2006,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2006

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2007,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May 2007,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2007,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2007

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2008,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May 2008,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2008,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2008

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2009,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May 2009,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2009,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2009

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2010,

  	
   

  	
  $

  	
  3,000,000

  	
   

  






 


69





















 




	
  Date

  	
   

  	
  Aggregate Term Loan

  Principal

  Amortization Payment

  	
   

  
	
  May 2010,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August 2010,

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November 2010

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February 2011

  	
   

  	
  $

  	
  1,119,000,000

  	
   

  






 


provided that the final principal repayment
installment of the Term Loans shall be repaid on the Maturity Date and in any
event shall be in an amount equal to the aggregate principal amount of all Term
Loans outstanding on such date.


 


(b)                            Revolving Credit Loans.  Each Borrower shall repay to the Administrative Agent for the ratable
account of the applicable Revolving Credit Lenders of each Class on the
Maturity Date for the Revolving Credit Commitments of such Class the aggregate
principal amount of all of its Revolving Credit Loans of such Class outstanding
on such date.


 


(c)                             Swing Line Loans.  Each Borrower shall repay its Swing Line Loans on the earlier to occur
of (i) the date five (5) Business Days after such Loan is made and (ii) the
Maturity Date.


 


Section 2.08.  Interest.  (a)
Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate plus
(in the case of a Eurodollar Rate Loan of any Lender which is lent
from a Lending Office in the United Kingdom or a Participating Member State)
the Mandatory Cost; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate for Revolving Credit Loans.


 


(b)                                 While any Event of Default set forth in Section 8.01(a)
or (f) exists, each Borrower shall pay interest on the principal amount of all
of its outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.


 


(c)                                  Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. Interest hereunder shall be due and
payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief
Law.


 


Section 2.09.  Fees.  In
addition to certain fees described in Sections 2.03(i) and (j):


 


70





















 


(a)                             Commitment Fee.  The Company shall pay to the Administrative Agent for the account of
each Revolving Credit Lender of each Class in accordance with its Pro Rata
Share, a commitment fee equal to the Applicable Rate times the actual daily
amount by which the aggregate Revolving Credit Commitments of such Class exceed
the sum of (A) the Outstanding Amount of Revolving Credit Loans of such Class
and (B) the Outstanding Amount of L/C Obligations of such Class; provided that any commitment fee accrued
with respect to any of the Commitments of a Defaulting Lender during the period
prior to the time such Lender became a Defaulting Lender and unpaid at such
time shall not be payable by the Company so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall otherwise
have been due and payable by the Company prior to such time; and provided further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender. The commitment fee shall accrue at all
times from the date hereof until the Maturity Date, including at any time
during which one or more of the conditions in Article 4 is not met, and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the first such date
to occur after the Closing Date, and on the Maturity Date for the applicable
Facility. The commitment fee shall be calculated quarterly in arrears, and if
there is any change in the Applicable Rate during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.


 


(b)                            Other Fees.  The Company shall pay to the Agents such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.


 


Section 2.10.  Computation of Interest and Fees.  All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America’s “prime
rate” and for Alternative Currency Loans denominated in Sterling shall be made
on the basis of a year of three hundred and sixty-five (365) or three hundred
and sixty-six (366) days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a three
hundred and sixty (360) day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
three hundred and sixty-five (365) day year). Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one (1) day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.


 


Section 2.11.  Evidence of Indebtedness.  (a) The Credit Extensions made by
each Lender shall be evidenced by one or more accounts or records maintained by
such Lender and evidenced by one or more entries in the Register maintained by
the Administrative Agent, acting solely for purposes of Treasury Regulation Section 5f.103-1(c),
as agent for the Borrowers, in each case in the ordinary course of business.
The accounts or records maintained by the Administrative Agent and each Lender
shall be prima facie evidence
absent manifest error of the amount of the


 


71





















 


Credit
Extensions made by the Lenders to the Borrowers and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrowers hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts
and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note payable to such Lender, which shall evidence such
Lender’s Loans in addition to such accounts or records. Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.


 


(b)                            In addition to the accounts and records
referred to in Section 2.11(a), each Lender and the Administrative Agent
shall maintain in accordance with its usual practice accounts or records and,
in the case of the Administrative Agent, entries in the Register, evidencing
the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans. In the event of any conflict between the accounts and
records maintained by the Administrative Agent and the accounts and records of any
Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.


 


(c)                             Entries made in good faith by the
Administrative Agent in the Register pursuant to Sections 2.11(a) and (b), and by
each Lender in its account or accounts pursuant to Sections 2.11(a) and (b),
shall be prima facie evidence of
the amount of principal and interest due and payable or to become due and
payable from the Borrowers to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement and the
other Loan Documents, absent manifest error; provided
that the failure of the Administrative Agent or such Lender to make
an entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrowers under this Agreement and the other Loan Documents.


 


Section 2.12. Payments
Generally. (a) All payments to be made by the Borrowers shall be
made without condition or deduction for any counterclaim, defense, recoupment
or setoff. Except as otherwise expressly provided herein and except with
respect to principal of and interest on Loans denominated in an Alternative
Currency, all payments by the Borrowers hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the applicable Administrative Agent’s Office in Dollars and
in Same Day Funds not later than 2:00 p.m. on the date specified herein. Except
as otherwise expressly provided herein, all payments by the Borrowers hereunder
with respect to principal and interest on Loans denominated in an Alternative
Currency shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the applicable
Administrative Agent’s Office in such Alternative Currency and in Same Day
Funds not later than the Applicable Time specified by the Administrative Agent
on the dates specified herein. If, for any reason, any Borrower is prohibited
by any Law from making any required payment hereunder in an Alternative
Currency, such Borrower shall make such payment in Dollars in the Dollar Amount
of the Alternative Currency payment amount. The Administrative


 


72





















 


Agent
will promptly distribute to each Lender its Pro Rata Share (or other applicable
share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars,
or (ii) after the Applicable Time specified by the Administrative Agent in the
case of payments in an Alternative Currency, shall in each case be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.


 


(b)                            If any payment to be made by the Borrowers
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be; provided that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made in the next
succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.


 


(c)                             Unless any Borrower or any Lender has
notified the Administrative Agent, prior to the date any payment is required to
be made by it to the Administrative Agent hereunder, that such Borrower or such
Lender, as the case may be, will not make such payment, the Administrative
Agent may assume that such Borrower or such Lender, as the case may be, has
timely made such payment and may (but shall not be so required to), in reliance
thereon, make available a corresponding amount to the Person entitled thereto.
If and to the extent that such payment was not in fact made to the
Administrative Agent in Same Day Funds, then:


 


(i)                                if any Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in Same Day Funds,
together with interest thereon in respect of each day from and including the
date such amount was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent in Same Day Funds
at the applicable Overnight Rate from time to time in effect; and


 


(ii)                             if any Lender failed to make such payment, such Lender shall forthwith
on demand pay to the Administrative Agent the amount thereof in Same Day Funds,
together with interest thereon for the period from the date such amount was
made available by the Administrative Agent to the relevant Borrower to the date
such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the
applicable Overnight Rate from time to time in effect. When such Lender makes
payment to the Administrative Agent (together with all accrued interest
thereon), then such payment amount (excluding the amount of any interest which
may have accrued and been paid in respect of such late payment) shall
constitute such Lender’s Loan included in the applicable Borrowing. If such
Lender does not pay such amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent may make a demand therefor upon the
relevant Borrower, and the relevant Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from
its obligation to


 


73





















 


fulfill its Commitment or to prejudice any rights
which the Administrative Agent or any Borrower may have against any Lender as a
result of any default by such Lender hereunder.


 


A
notice of the Administrative Agent to any Lender or any Borrower with respect
to any amount owing under this Section 2.12(c) shall be conclusive, absent
manifest error.


 


(d)                                 If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided
in the foregoing provisions of this Article 2, and such funds are not made
available to the relevant Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article 4 are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.


 


(e)                                  The obligations of the Lenders hereunder to
make Loans and to fund participations in Letters of Credit and Swing Line Loans
are several and not joint. The failure of any Lender to make any Loan or to
fund any such participation on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan or purchase its participation.


 


(f)                                    Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or will
obtain the funds for any Loan in any particular place or manner.


 


(g)                                 Whenever any payment received by the
Administrative Agent under this Agreement or any of the other Loan Documents is
insufficient to pay in full all amounts due and payable to the Administrative
Agent and the Lenders under or in respect of this Agreement and the other Loan
Documents on any date, such payment shall be distributed by the Administrative
Agent and applied by the Administrative Agent and the Lenders in the order of
priority set forth in Section 8.03. If the Administrative Agent receives
funds for application to the Obligations of the Loan Parties under or in
respect of the Loan Documents under circumstances for which the Loan Documents
do not specify the manner in which such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each of the Lenders in accordance with such Lender’s Pro Rata
Share of the sum of (a) the Outstanding Amount of all Loans outstanding at such
time and (b) the Outstanding Amount of all L/C Obligations outstanding at such
time, in repayment or prepayment of such of the outstanding Loans or other
Obligations then owing to such Lender.


 


Section 2.13. Sharing
of Payments. If, other than as expressly provided elsewhere herein,
any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations


 


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or
Swing Line Loans held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such
Loans or such participations, as the case may be, pro rata with each of them; provided that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under
any of the circumstances described in Section 10.06 (including pursuant to
any settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender’s ratable share (according to the proportion of (i)
the amount of such paying Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid
or payable by the purchasing Lender in respect of the total amount so
recovered, without further interest thereon. Each Borrower agrees that any
Lender so purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
setoff, but subject to Section 10.09) with respect to such participation
as fully as if such Lender were the direct creditor of such Borrower in the
amount of such participation. The Administrative Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section 2.13 and will in each case
notify the Lenders following any such purchases or repayments. Each Lender that
purchases a participation pursuant to this Section 2.13 shall from and
after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.


 


Section 2.14. Designation
of Overseas Borrower; Termination of Designations. (a) The Company
may from time to time designate any Qualified Foreign Subsidiary as an
additional Overseas Borrower for purposes of this Agreement by delivering to
the Administrative Agent an Election to Participate duly executed on behalf of
such Subsidiary and the Company in such number of copies as the Administrative
Agent may request. The Administrative Agent shall promptly notify the Lenders
of its receipt of any such Election to Participate.


 


(b)                                 The Company may at any time terminate the
status of any Subsidiary as an Overseas Borrower for purposes of this Agreement
by delivering to the Administrative Agent an Election to Terminate duly
executed on behalf of such Subsidiary and the Company in such number of copies
as the Administrative Agent may request. The delivery of such an Election to
Terminate shall not affect any obligation of such Subsidiary theretofore
incurred under this Agreement or any other Loan Document or any rights of the
Lenders and the Agents against such Subsidiary or against the Company in its
capacity as guarantor of the obligations of such Subsidiary. The Administrative
Agent shall promptly notify the Lenders of its receipt of any such Election to
Terminate.


 


Section 2.15. Increase
in Revolving Credit Commitments. (a) Provided there exists no
Default, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), the Company may on up to three (3) different occasions request an
increase in the Revolving Credit Commitments of either Class; provided that (i) after giving effect to
any such increase in the Revolving Credit Commitments, the aggregate amount of
increased Commitments that have been


 


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effected
pursuant to this Section 2.15 shall not exceed $100,000,000 and (ii) any
such increase shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof. At the time of the sending of such
notice, the Company (in consultation with the Administrative Agent) shall
specify the time period within which each Revolving Credit Lender of the
applicable Class is requested to respond (which shall in no event be less than
ten (10) Business Days from the date of delivery of such notice to the
Revolving Credit Lenders). Each Revolving Credit Lender of the applicable Class
shall notify the Administrative Agent within such time period whether or not it
agrees to increase its Revolving Credit Commitment of such Class and, if so,
whether by an amount equal to, greater than, or less than its Pro Rata Share of
such requested increase. Any Revolving Credit Lender of the applicable Class
not responding within such time period shall be deemed to have declined to
increase its Revolving Credit Commitment of such Class. The Administrative
Agent shall notify the Company and each Revolving Credit Lender of the applicable
Class of the Revolving Credit Lenders’ responses to each request made
hereunder. To achieve the full amount of a requested increase, the Company may
also invite additional Eligible Assignees to become Revolving Credit Lenders of
the applicable Class pursuant to a joinder agreement in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.


 


(b)                                 If the Revolving Credit Commitments of any
Class are increased in accordance with this Section 2.15, the
Administrative Agent and the Company shall determine the effective date (the “Revolving
Credit Commitments Increase Effective Date”) and the final allocation of such
increase. The Administrative Agent shall promptly notify the Company and the
Revolving Credit Lenders of the final allocation of such increase and the
Revolving Credit Commitments Increase Effective Date. As a condition precedent
to such increase, the Company shall deliver to the Administrative Agent a
certificate of the Company dated as of the Revolving Credit Commitments
Increase Effective Date signed by a Responsible Officer of the Company
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article 5 and the other Loan
Documents are true and correct in all material respects on and as of the
Revolving Credit Commitments Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in all material respects as of such
earlier date, and except that for purposes of this Section 2.15, the
representations and warranties contained in subsections (a) and (b) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to
subsections (a) and (b), respectively, of Section 6.01, and (B) no Default
exists. On each Revolving Credit Commitments Increase Effective Date, each of
the Lenders having a Revolving Credit Commitment of the applicable Class prior
to such Revolving Credit Commitments Increase Effective Date (the “Pre-Increase
Revolving Lenders”) shall
assign to any Lender which is acquiring a new or additional Revolving Credit
Commitment of such Class on the Revolving Credit Commitments Increase Effective
Date (the “Post-Increase Revolving Lenders”), and such Post-Increase Revolving Lenders shall
purchase from each Pre-Increase Revolving Lenders, at the principal amount
thereof, such interests in the Revolving Credit Loans and participation
interests in L/C Obligations and (in the case of an increase in the Tranche A
Revolving Credit Commitments) Swing Line Loans outstanding on such Revolving
Credit Commitments Increase Effective Date as shall be necessary in order that,
after giving effect to all


 


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such
assignments and purchases, such Revolving Credit Loans and participation
interests in L/C Obligations and (in the case of an increase in the Tranche A
Revolving Credit Commitments) Swing Line Loans will be held by Pre-Increase Revolving
Lenders and Post-Increase Revolving Lenders ratably in accordance with their
Revolving Credit Commitments of such Class after giving effect to such
increased Revolving Credit Commitments.


 


(c)                             This Section 2.15 shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.


 


Section 2.16. Overseas
Borrower Costs. (a) If the cost to any Lender of making or
maintaining any Loan to an Overseas Borrower is increased (or the amount of any
sum received or receivable by any Lender or its Lending Office is reduced) by
an amount deemed by such Lender to be material, by reason of the fact that such
Overseas Borrower is incorporated in, or conducts business in, a jurisdiction
outside the United States, such Borrower shall indemnify such Lender for such increased
cost or reduction within fifteen (15) days after demand by such Lender (with a
copy to the Administrative Agent). The foregoing indemnity shall not apply to
any Taxes addressed in Article 3. A certificate of such Lender claiming
compensation under this Section 2.16 and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error.


 


(b)                                 Each Lender will promptly notify the relevant
Overseas Borrower and the Administrative Agent of any event or circumstance of
which it has knowledge that will entitle such Lender to compensation pursuant
to this Section 2.16 and will designate a different Lending Office, if, in
the judgment of such Lender, such designation will avoid the need for, or reduce
the amount of, such compensation and will not be otherwise disadvantageous to
such Lender.


 


Section 2.17. Currency
Equivalents. (a) The Administrative Agent shall determine the Dollar
Amount of each Alternative Currency Loan as of the first day of each Interest
Period applicable thereto and, in the case of any such Interest Period of more
than three months, at three-month intervals after the first day thereof, and
shall promptly notify the relevant Borrower and the Lenders of each Dollar
Amount so determined by it. Each such determination shall be based on the Spot
Rate (x) on the date of the related Committed Loan Notice for purposes of the
initial such determination for any Alternative Currency Loan and (y) on the
fourth Business Day prior to the date as of which such Dollar Amount is to be
determined, for purposes of any subsequent determination.


 


(b)                                 The Administrative Agent shall determine the
L/C Obligations related to each Letter of Credit as of the date of issuance
thereof and at three-month intervals after the date of issuance thereof. Each
such determination shall be based on the Spot Rate (i) on the date of the
related notice of issuance, in the case of the initial determination in respect
of any Letter of Credit and (ii) on the fourth Business Day prior to the date
as of which such Dollar Amount is to be determined, in the case of any
subsequent determination with respect to an outstanding Letter of Credit.


 


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(c)                                  If after giving effect to any such
determination of a Dollar Amount, the aggregate Outstanding Amount of the
Tranche B Revolving Credit Loans and the Tranche B L/C Obligations exceeds the
aggregate Tranche B Revolving Credit Commitments, the Borrowers shall, within
five (5) Business Days of receipt of notice thereof from the Administrative
Agent setting forth such calculation in reasonable detail, prepay outstanding
Tranche B Revolving Credit Loans (as selected by the Company and notified to
the Lenders through the Administrative Agent not less than three (3) Business
Days prior to the date of prepayment) or take other action (including, in any
Borrower’s discretion, cash collateralization of L/C Obligations or Alternative
Currency Loans in amounts from time to time equal to such excess) to the extent
necessary to eliminate any such excess.


 


ARTICLE 3


TAXES,
INCREASED COSTS PROTECTION AND ILLEGALITY


 


Section 3.01. Taxes. (a)
Except as provided in this Section 3.01, any and all payments by any
Borrower to or for the account of any Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and all liabilities (including additions
to tax, penalties and interest) with respect thereto, excluding, in the case of
each Agent and each Lender, taxes imposed on or measured by its net income or
overall gross income (including branch profits), and franchise (and similar)
taxes imposed on it in lieu of net income taxes, by the jurisdiction (or any
political subdivision thereof) under the Laws of which such Agent or such
Lender, as the case may be, is organized or maintains a Lending Office, and all
liabilities (including additions to tax, penalties and interest) with respect
thereto (all such non-excluded taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as “Taxes”). If
any Borrower shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Loan Document to any Agent or any Lender,
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.01), each of such Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws, and (iv) within thirty (30) days
after the date of such payment, such Borrower shall furnish to such Agent or
Lender (as the case may be) the original or a certified copy of a receipt
evidencing payment thereof to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent.


 


(b)                                 In addition, each Borrower agrees to pay any
and all present or future stamp, court or documentary taxes and any other
excise, property, intangible or mortgage recording taxes or charges or similar
levies which arise from any payment made under any Loan Document or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”).


 


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(c)                             Each Borrower agrees to indemnify each Agent
and each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 3.01) paid by such Agent and such Lender, and (ii) any
liability (including additions to tax, penalties, interest and expenses)
arising therefrom or with respect thereto, in each case whether or not such
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority; provided such Agent or Lender, as the case may
be, provides such Borrower with a written statement thereof setting forth in
reasonable detail the basis and calculation of such amounts. Payment under this
Section 3.01(c) shall be made within thirty (30) days after the date such
Lender or such Agent makes a demand therefor.


 


(d)                            No Borrower shall be required pursuant to
this Section 3.01 to pay any additional amount to, or to indemnify, any
Lender or Agent, as the case may be, to the extent that such Lender or such
Agent becomes subject to Taxes subsequent to the Closing Date (or, if later,
the date such Lender or Agent becomes a party to this Agreement) as a result of
a change in the place of organization of such Lender or Agent or a change in
the lending office of such Lender, except to the extent that any such change is
requested or required in writing by any Borrower (and provided that nothing in
this clause (d) shall be construed as relieving any Borrower from any
obligation to make such payments or indemnification in the event of a change in
lending office or place of organization that precedes a change in Law to the
extent such Taxes result from a change in Law).


 


(e)                             If a Lender or an Agent is subject to United
States withholding tax at a rate in excess of zero percent at the time such
Lender or such Agent, as the case may be, first becomes a party to this
Agreement, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender or Agent, as the case may be, provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for
periods governed by such forms; provided that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to this Agreement, the Lender assignor was entitled to payments
under clause (a) of this Section 3.01 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date.


 


(f)                               If any Lender or Agent shall become aware
that it is entitled to receive a refund in respect of amounts paid by any
Borrower pursuant to this Section 3.01, which refund in the good faith
judgment of such Lender or Agent is allocable to such payment, it shall
promptly notify the Company of the availability of such refund and shall,
within thirty (30) days after the receipt of a request by the Company, apply
for such refund provided that in the sole judgment of the Lender or Agent,
applying for such refund would not be disadvantageous to it. If any Lender or
Agent determines that it has received a refund in respect of any Taxes or Other
Taxes as to which indemnification or additional amounts have been paid to it by
any Borrower pursuant to this Section 3.01, it shall promptly remit such
refund (including any interest included in such refund) to such Borrower (to
the extent that it determines that it can do so without prejudice to the


 


79





















 


retention
of the refund), net of all out-of-pocket expenses of the Lender or Agent, as
the case may be; provided that
such Borrower, upon the request of the Lender or Agent, as the case may be,
agrees promptly to return such refund to such party in the event such party is
required to repay such refund to the relevant taxing authority. Such Lender or
Agent, as the case may be, shall, at such Borrower’s request, provide such
Borrower with a copy of any notice of assessment or other evidence of the
requirement to repay such refund received from the relevant taxing authority (provided that such Lender or Agent may
delete any information therein that such Lender or Agent deems confidential).
Nothing herein contained shall interfere with the right of a Lender or Agent to
arrange its tax affairs in whatever manner it thinks fit nor oblige any Lender
or Agent to claim any tax refund or to disclose any information relating to its
tax affairs or any computations in respect thereof or require any Lender or
Agent to do anything that would prejudice its ability to benefit from any other
refunds, credits, reliefs, remissions or repayments to which it may be
entitled.


 


(g)                                 Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 3.01(a) or (c) with
respect to such Lender it will, if requested by the Company, use commercially
reasonable efforts (subject to such Lender’s overall internal policies of
general application and legal and regulatory restrictions) to avoid the
consequences of such event, including to designate another Lending Office for
any Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the
reasonable judgment of such Lender, cause such Lender and its Lending Office(s)
to suffer no material economic, legal or regulatory disadvantage, and provided further that nothing in this Section 3.01(g)
shall affect or postpone any of the Obligations of any Borrower or the rights
of such Lender pursuant to Section 3.01(a) and (c).


 


Section 3.02. Illegality.
If any Lender determines that any Law has made it unlawful, or that
any Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans,
or to determine or charge interest rates based upon the Eurodollar Rate, then,
on notice thereof by such Lender to the Borrowers through the Administrative
Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans
or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until
such Lender notifies the Administrative Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist. Upon receipt
of such notice, each such Borrower shall, upon demand from such Lender (with a
copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, each such Borrower shall also pay accrued interest on
the amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.


 


Section 3.03. Inability
to Determine Rates. If the Required Lenders determine that for any
reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for


 


80





















 


any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
that the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, or that Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and the Interest Period of such Eurodollar Rate Loan, the Administrative
Agent will promptly so notify each Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, each Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.


 


Section 3.04. Increased
Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans. (a)
If any Lender determines that as a result of the introduction of or any change
in or in the interpretation of any Law, in each case after the date hereof, or
such Lender’s compliance therewith, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurodollar
Rate Loans or (as the case may be) issuing or participating in Letters of
Credit, or a reduction in the amount received or receivable by such Lender in
connection with any of the foregoing (excluding for purposes of this Section 3.04(a)
any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the
basis of taxation of overall net income or overall gross income (including
branch profits), and franchise (and similar) taxes imposed in lieu of net
income taxes, by the United States or any foreign jurisdiction or any political
subdivision of either thereof under the Laws of which such Lender is organized
or maintains a Lending Office, (iii) reserve requirements contemplated by Section 3.04(c)
and (iv) the requirements of the Bank of England and the Financial Services
Authority or the European Central Bank reflected in the Mandatory Cost, other
than as set forth below) or the Mandatory Cost, as calculated hereunder, does
not represent the cost to such Lender of complying with the requirements of the
Bank of England and/or the Financial Services Authority or the European Central
Bank in relation to its making, funding or maintaining of Eurodollar Rate
Loans, then from time to time upon demand of such Lender setting forth in
reasonable detail such increased costs (with a copy of such demand to the
Administrative Agent given in accordance with Section 3.06), the Company shall
pay to such Lender such additional amounts as will compensate such Lender for
such increased cost or reduction or, if applicable, the portion of such cost
that is not represented by the Mandatory Cost.


 


(b)                                 If any Lender determines that the introduction
of any Law regarding capital adequacy or any change therein or in the
interpretation thereof, in each case after the date hereof, or compliance by
such Lender (or its Lending Office) therewith, has the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of such Lender’s obligations hereunder (taking
into consideration its policies with respect to capital adequacy and such
Lender’s desired return on capital), then from time to time upon demand of such
Lender setting forth in reasonable detail the charge and the calculation of
such reduced rate of return (with a copy of such demand to the Administrative
Agent given in


 


81





















 


accordance
with Section 3.06), the Company shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.


 


(c)                             The Company shall pay to each Lender, (i) as
long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive in the absence of manifest
error), and (ii) as long as such Lender shall be required to comply with any
reserve ratio requirement or analogous requirement of any other central banking
or financial regulatory authority imposed in respect of the maintenance of the
Commitments or the funding of the Eurodollar Rate Loans, such additional costs
(expressed as a percentage per annum and rounded upwards, if necessary, to the
nearest five decimal places) equal to the actual costs allocated to such
Commitment or Loan by such Lender (as determined by such Lender in good faith,
which determination shall be conclusive absent manifest error) which in each
case shall be due and payable on each date on which interest is payable on such
Loan, provided the Company shall have received at least fifteen (15) days’
prior notice (with a copy to the Administrative Agent) of such additional
interest or cost from such Lender. If a Lender fails to give notice fifteen
(15) days prior to the relevant Interest Payment Date, such additional interest
or cost shall be due and payable fifteen (15) days from receipt of such notice.


 


(d)                            The Company shall not be required to compensate
a Lender pursuant to Section 3.04(a), (b) or (c) for any such increased
cost or reduction incurred more than one hundred and eighty (180) clays prior
to the date that such Lender demands, or notifies the Company of its intention
to demand, compensation therefor; provided that,
if the circumstance giving rise to such increased cost or reduction is
retroactive, then such I80-day period referred to above shall he extended to
include the period of retroactive effect thereof.


 


(e)                             If any Lender requests compensation under
this Section 3.04, then such Lender will, if requested by the Company, use
commercially reasonable efforts to designate another Lending Office for any
Loan or Letter of Credit affected by such event; provided that such efforts are made on terms that, in the
reasonable judgment of such Lender, cause such Lender and its Lending Office(s)
to suffer no material economic, legal or regulatory disadvantage, and provided further that nothing in this Section 3.04(e)
shall affect or postpone any of the Obligations of any Borrower or the rights
of such Lender pursuant to Section 3.04(a), (b), (c) or (d).


 


Section 3.05. Funding
Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Company shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:


 


(a)                                            any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such


 


82





















 


Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or


 


(b)                                           any failure by any Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by such Borrower;


 


including
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.


 


For
purposes of calculating amounts payable by the Company to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.


 


Section 3.06. Matters
Applicable to All Requests for Compensation. (a) Any Agent or any
Lender claiming compensation under this Article 3 shall deliver a
certificate to the Company setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Agent or such Lender may use any reasonable
averaging and attribution methods.


 


(b)                            With respect to any Lender’s claim for
compensation under Section 3.01, 3.02, 3.03 or 3.04, the Borrowers shall
not be required to compensate such Lender for any amount incurred more than one
hundred and eighty (180) days prior to the date that such Lender notifies the
relevant Borrowers of the event that gives rise to such claim. If any Lender
requests compensation by the Company under Section 3.04, the Company may,
by notice to such Lender (with a copy to the Administrative Agent), suspend the
obligation of such Lender to make or continue from one Interest Period to
another Eurodollar Rate Loans, or to convert Base Rate Loans into Eurodollar
Rate Loans, until the event or condition giving rise to such request ceases to
be in effect (in which case the provisions of Section 3.06(c) shall be
applicable); provided that such
suspension shall not affect the right of such Lender to receive the
compensation so requested.


 


(c)                             If the obligation of any Lender to make or
continue from one Interest Period to another any Eurodollar Rate Loan, or to
convert Base Rate Loans into Eurodollar Rate Loans shall be suspended pursuant
to Section 3.06(b) hereof, such Lender’s Eurodollar Rate Loans shall be
automatically converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Rate Loans (or, in the case of
an immediate conversion required by Section 3.02, on such earlier date as
required by Law) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 3.01, 3.02, 3.03 or 3.04
hereof that gave rise to such conversion no longer exist:


 


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(i)                                to the extent that such Lender’s Eurodollar Rate Loans have been so
converted, all payments and prepayments of principal that would otherwise be
applied to such Lender’s Eurodollar Rate Loans shall be applied instead to its
Base Rate Loans; and


 


(ii)                             all Loans that would otherwise be made or continued from one Interest
Period to another by such Lender as Eurodollar Rate Loans shall be made or
continued instead as Base Rate Loans, and all Base Rate Loans of such Lender
that would otherwise be converted into Eurodollar Rate Loans shall remain as
Base Rate Loans.


 


(d)                                 If any Lender gives notice to the Company
(with a copy to the Agent) that the circumstances specified in Section 3.01,
3.02, 3.03 or 3.04 hereof that gave rise to the conversion of such Lender’s
Eurodollar Rate Loans pursuant to this Section 3.06 no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at
a time when Eurodollar Rate Loans made by other Lenders are outstanding, such
Lender’s Base Rate Loans shall be automatically converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding Eurodollar Rate
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding Eurodollar Rate Loans and by such Lender are held
pro rata (as to principal amounts, interest rate basis, and Interest Periods)
in accordance with their respective Commitments.


 


Section 3.07. Replacement
of Lenders under Certain Circumstances. (a) If at any time (x) any
Borrower becomes obligated to pay additional amounts or indemnity payments
described in Section 3.01 or Section 3.04 as a result of any
condition described in such Sections or any Lender ceases to make Eurodollar
Rate Loans as a result of any condition described in Section 3.02 or Section 3.04,
(y) any Lender becomes a Defaulting Lender or (z) any Lender becomes a “Non-Consenting
Lender” (as
defined below in this Section 3.07), then the Company may, on ten (10)
Business Days’ prior written notice to the Administrative Agent and such
Lender, either (i) replace such Lender by causing such Lender to (and such
Lender shall be obligated to) assign pursuant to Section 10.07(b) (with
the assignment fee to be paid by the Company in such instance) all of its
rights and obligations under this Agreement to one or more Eligible Assignees; provided that (A) the replacement lender
shall agree to the consent, waiver or amendment to which the Non-Consenting
Lender did not agree and (B) neither the Administrative Agent nor any Lender
shall have any obligation to the Company to find a replacement Lender or other
such Person or (ii) terminate the Commitment of such Lender and repay all
obligations of the Borrowers owing to such Lender relating to the Loans and
participations held by such Lender as of such termination date.


 


(b)                                 Any Lender being replaced pursuant to Section 3.07(a)
above shall (i) execute and deliver an Assignment and Assumption with respect
to such Lender’s Commitment and outstanding Loans and participations in L/C
Obligations and Swing Line Loans, and (ii) deliver any Notes evidencing such
Loans to the Borrowers or Administrative Agent. Pursuant to such Assignment and
Assumption, (i) the assignee Lender shall acquire all or a portion, as the case
may be, of the assigning Lender’s Commitment and outstanding Loans and
participations in L/C Obligations and Swing Line Loans, (ii) all obligations of
the Borrowers owing to the assigning Lender relating to the Loans and
participations so assigned shall be paid in full by the assignee


 


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Lender
to such assigning Lender concurrently with such assignment and assumption and
(iii) upon such payment and, if so requested by the assignee Lender, delivery
to the assignee Lender of the appropriate Note or Notes executed by the
relevant Borrowers, the assignee Lender shall become a Lender hereunder and the
assigning Lender shall cease to constitute a Lender hereunder with respect to
such assigned Loans, Commitments and participations, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
assigning Lender.


 


(c)                             Notwithstanding anything to the contrary
contained above, (i) the Lender that acts as the L/C Issuer may not be replaced
hereunder at any time that it has any Letter of Credit outstanding hereunder
unless arrangements reasonably satisfactory to such L/C Issuer (including the
furnishing of a back-up standby letter of credit in form and substance, and
issued by an issuer reasonably satisfactory to such L/C Issuer or the
depositing of cash collateral into a cash collateral account in amounts and
pursuant to arrangements reasonably satisfactory to such L/C Issuer) have been
made with respect to such outstanding Letter of Credit and (ii) the Lender that
acts as the Administrative Agent may not be replaced hereunder except in
accordance with the terms of Section 9.09.


 


(d)                            In the event that (i) the Company or the Administrative
Agent has requested the Lenders to consent to a departure or waiver of any
provisions of the Loan Documents or to agree to any amendment thereto, (ii) the
consent, waiver or amendment in question requires the agreement of all affected
Lenders in accordance with the terms of Section 10.01 or all the Lenders
with respect to a certain class of the Loans and (iii) the Required Lenders
have agreed to such consent, waiver or amendment, then any Lender who does not
agree to such consent, waiver or amendment shall be deemed a “Non-Consenting
Lender.”


 


Section 3.08. Survival.
All of the Borrowers’ obligations under this Article 3 shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.


 


ARTICLE 4


CONDITIONS PRECEDENT


 


Section 4.01. Conditions
to Effectiveness. The effectiveness of this Agreement is subject to
satisfaction of the following conditions precedent:


 


(a)                                         The Administrative Agent’s receipt of the
following, each of which shall be originals or facsimiles (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each in form and substance reasonably
satisfactory to the Administrative Agent and its legal counsel:


 


(i)                           executed counterparts of this Agreement and each Guaranty;


 


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(ii)                        a Note executed by each relevant Borrower in favor of each Lender
requesting a Note;


 


(iii)                     the Security Agreement, duly executed by each Loan Party party thereto,
together with:


 


(A)                                   certificates representing the Pledged Equity
referred to therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,


 


(B)                                     copies of all searches with respect to the
Collateral, and all proper financing statements, duly prepared for filing under
the Uniform Commercial Code in all jurisdictions that the Administrative Agent
may deem reasonably necessary in order to perfect and protect the Liens created
under the Security Agreement, covering the Collateral described in the Security
Agreement,


 


(C)                                     evidence that all other actions, recordings
and filings of or with respect to the Security Agreement that the
Administrative Agent may deem reasonably necessary in order to perfect and
protect the Liens created thereby shall have been taken, completed or otherwise
provided for in a manner reasonably satisfactory to the Administrative Agent,


 


(iv)                    the Intellectual Property Security Agreement, duly executed by each
Loan Party party thereto, together with evidence that all action that the
Administrative Agent in its reasonable judgment may deem reasonably necessary
or desirable in order to perfect and protect the Liens created under the
Intellectual Property Security Agreements has been taken;


 


(v)                       such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may reasonably require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized
to act as a Responsible Officer in connection with this Agreement and the other
Loan Documents to which such Loan Party is a party or is to be a party;


 


(vi)                    such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or
formed, and that each of the Borrowers and the Guarantors is validly existing,
in good standing and qualified to engage in business in each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect;


 


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(vii)                 an
opinion of (A) Simpson Thacher & Bartlett LLP New York counsel to the Loan
Parties, (B) Paul Robinson, internal counsel to the Loan Parties, and (C)
Amster, Rothstein & Ebenstein, special intellectual property counsel to the
Administrative Agent, each dated as of the ARCA Effective Date, addressed to
each Agent and each Lender and each in form and substance reasonably
satisfactory to the Administrative Agent;


 


(viii)              a
certificate signed by a Responsible Officer of the Company certifying that
there has been no change, effect, event, occurrence or state of facts since August 31,
2003, that has had or could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), business, assets or results
of operations of the Warner Business or which materially impairs the ability of
the Seller to consummate the transactions contemplated by the Purchase
Agreement, other than any change, effect, event, occurrence or state of facts
relating to or arising from (i) the economy in general, (ii) the Purchase
Agreement or the transactions contemplated thereby or the public announcement
thereof and (iii) the music industry in general, and not specifically relating
to the Warner Business;


 


(ix)                      a certificate dated as of the ARCA Effective Date, attesting to the
Solvency of the Loan Parties (taken as a whole) after giving effect to the
Transaction, from the Chief Financial Officer of the Company;


 


(x)                         a certified copy of the Sponsor Management Agreement (if such agreement
shall have been entered into on or prior to the ARCA Effective Date);


 


(xi)                      evidence that all insurance (including without limitation title
insurance) required to be maintained pursuant to the Loan Documents has been
obtained and is in effect and that the Administrative Agent has been named as
loss payee under each insurance policy with respect to such insurance as to
which the Administrative Agent shall have requested to be so named;


 


(xii)                   certified copies of the Purchase Agreement, duly executed by the
parties thereto, together with all material agreements, instruments and other
documents delivered in connection therewith as the Administrative Agent and the
Initial Lenders shall reasonably request;


 


(xiii)                a
Committed Loan Notice or Letter of Credit Application, as applicable, relating
to the Credit Extensions to be made on the ARCA Effective Date; and


 


(xiv)               an
acknowledgement and consent, duly executed by each Loan Party, consenting to
this Agreement and acknowledging the continued effectiveness of the Collateral
Documents.


 


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(b)                                        All fees and expenses required to be paid on
or before the ARCA Effective Date shall have been paid in full in cash.


 


(c)                                         All material governmental, shareholder and
material third party consents and approvals necessary in connection with the
Transaction shall have been obtained and shall remain in effect; all applicable
waiting periods (including, without limitation, the expiration or termination
of the requisite waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1975) in connection with the Transaction shall have expired
without any action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on any of the Loan Parties or the
Transaction or that could seek or threaten any of the foregoing.


 


(d)                                        The Purchase Agreement shall be in full force
and effect.


 


(e)                                         Prior to or simultaneously with the initial
Credit Extension, (x) the Equity Contributions shall have been funded in full
and (y) the Acquisition shall be consummated in accordance with the terms of
the Purchase Agreement, without any waiver or amendment that would be
materially adverse to the interests of the Lenders (unless the Administrative Agent
and the Arrangers shall have consented in writing to such waiver or amendment),
and in compliance with applicable material Laws and regulatory approvals.


 


(f)                                           The final terms and conditions of each
material aspect of the Acquisition shall be (i) as described in the Acquisition
Agreement as in effect on November 24, 2003 and in the commitment letter
dated as of November 23, 2003 among Holdings and the Initial Lenders and
(ii) to the extent not described in the documents described in clause (i) or in
other information provided by Holdings to the Initial Lenders prior to November 23,
2003, reasonably satisfactory to the Initial Lenders and the Arrangers. The
Initial Lenders and the Arrangers shall be reasonably satisfied with all
material agreements, instruments and documents relating to the Transaction.


 


(g)                                        Prior to or simultaneously with the initial
Credit Extensions the Company shall have received at least $500,000,000 in
gross cash proceeds from its borrowing of the Bridge Loans.


 


(h)                                        On or prior to the ARCA Effective Date, the
Administrative Agent shall have received evidence satisfactory to it of (i) the
repayment in full of the principal of and accrued and unpaid interest on the
Tranche B Term Loans, (ii) the issuance of Senior Subordinated Notes in an
aggregate amount of not less than (x) $465,000,000 for Dollar-denominated
Senior Subordinated Notes and (y) £100,000,000 for Sterling-denominated Senior
Subordinated Notes and (iii) the repayment in full of the principal of and
accrued and unpaid interest on the Bridge Loans and the termination of the
Bridge Loan Agreement.


 


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For the avoidance of doubt, the parties agree that
the conditions set forth in paragraphs (a)(i), (a)(iii), (a)(iv), (a)(viii),
(a)(xi), (a)(xii), (d), (e), (f) and (g) were satisfied in connection with the
initial Credit Extension under the Existing Credit Agreement.


 


Section 4.02. Consequence
of Effectiveness. (a) On the ARCA Effective Date (i) the Existing
Credit Agreement shall be automatically amended and restated in its entirety to
read as set forth herein and (ii) the Commitments of the Lenders shall be as
set forth on Schedule 2.01. On and after the ARCA Effective Date, the
rights and obligations of the parties hereto shall be governed by this
Agreement; provided that the
rights and obligations of the parties hereto with respect to the period prior
to the ARCA Effective Date shall continue to be governed by the provisions of
the Existing Credit Agreement, except that all unpaid interest and fees accrued
under the Existing Credit Agreement to but excluding the ARCA Effective Date
shall be paid on or prior to the ARCA Effective Date. On and after the ARCA
Effective Date, all Letters of Credit outstanding under the Existing Credit Agreement
shall be deemed to be Tranche A Letters of Credit outstanding under this
Agreement, and each Tranche A Revolving Credit Lender shall have a
participation therein (and in the related reimbursement obligation) equal to
such Tranche A Revolving Credit Lender’s Pro Rata Share thereof.


 


(b)                            On the ARCA Effective Date, Tranche A Term
Loans owing under the Existing Credit Agreement to any Lender shall be deemed
to be outstanding as Term Loans of such Initial Lender hereunder and will
constitute continuing obligations hereunder and shall continue to be secured by
the Collateral. This Agreement does not constitute a novation, payment and
reborrowing or termination of the Loans or other Obligations (in each case as
defined in the Existing Credit Agreement) under the Existing Credit Agreement
as in effect prior to the ARCA Effective Date. Each Term Lender shall be deemed
to have satisfied its obligation to make Term Loans on the ARCA Effective Date
pursuant to Section 2.01(a) upon paying to the Administrative Agent for
the account of the Company in accordance with this Agreement an amount equal to
such Term Lender’s Term Commitment minus the
aggregate principal amount of Tranche A Term Loans of such Term Lender
outstanding under the Existing Credit Agreement on the ARCA Effective Date.


 


(c)                             The Initial Lenders in their capacity as
Required Lenders under the Existing Credit Agreement hereby agree that, subject
to Section 3.05 of the Existing Credit Agreement, the Company may prepay
all Tranche B Term Loans outstanding under the Existing Credit Agreement on the
ARCA Effective Date and that any requirement for notice of such prepayment
shall be waived.


 


Section 4.03. Conditions
to All Credit Extensions. The obligation of each Lender to honor any
Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Eurodollar
Rate Loans) is subject to the following conditions precedent:


 


(a)                                         The representations and warranties of each
Borrower and each other Loan Party contained in Article 5 or any other
Loan Document shall be true and correct in all material respects on and as of
the date of such Credit Extension, except (i) to the extent


 


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that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date, (ii) the
representations and warranties set forth in Section 5.05(b) shall not be
required to be true and correct on the Closing Date and (iii) that for purposes
of this Section 4.03, the representations and warranties contained in
Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements
furnished pursuant to Sections 6.01(a) and (b).


 


(b)                                        No Default shall exist, or would result from
such proposed Credit Extension or from the application of the proceeds
therefrom.


 


(c)                                         The Administrative Agent and, if applicable,
the L/C Issuer or the Swing Line Lender shall have received a Request for
Credit Extension in accordance with the requirements hereof.


 


Each
Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurodollar
Rate Loans) submitted by the relevant Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.03(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.


 


Section 4.04. First
Credit Extension to an Overseas Borrowers. The obligation of each
Lender to honor any Request for Credit Extension on the occasion of the first
Credit Extension under the Revolving Credit Commitments to each Overseas
Borrower is subject to the satisfaction of the following further conditions:


 


(a)                                         receipt by the Administrative Agent of an
opinion of counsel for such Overseas Borrower reasonably acceptable to the
Administrative Agent, substantially in the form of Exhibit I hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Administrative Agent may reasonably request;


 


(b)                                        receipt by the Administrative Agent of all
documents which it may reasonably request relating to the existence of such
Overseas Borrower, its corporate authority for and the validity of its Election
to Participate, this Agreement and any other Loan Document, and any other
matters relevant thereto, all in form and substance reasonably satisfactory to
the Administrative Agent; and


 


(c)                                         the requirements of Section 6.12(c)
shall have been satisfied with respect to such Overseas Borrower.


 


The
opinion referred to in Section 4.04(a) above shall be dated no more than
fifteen (15) Business Days before the date of the first Borrowing by such
Overseas Borrower hereunder.


 


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ARTICLE 5


REPRESENTATIONS AND
WARRANTIES


 


Each of Holdings and the Borrowers represents and
warrants to the Agents and the Lenders that:


 


Section 5.01. Existence,
Qualification and Power; Compliance with Laws. Each Loan Party and
each of its Subsidiaries (a) is a Person duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority to (i)
own or lease its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents and the Purchase Agreement to
which it is a party, (c) is duly qualified and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification, (d) is in compliance
with all Laws, orders, writs, injunctions and orders and (e) has all requisite
governmental licenses, authorizations, consents and approvals to operate its
business as currently conducted; except in each case referred to in clause (c),
(d) or (e), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.


 


Section 5.02. Authorization;
No Contravention. The execution, delivery and performance by each
Loan Party of each Loan Document to which such Person is a party, and the
consummation of the Transaction, are within such Loan Party’s corporate or
other powers, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents, (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under (other than as
permitted by Section 7.01), or require any payment to be made under (i)
(x) any Junior Financing Documentation or (y) any other Contractual Obligation
to which such Person is a party or affecting such Person or the properties of
such Person or any of its Subsidiaries or (ii) any order, injunction, writ or
decree of any Governmental Authority or any arbitral award to which such Person
or its property is subject; or (c) violate any Law; except with respect to any
conflict, breach or contravention or payment (but not creation of Liens)
referred to in clause (b)(i), to the extent that such conflict, breach,
contravention or payment could not reasonably be expected to have a Material
Adverse Effect.


 


Section 5.03. Governmental
Authorization; Other Consents. No material approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, or for
the consummation of the Transaction, (b) the grant by any Loan Party of the
Liens granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof) or (d) the exercise by the Administrative Agent or any Lender
of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for (i) filings
necessary to perfect the Liens on the Collateral granted by the Loan Parties in
favor of the Secured Parties, (ii) the approvals, consents, exemptions,


 


91





















 


authorizations,
actions, notices and filings which have been duly obtained, taken, given or
made and are in full force and effect and (iii) those approvals, consents,
exemptions, authorizations or other actions, notices or filings, the failure of
which to obtain or make could not reasonably be expected to have a Material
Adverse Effect.


 


Section 5.04. Binding
Effect. This Agreement and each other Loan Document has been duly
executed and delivered by each Loan Party that is party thereto. This Agreement
and each other Loan Document constitutes, a legal, valid and binding obligation
of such Loan Party, enforceable against each Loan Party that is party thereto
in accordance with its terms, except as such enforceability may be limited by
bankruptcy insolvency, reorganization, receivership, moratorium or other laws
affecting creditors’ rights generally and by general principles of equity.


 


Section 5.05. Financial
Statements; No Material Adverse Effect. (a) (i) The Warner Music
Publishing Audited Financial Statements fairly present in all material respects
the financial condition of the Warner Music Publishing Business as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein. During the period from November 30,
2002 to and including the Closing Date, there has been (i) no sale, transfer or
other disposition by the Warner Music Publishing Business of any material part
of the business or property of the Warner Music Publishing Business, taken as a
whole and (ii) no purchase or other acquisition by the Warner Music Publishing
Business of any business or property (including any Equity Interests of any
other Person) material in relation to the consolidated financial condition of
the Warner Music Publishing Business, taken as a whole, in each case, which is
not reflected in the foregoing financial statements or in the notes thereto or
has not otherwise been disclosed in writing to the Lenders prior to the Closing
Date.


 


(ii)                        The Warner Recorded Music Audited Financial
Statements fairly present in all material respects the financial condition of
the Warner Recorded Music Business as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein. During the period from November 30, 2002 to and including
the Closing Date, there has been (i) no sale, transfer or other disposition by
the Warner Recorded Music Business of any material part of the business or
property of the Warner Recorded Music Business, taken as a whole and (ii) no
purchase or other acquisition by the Warner Recorded Music Business of any
business or property (including any Equity Interests of any other Person)
material in relation to the consolidated financial condition of the Warner
Recorded Music Business, taken as a whole, in each case, which is not reflected
in the foregoing financial statements or in the notes thereto or has not
otherwise been disclosed in writing to the Lenders prior to the Closing Date.


 


(b)                                 Since August 31, 2003, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a material adverse effect on the business,
operations, assets, liabilities (actual or contingent) or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole.


 


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(c)                                  The forecasts of consolidated balance sheets,
income statements and cash flow statements of the Company and its Subsidiaries
for each fiscal year ending after the Closing Date until the eighth anniversary
of the Closing Date, copies of which have been furnished to the Administrative
Agent and the Initial Lenders prior to the Closing Date in a form reasonably
satisfactory to them, have been prepared in good faith on the basis of the
assumptions stated therein, which assumptions were reasonable in light of the
conditions existing at the time of delivery of such forecasts, it being
understood that actual results may vary from such forecasts and that such
variations may be material.


 


Section 5.06. Litigation.
There are no actions, suits, proceedings, claims or disputes pending
or, to the knowledge of any Borrower, threatened in writing or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against any Borrower or any of its Subsidiaries or against any of their properties
or revenues that (a) purport to affect or pertain to this Agreement, any other
Loan Document or, as of the Closing Date, the consummation of the Transaction,
or (b) either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.


 


Section 5.07. No Default. Neither any Borrower nor any Subsidiary is in
default under or with respect to, or a party to, any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.


 


Section 5.08. Ownership
of Property; Liens. (a) Each Loan Party and each of its Subsidiaries
has good record and indefeasible title in fee simple to, or valid leasehold
interests in, or easements or other limited property interests in, all real
property necessary in the ordinary conduct of its business, free and clear of
all Liens except for minor defects in title that do not materially interfere
with its ability to conduct its business or to utilize such assets for their
intended purposes and Liens permitted by Section 7.01 and except where the
failure to have such title could not reasonable be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


(b)                               Set forth on Schedule 5.08(b) hereto is a
complete and accurate list of all real property owned by any Loan Party or any
of its Subsidiaries, as of the Closing Date, showing as of the date hereof the
street address (to the extent available), county or other relevant
jurisdiction, state and record owner.


 


Section 5.09. Environmental
Compliance. (a) There are no claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.


 


(b)                               Except as specifically disclosed in Schedule
5.09 or except as could not reasonably be expected to have a Material Adverse
Effect, (i) none of the properties currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries is listed or proposed for listing on
the NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; (ii) there are no and never have been any
underground or aboveground storage


 


93





















 


tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or operated by
any Loan Party or any of its Subsidiaries or, to its knowledge, on any property
formerly owned or operated by any Loan Party or any of its Subsidiaries; (iii)
there is no asbestos or asbestos-containing material on any property currently
owned or operated by any Loan Party or any of its Subsidiaries; and (iv)
Hazardous Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or any of
its Subsidiaries except for such releases, discharges or disposal that were in
material compliance with Environmental Laws.


 


(c)                             The Properties do not contain any Hazardous
Materials in amounts or concentrations which (i) constitute, or constituted a
violation of, (ii) require remedial action under, or (iii) could give rise to
liability under, Environmental Laws, which violations, remedial actions and
liabilities, in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.


 


(d)                            Except as specifically disclosed in Schedule
5.09, neither any Borrower nor any of its Subsidiaries is undertaking, and has
not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law except for such investigation or assessment or remedial or
response action that, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.


 


(e)                             All Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected to
result in a Material Adverse Effect.


 


Section 5.10. Taxes. Each
Borrower and its Subsidiaries have filed all Federal and material state and
other tax returns and reports required to be filed, and have paid all Federal
and material state and other taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those (a) which are not overdue by more than
thirty (30) days or (b) which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP or (c) with respect to which the failure to
make such filing or payment could not reasonably be expected to have a Material
Adverse Effect.


 


Section 5.11.
ERISA Compliance. (a) Each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Federal or state Laws. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS or an application for such a letter will be submitted to
the IRS within the applicable required time period with respect thereto and, to
the knowledge of any Borrower and Holdings, nothing has occurred which would
prevent, or cause the loss of, such


 


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qualification. Each Loan Party and each ERISA
Affiliate have made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.


 


(b)                            There are no pending or, to the knowledge of
any Borrower and Holdings, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.


 


(c)                             (i) No ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has an “accumulated funding
deficiency” (as defined in Section 412 of the Code), whether or not waived, and
no application for a waiver of the minimum funding standard has been filed with
respect to any Pension Plan; (iii) neither any Borrower nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither any Borrower nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v) neither any Borrower nor any
ERISA Affiliate has engaged in a transaction that could be subject to Sections
4069 or 4212(c) of ERISA, except, with respect to each of the foregoing clauses
of this Section 5.11(c), as could not reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect.


 


Section 5.12. Subsidiaries;
Equity Interests. As of the Closing Date, neither Holdings nor any
Loan Party has any Subsidiaries other than those specifically disclosed in
Schedule 5.12, and all of the outstanding Equity Interests in such Subsidiaries
have been validly issued, are fully paid and nonassessable and are owned by
Holdings or a Loan Party free and clear of all Liens except (i) those created
under the Collateral Documents and (ii) any nonconsensual Lien that is
permitted under Section 7.01. Schedule 5.12 (a) sets forth the name and
jurisdiction of each Subsidiary, (b) sets forth the ownership interest of
Holdings, the Company and any other Subsidiary in each Subsidiary, including
the percentage of such ownership and (c) identifies each Subsidiary that is (i)
an Overseas Borrower or (ii) a Subsidiary the Equity Interests of which are
required to be pledged on the Closing Date.


 


Section 5.13. Margin Regulations;
Investment Company Act; Public Utility Holding Company Act. (a) Each Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock and no proceeds of any Borrowings or drawings under any Letter of
Credit will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.


 


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(b)                                 None of any Borrower, any Person Controlling
any Borrower, or any Subsidiary (i) is a “holding company,” or a “subsidiary
company” of a “holding company,” or an “affiliate” of a “holding company” or of
a “subsidiary company” of a “holding company,” within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.


 


Section 5.14. Disclosure.
No report, financial statement, certificate or other written
information furnished by or on behalf of any Loan Party to any Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or any other Loan Document (as modified
or supplemented by other information so furnished) when taken as a whole
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading; provided that, with respect to projected
financial information, each Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time of preparation; it being understood that such projections may vary from
actual results and that such variances may be material.


 


Section 5.15. Intellectual
Property; Licenses, Etc. Each Loan Party and its Subsidiaries own,
or possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses, database rights and
design rights and other intellectual property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person, except to the extent such conflicts,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. To the knowledge of each Borrower, no slogan or
other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Loan Party or
any Subsidiary infringes upon any rights held by any other Person except for
such infringements, individually or in the aggregate, which could not
reasonably be expected to have a Material Adverse Effect. No claim or
litigation regarding any of the foregoing is pending or, to the knowledge of
any Borrower, threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.


 


Section 5.16. Solvency.
On the ARCA Effective Date after giving effect to the Transactions,
the Loan Parties, on a consolidated basis, are Solvent.


 


Section 5.17. Perfection,
Etc. All filings and other actions necessary or desirable to perfect
and protect the Lien in the Collateral created under the Collateral Documents
have been duly made or taken or otherwise provided for in a manner reasonably
acceptable to Administrative Agent and are in full force and effect, and the
Collateral Documents create in favor of the Administrative Agent for the
benefit of the Secured Parties a valid and, together with such filings and
other actions, perfected first priority Lien in the Collateral, securing the
payment of the Secured Obligations, subject to Liens permitted by Section 7.01.
The Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the Liens created or permitted under the Loan
Documents.


 


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Section 5.18. Representations
and Warranties of Overseas Borrowers. Each Overseas Borrower shall
be deemed by the execution and delivery of its Election to Participate to have
represented and warranted as of the date thereof (and each other date on which
this representation is deemed to have been made) that the representations and
warranties set forth in Sections 5.01, 5.02, 5.03 and 5.04 are true and correct
as to such Overseas Borrower and its Election to Participate and any Loan
Document to which it is a party.


 


ARTICLE 6


AFFIRMATIVE COVENANTS


 


So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder which is
accrued and payable shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, each of Holdings and the Company shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03)
cause each Restricted Subsidiary to:


 


Section 6.01. Financial
Statements. Deliver to the Administrative Agent for further
distribution to each Lender:


 


(a)                                       (i) as soon as available, but in any event by
March 31, 2004, a consolidated balance sheet of the Warner Business as at
November 30, 2003, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal year ended November
30, 2003, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of Ernst & Young LLP,
which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any “going concern” or
like qualification or exception or any qualification or exception as to the
scope of such audit and (ii) as soon as available, but in any event within
ninety (90) days after the end of each fiscal year of the Company beginning
with the 2004 fiscal year, a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for
such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by a report and opinion of Ernst
& Young LLP or any other independent certified public accountant of
nationally recognized standing, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject
to any “going concern” or like qualification or exception or any qualification
or exception as to the scope of such audit;


 


(b)                                      as soon as available, but in any event within
(x) sixty (60) days after the end of each of the first three (3) fiscal
quarters of the fiscal year ending November 30, 2004, and (y) forty-five (45)
days after the end of each of the first three (3) fiscal quarters of each
subsequent fiscal year of the Company, a consolidated balance sheet of the


 


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Company and its Subsidiaries
as at the end of such fiscal quarter, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
quarter and for the portion of the fiscal year then ended, setting forth
(except with respect to the first three fiscal quarters of the fiscal year
ended November 30, 2004) in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by
a Responsible Officer of the Company as fairly presenting in all material
respects the financial condition, results of operations, shareholders’ equity
and cash flows of the Company and its Subsidiaries in accordance with GAAP,
subject only to normal year-end audit adjustments and the absence of footnotes;


 


(c)                                       as soon as available, but in any event no
later than forty-five (45) days after the end of each fiscal year, forecasts
prepared by management of the Company, in form reasonably satisfactory to the
Administrative Agent, of consolidated balance sheets, income statements and
cash flow statements of the Company and its Subsidiaries for the fiscal year
following such fiscal year then ended; and


 


(d)                                      simultaneously with the delivery of each set
of consolidated financial statements referred to in Sections 6.01(a) and
6.01(b) above, the related consolidating financial statements reflecting the
adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries
(if any) from such consolidated financial statements.


 


Section 6.02. Certificates; Other
Information. Deliver to the
Administrative Agent for further distribution to each Lender:


 


(a)                                       no later than five (5) days after the
delivery of the financial statements referred to in Section 6.01(a), a
certificate of its independent certified public accountants certifying such
financial statements and stating that in making the examination necessary
therefor no knowledge was obtained of any Event of Default under Section 7.11
or, if any such Event of Default shall exist, stating the nature and status of
such event;


 


(b)                                      no later than five (5) days after the
delivery of the financial statements referred to in Section 6.01(a) and (b), a
duly completed Compliance Certificate signed by a Responsible Officer of the
Company and, if such Compliance Certificate demonstrates an Event of Default of
any covenant under Section 7.11, the Equity Investors may deliver, together
with such Compliance Certificate, notice of their intent to cure (a “Notice of
Intent to Cure”) such
Event of Default through capital contributions or the purchase of Equity
Interests as contemplated pursuant to clause (b)(xx) and the final proviso of
the definition of “Consolidated EBITDA”; provided
that the delivery of a Notice of Intent to Cure shall in no way
affect or alter the occurrence, existence or continuation of any such Event of
Default or the rights, benefits, powers and remedies of the Administrative
Agent and the Lenders under any Loan Document;


 


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(c)                                  promptly after the same are publicly
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of the Company, and copies of
all annual, regular, periodic and special reports and registration statements
which the Company may file or be required to file, copies of any report, filing
or communication with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, or with any Governmental Authority that may be
substituted therefor, or with any national securities exchange, and in any case
not otherwise required to be delivered to the Administrative Agent pursuant
hereto;


 


(d)                                 promptly after the furnishing thereof, copies
of any requests or notices received by any Loan Party (other than in the
ordinary course of business), statement or report furnished to any holder of
debt securities of any Loan Party or of any of its Subsidiaries pursuant to the
terms of any Junior Financing Documentation in a principal amount greater than
the Threshold Amount and not otherwise required to be furnished to the Lenders
pursuant to any other clause of this Section 6.02;


 


(e)                                  promptly after the receipt thereof by any
Loan Party or any of its Subsidiaries, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any material investigation or other material
inquiry by such agency regarding financial or other operational results of any
Loan Party or any of its Subsidiaries;


 


(f)                                    together with the delivery of each Compliance
Certificate pursuant to Section 6.02(b), (i) a report supplementing Schedule
5.08(b) hereto, including, in the case of supplements to Schedule 5.08(b), an
identification of all owned real property disposed of by any Loan Party or any
of its Restricted Subsidiaries since the delivery of the last supplements and a
list and description of all real property acquired or leased since the delivery
of the last supplements (including the street address (if available), county or
other relevant jurisdiction, state, and in the case of the owned real property,
the record owner), (ii) a description of each event, condition or circumstance
during the last fiscal quarter covered by such Compliance Certificate requiring
a mandatory prepayment under Section 2.05(b) and (iii) a list of each
Subsidiary that is an Unrestricted Subsidiary as of the date of delivery of such
Compliance Certificate;


 


(g)                                 promptly after the furnishing thereof, copies
of all financial statements, forecasts, budgets or other similar information of
Holdings furnished to the lenders or holders of any Permitted Holdco Debt;


 


(h)                                 promptly after the Company has notified the
Administrative Agent of any intention by the Company to treat the Loans and/or
Letters of Credit and related transactions as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6011-4), a duly completed
copy of IRS Form 8886 or any successor form;


 


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(i)                                     promptly, such additional information
regarding the business, legal, financial or corporate affairs of any Loan Party
or any Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender through the Administrative Agent may from
time to time reasonably request; and


 


(j)                                     promptly after entering into such agreement,
the Sponsor Management Agreement.


 


Documents required to be
delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent
any such documents are included in materials otherwise filed with the SEC) may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Company posts such documents, or
provides a link thereto on the Company’s website on the Internet at the website
address listed on Schedule 10.02; or (ii) on which such documents are posted on
the Company’s behalf on IntraLinks/IntraAgency or another relevant website, if
any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the
Company shall deliver paper copies of such documents to the Administrative
Agent for further distribution to each Lender until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Company shall notify (which may be by facsimile or electronic mail)
the Administrative Agent of the posting of any such documents and provide to
the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Company shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent. Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Company with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.


 


Section 6.03. Notices.
Promptly notify the Administrative Agent:


 


(a)                                            of the occurrence of any Default; and


 


(b)                                           of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including
arising out of or resulting from (i) breach or non-performance of, or any
default under, a Contractual Obligation of any Loan Party or any Subsidiary,
(ii) any dispute, litigation, investigation, proceeding or suspension between
any Loan Party or any Subsidiary and any Governmental Authority, (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Loan Party or any Subsidiary, including pursuant to any
applicable Environmental Laws and or in respect of IP Rights or the assertion
or occurrence of any noncompliance by any Loan Party or as any of its
Subsidiaries with any Environmental Law or Environmental Permit, or (iv) the
occurrence of any ERISA Event.


 


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Each notice pursuant to this
Section shall be accompanied by a written statement of a Responsible Officer of
the Company (x) that such notice is being delivered pursuant to Section 6.03(a)
or (b) (as applicable) and directing that such notice be delivered by the
Administrative Agent to each Lender and (y) setting forth details of the
occurrence referred to therein and stating what action the Company has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached. The
Administrative Agent agrees to promptly transmit each notice received by it in
compliance with this Section 6.03(a) to each Lender.


 


Section 6.04. Payment
of Obligations. Pay, discharge or otherwise satisfy as the same
shall become due and payable, all its obligations and liabilities except, in
each case, to the extent the failure to pay or discharge the same could not
reasonably be expected to have a Material Adverse Effect.


 


Section 6.05. Preservation
of Existence, Etc. (a) Preserve, renew and maintain in full force
and effect its legal existence under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05 except
(x) that the Company and its Restricted Subsidiaries may consummate the
Acquisition and (y) for the liquidation or dissolution of Restricted
Subsidiaries if the assets of such Restricted Subsidiaries are acquired by a
Borrower or a wholly owned Restricted Subsidiary of a Borrower in such
liquidation or dissolution, (b) take all reasonable action to maintain all
rights, privileges (including its good standing), permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect, and (c) preserve or renew all of its registered
patents, trademarks, trade names, service marks and copyrights, as required
under the Security Agreement.


 


Section 6.06. Maintenance
of Properties. Except if the failure to do so could not reasonably
be expected to have a Material Adverse Effect, (a) maintain, preserve and
protect all of its material properties and equipment necessary in the operation
of its business in good working order, repair and condition, ordinary wear and
tear excepted and casualty or condemnation excepted, and (b) make all necessary
renewals, replacements, modifications, improvements, upgrades, extensions and
additions thereof or thereto in accordance with prudent industry practice.


 


Section 6.07. Maintenance
of Insurance. Maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts
(after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Company and its Restricted Subsidiaries) as are customarily carried under
similar circumstances by such other Persons.


 


Section 6.08. Compliance
with Laws. Comply in all material respects with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its


 


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business or property, except if the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.


 


Section 6.09. Books
and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all material financial transactions and matters involving the
assets and business of the Company or such Subsidiary, as the case may be.


 


Section 6.10. Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Company and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided
that, excluding any such visits and inspections during the
continuation of an Event of Default, only the Administrative Agent on behalf of
the Lenders may exercise rights under this Section 6.10 and the Administrative
Agent shall not exercise such rights more often than two (2) times during any
calendar year absent the existence of an Event of Default and only one (1) such
time shall be at the Company’s expense; provided
further that when an Event of Default exists the Administrative
Agent or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Company at any
time during normal business hours and upon reasonable advance notice. The
Administrative Agent and the Lenders shall give the Company the opportunity to
participate in any discussions with the Company’s accountants.


 


Section 6.11. Use of
Proceeds. Use the proceeds of the Credit Extensions (i) to finance
in part the Acquisition, (ii) to pre-fund certain restructuring charges, (iii)
to pay fees and expenses incurred in connection with the Transaction and (iv)
to provide ongoing working capital and for other general corporate purposes of
the Company and its Subsidiaries (including Permitted Acquisitions).


 


Section 6.12. Covenant
to Guarantee Obligations and Give Security. (a) Upon (A) the
formation or acquisition of any new direct or indirect wholly owned Restricted
Subsidiary by any Loan Party or the designation in accordance with Section 6.17
of any existing direct or indirect wholly owned Subsidiary as a Restricted
Subsidiary or (B) any Restricted Subsidiary guaranteeing any obligations of
Holdings, the Company or any other Restricted Subsidiary in respect of any
Junior Financing, the Company shall, in each case at the Company’s expense:


 


(i)                           within thirty (30) days after such formation,
acquisition, designation or guarantee or such longer period as the
Administrative Agent may agree in its discretion:


 


(A)                    cause each such Restricted Subsidiary that is
(x) not a Foreign Subsidiary or (y) a Foreign Subsidiary that has guaranteed
the obligations of Holdings, the Company or a Restricted Subsidiary in respect
of any Junior Financing, to duly execute and deliver to the Administrative
Agent a guaranty or


 


102





















 


guaranty supplement, in form
and substance reasonably satisfactory to the Administrative Agent, guaranteeing
the Obligations of each Loan Party;


 


(B)                                cause each such Restricted Subsidiary that is
a Foreign Subsidiary of an Overseas Borrower to duly execute and deliver to the
Administrative Agent a guarantee or guaranty supplement, in form and substance
reasonably satisfactory to the Administrative Agent, guaranteeing the
obligations of such Overseas Borrower under the Loan Documents and the Secured
Hedge Agreements;


 


(C)                                cause each direct or indirect parent of such
Restricted Subsidiary (if it has not already done so) to duly execute and
deliver to the Administrative Agent a guaranty or guaranty supplement, in form
and substance reasonably satisfactory to the Administrative Agent, guaranteeing
the obligations of such Restricted Subsidiary, if any, under the Loan
Documents;


 


(D)                               cause each such Restricted Subsidiary to
furnish to the Administrative Agent a description of the real properties owned
by such Restricted Subsidiary in detail reasonably satisfactory to the Administrative
Agent;


 


(E)                                 cause (x) each such Restricted Subsidiary
that is required to become a Guarantor pursuant to this Section 6.12(a)(i)(A)
or Section 6.12(a)(i)(B) to duly execute and deliver to the Administrative
Agent Mortgages, Security Agreement Supplements, IP Security Agreements and
other security agreements and documents (including, with respect to Mortgages,
the documents listed in Section 6.14(b)), as specified by and in form and
substance reasonably satisfactory to the Administrative Agent (consistent with
the Mortgages, Security Agreement, Intellectual Property Security Agreement and
other security agreements in effect on the Closing Date), granting a Lien in
substantially all of the real and personal property of such Restricted
Subsidiary, in each case securing the Obligations of such Restricted Subsidiary
under its Guaranty and (y) each direct or indirect parent of each Restricted
Subsidiary that is required to become a Guarantor pursuant to Section
6.12(a)(i)(C) to duly execute and deliver to the Administrative Agent such
Security Agreement Supplements and other security agreements as specified by
and in form and substance reasonably satisfactory to the Administrative Agent
(consistent with the Security Agreements in effect on the Closing Date)
granting a Lien on all of the outstanding Equity Interests issued by such
Restricted Subsidiary and held by such direct or indirect parent, and all
intercompany debt issued by such Restricted Subsidiary and held by such direct
or indirect parent, in each case securing the Obligations of such Restricted
Subsidiary under its Guaranty;


 


(F)                                 (x) cause each such Restricted Subsidiary
that is required to become a Guarantor pursuant to this Section 6.12(a)(i)(A)
or Section 6.12(a)(i)(B)


 


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to deliver any and all
certificates representing Equity Interests owned by such Restricted Subsidiary
accompanied by undated stock powers or other appropriate instruments of
transfer executed in blank and instruments evidencing the intercompany debt
held by such Restricted Subsidiary, indorsed in blank to the Administrative
Agent and (y) cause each direct or indirect parent of such Restricted
Subsidiary that is required to provide a guaranty pursuant to Section
6.12(a)(i)(C) to deliver any and all certificates representing the outstanding
Equity Interests of such Restricted Subsidiary held by such direct or indirect
parent, accompanied by undated stock powers or other appropriate instruments of
transfer executed in blank and instruments evidencing the intercompany debt
issued by such Restricted Subsidiary and held by such direct or indirect
parent, indorsed in blank to the Administrative Agent;


 


(G)                                take and cause such Restricted Subsidiary and
each direct or indirect parent of such Restricted Subsidiary to take whatever
action (including the recording of Mortgages, the filing of Uniform Commercial
Code financing statements, the giving of notices and the indorsement of notices
on title documents and delivery of stock and membership interest certificates)
may be necessary in the reasonable opinion of the Administrative Agent to vest
in the Administrative Agent (or in any representative of the Administrative
Agent designated by it) valid and subsisting Liens on the properties purported
to be subject to the Mortgages, Security Agreement Supplements, IP Security
Agreements and security agreements delivered pursuant to this Section 6.12,
enforceable against all third parties in accordance with their terms,


 


(ii)                                       within thirty (30) days after the request
therefor by the Administrative Agent, deliver to the Administrative Agent a
signed copy of an opinion, addressed to the Administrative Agent and the other
Secured Parties, of counsel for the Loan Parties reasonably acceptable to the
Administrative Agent as to such matters set forth in this Section 6.12(a) as
the Administrative Agent may reasonably request, and


 


(iii)                                    as promptly as practicable after the request
therefor by the Administrative Agent, deliver to the Administrative Agent with
respect to each parcel of real property with a value in excess of $2,000,000
owned or held by such Restricted Subsidiary that is the subject of such
request, title reports in scope, form and substance reasonably satisfactory to
the Administrative Agent and, to the extent available, surveys and
environmental assessment reports.


 


For the avoidance of doubt, (i) no Foreign
Subsidiary shall be obligated hereunder to guarantee the obligations of any
Borrower other than an Overseas Borrower (unless such Foreign Subsidiary is a guarantor
of any Junior Financing) and (ii) no more than 65% of the voting Equity
Interests of any Subsidiary that is not a Domestic Subsidiary shall be required
to be pledged to support obligations of any Borrower other than Overseas
Borrowers (except to the extent pledged to support obligations under any Junior
Financing).


 


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(b)                            Upon the acquisition of (x) any personal
property (other than IP Rights) by any Loan Party or (y) fee owned real
property with a value in excess of $2,000,000 by any Loan Party, and such
personal property shall not already be subject to a perfected Lien in favor of
the Administrative Agent for the benefit of the Secured Parties, the Company
shall give notice thereof to the Administrative Agent and shall, if requested
by the Administrative Agent or the Required Lenders, cause such assets to be
subjected to a Lien securing such Loan Party’s Obligations and will take, or
cause the relevant Loan Party to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect or record
such Lien, including, as applicable, the actions referred to in Section
6.12(a)(i)(D), (E) and (G) with respect to personal property and Section
6.14(b) with respect to real property.


 


(c)                             On or prior to the date on which any Overseas
Borrower is designated in accordance with Section 2.14 or such later date (not
more than thirty (30) days later) as the Administrative Agent may agree in its
discretion, the Company shall, in each case at the Company’s expense (A) cause
each wholly owned Restricted Subsidiary of such Overseas Borrower and each
direct and indirect parent of such Overseas Borrower to duly execute and
deliver to the Administrative Agent a guaranty or guaranty supplement in form
and substance reasonably satisfactory to the Administrative Agent, guaranteeing
the obligations of such Overseas Borrower under the Loan Documents, (B) cause
such Overseas Borrower, its wholly owned Restricted Subsidiaries and, to the
extent that it has not already done so, each direct or indirect parent of the
Overseas Borrower, at the Company’s expense, to execute, deliver, file and
record any documents, statements, assignment, instrument agreement or other
paper and take all other actions necessary in order to create a first priority
perfected security interest in substantially all of the assets (subject to
exceptions and limitations consistent with those set forth in the Collateral
Documents as in effect on the Closing Date (to the extent appropriate in the
applicable jurisdiction)) of such Overseas Borrower and each of its wholly
owned Restricted Subsidiaries and direct or indirect parents securing their
respective obligations under the Loan Documents, (C) deliver to the Administrative
Agents an opinion of counsel, addressed to the Administrative Agent and the
other Secured Parties, reasonably acceptable to the Administrative Agent
addressing the matters set forth in clause (B) above and such other matters as
the Administrative Agent may reasonably request and (D) such other documents or
certificates evidencing matters referred to in Section 4.01(a)(v) and Section
4.01(a)(vi) as the Administrative Agent shall reasonably request.


 


(d)                            Notwithstanding the foregoing, (x) the
Administrative Agent shall not take a security interest in those assets as to
which the Administrative Agent shall determine, in its reasonable discretion,
that the cost of obtaining such Lien (including any mortgage, stamp,
intangibles or other tax) are excessive in relation to the benefit to the
Lenders of the security afforded thereby and (y) Liens required to be granted
pursuant to this Section 6.12 shall be subject to exceptions and limitations
consistent with those set forth in the Collateral Documents as in effect on the
Closing Date (to the extent appropriate in the applicable jurisdiction).


 


Section 6.13. Compliance
with Environmental Laws. Except, in each case, to the extent that
the failure to do so could not reasonably be expected to have a Material
Adverse Effect, comply, and take all reasonable actions to cause all lessees
and other Persons operating or


 


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occupying its properties to comply, in all
material respects, with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its
operations and properties; and, in each case to the extent required by
Environmental Laws, conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove
and clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all Environmental Laws.


 


Section 6.14. Further
Assurances. (a) Promptly upon reasonable request by the
Administrative Agent, or any Lender through the Administrative Agent, (i)
correct any material defect or error that may be discovered in the execution,
acknowledgment, filing or recordation of any Loan Document or other document or
instrument relating to any Collateral, and (ii) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to carry out more effectively the
purposes of the Loan Documents.


 


(b)                                 By the date that is forty five (45) days after the Closing Date, as
such time period may be extended in the Administrative Agent’s sole discretion,
the Company shall deliver the Mortgages covering the Real Properties duly
executed by the appropriate Loan Party, together with:


 


(i)                                evidence that counterparts of the Mortgages
have been duly executed, acknowledged and delivered and are in form suitable
for filing or recording in all filing or recording offices that the
Administrative Agent may deem reasonably necessary or desirable in order to
create a valid and subsisting perfected Lien on the property described therein
in favor of the Administrative Agent for the benefit of the Secured Parties and
that all filing and recording taxes and fees have been paid or otherwise
provided for in a manner reasonably satisfactory to the Administrative Agent;


 


(ii)                             fully paid American Land Title Association
Lender’s Extended Coverage title insurance policies or the equivalent or other
form available in each applicable jurisdiction (the “Mortgage Policies”) in form and substance, with
indorsements and in amount, reasonably acceptable to the Administrative Agent
(not to exceed the value of the Real Properties covered thereby), issued,
coinsured and reinsured by title insurers reasonably acceptable to the
Administrative Agent, insuring the Mortgages to be valid subsisting Liens on
the property described therein, free and clear of all defects and encumbrances,
subject to Liens permitted by Section 7.01, and providing for such other
affirmative insurance (including indorsements for future advances under the
Loan Documents) and such coinsurance and direct access reinsurance as the
Administrative Agent may deem reasonably necessary or desirable;


 


(iii)                          American Land Title Association/American
Congress on Surveying and Mapping form surveys (to the extent available and
unless otherwise agreed by the Administrative Agent);


 


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(iv)                         opinions of local counsel for the Loan
Parties in states in which the Real Properties are located, with respect to the
enforceability and perfection of the Mortgages and any related fixture filings
in form and substance reasonably satisfactory to the Administrative Agent; and


 


(v)                            such other evidence that all other actions
that the Administrative Agent may deem necessary or desirable in order to
create valid and subsisting Liens on the property described in the Mortgages
has been taken.


 


Section 6.15. Interest
Rate Hedging. Enter into prior to ninety (90) days following the
Closing Date, and maintain at all times thereafter until the third anniversary
date of the Closing Date, protection against fluctuations in interest rates
pursuant to, as of such time, one or more interest rate Swap Contracts with
Persons reasonably acceptable to the Administrative Agent and providing
coverage in a notional amount, together with the amount of Funded Debt of
Holdings, the Company and its Restricted Subsidiaries on a consolidated basis
that is bearing interest at a fixed rate, at least equal to 50% of the
aggregate amount of all Funded Debt of Holdings, the Company and its Restricted
Subsidiaries on a consolidated basis.


 


Section 6.16. Ownership
of Overseas Borrowers. The Company will, at all times, own, directly
or indirectly, 100% of the Equity Interests of each Overseas Borrower (except
directors’ qualifying shares).


 


Section 6.17. Designation
of Subsidiaries. The board of directors of Holdings may at any time
designate any Restricted Subsidiary as an Unrestricted Subsidiary or any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that (i) immediately before and after such
designation, no Default shall have occurred and be continuing, (ii) immediately
after giving effect to such designation, Holdings and its Subsidiaries shall be
in compliance, on a pro forma basis, with the covenants set forth in Section
7.11 (and, as a condition precedent to the effectiveness of any such
designation, the Company shall deliver to the Administrative Agent a
certificate setting forth in reasonable detail the calculations demonstrating
such compliance), (iii) no Subsidiary may be designated as an Unrestricted
Subsidiary if such Subsidiary is a Borrower and (iv) no Subsidiary may be
designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for
the purpose of any Junior Financing. The designation of any Subsidiary as an
Unrestricted Subsidiary shall constitute an Investment by Holdings or the
Company (as applicable) therein at the date of designation in an amount equal
to the net book value of Holdings’ or the Company’s (as applicable) investment
therein. The designation of any Unrestricted Subsidiary as a Restricted
Subsidiary shall constitute the incurrence at the time of designation of any
Indebtedness or Liens of such Subsidiary existing at such time.


 


ARTICLE 7


NEGATIVE COVENANTS


 


So long as any Lender shall
have any Commitment hereunder, any Loan or other Obligation hereunder which is
accrued and payable shall remain unpaid or unsatisfied, or any


 


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Letter of Credit shall remain outstanding,
Holdings and the Company shall not, nor shall they permit any of their
Restricted Subsidiaries to, directly or indirectly:


 


Section 7.01. Liens. Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:


 


(a)                                       Liens pursuant to any Loan Document;


 


(b)                                      Liens existing on the Closing Date and listed
on Schedule 7.01(b) and any modifications, replacements, renewals or extensions
thereof; provided that (i) the
Lien does not extend to any additional property other than (A) after-acquired
property that is affixed or incorporated into the property covered by such Lien
or financed by Indebtedness permitted under Section 7.03, and (B) and proceeds
and products thereof and (ii) the renewal, extension or refinancing of the
obligations secured or benefited by such Liens is permitted by Section 7.03;


 


(c)                                       Liens for taxes, assessments or governmental
charges which are not overdue for a period of more than thirty (30) days or
which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;


 


(d)                                      statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen, repairmen, construction contractors or
other like Liens arising in the ordinary course of business which secure
amounts not overdue for a period of more than thirty (30) days or if more than
thirty (30) days overdue, are unfiled and no other action has been taken to
enforce such Lien or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person;


 


(e)                                       (i) pledges or deposits in the ordinary
course of business in connection with workers’ compensation, unemployment
insurance and other social security legislation and (ii) pledges and deposits
in the ordinary course of business securing liability for reimbursement or
indemnification obligations of (including obligations in respect of letters of
credit or bank guarantees for the benefit of) insurance carriers providing
property, casualty or liability insurance to Holdings, the Company or any of
its Restricted Subsidiaries;


 


(f)                                         deposits to secure the performance of bids,
trade contracts, governmental contracts and leases (other than Indebtedness for
borrowed money), statutory obligations, surety, stay, customs and appeal bonds,
performance bonds and other obligations of a like nature (including those to
secure health, safety and environmental obligations) incurred in the ordinary
course of business;


 


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(g)                                 easements, rights-of-way, restrictions,
encroachments, protrusions and other similar encumbrances and minor title
defects affecting real property which, in the aggregate, do not in any case
materially interfere with the ordinary conduct of the business of the
applicable Person;


 


(h)                                 Liens securing judgments for the payment of
money not constituting an Event of Default under Section 8.01(h);


 


(i)                                     Liens securing Indebtedness permitted under
Sections 7.03(b)(v) and (b)(xv); provided that
(i) such Liens attach concurrently with or within two hundred and seventy (270)
days after the acquisition, repair, replacement, construction or improvement
(as applicable) of the property subject to such Liens, (ii) such Liens do not
at any time encumber any property except for accessions to such property other
than the property financed by such Indebtedness and the proceeds and the
products thereof and (iii) with respect to Capitalized Leases, such Liens do
not at any time extend to or cover any assets (except for accessions to such
assets) other than the assets subject to such Capitalized Leases; provided that individual financings of
equipment provided by one lender may be cross collateralized to other
financings of equipment provided by such lender;


 


(j)                                     leases, licenses, subleases or sublicenses
granted to others in the ordinary course of business which do not (x) interfere
in any material respect with the business of the Company or any of its material
Restricted Subsidiaries or (y) secure any Indebtedness;


 


(k)                                  Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;


 


(1)                                  Liens (i) of a collection bank arising under
Section 4-210 of the Uniform Commercial Code on items in the course of
collection, (ii) attaching to commodity trading accounts or other commodities
brokerage accounts incurred in the ordinary course of business; and (iii) in
favor of a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general parameters
customary in the banking industry;


 


(m)                               Liens (i) on cash advances in favor of the
seller of any property to be acquired in an Investment permitted pursuant to
Sections 7.02(i) and (n) to be applied against the purchase price for such
Investment, and (ii) consisting of an agreement to Dispose of any property in a
Disposition permitted under Section 7.05, in each case, solely to the extent
such Investment or Disposition, as the case may be, would have been permitted
on the date of the creation of such Lien;


 


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(n)                                 Liens on property of any Foreign Subsidiary
that does not constitute Collateral securing Indebtedness of such Foreign
Subsidiary to the extent permitted under Section 7.03(b);


 


(o)                                 Liens in favor of the Company or a Restricted
Subsidiary of the Company securing Indebtedness permitted under Section
7.03(b)(iv);


 


(p)                                 Liens existing on property at the time of its
acquisition or existing on the property of any Person at the time such Person
becomes a Restricted Subsidiary, in each case after the date hereof (other than
Liens on the Equity Interests of any Person that becomes a Restricted
Subsidiary); provided that (i)
such Lien was not created in contemplation of such acquisition or such Person
becoming a Restricted Subsidiary, (ii) such Lien does not extend to or cover
any other assets or property (other than the proceeds or products thereof and
other than after-acquired property subjected to a Lien securing Indebtedness and
other obligations incurred prior to such time and which Indebtedness and other
obligations are permitted hereunder that require, pursuant to their terms at
such time, a pledge of after-acquired property, it being understood that such
requirement shall not be permitted to apply to any property to which such
requirement would not have applied but for such acquisition), and (iii) the
Indebtedness secured thereby is permitted under Section 7.03(b)(v), (ix), or
(xii);


 


(q)                                 Liens arising from precautionary UCC financing
statement filings regarding leases entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;


 


(r)                                    Liens arising out of conditional sale, title
retention, consignment or similar arrangements for sale of goods entered into
by the Company or any of its Restricted Subsidiaries in the ordinary course of
business permitted by this Agreement;


 


(s)                                  Liens deemed to exist in connection with
Investments in repurchase agreements under Section 7.02;


 


(t)                                    Liens encumbering reasonable customary
initial deposits and margin deposits and similar Liens attaching to commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business and not for speculative purposes;


 


(u)                                 Permitted Encumbrances;


 


(v)                                 other Liens securing Indebtedness outstanding
in an aggregate principal amount not to exceed $50,000,000;


 


(w)                               Liens on Securitization Assets owned by a
Securitization Subsidiary securing Indebtedness permitted by Section
7.03(b)(xvi);


 


(x)                                   Liens that are contractual rights of set-off
(i) relating to the establishment of depository relations with banks not given
in connection with the issuance of


 


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Indebtedness, (ii) relating
to pooled deposit or sweep accounts of Holdings, the Company or any Restricted
Subsidiary to permit satisfaction of overdraft or similar obligations incurred
in the ordinary course of business of Holdings, the Company and its Restricted
Subsidiaries or (iii) relating to purchase orders and other agreements entered
into with customers of Holdings, the Company or any Restricted Subsidiary in
the ordinary course of business; and


 


(y)                                 Liens solely on any cash earnest money
deposits made by Holdings, the Company or any of its Restricted Subsidiaries in
connection with any letter of intent or purchase agreement permitted hereunder.


 


Notwithstanding the foregoing, no Liens on
any IP Collateral shall be permitted at any time, other than pursuant to
Section 7.01(a), (c), (h), (j), (m), (p), (v) and (w).


 


Section 7.02. Investments.
Make or hold any Investments, except:


 


(a)                                       Investments by the Company or such Restricted
Subsidiary in assets that were Cash Equivalents when such Investment was made;


 


(b)                                      loans or advances to officers, directors and
employees of Holdings, the Company and its Restricted Subsidiaries (i) in an
aggregate amount not to exceed $5,000,000 at any time outstanding, for
business-related travel, entertainment, relocation and analogous ordinary
business purposes, and (ii) in connection with such Person’s purchase of Equity
Interests of Holdings in an aggregate amount not to exceed $5,000,000;


 


(c)                                       Investments (i) by Holdings, the Company or
any of its Restricted Subsidiaries in any Loan Party (including any new
Restricted Subsidiary which becomes a Loan Party but excluding any Foreign
Subsidiary), (ii) by any Restricted Subsidiary that is not a Loan Party in any
other such Restricted Subsidiary that is also not a Loan Party and (iii) by
Holdings or any other Loan Party in aggregate amount not to exceed $300,000,000
(not more than $50,000,000 of which shall be in a form other than cash or Cash
Equivalents) in (x) any Foreign Subsidiary that is a Loan Party or (y) any
Restricted Subsidiary that is not a Loan Party;


 


(d)                                      Investments consisting of extensions of
credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors and other credits to suppliers in the ordinary course
of business;


 


(e)                                       Investments consisting of Liens,
Indebtedness, fundamental changes, Dispositions and Restricted Payments
permitted under Sections 7.01, 7.03, 7.04, 7.05 and 7.06, respectively;


 


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(f)                                              Investments existing or contemplated on the
Closing Date and set forth on Schedule 7.02(f) and any modification,
replacement, renewal or extension thereof; provided
that the amount of the original Investment is not increased except
by the terms of such Investment or as otherwise permitted by this Section 7.02;


 


(g)                                           Investments in Swap Contracts permitted under
Section 7.03;


 


(h)                                           promissory notes and other noncash
consideration received in connection with Dispositions permitted by Section
7.05;


 


(i)                                               the purchase or other acquisition of all or
substantially all of the property and assets or business of, any Person or of
assets constituting a business unit, a line of business or division of such
Person, or of all of the Equity Interests (other than directors’ qualifying
shares) in a Person that, upon the consummation thereof, will be owned directly
by the Company or one or more of its wholly owned Subsidiaries (including,
without limitation, as a result of a merger or consolidation); provided that, with respect to each
purchase or other acquisition made pursuant to this Section 7.02(i) (each, a “Permitted Acquisition”):


 


(A)                    each applicable Loan Party and any such newly
created or acquired Subsidiary shall, or will within the times specified
therein, have complied with the requirements of Section 6.12;


 


(B)                      the total cash and noncash consideration
(including, without limitation, the fair market value of all Equity Interests
issued or transferred to the sellers thereof, earnouts and other contingent
payment obligations to such sellers and all assumptions of Indebtedness in
connection therewith, but excluding any Excluded Consideration) paid by or on
behalf of the Company and its Restricted Subsidiaries for any such purchase or
other acquisition, when aggregated with the total cash and noncash
consideration paid by or on behalf of the Company and its Restricted
Subsidiaries for all other purchases and other acquisitions made by the Company
and its Restricted Subsidiaries pursuant to this Section 7.02(i), shall not
exceed $100,000,000 in any fiscal year (with any unused amounts in any fiscal
year being carried forward to any succeeding fiscal year);


 


(C)                      (1) immediately before and immediately after
giving Pro Forma Effect to any
such purchase or other acquisition, no Event of Default shall have occurred and
be continuing and (2) immediately after giving effect to such purchase or other
acquisition, Holdings, the Company and its Restricted Subsidiaries shall be in Pro Forma Compliance with all of the
covenants set forth in Section 7.11, such compliance to be determined on the
basis of the financial information most recently delivered to the
Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as
though such purchase or other acquisition had been consummated as of the first
day of the fiscal period covered thereby


 


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and
evidenced by a certificate from the Chief Financial Officer of the Company
demonstrating such compliance calculation in reasonable detail; and


 


(D)                     the Company shall have delivered to the
Administrative Agent, on behalf of the Lenders, no later than five (5) Business
Days after the date on which any such purchase or other acquisition is
consummated, a certificate of a Responsible Officer, in form and substance
reasonably satisfactory to the Administrative Agent, certifying that all of the
requirements set forth in this clause (i) have been satisfied or will be
satisfied on or prior to the consummation of such purchase or other
acquisition;


 


(j)                           the Acquisition;


 


(k)                        Investments in the ordinary course of
business consisting of (i) indorsements for collection or deposit, (ii)
customary trade arrangements with customers consistent with past practices and
(iii) any advance directly or indirectly related to royalties or future profits
(whether or not recouped), directly or indirectly (including through capital
contributions or loans to an entity or Joint Venture relating to such artist(s)
or writer(s)) to one or more artists or writers pursuant to label and license
agreements, agreements with artists/writers and related ventures, pressing and
distribution agreements, publishing agreements and any similar contract or agreement;


 


(1)                        Investments (including debt obligations and
Equity Interests) received in connection with the bankruptcy or reorganization
of suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business and upon the foreclosure with respect to any secured Investment or
other transfer of title with respect to any secured Investment;


 


(m)                     loans and advances to Holdings in lieu of,
and not in excess of the amount of (after giving effect to any other loans,
advances or Restricted Payments in respect thereof), Restricted Payments to the
extent permitted to be made to Holdings in accordance with Section 7.06;


 


(n)                       so long as immediately after giving effect to
any such Investment, no Event of Default has occurred and is continuing, other
Investments that (net of any cash repayment of or return on such Investments
theretofore received) do not exceed $25,000,000 in any fiscal year (such amount
to be increased to (A) $30,000,000, if the Leverage Ratio as of the last day of
the immediately preceding four fiscal quarters was less than 4.5:1 and (B)
$35,000,000 if the Leverage Ratio as of the last day of the immediately
preceding four fiscal quarters was less than 3.5:1), of which not more than
$15,000,000 shall be made to Joint Ventures (such amount to be increased to (A)
$17,500,000 if the Leverage Ratio as of the last day of the immediately
preceding four fiscal quarters was less than 4.5:1 and (B) $20,000,000 if the Leverage
Ratio as of the last day of the immediately preceding four fiscal quarters was
less than 3.5:1); provided that,
such amounts may be increased by (x) the Net Cash Proceeds of Permitted Equity


 


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Issuances
which are Not Otherwise Applied, (y) with respect to Investments other than
Investments in Joint Ventures, (i) the Net Cash Proceeds of Permitted
Subordinated Indebtedness permitted by Section 7.03(a)(iii)(A) which are Not
Otherwise Applied and (ii) the sum of the Rollover Amounts for the two
preceding fiscal years, to the extent that such Rollover Amounts have not been
used to make Capital Expenditures pursuant to Section 7.19(b); provided that the Company shall promptly
notify the Administrative Agent of any application of any Rollover Amount
pursuant to this clause (n) and (z) with respect to Investments in Joint
Ventures, the amount of any Investments made in Joint Ventures in existence on
the Closing Date as required by, or made pursuant to buy/sell arrangements
between the joint venture parties forth in, joint venture agreements and
similar binding arrangements in effect on the Closing Date; provided further that, to the extent that
any such Investment (or series of related Investments) made pursuant to this
clause (n) consists of the contribution(s) or other transfer(s) of property
(other than cash) having an aggregate net book value in excess of $5,000,000 to
a Joint Venture for consideration less than the fair market value of such
property, then the Company shall have delivered to the Administrative Agent a
pro forma Compliance Certificate demonstrating that, after giving Pro Forma Effect to such Investment(s),
the Loan Parties would be in compliance with the financial covenants set forth
in Section 7.11;


 


(o)                                 advances of payroll payments to employees in
the ordinary course of business;


 


(p)                                 Guarantees by the Borrowers or any Restricted
Subsidiary of leases (other than Capital Lease Obligations) or of other
obligations that do not constitute Indebtedness, in each case entered into in
the ordinary course of business;


 


(q)                                 any Investment in a Securitization Subsidiary
or any Investment by a Securitization Subsidiary in any other Person in
connection with a Qualified Securitization Financing, including Investments of
funds held in accounts permitted or required by the arrangements governing the
Qualified Securitization Financing or any related Indebtedness; provided that any Investment in a
Securitization Subsidiary is in the form of a Purchase Money Note, contribution
of additional Securitization Assets or equity investments;


 


(r)                                    Investments in Unrestricted Subsidiaries; provided that immediately after giving
effect to such Investment, the fair market value of the assets of such
Subsidiary, when aggregated with the fair market value of the assets of all
other Unrestricted Subsidiaries, shall not exceed 5% of the aggregate fair
market value of the assets of Holdings and its Subsidiaries; and


 


(s)                                  A loan made by the Company to WMG Acquisition
(UK) Limited on the ARCA Effective Date in an amount not greater than
£105,000,000, the proceeds of which were used by WMG Acquisition (UK) Limited
to prepay the Tranche B Term Loans; provided
that such loan shall be evidenced by a promissory note which shall
have been delivered to the Administrative Agent in accordance with the
Collateral Documents.


 


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Section 7.03. Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:


 


(a)                                  in the case of the Company:


 


(i)                                     Indebtedness in respect of Swap Contracts
designed to hedge against fluctuations in interest rates, foreign exchange
rates or commodities pricing risks incurred in the ordinary course of business
and consistent with prudent business practice and not for speculative purposes;


 


(ii)                                  Indebtedness evidenced by the Senior
Subordinated Notes, and any Permitted Refinancing thereof; and


 


(iii)                               Permitted Subordinated Indebtedness (A) in an
aggregate amount not to exceed $50,000,000, and (B) in an aggregate amount in
excess of $50,000,000 solely to the extent that such excess amounts are applied
to prepay the Loans pursuant to Section 2.05(b)(iv).


 


(b)                                      in the case of the Company and its Restricted
Subsidiaries:


 


(i)                                Indebtedness of the Loan Parties under the
Loan Documents;


 


(ii)                             Indebtedness outstanding on the Closing Date
and listed on Schedule 7.03(b) and any Permitted Refinancing thereof;


 


(iii)                          Guarantees of each Borrower and its
Restricted Subsidiaries in respect of Indebtedness of such Borrower or such
Restricted Subsidiary otherwise permitted hereunder; provided that (A) no Guarantee by any Restricted Subsidiary
of any Indebtedness constituting a Junior Financing shall be permitted unless
such Restricted Subsidiary shall have also provided a Guarantee of the
Obligations substantially on the terms set forth in the Subsidiary Guarantee
and (B) if the Indebtedness being Guaranteed is subordinated to the
Obligations, such Guarantee shall be subordinated to the Guarantee of the
Obligations on terms at least as favorable to the Lenders as those contained in
the subordination of such Indebtedness;


 


(iv)                         Indebtedness of (A) any Loan Party (other
than a Foreign Subsidiary) owing to any other Loan Party (other than a Foreign
Subsidiary), (B) any Restricted Subsidiary (other than a Foreign Subsidiary)
that is not a Loan Party owing to (1) any other Restricted Subsidiary that is
not a Loan Party (other than a Foreign Subsidiary) or (2) Holdings or a Loan
Party in respect of an Investment permitted under Section 7.02(c) or Section
7.02(n), (C) any Loan Party (other than a Foreign Subsidiary) owing to any
Restricted Subsidiary that is not a Loan Party (other than a Foreign
Subsidiary), (D) any Foreign Subsidiary owing to any other Foreign Subsidiary
and (E) any Foreign Subsidiary or any


 


115





















 


Restricted
Subsidiary that is not a Loan Party owing to Holdings, the Company or any
Restricted Subsidiary in an amount not to exceed $300,000,000; provided that all such Indebtedness of any
Loan Party in clause (iv)(C), (D) or (E) must be expressly subordinated to its
Obligations;


 


(v)                                 Attributable Indebtedness and purchase money
obligations (including obligations in respect of mortgage, industrial revenue
bond, industrial development bond, and similar financings) to finance the
purchase, repair or improvement of fixed or capital assets within the
limitations set forth in Section 7.01(i) and any Permitted Refinancing thereof;
provided that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$10,000,000;


 


(vi)                              (A) Indebtedness of Foreign Subsidiaries in
an aggregate principal amount at any time outstanding for all such Persons
taken together (excluding Indebtedness referred to in (B)) not exceeding
$50,000,000 and (B) Euro-denominated Indebtedness of Foreign Subsidiaries
domiciled in Italy in an aggregate principal amount at any time outstanding for
all such persons taken together not exceeding $100,000,000, to the extent that
such amount is applied to prepay the Terms Loans;


 


(vii)                           Indebtedness in respect of Swap Contracts
required by Section 6.15, in respect of Swap Contracts required in connection
with any Permitted Securitization or in respect of other Swap Contracts
designed to hedge against interest rates, foreign exchange rates or commodities
pricing risks incurred in the ordinary course of business and not for
speculative purposes;


 


(viii)                        Indebtedness (other than for borrowed money)
subject to Liens permitted under Section 7.01;


 


(ix)                                Indebtedness of the Company and its
Restricted Subsidiaries (A) assumed in connection with any Permitted
Acquisition; provided that such
Indebtedness is not incurred in contemplation of such Permitted Acquisition, or
(B) owed to the seller of any property acquired in a Permitted Acquisition on
an unsecured subordinated basis, which subordination shall be on terms
satisfactory to the Administrative Agent, in each case, so long as both
immediately prior and after giving effect thereto, (x) no Event of Default shall
exist or result therefrom, and (y) Holdings, the Company and its Restricted
Subsidiaries will be in Pro Forma Compliance
with the covenants set forth in Section 7.11, after giving effect to
such Permitted Acquisition and the incurrence or issuance of such Indebtedness
and any Permitted Refinancing thereof;


 


(x)                                   Indebtedness representing deferred
compensation to employees of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business;


 


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(xi)                                Indebtedness consisting of promissory notes
issued by any Loan Party to current or former officers, directors and
employees, their respective estates, spouses or former spouses to finance the
purchase or redemption of Equity Interests of Holdings permitted by Section
7.06;


 


(xii)                             Indebtedness incurred by the Company or its
Restricted Subsidiaries in a Permitted Acquisition or Disposition under
agreements providing for indemnification, the adjustment of the purchase price
or similar adjustments;


 


(xiii)                          Indebtedness consisting of obligations of the
Company or its Restricted Subsidiaries under deferred compensation or other
similar arrangements incurred by such Person in connection with the Transaction
and Permitted Acquisitions;


 


(xiv)                         Cash Management Obligations and other
Indebtedness in respect of netting services, overdraft protections and similar
arrangements in each case in connection with deposit accounts;


 


(xv)                            Indebtedness in an aggregate principal amount
not to exceed $125,000,000 at any time outstanding;


 


(xvi)                         Indebtedness incurred by a Securitization
Subsidiary in a Qualified Securitization Financing that is non-recourse to
Holdings, the Company or any Restricted Subsidiary (except for Standard
Securitization Undertakings);


 


(xvii)                      Non-Recourse Product Financing Indebtedness;


 


(xviii)                   Non-Recourse Acquisition Financing
Indebtedness;


 


(xix)                           Indebtedness consisting of (x) the financing
of insurance premiums or (y) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business;


 


(xx)                              Indebtedness incurred by the Company or any
of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including without limitation letters of credit in respect of workers
compensation claims, health, disability or other employee benefits or property,
casualty or liability insurance or self-insurance or other Indebtedness with
respect to reimbursement-type obligations regarding workers compensation
claims; provided that upon the
drawing of such letters of
credit or the incurrence of such Indebtedness, such obligations are reimbursed
within 30 days following such drawing or incurrence;


 


(xxi)                           obligations in respect of performance and
surety bonds and performance and completion guarantees provided by the Company
or any of its


 


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Restricted
Subsidiaries or obligations in respect of letters of credit related thereto, in
each case in the ordinary course of business or consistent with past practice;


 


(xxii)                        all premiums (if any), interest (including
post-petition interest), fees, expenses, charges and additional or contingent
interest on obligations described in clauses (i) through (xxi) above; and


 


(xxiii)                     Indebtedness of WMG Acquisition (UK) Limited
arising from the Investment described in Section 7.02(s).


 


(c)                                  in the case of Holdings:


 


(i)                                     Indebtedness under the Loan Documents;


 


(ii)                                  Guarantees of the Senior Subordinated Notes
and any Permitted Refinancing thereof;


 


(ii)                                  unsecured
Indebtedness of Holdings (“Permitted Holdco
Debt”) that (A) is not subject to any Guarantee by the Company or
any Restricted Subsidiary, (B) will not mature prior to the date that is
ninety-one (91) after the Maturity Date of the Term Loans, (C) has no scheduled
amortization or payments of principal, (D) does not permit any payments in cash
of interest or other amounts in respect of the principal thereof for at least
five (5) years from the date of the issuance or incurrence thereof, (E) has
mandatory prepayment, repurchase or redemption, covenant, default and remedy
provisions customary for senior discount notes of an issuer that is the parent
of a borrower under senior secured credit facilities, and in any event, with
respect to covenant, default and remedy provisions, no more restrictive than
those set forth in the Senior Subordinated Notes Indenture taken as a whole
(other than provisions customary for senior discount notes of a holding
company), and (F) contains provisions with respect to paid-in-kind interest
which are reasonably satisfactory to the Administrative Agent; provided that any such Indebtedness shall
constitute Permitted Holdco Debt only if (i) both before and after giving
effect to the issuance or incurrence thereof, no Event of Default shall have
occurred and be continuing, (ii) after giving Pro
Forma Effect to the issuance or incurrence thereof, the Holdings
Consolidated Leverage Ratio shall be less than 5.75:1 and the Leverage Ratio
shall be less than 3.75:1, (iii) if the amount of such Indebtedness issued or
incurred in any fiscal quarter exceeds $50,000,000, the Chief Financial Officer
of Holdings or the Borrower shall have delivered an officer’s certificate
demonstrating Pro Forma Compliance with
the covenants set forth in Section 7.11 in form and substance reasonably
satisfactory to the Administrative Agent, it being understood that any
capitalized or paid-in-kind interest or accreted principal on such Indebtedness
shall not constitute an issuance or incurrence of Indebtedness for purposes of
this proviso;


 


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(iv)                              unsecured Guarantees of obligations of its
Subsidiaries in the ordinary course of business;


 


(v)                                 Indebtedness permitted pursuant to clause
(b)(iv) above;


 


(vi)                              Indebtedness owed to the seller of any
property acquired in a Permitted Acquisition on an unsecured subordinated
basis, which subordination shall be on terms reasonably satisfactory to the
Administrative Agent, so long as, if applicable, Holdings complies with the
proviso in Section 7.06(h)(v) (whether or not any Restricted Payment is made to
Holdings); and


 


(vii)                           Indebtedness of the type described in Section
7.03(b) (xi) and (xii).


 


Section 7.04. Fundamental
Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that:


 


(a)                                  any Restricted Subsidiary may merge with (i)
any Borrower (including a merger, the purpose of which is to reorganize such
Borrower into a new jurisdiction); provided that
such Borrower shall be the continuing or surviving Person or the surviving Person
shall expressly assume the obligations of such Borrower in a manner reasonably
acceptable to the Administrative Agent, or (ii) any one or more other
Restricted Subsidiaries; provided that
when any Restricted Subsidiary that is a Loan Party is merging with another
Restricted Subsidiary, (A) a Loan Party shall be the continuing or surviving
Person or (B) to the extent constituting an Investment, such Investment must be
a permitted Investment in or Indebtedness of a Restricted Subsidiary which is
not a Loan Party in accordance with Sections 7.02(c) and 7.03(b)(iv);


 


(b)                                 (i) any Subsidiary that is not a Loan Party
may merge or consolidate with or into any other Subsidiary that is not a Loan
Party and (ii) any Subsidiary (other than a Borrower) may liquidate or dissolve
or change its legal form if Holdings determines in good faith that such action
is in the best interests of Holdings and if not materially disadvantageous to
the Lenders;


 


(c)                                  any Restricted Subsidiary may Dispose of all
or substantially all of its assets (upon voluntary liquidation or otherwise) to
the Company or to another Restricted Subsidiary; provided that if the transferor in such a transaction is a
Guarantor or a Borrower, then (i) the transferee must either be a Borrower or a
Guarantor or (ii) to the extent constituting an Investment, such Investment
must be a permitted Investment in or Indebtedness of a Restricted Subsidiary
which is not a Loan Party in accordance with Sections 7.02 and 7.03,
respectively;


 


(d)                                 so long as no Event of Default exists or
would result therefrom, any Restricted Subsidiary may merge with any other
Person in order to effect an Investment


 


119





















 


permitted
pursuant to Section 7.02; provided that (i) the continuing or
surviving Person shall be a Restricted Subsidiary, which together with each of
its Restricted Subsidiaries, shall have complied with the requirements of
Section 6.12 or (ii) to the extent constituting an Investment, such Investment
must be a permitted Investment in accordance with Section 7.02;


 


(e)                                  the Company and its Restricted Subsidiaries
may consummate the Acquisition; and


 


(f)                                    so long as no Event of Default exists or
would result therefrom, a merger, dissolution, liquidation, consolidation or
Disposition, the purpose of which is to effect a Disposition permitted pursuant
to Section 7.05.


 


Section 7.05. Dispositions.
Make any Disposition or enter into any agreement to make any
Disposition, except:


 


(a)                                  Dispositions of obsolete or worn out
property, whether now owned or hereafter acquired, in the ordinary course of
business and Dispositions of property no longer used or useful in the conduct
of the business of the Company and its Restricted Subsidiaries;


 


(b)                                 Dispositions of inventory in the ordinary
course of business;


 


(c)                                  Dispositions of property to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are promptly
applied to the purchase price of such replacement property;


 


(d)                                 Dispositions of property by any Restricted
Subsidiary to the Company or to a Restricted Subsidiary; provided that if the transferor of such
property is a Guarantor or a Borrower (i) the transferee thereof must either be
a Borrower or a Guarantor or (ii) to the extent such transaction constitutes an
Investment, such transaction is permitted under Section 7.02;


 


(e)                                  Dispositions permitted by Sections 7.04 and
7.06 and Liens permitted by Section 7.01;


 


(f)                                    Dispositions by the Company and its
Restricted Subsidiaries of property (other than IP Collateral) pursuant to
sale-leaseback transactions; provided that
(i) the fair market value of all property so Disposed of shall not exceed
$75,000,000 from and after the Closing Date and (ii) the purchase price for
such property shall be paid to the Company or such Restricted Subsidiary for
not less than 75% cash consideration;


 


(g)                                 Dispositions of Cash Equivalents;


 


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(h)                                 Dispositions of accounts receivable in
connection with the collection or compromise thereof;


 


(i)                                     leases, subleases, licenses or sublicenses of
property in the ordinary course of business and which do not materially
interfere with the business of Holdings, the Company and its Restricted
Subsidiaries;


 


(j)                                     transfers of property subject to Casualty
Events upon receipt of the Net Cash Proceeds of such Casualty Event;


 


(k)                                  Dispositions of property by the Company and
its Restricted Subsidiaries not otherwise permitted under this Section 7.05; provided that (i) at the time of such
Disposition, no Event of Default shall exist or would result from such
Disposition, (ii) the aggregate book value of all property Disposed of in
reliance on this clause (k) shall not exceed $100,000,000 and (iii) the
purchase price for such property (if in excess of $5,000,000) shall be paid to
the Company or such Restricted Subsidiary for not less than 75% cash
consideration;


 


(1)                                  Dispositions of Securitization Assets and
other related assets of the type specified in the definition of “Securitization
Financing” (or a fractional undivided interest therein) in a Qualified
Securitization Financing;


 


(m)                               Dispositions listed on Schedule 7.05(o); and


 


(n)                                 Dispositions of Investments in Joint
Ventures, to the extent required by, or made pursuant to buy/sell arrangements
between the joint venture parties forth in, joint venture arrangements and
similar binding arrangements in effect on the Closing Date.


 


provided that any Disposition of any property pursuant to this Section 7.05
(except pursuant to Sections 7.05(d) and (e)), shall be for no less than the
fair market value of such property at the time of such Disposition. To the
extent any Collateral is Disposed of as expressly permitted by this Section
7.05 to any Person other than Holdings, the Company or any of its Restricted
Subsidiaries, such Collateral shall be sold free and clear of the Liens created
by the Loan Documents, and the Administrative Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.


 


Section 7.06. Restricted
Payments. Declare or make, directly or indirectly, any Restricted
Payment, except:


 


(a)                                  each Restricted Subsidiary may make
Restricted Payments to the Company and to Restricted Subsidiaries (and, in the
case of a Restricted Payment by a non-wholly owned Restricted Subsidiary, to
the Company and any Restricted Subsidiary and to each other owner of Equity
Interests of such Restricted Subsidiary based on their relative ownership
interests);


 


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(b)                                 Holdings, the Company and each Restricted
Subsidiary may declare and make dividend payments or other distributions
payable solely in the Equity Interests (other than Disqualified Equity
Interests) of such Person;


 


(c)                                  so long as no Event of Default shall have
occurred and be continuing or would result therefrom, (x) Holdings (and, from
and after a Qualifying IPO of the Company, the Company) may make Restricted
Payments with the proceeds received from any Permitted Equity Issuance to the
extent not required to prepay the Loans pursuant to Section 2.05(b) and (y)
Holdings may make Restricted Payments with the proceeds of the issuance of
Permitted Holdco Debt;


 


(d)                                 the Company may make Restricted Payments made
on the Closing Date to consummate the Acquisition and the other Transactions;


 


(e)                                  to the extent constituting Restricted
Payments, the Company and its Restricted Subsidiaries may enter into
transactions expressly permitted by Section 7.04 or 7.08;


 


(f)                                    repurchases of Equity Interests deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;


 


(g)                                 Holdings may pay for the repurchase,
retirement or other acquisition or retirement for value of common Equity
Interests of Holdings held by any future, present or former employee, director
or consultant of Holdings or any of its Subsidiaries pursuant to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement; provided that
the aggregate amount of Restricted Payments made under this clause (g) does not
exceed in any calendar year $15,000,000 (with unused amounts in any calendar
year being carried over to the two (2) succeeding calendar years); and provided further that such amount in any
calendar year may be increased by an amount not to exceed (A) the cash proceeds
from the sale of Equity Interests (other than Disqualified Equity Interests) to
members of management, directors or consultants of Holdings or of its
Subsidiaries that occurs after the Closing Date plus (B) the amount of any cash
bonuses otherwise payable to members of management, directors or consultants of
Holdings or any of its Subsidiaries in connection with the Transaction that are
foregone in return for the receipt of Equity Interests of Holdings pursuant to
a deferred compensation plan of such corporation plus (C) the cash proceeds of
key man life insurance policies received by Holdings, the Company or its Restricted
Subsidiaries after the Closing Date (provided that Holdings may elect to apply
all or any portion of the aggregate increase contemplated by clauses (A), (B)
and (C) above in any calendar year) less (D) the amount of any Restricted
Payments previously made pursuant to clauses (A), (B) and (C) of this clause
(g);


 


(h)                                 the Company and its Restricted Subsidiaries
may make Restricted Payments to Holdings:


 


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(i)                                     the proceeds of which will be used to pay the
tax liability for the relevant jurisdiction in respect of consolidated,
combined, unitary or affiliated returns for the relevant jurisdiction of
Holdings attributable to the Company and its Subsidiaries determined as if the
Company and its Subsidiaries filed separately;


 


(ii)                                  the
proceeds of which shall be used by Holdings to pay its operating expenses
incurred in the ordinary course of business and other corporate overhead costs
and expenses (including, without limitation, administrative, legal, accounting
and similar expenses provided by third parties), which are reasonable and
customary and incurred in the ordinary course of business, in an aggregate
amount not to exceed $1,000,000 in any fiscal year plus any reasonable and
customary indemnification claims made by directors or officers of Holdings
attributable to the ownership or operations of the Company and its Restricted
Subsidiaries;


 


(iii)                               the proceeds of which shall be used by
Holdings to pay franchise taxes and other fees, taxes and expenses required to
maintain its corporate existence;


 


(iv)                              the proceeds of which will be used by
Holdings to make Restricted Payments permitted by clause (g) and (k);


 


(v)                                 to finance any Investment permitted to be
made pursuant to Section 7.02; provided that (A) such Restricted
Payment shall be made substantially concurrently with the closing of such
Investment and (B) Holdings shall, immediately following the closing thereof,
cause (1) all property acquired (whether assets or Equity Interests) to be
contributed to the Company or its Restricted Subsidiaries or (2) the merger (to
the extent permitted in Section 7.04) of the Person formed or acquired into the
Company or its Restricted Subsidiaries in order to consummate such Permitted
Acquisition, in each case, in accordance with the requirements of Section 6.12;


 


(vi)                              the proceeds of which shall be used by
Holdings to pay fees and expenses (other than to Affiliates) related to any
unsuccessful equity or debt offering permitted by this Agreement;


 


(vii)                           the proceeds of which shall be used by
Holdings to pay when due (and required to be paid in cash), and in aggregate
amounts equal to, accrued and unpaid interest on Permitted Holdco Debt; provided that before and immediately after
giving effect to such payment, no Event of Default shall exist or would result
from such action;


 


(i)                                     in addition to the foregoing Restricted
Payments, the Company may make additional Restricted Payments to Holdings the
proceeds of which may be utilized by


 


123





















 


Holdings
to make additional Restricted Payments, in an aggregate amount not to exceed
$10,000,000 (such amount to be increased to (A) $35,000,000 if the Leverage
Ratio as of the last day of the immediately preceding four fiscal quarters was
less than 4.0:1 and (B) $50,000,000 if the Leverage Ratio as of the last day of
the immediately preceding four fiscal quarters was less than 3.5:1); provided that such amounts may be
increased by an amount equal to 50% of Cumulative Excess Cash Flow that is Not
Otherwise Applied. For the purpose of this clause (i), “Cumulative Excess Cash Flow” means the sum
of Excess Cash Flow for each fiscal year commencing with the fiscal year ended
November 30, 2004 and ending on the Company’s most recently ended fiscal year;


 


(j)                                     from and after a Qualifying IPO of the
Company, the Company may make the Restricted Payments referred to in clauses
(f) or (i); and


 


(k)                                  Holdings may make Restricted Payments to
Equity Investors on the ARCA Effective Date in an aggregate amount not greater
than $200,000,000.


 


Section 7.07. Change
in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Company
and its Restricted Subsidiaries on the Closing Date or any business reasonably
related or ancillary thereto.


 


Section 7.08. Transactions
with Affiliates. Enter into any transaction of any kind with any
Affiliate of the Company, whether or not in the ordinary course of business,
other than (a) transactions among Loan Parties, (b) on fair and reasonable
terms substantially as favorable to the Company or such Restricted Subsidiary
as would be obtainable by the Company or such Restricted Subsidiary at the time
in a comparable arm’s-length transaction with a Person other than an Affiliate,
(c) the payment of fees and expenses in connection with the consummation of the
Transactions in amounts disclosed to the Initial Lenders prior to the Closing
Date, (d) so long as no Event of Default shall have occurred and be continuing
under Section 8.01(f), the payment of management and monitoring fees to the
Sponsors pursuant to the Sponsor Management Agreement in an aggregate amount in
any fiscal year not to exceed $10,000,000, (e) equity issuances by Holdings
permitted under Section 7.06, (f) loans and other transactions by Holdings, the
Company and its Restricted Subsidiaries to the extent permitted under this
Article 7, (g) customary fees payable to any directors of Holdings and
reimbursement of reasonable out of pocket costs of the directors of Holdings,
(h) employment and severance arrangements between Holdings, the Company and its
Restricted Subsidiaries and their respective officers and employees in the
ordinary course of business, (i) payments by Holdings, the Company and its
Restricted Subsidiaries pursuant to the tax sharing agreements among Holdings,
the Company and its Restricted Subsidiaries on customary terms, (j) any
transaction with a Securitization Subsidiary effected as part of a Qualified
Securitization Financing, (k) the payment of customary fees and indemnities to
directors, officers and employees of Holdings, the Company and the Restricted
Subsidiaries in the ordinary course of business, (1) transactions pursuant to
permitted agreements in existence on the Closing Date and set forth on Schedule
7.08 or any amendment thereto to the extent such an amendment is not adverse to
the Lenders in any material respect, (m) dividends, redemptions and repurchases
permitted under Section 7.06, and (n) payments by Holdings, the Company and any
Restricted Subsidiaries to the Sponsors made for any customary


 


124





















 


financial
advisory, financing, underwriting or placement services or in respect of other
investment banking activities, including in connection with acquisitions or
divestitures, which payments are approved by the majority of the board of
directors of Holdings in good faith.


 


Section 7.09. Burdensome
Agreements. Enter into or permit to exist any Contractual Obligation
(other than this Agreement or any other Loan Document) that limits the ability
of (a) any Restricted Subsidiary of the Company to make Restricted Payments to
the Company or any Guarantor or to otherwise transfer property to or invest in
the Company or any Guarantor, or (b) the Company or any Loan Party to create,
incur, assume or suffer to exist Liens on property of such Person for the
benefit of the Lenders with respect to the Facilities and the Obligations or
under the Loan Documents; provided that
the foregoing shall not apply to Contractual Obligations which (i) (x) exist on
the Closing Date and (to the extent not otherwise permitted by this Section
7.09) are listed on Schedule 7.09 hereto and (y) to the extent Contractual
Obligations permitted by clause (x) are set forth in an agreement evidencing
Indebtedness, are set forth in any agreement evidencing any permitted renewal,
extension or refinancing of such Indebtedness so long as such renewal,
extension or refinancing does not expand the scope of such Contractual Obligation,
(ii) are binding on a Restricted Subsidiary at the time such Restricted
Subsidiary first becomes a Restricted Subsidiary of the Company, so long as
such Contractual Obligations were not entered into solely in contemplation of
such Person becoming a Restricted Subsidiary of the Company, (iii) represent
Indebtedness of a Restricted Subsidiary of the Company which is not a Loan
Party which is permitted by Section 7.03, (iv) arise in connection with any
Disposition permitted by Section 7.05, (v) are customary provisions in joint
venture agreements and other similar agreements applicable to joint ventures
permitted under Section 7.02 and applicable solely to such joint venture
entered into in the ordinary course of business, (vi) are negative pledges and
restrictions on Liens in favor of any holder of Indebtedness permitted under
Section 7.03 but solely to the extent any negative pledge relates to the
property financed by or the subject of such Indebtedness (and excluding in any
event any Indebtedness constituting any Junior Financing), (vii) are customary
restrictions on leases, subleases, licenses or asset sale agreements otherwise
permitted hereby so long as such restrictions may relate to the assets subject
thereto, (viii) comprise restrictions imposed by any agreement relating to
secured Indebtedness permitted pursuant to Section 7.03(b)(v) to the extent
that such restrictions apply only to the property or assets securing such
Indebtedness, (ix) are customary provisions restricting subletting or assignment
of any lease governing a leasehold interest, and (x) are customary provisions
restricting assignment of any agreement entered into in the ordinary course of
business.


 


Section 7.10. Use of
Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund Indebtedness originally
incurred for such purpose.


 


Section 7.11. Financial
Covenants. (a) Leverage Ratio. Permit the
Leverage Ratio as of the end of any fiscal quarter of the Company (beginning
with the fiscal quarter ending November 30, 2004) set forth below to be greater
than the ratio set forth below opposite such period:


 


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  Fiscal Year

  	
   

  	
  February 28/29

  	
   

  	
  May 31

  	
   

  	
  August 31

  	
   

  	
  November 30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2004

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  6.5:1

  	
   

  
	
  2005

  	
   

  	
  6.5:1

  	
   

  	
  6.5:1

  	
   

  	
  6.25:1

  	
   

  	
  5.85:1

  	
   

  
	
  2006

  	
   

  	
  5.5:1

  	
   

  	
  5.5:1

  	
   

  	
  5.35:1

  	
   

  	
  4.85:1

  	
   

  
	
  2007

  	
   

  	
  4.85:1

  	
   

  	
  4.75:1

  	
   

  	
  4.75:1

  	
   

  	
  4.5:1

  	
   

  
	
  2008

  	
   

  	
  4.5:1

  	
   

  	
  4.25:1

  	
   

  	
  4.25:1

  	
   

  	
  4.0:1

  	
   

  
	
  2009

  	
   

  	
  4.0:1

  	
   

  	
  3.75:1

  	
   

  	
  3.75:1

  	
   

  	
  3.5:1

  	
   

  
	
  2010

  	
   

  	
  3.5:1

  	
   

  	
  3.5:1

  	
   

  	
  3.5:1

  	
   

  	
  3.5:1

  	
   

  



 


(b)                                      Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the
end of any fiscal quarter of the Company (beginning with the fiscal quarter
ending November 30, 2004) (as set forth below to be less than the ratio set
forth below opposite such fiscal quarter:


 


	
  Fiscal Year

  	
   

  	
  February 28/29

  	
   

  	
  May 31

  	
   

  	
  August 31

  	
   

  	
  November 30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2004

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  2.25:1

  	
   

  
	
  2005

  	
   

  	
  2.25:1

  	
   

  	
  2.25:1

  	
   

  	
  2.25:1

  	
   

  	
  2.5:1

  	
   

  
	
  2006

  	
   

  	
  2.5:1

  	
   

  	
  2.5:1

  	
   

  	
  2.5:1

  	
   

  	
  2.75:1

  	
   

  
	
  2007

  	
   

  	
  2.75:1

  	
   

  	
  2.75:1

  	
   

  	
  2.75:1

  	
   

  	
  2.75:1

  	
   

  
	
  2008

  	
   

  	
  2.75:1

  	
   

  	
  2.75:1

  	
   

  	
  2.75:1

  	
   

  	
  3.0:1

  	
   

  
	
  2009

  	
   

  	
  3.0:1

  	
   

  	
  3.0:1

  	
   

  	
  3.0:1

  	
   

  	
  3.25:1

  	
   

  
	
  2010

  	
   

  	
  3.25:1

  	
   

  	
  3.25:1

  	
   

  	
  3.25:1

  	
   

  	
  3.5:1

  	
   

  



 


Section 7.12. Amendments
of Organization Documents. Amend any of its Organization Documents
in a manner materially adverse to the Administrative Agent or the Lenders.


 


Section 7.13. Accounting
Changes. Make any change in fiscal year.


 


Section 7.14. Prepayments,
Etc. of Indebtedness. (a) Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner (it
being understood that payments of regularly scheduled interest shall be
permitted) any Senior Subordinated Notes, Permitted Subordinated Indebtedness
or any Permitted Holdco Debt (collectively, “Junior
Financing”) or make any payment in violation of
any subordination terms of any Junior Financing Documentation, except (i) the
refinancing thereof with the Net Cash Proceeds of any Permitted Subordinated
Indebtedness, Permitted Holdco Debt or Permitted Equity Issuance, to the extent
not required to prepay any Loans pursuant to Section 2.05(b) and (ii) the
conversion of any Junior Financing to Equity Interests (other than Disqualified
Equity Interests), or (b) amend, modify or change in any manner materially
adverse to the interests of the Administrative Agent or the Lenders any term or
condition of any Junior Financing Documentation without the consent of the
Required Lenders.


 


Section 7.15. Amendment
of Purchase Agreement. Amend, modify or supplement the Purchase
Agreement or waive or otherwise consent to any change or departure from any of
the terms or conditions of the Purchase Agreement in any manner materially
adverse to the interests of the Lenders without the consent of the Required
Lenders and the Administrative Agent.


 


126





















 


Section 7.16. Equity
Interests of the Company and Restricted Subsidiaries. (a) (i) Own
directly or indirectly less than 100% of the Equity Interests of any of the
Domestic Subsidiaries that are Restricted Subsidiaries except as a result of or
in connection with a dissolution, merger, consolidation or Disposition of a
Restricted Subsidiary permitted by Section 7.04, 7.05 or an Investment in any
Person permitted under Section 7.02;


 


(ii)                                  Own directly or indirectly less than 100% of
the Equity Interests of any of the Foreign Subsidiaries that are (or would, if
they were wholly owned, be required to be) Loan Parties except (A) to qualify
directors where required by applicable Law or to satisfy other requirements of
applicable Law with respect to the ownership of Equity Interests of Foreign
Subsidiaries, or (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Restricted Subsidiary permitted by
Section 7.04, 7.05 or an Investment in any Person permitted under Section 7.02,
or


 


(b)                                 Create, incur, assume or suffer to exist any
Lien on any Equity Interests of the Company (other than nonconsensual Liens
arising solely by operation of law to the extent permitted under Section 7.01).


 


Section 7.17. Holding
Company. In the case of Holdings, (i) conduct, transact or otherwise
engage in any business or operations other than those incidental to its
ownership of the Equity Interests of the Company, the performance of the Loan
Documents, the Acquisition Agreement and the other agreements contemplated by
the Acquisition Agreement and any transactions that Holdings is permitted to
enter into or consummate under this Article 7 or (ii) incur any Indebtedness
other than Indebtedness permitted pursuant to Section 7.03(c); or


 


Section 7.18. Designated
Senior Debt. Designate any other Indebtedness (other than under this
Agreement and the other Loan Documents) of the Company or its Restricted
Subsidiaries as “Senior Debt” or “Designated Senior Debt” (or any comparable
term) under, and as defined in, any Junior Financing Documentation.


 


Section 7.19. Capital
Expenditures. (a) Make any Capital Expenditure except for Capital
Expenditures not exceeding, in the aggregate for the Company and its Restricted
Subsidiaries during each fiscal year set forth below, the amount set forth
opposite such fiscal year:


 




	
  Fiscal Year

  	
   

  	
  Amount

  	
   

  
	
  2004

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  2005

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  70,000,000

  	
   

  
							






 


127





















 


(b)                                 Notwithstanding anything to the contrary
contained in clause (a) above, to the extent that the aggregate amount of
Capital Expenditures made by the Company and the Restricted Subsidiaries in any
fiscal year pursuant to Section 7.19(a) is less than the amount set forth in
such fiscal year, the amount of such difference (the “Rollover Amount”) may be carried forward and used to
make Capital Expenditures in the two succeeding fiscal years to the extent that
such Rollover Amount shall not previously have been used to determine the
permissibility of an Investment pursuant to Section 7.02(n).


 


ARTICLE 8


EVENTS
OF DEFAULT AND REMEDIES


 


Section 8.01. Events
of Default. Any of the following shall constitute an Event of
Default:


 


(a)                                  Non-Payment. Any Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of any
Loan, or (ii) within five (5) Business Days after the same becomes due, any
interest on any Loan or any other amount payable hereunder or with respect to
any other Loan Document; or


 


(b)                                 Specific Covenants. The Company fails to perform or observe any
term, covenant or agreement contained in any of Sections 6.03(a), 6.05(a)
(solely with respect to Holdings and the Company) or 6.11 or Article 7;
provided that any Event of Default under Section 7.11 is subject
to cure as contemplated by the last proviso set
forth in the definition of “Consolidated EBITDA”; or


 


(c)                                  Other Defaults. Any Loan Party fails to perform or observe
any other covenant or agreement (not specified in Section 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for thirty (30) days after notice thereof by the
Administrative Agent to the Company; or


 


(d)                                 Representations and
Warranties. Any
representation, warranty, certification or statement of fact made or deemed
made by or on behalf of the Company or any other Loan Party herein, in any
other Loan Document, or in any document required to be delivered in connection
herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or


 


(e)                                  Cross-Default. (i) Any Loan Party or any Restricted
Subsidiary (A) fails to make any payment beyond the applicable grace period
with respect thereto, if any (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness (other than
Indebtedness hereunder) having an aggregate principal amount of not less than
the Threshold Amount, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness, or any


 


128





















 


other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness (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 or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity; provided that
this clause (e)(B) shall not apply to secured Indebtedness that becomes due as
a result of the voluntary sale or transfer of the property or assets securing such
Indebtedness, if such sale or transfer is permitted hereunder and under the
documents providing for such Indebtedness; or


 


(f)                                    Insolvency Proceedings,
Etc. Any Loan Party or any
of its Restricted Subsidiaries institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator, administrator,
administrative receiver or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, administrator, administrative receiver or similar
officer is appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for sixty (60) calendar days; or
any proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent of
such Person and continues undismissed or unstayed for sixty (60) calendar days,
or an order for relief is entered in any such proceeding; or


 


(g)                                 Inability to Pay Debts;
Attachment. (i) Any Loan Party or
any Restricted Subsidiary becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the property of any such Person and is not
released, vacated or fully bonded within sixty (60) days after its issue or
levy; or


 


(h)                                 Judgments. There is entered against any Loan Party or
any Restricted Subsidiary a final judgment or order for the payment of money in
an aggregate amount exceeding the Threshold Amount (to the extent not covered
by independent third-party insurance as to which the insurer has been notified
of such judgment or order and does not deny coverage) and there is a period of
sixty (60) consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or


 


(i)                                     ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of any Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount which could
reasonably be expected to result in a Material Adverse Effect, or (ii) any
Borrower or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment


 


129





















 


with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount which could reasonably be expected to
result in a Material Adverse Effect; or


 


(j)                                     Invalidity of Loan
Documents. Any material
provision of any Loan Document, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or thereunder
(including as a result of a transaction permitted under Section 7.04 or 7.05)
or satisfaction in full of all the Obligations, ceases to be in full force and
effect; or any Loan Party contests in writing the validity or enforceability of
any provision of any Loan Document; or any Loan Party denies in writing that it
has any or further liability or obligation under any Loan Document (other than
as a result of repayment in full of the Obligations and termination of the
Aggregate Commitments), or purports in writing to revoke or rescind any Loan
Document; or


 


(k)                                  Change of Control. There occurs any Change of Control; or


 


(1)                                  Collateral Documents. Any Collateral Document after delivery
thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than
pursuant to the terms thereof including as a result of a transaction permitted
under Section 7.04 or 7.05) cease to create a valid and perfected first
priority lien on and security interest in the Collateral covered thereby, subject
to Liens permitted under Section 7.01, or any Loan Party shall so assert in
writing such invalidity, lack of perfection or priority, except to the extent
that any such loss of perfection or priority results from the failure of the
Administrative Agent to maintain possession of certificates actually delivered
to it representing securities pledged under the Collateral Agreements or to
file Uniform Commercial Code continuation statements and except, as to
Collateral consisting of real property, to the extent that such loss is covered
by a lender’s title insurance policy and the Administrative Agent shall be
reasonably satisfied with the credit of such insurer; or


 


(m)                               Junior Financing
Documentation. (i) Any of the
Obligations of the Loan Parties under the Loan Documents for any reason shall
cease to be “Senior Debt” (or any comparable term) or “Designated Senior Debt”
(or any comparable term) under, and as defined in, the Senior Subordinated
Notes Indenture or any other Junior Financing Documentation or (ii) the
subordination provisions set forth in the Senior Subordinated Notes Indenture
or any other Junior Financing Documentation shall, in whole or in part, cease
to be effective or cease to be legally valid, binding and enforceable against
the holders of any Junior Financing, if applicable.


 


Section 8.02. Remedies
Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:


 


(a)                                  declare the commitment of each Lender to make
Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;


 


130





















 


(b)                                 declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrowers;


 


(c)                                  require that the Company Cash Collateralize
the L/C Obligations (in an amount equal to the then Outstanding Amount
thereof); and


 


(d)                                 exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Loan
Documents or applicable Law;


 


provided that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Company under the Bankruptcy Code of the United
States, the obligation of each Lender to make Loans and any obligation of the
L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Company to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender.


 


Section 8.03. Application
of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans have automatically become immediately due and payable
and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:


 


First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including Attorney
Costs payable under Section 10.04 and amounts payable under Article 3 but
excluding principal and interest) payable to the Administrative Agent in its
capacity as such;


 


Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including Attorney Costs payable under
Section 10.05 and amounts payable under Article 3), ratably among them in
proportion to the amounts described in this clause Second payable to them;


 


Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and L/C Borrowings,
ratably among the Lenders in proportion to the respective amounts described in
this clause Third payable to them;


 


Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans and L/C Borrowings, the termination
value under Secured Hedge Obligations and the Cash Management Obligations,
ratably among the Lenders in proportion to the respective amounts described in
this clause Fourth held by them;


 


131





















 


Fifth, to the Administrative Agent for the account
of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit;


 


Sixth, to the payment of all other Obligations of
the Loan Parties that are due and payable to the Administrative Agent and the
other Secured Parties on such date, ratably based upon the respective aggregate
amounts of all such Obligations owing to the Administrative Agent and the other
Secured Parties on such date; and


 


Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Borrowers or as
otherwise required by Law.


 


Subject
to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fifth
above shall be applied to satisfy drawings under such Letters of
Credit as they occur. If any amount remains on deposit as Cash Collateral after
all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Obligations, if any, in the order set forth
above and, if no Obligations remain outstanding, to the Borrowers.


 


ARTICLE 9


ADMINISTRATIVE
AGENT AND OTHER AGENTS


 


Section 9.01. Appointment
and Authorization of Agents. (a) Each Lender hereby irrevocably
appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly.
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, the Administrative Agent shall have no duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative Agent
have or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein
and in the other Loan Documents with reference to any Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.


 


(b)                                 The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits and
immunities (i) provided to the Agents in this Article 9 with respect to any
acts taken or omissions suffered by the L/C Issuer in connection with Letters
of Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to


 


132





















 


such
Letters of Credit as fully as if the term “Agent” as used in this Article 9 and
in the definition of “Agent-Related Person” included the L/C Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein
with respect to the L/C Issuer.


 


(c)                                  The Administrative Agent shall also act as
the “collateral agent” under the Loan Documents, and each of the Lenders (in
its capacities as a Lender, Swing Line Lender (if applicable), L/C Issuer (if
applicable) and a potential Hedge Bank) hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of (and to hold any
security interest created by the Collateral Documents for and on behalf of or
on trust for) such Lender for purposes of acquiring, holding and enforcing any
and all Liens on Collateral granted by any of the Loan Parties to secure any of
the Secured Obligations, together with such powers and discretion as are
reasonably incidental thereto. In this connection, the Administrative Agent, as
“collateral agent” (and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.02 for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents, or for exercising any rights and
remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article 9 (including,
without limitation, Section 9.07, as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.


 


Section 9.02. Delegation
of Duties. The Administrative Agent may execute any of its duties
under this Agreement or any other Loan Document (including for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents or of exercising any rights and remedies
thereunder) by or through agents, employees or attorneys-in-fact including for
the purpose of any Borrowings or payments in Alternative Currencies, such
sub-agents as shall be deemed necessary by the Administrative Agent and shall
be entitled to advice of counsel and other consultants or experts concerning
all matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or sub-agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.


 


Section 9.03. Liability
of Agents. No Agent-Related Person shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein), or (b) be responsible in any
manner to any Lender or participant for any recital, statement, representation
or warranty made by any Loan Party or any officer thereof, contained herein or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document, or the perfection or priority of any
Lien or security interest created or purported to be created under the
Collateral Documents, or for any failure of any Loan Party or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or


 


133





















 


performance
of any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party or any Affiliate thereof.


 


Section 9.04. Reliance
by Agents. (a) Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed 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 legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, 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. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.


 


(b)                                 For purposes of determining compliance with
the conditions specified in Section 4.01, each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
the Administrative Agent shall have received notice from such Lender prior to
the proposed Closing Date specifying its objection thereto.


 


Section 9.05. Notice
of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Company referring
to this Agreement, describing such Default and stating that such notice is a “notice
of default.” The Administrative Agent will notify the Lenders of its receipt of
any such notice. The Administrative Agent shall take such action with respect
to any Event of Default as may be directed by the Required Lenders in
accordance with Article 8; provided that
unless and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable or in the best interest of the Lenders.


 


Section 9.06. Credit
Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Loan Party or any Affiliate thereof, shall be deemed to


 


134





















 


constitute
any representation or warranty by any Agent-Related Person to any Lender as to
any matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to each Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Company
and the other Loan Parties hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person 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 action under this Agreement and the other Loan Documents, and to
make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by any Agent herein, such Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any of the Loan Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.


 


Section 9.07. Indemnification
of Agents. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand each Agent-Related Person
(to the extent not reimbursed by or on behalf of any Loan Party and without
limiting the obligation of any Loan Party to do so), pro rata, and hold harmless
each Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting from such Agent-Related
Person’s own gross negligence or willful misconduct; provided further that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 9.07; provided further that to the extent an L/C
Issuer is entitled to indemnification under this Section 9.07 solely in
connection with its role as an L/C Issuer, only the Revolving Credit Lenders
shall be required to indemnify the L/C Issuer in accordance with this Section
9.07. In the case of any investigation, litigation or proceeding giving rise to
any Indemnified Liabilities, this Section 9.07 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other Person.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this


 


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Section
9.07 shall survive termination of the Aggregate Commitments, the payment of all
other Obligations and the resignation of the Administrative Agent.


 


Section 9.08. Agents
in their Individual Capacities. Bank of America and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire Equity Interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each of the Loan
Parties and their respective Affiliates as though Bank of America were not the
Administrative Agent or the L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise such rights and powers as though it were not the
Administrative Agent or the L/C Issuer, and the terms “Lender” and “Lenders”
include Bank of America in its individual capacity.


 


Section 9.09. Successor
Agents. The Administrative Agent may resign as the Administrative
Agent upon thirty (30) days’ notice to the Lenders. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
consented to by the Company at all times other than during the existence of an
Event of Default under Section 8.01(f) (which consent of the Company shall not
be unreasonably withheld or delayed). If no successor agent is appointed prior
to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Company, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, the Person acting as such successor
agent shall succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term “Administrative Agent,” shall mean such successor
administrative agent and/or supplemental administrative agent, as the case may
be, and the retiring Administrative Agent’s appointment, powers and duties as
the Administrative Agent shall be terminated. After the retiring Administrative
Agent’s resignation hereunder as the Administrative Agent, the provisions of
this Article 9 and Sections 10.04 and 10.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Administrative
Agent under this Agreement. If no successor agent has accepted appointment as
the Administrative Agent by the date which is thirty (30) days following the
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. Upon the acceptance of any appointment
as the Administrative Agent hereunder by a successor and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, the Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Administrative


 


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Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After the retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this
Article 9 shall continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as the Administrative Agent.


 


Section 9.10. Administrative
Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on any Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:


 


(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders and the Administrative Agent under Sections 2.03(i)
and (j), 2.09 and 10.04) allowed in such judicial proceeding; and


 


(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;


 


and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Agents and
their respective agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.


 


Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.


 


Section 9.11. Collateral
and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent:


 


(a)                                  to release any Lien on any property granted
to or held by the Administrative Agent under any Loan Document (i) upon
termination of the Aggregate


 


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Commitments
and payment in full of all Obligations (other than (x) obligations under
Secured Hedge Agreements, (y) Cash Management Obligations not yet due and
payable and (z) contingent indemnification obligations not yet accrued and
payable) and the expiration or termination of all Letters of Credit, (ii) that
is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document to any Person other than Holdings,
the Company or any of its Restricted Subsidiaries, (iii) subject to Section
10.01, if approved, authorized or ratified in writing by the Required Lenders,
or (iv) owned by a Guarantor upon release of such Guarantor from its
obligations under its Guaranty pursuant to clause (c) below;


 


(b)                                 to subordinate any Lien on any property
granted to or held by the Administrative Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 7.01(i); and


 


(c)                                  to release any Guarantor from its obligations
under the Guaranty if such Person ceases to be a Restricted Subsidiary as a
result of a transaction or designation permitted hereunder; provided that no such release shall occur
if such Guarantor continues to be a guarantor in respect of any Junior
Financing.


 


Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent’s authority to release its interest in particular
types or items of property, or to release any Guarantor from its obligations
under the Guaranty pursuant to this Section 9.11. In each case as specified in
this Section 9.11, the Administrative Agent will, at the Company’s expense,
execute and deliver to the applicable Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral
Documents, or to release such Guarantor from its obligations under the
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section 9.11.


 


Section 9.12. Other
Agents; Arrangers and Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a “co
syndication agent,” “co-documentation agent,” “co agent,” “book manager,” “lead
manager,” “arranger,” “lead arranger” or “co-arranger” shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders or other Persons so identified shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.


 


Section 9.13. Appointment
of Supplemental Administrative Agents. (a) It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
Law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by


 


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reason
of any present or future Law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, the Administrative Agent is hereby authorized to appoint an
additional individual or institution selected by the Administrative Agent in its
sole discretion as a separate trustee, co-trustee, administrative agent,
collateral agent, administrative sub-agent or administrative co-agent (any such
additional individual or institution being referred to herein individually as a
“Supplemental
Administrative Agent” and
collectively as “Supplemental Administrative Agents”).


 


(b)                                 In the event that the Administrative Agent
appoints a Supplemental Administrative Agent with respect to any Collateral,
(i) each and every right, power, privilege or duty expressed or intended by
this Agreement or any of the other Loan Documents to be exercised by or vested
in or conveyed to the Administrative Agent with respect to such Collateral
shall be exercisable by and vest in such Supplemental Administrative Agent to
the extent, and only to the extent, necessary to enable such Supplemental
Administrative Agent to exercise such rights, powers and privileges with
respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Administrative Agent shall run to and be enforceable by either the
Administrative Agent or such Supplemental Administrative Agent, and (ii) the provisions
of this Article 9 and of Section 9.07 (obligating the Company to pay the
Administrative Agent’s expenses and to indemnify the Administrative Agent) that
refer to the Administrative Agent shall inure to the benefit of such
Supplemental Administrative Agent and all references therein to the
Administrative Agent shall be deemed to be references to the Administrative
Agent and/or such Supplemental Administrative Agent, as the context may
require.


 


(c)                                  Should any instrument in writing from the
Company, Holdings or any other Loan Party be required by any Supplemental
Administrative Agent so appointed by the Administrative Agent for more fully
and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, the Company or Holdings, as applicable, shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by the Administrative Agent. In case any
Supplemental Administrative Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Administrative Agent, to the extent permitted
by Law, shall vest in and be exercised by the Administrative Agent until the
appointment of a new Supplemental Administrative Agent.


 


ARTICLE 10


MISCELLANEOUS


 


Section 10.01. Amendments,
Etc. No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent to any departure by the Company or any
other Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Company or the applicable Loan Party, as the case may
be, and each such


 


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waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that
no such amendment, waiver or consent shall:


 


(a)                                  extend or increase the Commitment of any
Lender (including by extending the expiry of any Letter of Credit beyond the Maturity
Date) without the written consent of each Lender directly affected thereby (it
being understood that a waiver of any condition precedent set forth in Section
4.03 or the waiver of any Default, mandatory prepayment or mandatory reduction
of the Commitments shall not constitute an extension or increase of any
Commitment of any Lender);


 


(b)                                 postpone any date scheduled for any payment
of principal or interest under Section 2.07 or 2.08 or fees under Section 2.03
or 2.09 without the written consent of each Lender directly affected thereby,
it being understood that the waiver of any mandatory prepayment of the Term
Loans shall not constitute a postponement of any date scheduled for the payment
of principal or interest;


 


(c)                                  reduce or forgive the principal of, or the
rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to
clause (iii) of the second proviso to this Section 10.01) any fees or other
amounts payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby, it being understood that any
change to the definition of Leverage Ratio or in the component definitions
thereof shall not constitute a reduction in the rate; provided that only the consent of the
Required Lenders shall be necessary to amend the definition of “Default Rate”
or to waive any obligation of the Borrowers to pay interest at the Default
Rate;


 


(d)                                 change any provision of this Section 10.01,
the definition of “Required Lenders” or Section 2.06(c) without the written
consent of each Lender;


 


(e)                                  change Section 2.13 or 8.03 in any manner
that would alter the pro rata sharing of payments required thereby without the
written consent of each Lender;


 


(f)                                    other than in a transaction permitted under
Section 7.05, release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent of
each Lender; and


 


(g)                                 other than in connection with a transaction
permitted under Section 7.04 or 7.05, release all or substantially all of the
value of the Guaranty, without the written consent of each Lender;


 


and
provided further that (i) no
amendment, waiver or consent shall, unless in writing and signed by the L/C
Issuer in addition to the Lenders required above, affect the rights or duties
of the L/C Issuer under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment,
waiver or consent


 


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shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required above, affect the rights or duties of, or any fees or other
amounts payable to, the Administrative Agent under this Agreement or any other
Loan Document; and (iv) Section 10.07(g) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part
of whose Loans are being funded by an SPC at the time of such amendment, waiver
or other modification; and (v) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties
thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender (it being understood that any
Commitments or Loans held or deemed held by any Defaulting Lender shall be
excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders).


 


Notwithstanding the
foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent, Holdings and
the Borrowers (a) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share
ratably in the benefits of this Agreement and the other Loan Documents with the
Term Loans and the Revolving Credit Loans and the accrued interest and fees in
respect thereof and (b) to include appropriately the Lenders holding such
credit facilities in any determination of the Required Lenders.


 


In addition, notwithstanding
the foregoing, this Agreement may be amended with the written consent of the
Administrative Agent, Holdings, the Borrowers and the Lenders providing the
relevant Replacement Term Loans (as defined below) to permit the refinancing of
all outstanding Term Loans (“Refinanced Term Loans”) with a replacement term loan
tranche hereunder (“Replacement Term Loans”); provided
that (a) the aggregate principal amount of such Replacement Term
Loans shall not exceed the aggregate principal amount of such Refinanced Term
Loans, (b) the Applicable Margin for such Replacement Term Loans shall not be
higher than the Applicable Margin for such Refinanced Term Loans, (c) the
weighted average life to maturity of such Replacement Term Loans shall not be
shorter than the weighted average life to maturity of such Refinanced Term
Loans at the time of such refinancing and (d) all other terms applicable to
such Replacement Term Loans shall be substantially identical to, or less
favorable to the Lenders providing such Replacement Term Loans than, those applicable
to such Refinanced Term Loans, except to the extent necessary to provide for
covenants and other terms applicable to any period after the latest final
maturity of the Term Loans in effect immediately prior to such refinancing.


 


Section 10.02. Notices
and Other Communications; Facsimile Copies. (a) General. Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder or any other Loan Document shall be in writing
(including by facsimile transmission). All such written notices shall be
mailed, faxed or delivered to the applicable address, facsimile number or
(subject to Section 10.02(c)) electronic mail address, and all notices and
other communications expressly permitted hereunder to be given by telephone shall
be made to the applicable telephone number, as follows:


 


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(i)                                     if to any Borrower, the Administrative Agent,
the L/C Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and


 


(ii)                                  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such
party in a notice to the Company, the Administrative Agent, the L/C Issuer and
the Swing Line Lender.


 


All
such notices and other communications shall be deemed to be given or made upon
the earlier to occur of (i) actual receipt by the relevant party hereto and (ii)
(A) if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four (4) Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of Section 10.02(c)),
when delivered; provided that
notices and other communications to the Administrative Agent, the L/C Issuer
and the Swing Line Lender pursuant to Article 2 shall not be effective until
actually received by such Person. In no event shall a voice mail message be
effective as a notice, communication or confirmation hereunder.


 


(b)                            Effectiveness of Facsimile
Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually signed originals and shall be binding on all
Loan Parties, the Agents and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually
signed original thereof; provided that
the failure to request or deliver the same shall not limit the effectiveness of
any facsimile document or signature.


 


(c)                             Limited Use of Electronic
Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as provided
in Section 6.02, and to distribute Loan Documents for execution by the parties
thereto, and may not be used for any other purpose.


 


(d)                            Reliance by Agents and
Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Committed Loan Notices and Swing Line Loan Notices)
purportedly given by or on behalf of any Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrowers shall indemnify each Agent-Related Person and each Lender from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrowers in the
absence of gross negligence or willful misconduct. All telephonic notices to
the Administrative


 


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Agent
may be recorded by the Administrative Agent, and each of the parties hereto
hereby consents to such recording.


 


(e)                                  Designation by Overseas
Borrowers. Each Overseas
Borrower hereby designates the Company as its representative and agent on its
behalf for the purposes of giving and receiving all notices (other than
Committed Loan Notices and requests for the issuance of Letters of Credit
pursuant to Section 2.03) and any other documentation required to be delivered
to it pursuant to this Agreement and any other Loan Document by the
Administrative Agent or any Lender. The Company hereby accepts such
appointment. The Agents and the Lenders may regard any notice (other than
Committed Loan Notices and requests for the issuance of Letters of Credit
pursuant to Section 2.03) or other communication pursuant to any Loan Document
from the Company as a notice or communication from all Borrowers, and may give
any notice or communication required or permitted to be given to any Overseas
Borrower or Overseas Borrowers hereunder to the Company on behalf of such
Overseas Borrower or Overseas Borrowers. Each Overseas Borrower agrees that
each notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by the Company shall be deemed for all purposes
to have been made by such Overseas Borrower and shall be binding upon and
enforceable against such Overseas Borrower to the same extent as if the same
had been made directly by such Overseas Borrower.


 


Section 10.03. No
Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, 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, and provided under each other Loan Document, are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by Law.


 


Section 10.04. Attorney
Costs, Expenses and Taxes. The Company agrees (a) to pay or
reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the preparation, negotiation, syndication and
execution of this Agreement and the other Loan Documents, and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs of Davis Polk & Wardwell, and (b) to
pay or reimburse the Administrative Agent and each Lender for all reasonable
costs and expenses incurred in connection with the enforcement of any rights or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs of
counsel to the Administrative Agent). The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges
and fees and taxes related thereto, and other reasonable out-of-pocket expenses
incurred by any Agent. All amounts due under this Section 10.04 shall be paid
promptly. The agreements in this Section 10.04 shall survive the termination of
the Aggregate Commitments and repayment of all other Obligations. If any Loan
Party fails


 


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to
pay when due any costs, expenses or other amounts payable by it hereunder or
under any Loan Document, such amount may be paid on behalf of such Loan Party
by the Administrative Agent or any Lender, in its sole discretion.


 


Section 10.05. Indemnification
by the Company. Whether or not the transactions contemplated hereby
are consummated, the Company shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents, attorneys-in-fact, trustees and advisors
(collectively the “Indemnitees”) from
and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs (which shall be limited to one (1) counsel to the
Administrative Agent and the Lenders (exclusive of local counsel), unless (x)
the interests of the Administrative Agent and the Lenders are sufficiently
divergent, in which case one (1) additional counsel may be appointed and (y) if
the interests of any Lender or group of Lenders (other than all of the Lenders)
are distinctly or disproportionately affected, one (1) additional counsel for
such Lender or group of Lenders in the case of clause (a) below)) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of
or in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby
or the consummation of the transactions contemplated thereby, (b) any
Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for
payment under 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), or
(c) any actual or alleged presence or release of Hazardous Materials on or from
any property currently or formerly owned or operated by the Company, any
Subsidiary or any other Loan Party, or any Environmental Liability related in
any way to the Company, any Subsidiary or any other Loan Party, or (d) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”), in
all cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnitee; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses or disbursements resulted from the
gross negligence or willful misconduct of such Indemnitee or breach of the Loan
Documents by such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in connection
with this Agreement, nor shall any Indemnitee or any Loan Party have any
liability for any special, punitive, indirect or consequential damages relating
to this Agreement or any other Loan Document or arising out of its activities
in connection herewith or therewith (whether before or after the Closing Date).
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 10.05 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is


 


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brought
by any Loan Party, its directors, shareholders or creditors or an Indemnitee or
any other Person, whether or not any Indemnitee is otherwise a party thereto
and whether or not any of the transactions contemplated hereunder or under any
of the other Loan Documents is consummated. All amounts due under this Section
10.05 shall be paid promptly. The agreements in this Section 10.05 shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.


 


Section 10.06. Payments
Set Aside. To the extent that any payment by or on behalf of the
Company is made to any Agent or any Lender, or any Agent or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by such Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such setoff had not occurred, and (b) each Lender severally agrees to
pay to the Administrative Agent upon demand its applicable share of any amount
so recovered from or repaid by any Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to
the applicable Overnight Rate from time to time in effect.


 


Section 10.07. Successors
and Assigns. (a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Holdings nor any
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of Section
10.07(b), (ii) by way of participation in accordance with the provisions of
Section 10.07(d), (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Section 10.07(f) and Section 10.07(h) or (iv) to
an SPC in accordance with the provisions of Section 10.07(g) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in Section
10.07(d) and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.


 


(b)                                 Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this Section 10.07(b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender’s Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitment


 


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(which for this purpose
includes Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the outstanding principal balance of the Loan of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than (A) $2,500,000 in the
case of any assignment in respect of any Revolving Credit Commitments occurring
after the completion of the primary syndication of the Facilities or (B)
$1,000,000, in the case of any assignment
in respect of any (x) Revolving Credit Commitments occurring in connection with
the primary syndication of the Facilities and (y) Term Loans and, unless each
of the Administrative Agent and, so long as no Event of Default in respect of
Section 8.01(a) or (f) has occurred and is continuing and except for
assignments in connection with the primary syndication of the Facilities, the
Company otherwise consents (each such consent not to be unreasonably withheld
or delayed); provided that in
determining whether, with respect to any assignment to any Person on any date,
an assigning Lender is in compliance with the minimum assignment
amounts set forth in this clause (i), the amount of the Commitments or Loans
the subject of such assignment shall be aggregated with the amount of the
Commitments or Loans to be assigned on such date to such Person by such Lender’s
Affiliates and Approved Funds; (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not (x) apply to rights in respect
of Swing Line Loans or (y) prohibit any Lender from assigning all or a portion
of its rights and obligations among separate Facilities on a non-pro rata
basis; (iii) any assignment of a Revolving Credit Commitment must be approved
by the Administrative Agent, the L/C Issuer and the Swing Line Lender unless
the Person that is the proposed assignee is itself a Revolving Credit Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible
Assignee); (iv) the parties (other than the Company unless its consent to such
assignment is required hereunder) to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 (which fee the Company shall have no
obligation to pay and which fee may be waived by the Administrative Agent in
its discretion); and (v) the assigning Lender shall deliver any Notes
evidencing such Loans to the relevant Borrower or the Administrative Agent.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to Section 10.07(c), from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, and
the surrender by the assigning Lender of its Note, the relevant Borrower (at
its expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this clause (b) shall be treated for
purposes of this Agreement as a sale


 


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by
such Lender of a participation in such rights and obligations in accordance
with Section 10.07(d).


 


(c)                                  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and related interest amounts) of the
Loans, L/C Obligations (specifying the Unreimbursed Amounts), L/C Borrowings
and amounts due under Section 2.03, owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, absent manifest error, and the
Borrowers, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by any Borrower, any Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.


 


(d)                                 Any Lender may at any time, without the
consent of, or notice to, the Borrowers or the Administrative Agent, sell
participations to any Person (other than a natural person) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all
or a portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of
any provision of this Agreement or the other Loan Documents; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that directly affects such Participant. Subject to
Section 10.07(e), the Borrowers agree that each Participant shall be entitled
to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to Section
10.07(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender; provided that such Participant agrees to
be subject to Section 2.13 as though it were a Lender.


 


(e)                                  A Participant shall not be entitled to
receive any greater payment under Section 3.01, 3.04 or 3.05 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the relevant Borrower’s prior written consent. A
Participant shall not be entitled to the benefits of Section 3.01 unless the
relevant Borrower is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the relevant Borrower, to comply
with Section 10.15 as though it were a Lender.


 


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(f)                                    Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.


 


(g)                                 Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose
funding vehicle identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the relevant Borrower (an “SPC”) the option to provide
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to
fund any Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting Lender shall
be obligated to make such Loan pursuant to the terms hereof. Each party hereto
hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of the relevant Borrower under this Agreement (including
its obligations under Section 3.01, 3.04 or 3.05), (ii) no SPC shall be liable
for any indemnity or similar payment obligation under this Agreement for which
a Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Notwithstanding anything to the contrary contained herein, any
SPC may (i) with notice to, but without prior consent of the relevant Borrower
and the Administrative Agent and with the payment of a processing fee of
$3,500, assign all or any portion of its right to receive payment with respect
to any Loan to the Granting Lender and (ii) disclose on a confidential basis
any non-public information relating to its funding of Loans to any rating
agency, commercial paper dealer or provider of any surety or Guarantee or
credit or liquidity enhancement to such SPC.


 


(h)                                 Notwithstanding
anything to the contrary contained herein, any Lender that is a Fund may create
a security interest in all or any portion of the Loans owing to it and the
Note, if any, held by it to the trustee for holders of obligations owed, or
securities issued, by such Fund as security for such obligations or securities;
provided that unless and until
such trustee actually becomes a Lender in compliance with the other provisions
of this Section 10.07, (i) no such pledge shall release the pledging Lender
from any of its obligations under the Loan Documents, (ii) such trustee shall
not be entitled to exercise any of the rights of a Lender under the Loan
Documents even though such trustee may have acquired ownership rights with
respect to the pledged interest through foreclosure or otherwise, and (iii) no
Lender may create a security interest in favor of Highland Capital Management
L.P. or any of its Affiliates or Subsidiaries.


 


(i)                                     Notwithstanding anything to the contrary
contained herein, Bank of America may, upon thirty (30) days’ notice to the
Company and the Lenders, resign as L/C Issuer and/or Swing Line Lender; provided that on or prior to the
expiration of such 30-day period with respect to


 


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Bank
of America’s resignation as L/C Issuer, Bank of America shall have identified a
successor L/C Issuer reasonably acceptable to the Company willing to accept its
appointment as successor L/C Issuer. In the event of any such resignation as
L/C Issuer or Swing Line Lender, the Company shall be entitled to appoint from
among the Lenders willing to accept such appointment a successor L/C Issuer or
Swing Line Lender hereunder; provided that
no failure by the Company to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case
may be, except as expressly provided above. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Bank of America resigns as Swing Line Lender, it shall retain all the rights
of the Swing Line Lender provided for hereunder with respect to Swing Line
Loans made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).


 


Section 10.08. Confidentiality.
Each of the Agents and the Lenders agrees to maintain the
confidentiality of the Information, except that Information may be disclosed
(a) to its directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (b) to the
extent requested by any regulatory authority; (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process; (d)
to any other party to this Agreement; (e) subject to an agreement containing
provisions substantially the same as those of this Section 10.08 (or as may
otherwise be reasonably acceptable to the Company), to any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement; (f) with the written
consent of the Company; (g) to the extent such Information becomes publicly
available other than as a result of a breach of this Section 10.08; (h) to any
state, Federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any other similar organization)
regulating any Lender; or (i) to any rating agency when required by it (it
being understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender). In addition, the Agents and the
Lenders may disclose the existence of this Agreement and information about this
Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Agents and the Lenders in connection
with the administration and management of this Agreement, the other Loan
Documents, the Commitments, and the Credit Extensions. For the purposes of this
Section 10.08, “Information” means
all information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is publicly available to any
Agent or any Lender prior to disclosure by any Loan Party other than as a
result of a breach of this Section 10.08; provided
that, in the case of information received from a Loan Party after
the date hereof, such information is clearly identified at the time of delivery
as confidential. Notwithstanding


 


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anything
(express or implied) herein or in any other Loan Document to the contrary, “Information”
shall not include, and the Administrative Agent, each Lender and each Loan
Party may disclose without limitation of any kind, any information with respect
to the “tax treatment” and “tax structure” (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and thereby and all materials of any kind (including opinions or other tax
analyses) that are provided to the Administrative Agent or such Lender or Loan
Party relating to such tax treatment and tax structure.


 


Section 10.09. Setoff. In
addition to any rights and remedies of the Lenders provided by Law, upon the
occurrence and during the continuance of any Event of Default, after obtaining
the prior written consent of the Administrative Agent, each Lender is
authorized at any time and from time to time, without prior notice to the
Company or any other Loan Party, any such notice being waived by the Company
(on its own behalf and on behalf of each Loan Party) to the fullest extent
permitted by Law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not such Agent or such Lender shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness. Each Lender
agrees promptly to notify the Company and the Administrative Agent after 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 setoff and application. The rights of the
Administrative Agent and each Lender under this Section 10.09 are in addition
to other rights and remedies (including, without limitation, other rights of
setoff) that the Administrative Agent and such Lender may have. Notwithstanding
anything herein or in any other Loan Document to the contrary, in no event
shall the assets of any Foreign Subsidiary that is not a Loan Party constitute
security, or shall the proceeds of such assets be available for, payment of the
Obligations of the Company or any Domestic Subsidiary, it being understood that
(a) the Equity Interests of any Foreign Subsidiary that is not a Loan Party do
not constitute such an asset and (b) the provisions hereof shall not limit,
reduce or otherwise diminish in any respect the Borrowers’ obligations to make
any mandatory prepayment pursuant to Section 2.05(b)(ii).


 


Section 10.10. Interest
Rate Limitation. Notwithstanding anything to the contrary contained
in any Loan Document, the interest paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum Rate”). If
any Agent or any Lender shall receive interest in an amount that exceeds the
Maximum Rate, the excess interest shall be applied to the principal of the
Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In
determining whether the interest contracted for, charged, or received by an
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.


 


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Section 10.11. Counterparts.
This Agreement and each other Loan Document may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Delivery by
telecopier of an executed counterpart of a signature page to this Agreement and
each other Loan Document shall be effective as delivery of an original executed
counterpart of this Agreement and such other Loan Document. The Agents may also
require that any such documents and signatures delivered by telecopier be
confirmed by a manually signed original thereof; provided that the failure to request or deliver the same
shall not limit the effectiveness of any document or signature delivered by
telecopier.


 


Section 10.12. Integration.
This Agreement, together with the other Loan Documents, comprises
the complete and integrated agreement of the parties on the subject matter
hereof and thereof and supersedes all prior agreements, written or oral, on
such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that
the inclusion of supplemental rights or remedies in favor of the Agents or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor of
any party, but rather in accordance with the fair meaning thereof.


 


Section 10.13. Survival
of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any
Lender or on their behalf and notwithstanding that any Agent or any Lender may
have had notice or knowledge of any Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.


 


Section 10.14. Severability.
If any provision of this Agreement or the other Loan Documents is
held to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


Section 10.15. Tax
Forms. (a) (i) Each Lender and Agent that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Code (each, a “Foreign Lender”) shall deliver to
the Company and the Administrative Agent, on or prior to the date which is ten
(10) Business Days after the Closing Date (or upon accepting an assignment of
an interest herein), two duly signed, properly completed copies of either IRS
Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, United States withholding
tax on all payments to be made to such Foreign Lender by the Company or any
other Loan Party pursuant to this Agreement or any other Loan Document) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to


 


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such
Foreign Lender by the Company or any other Loan Party pursuant to this
Agreement or any other Loan Document) or such other evidence reasonably
satisfactory to the Company and the Administrative Agent that such Foreign
Lender is entitled to an exemption from, or reduction of, United States
withholding tax, including any exemption pursuant to Section 881(c) of the
Code, and in the case of a Foreign Lender claiming such an exemption under
Section 881(c) of the Code, a certificate that establishes in writing to the
Company and the Administrative Agent that such Foreign Lender is not (i) a “bank”
as defined in Section 881(c)(3)(A) of the Code, (ii) a 10-percent shareholder
within the meaning of Section 871(h)(3)(B) of the Code, or (iii) a controlled
foreign corporation related to the Company with the meaning of Section 864(d)
of the Code. Thereafter and from time to time, each such Foreign Lender shall
(A) promptly submit to the Company and the Administrative Agent such additional
duly completed and signed copies of one or more of such forms or certificates
(or such successor forms or certificates as shall be adopted from time to time
by the relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid, or such
evidence as is reasonably satisfactory to the Company and the Administrative
Agent of any available exemption from, or reduction of, United States
withholding taxes in respect of all payments to be made to such Foreign Lender
by the Company or other Loan Party pursuant to this Agreement, or any other
Loan Document, in each case, (1) on or before the date that any such form,
certificate or other evidence expires or becomes obsolete, (2) after the
occurrence of any event requiring a change in the most recent form, certificate
or evidence previously delivered by it to the Company and the Administrative
Agent and (3) from time to time thereafter if reasonably requested by the
Company or the Administrative Agent, and (B) promptly notify the Company and
the Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.


 


(ii)                                  Each Foreign Lender, to the extent it does
not act or ceases to act for its own account with respect to any portion of any
sums paid or payable to such Foreign Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Foreign Lender),
shall deliver to the Company and the Administrative Agent on the date when such
Foreign Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be necessary in
the determination of the Company or the Administrative Agent (in either case,
in the reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such Foreign Lender
as set forth above, to establish the portion of any such sums paid or payable
with respect to which such Foreign Lender acts for its own account that is not
subject to United States withholding tax, and (B) two duly signed completed
copies of IRS Form W-8IMY (or any successor thereto), together with any
information such Foreign Lender chooses to transmit with such form, and any
other certificate or statement of exemption required under the Code, to
establish that such Foreign Lender is not acting for its own account with
respect to a portion of any such sums payable to such Foreign Lender.


 


(iii)                               The Company shall not be required to pay any
additional amount or any indemnity payment under Section 3.01 to (A) any
Foreign Lender with respect to any Taxes required to be deducted or withheld on
the basis of the information, certificates or


 


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statements
of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section 10.15(a), (B) any Foreign Lender if such Foreign Lender shall have
failed to satisfy the foregoing provisions of this Section 10.15(a), or (C) any
U.S. Lender if such U.S. Lender shall have failed to satisfy the provisions of
Section 10.15(b); provided that
if such Lender shall have satisfied the requirement of this Section 10.15(a) or
Section 10.15(b), as applicable, on the date such Lender became a Lender or
ceased to act for its own account with respect to any payment under any of the
Loan Documents, nothing in this Section 10.15(a) or Section 10.15(b) shall
relieve any Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable Law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.


 


(iv)                              The Administrative Agent may deduct and
withhold any taxes required by any Laws to be deducted and withheld from any
payment under any of the Loan Documents.


 


(b)                                 Each Lender and Agent that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code (each, a “U.S.  Lender”) shall
deliver to the Administrative Agent and the Company two duly signed, properly
completed copies of IRS Form W-9 on or prior to the Closing Date (or on or
prior to the date it becomes a party to this Agreement), certifying that such
U.S. Lender is entitled to an exemption from United States backup withholding
tax, or any successor form. If such U.S. Lender fails to deliver such forms,
then the Administrative Agent may withhold from any payment to such U.S. Lender
an amount equivalent to the applicable backup withholding tax imposed by the
Code.


 


(c)                                  If any Governmental Authority asserts that
the Company or the Administrative Agent did not properly withhold or backup
withhold, as the case may be, any tax or other amount from payments made to or
for the account of any Foreign Lender or U.S. Lender, such Foreign Lender or
U.S. Lender shall indemnify the Company and the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Company and the Administrative Agent under this
Section 10.15, and costs and expenses (including Attorney Costs) of the Company
and the Administrative Agent. The obligation of the Foreign Lenders or U.S.
Lenders, severally, under this Section 10.15 shall survive the termination of
the Aggregate Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.


 


Section 10.16. Governing
Law. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.


 


153





















 


(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH BORROWER, HOLDINGS, EACH AGENT AND EACH LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN
SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO.


 


Section 10.17. Waiver
of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS Section 10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.


 


Section 10.18. Binding
Effect. This Agreement shall become effective when it shall have
been executed by the Borrowers and Holdings and the Administrative Agent shall
have been notified by each Lender, Swing Line Lender and the L/C Issuer that
each such Lender, Swing Line Lender and the L/C Issuer has executed it and
thereafter shall be binding upon and inure to the benefit of each Borrower,
each Agent and each Lender and their respective successors and assigns, except
that no Borrower shall have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders except as
permitted by Section 7.04.


 


Section 10.19. Judgment
Currency. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder or any other Loan Document in
one currency into another currency, the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each
Borrower in respect of any such sum due from it to the Administrative Agent or
the Lenders hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is


 


154





















 


denominated
in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only
to the extent that on the Business Day following receipt by the Administrative
Agent of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent from any Borrower in the Agreement Currency, such Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or the Person to whom such obligation was
owing against such loss. If the amount of the Agreement Currency so purchased
is greater than the sum originally due to the Administrative Agent in such
currency, the Administrative Agent agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under
applicable law).


 


Section 10.20. Lender
Action . Each Lender agrees that it shall not take or institute any
actions or proceedings, judicial or otherwise, for any right or remedy against
any Loan Party or any other obligor under any of the Loan Documents or the
Secured Hedge Agreements (including, without limitation, the exercise of any
right of setoff, rights on account of any banker’s lien or similar claim or
other rights of self-help), or institute any actions or proceedings, or
otherwise commence any remedial procedures, with respect to any Collateral or
any other property of any such Loan Party, without the prior written consent of
the Administrative Agent. The provision of this Section 10.20 (i) are for the
sole benefit of the Lenders and shall not afford any right to, or constitute a
defense available to, any Loan Party and (ii) shall not extend to any
individual Lender enforcement (or other) rights not otherwise available to an
individual Lender under the Loan Documents.


 


[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]


 


155





















 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.


 


 


	
   

  	
  WMG ACQUISITION
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul Robinson

  	
   

  
	
   

  	
  Name:

  	
  Paul
  Robinson

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  



 





















 


	
   

  	
  WMG HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul Robinson

  	
   

  
	
   

  	
  Name:

  	
  Paul
  Robinson

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  



 





















 


	
   

  	
  BANK OF AMERICA, N.A., as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bradford Jones

  	
   

  
	
   

  	
  Name:

  	
  Bradford
  Jones

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., as Initial

  Lender, L/C Issuer and Swing Line

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bradford Jones

  	
   

  
	
   

  	
  Name:

  	
  Bradford
  Jones

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  



 





















 


	
   

  	
  LEHMAN COMMERCIAL PAPER INC.,

  as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Francis Chang

  	
   

  
	
   

  	
  Name:

  	
  Francis
  Chang

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN COMMERCIAL PAPER INC.,

  as Initial Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Francis Chang

  	
   

  
	
   

  	
  Name:

  	
  Francis
  Chang

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  



 





















 


	
   

  	
  DEUTSCHE BANK SECURITIES INC.,

  as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Flannery

  	
   

  
	
   

  	
  Name:

  	
  David
  Flannery

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas Cole

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  Cole

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  



 





















 


	
   

  	
  DEUTSCHE BANK AG, NEW YORK

  BRANCH, as Initial Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Mayhew

  	
   

  
	
   

  	
  Name:

  	
  David
  Mayhew

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert Wheeler

  	
   

  
	
   

  	
  Name:

  	
  Robert
  Wheeler

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  



 





















 


	
   

  	
  MERRILL LYNCH, PIERCE, FENNER & SMITH
  INCORPORATED, as Documentation
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Cecile Baker

  	
   

  
	
   

  	
  Name:

  	
  Cecile
  Baker

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  



 





















 


	
   

  	
  MERRILL LYNCH CAPITAL

  CORPORATION, as Initial Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Cecile Baker

  	
   

  
	
   

  	
  Name:

  	
  Cecile
  Baker

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  



 





















 


SCHEDULE 1.01D


 


MANDATORY COST FORMULAE


 


1.                                       The Mandatory Cost (to the extent applicable)
is an addition to the interest rate to compensate Lenders for the cost of
compliance with:


 


(a)                                  the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of its functions); or


 


(b)                                 the requirements of the European Central
Bank.


 


2.                                       On the first day of each Interest Period (or
as soon as practicable thereafter) the Administrative Agent shall calculate, as
a percentage rate, a rate (the “Additional
Cost Rate”) for each Lender, in accordance with
the paragraphs set out below. The Mandatory Cost will be calculated by the
Administrative Agent as a weighted average of the Lenders’ Additional Cost
Rates (weighted in proportion to the percentage participation of each Lender in
the relevant Loan) and will be expressed as a percentage rate per annum. The
Administrative Agent will, at the request of the Company or any Lender, deliver
to the Company or such Lender as the case may be, a statement setting forth the
calculation of any Mandatory Cost.


 


3.                                       The Additional Cost Rate for any Lender
lending from a Lending Office in a Participating Member State will be the
percentage notified by that Lender to the Administrative Agent. This percentage
will be certified by such Lender in its notice to the Administrative Agent as
the cost (expressed as a percentage of such Lender’s participation in all Loans
made from such Lending Office) of complying with the minimum reserve
requirements of the European Central Bank in respect of Loans made from that
Lending Office.


 


4.                                       The Additional Cost Rate for any Lender
lending from a Lending Office in the United Kingdom will be calculated by the Administrative
Agent as follows:


 


(a)                                  in relation to any Loan in Sterling:


 




	
  AB+C(B-D)+E x 0.01

  	
   per cent per annum

  
	
  100-(A+C)

  






 


(b)                                 in relation to any Loan in any currency other
than Sterling:


 




	
  E x 0.01

  	
   per cent per annum

  
	
  300

  






 


Where:


 


“A”                          is the percentage of Eligible Liabilities
(assuming these to be in excess of any stated minimum) which that Lender is
from time to time required to


 





















 


Maintain
as an interest free cash ratio deposit with the Bank of England to comply with
cash ratio requirements.


 


“B”                            is the percentage rate of interest (excluding
the Applicable Rate, the Mandatory Cost and any interest charged on overdue
amounts pursuant to the first sentence of Section 2.08(b) and, in the
case of interest (other than on overdue amounts) charged at the Default Rate,
without counting any increase in interest rate effected by the charging of the
Default Rate) payable for the relevant Interest Period of such Loan.


 


“C”                            is the percentage (if any) of Eligible
Liabilities which that Lender is required from time to time to maintain as
interest bearing Special Deposits with the Bank of England.


 


“D”                           is the percentage rate per annum payable by
the Bank of England to the Administrative Agent on interest bearing Special
Deposits.


 


“E”                             is designed to compensate Lenders for amounts
payable under the Fees Regulations and is calculated by the Administrative
Agent as being the average of the most recent rates of charge supplied by the
Lenders to the Administrative Agent pursuant to paragraph 7 below and
expressed in pounds per £1,000,000.


 


5.                                       For the purposes of this Schedule:


 


(a)                                  “Eligible Liabilities” and “Special Deposits” have the
meanings given to them from time to time under or pursuant to the Bank of
England Act 1998 or (as may be appropriate) by the Bank of England;


 


(b)                                 “Fees Regulations” means the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of the
payment of fees for the acceptance of deposits;


 


(c)                                  “Fee Tariffs” means the fee tariffs specified in the Fees
Regulations under the activity group A.1 Deposit acceptors (ignoring any
minimum fee or zero rated fee required pursuant to the Fees Regulations but
taking into account any applicable discount rate); and


 


(d)                                 “Tariff Base” has the meaning given to it in, and will be
calculated in accordance with, the Fees Regulations.


 


6.                                       In application of the above formulae, A, B, C
and D will be included in the formulae as percentages (i.e. 5% will be included
in the formula as 5 and not as 0.05). A negative result obtained by subtracting
D from B shall be taken as zero. The resulting figures shall be rounded to four
decimal places.


 


7.                                       If requested by the Administrative Agent or
the Company, each Lender with a Lending Office in the United Kingdom or a
Participating Member State shall, as


 





















 


soon
as practicable after publication by the Financial Services Authority, supply to
the Administrative Agent and the Company, the rate of charge payable by such
Lender to the Financial Services Authority pursuant to the Fees Regulations in
respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by such Lender as being the average of the Fee
Tariffs applicable to such Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of such Lender.


 


8.                                       Each Lender shall supply any information
required by the Administrative Agent for the purpose of calculating its
Additional Cost Rate. In particular, but without limitation, each Lender shall
supply the following information in writing on or prior to the date on which it
becomes a Lender:


 


(a)                                  its jurisdiction of incorporation and the
jurisdiction of the Lending Office out of which it is making available its
participation in the relevant Loan; and


 


(b)                                 any other information that the Administrative
Agent may reasonably require for such purpose.


 


Each
Lender shall promptly notify the Administrative Agent in writing of any change
to the information provided by it pursuant to this paragraph.


 


9.                                       The percentages or rates of charge of each
Lender for the purpose of A, C and E above shall be determined by the
Administrative Agent based upon the information supplied to it pursuant to paragraphs
7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits, Special Deposits and the Fees Regulations are the same
as those of a typical bank from its jurisdiction of incorporation with a
Lending Office in the same jurisdiction as such Lender’s Lending Office.


 


10.                                 The Administrative Agent shall have no
liability to any Person if such determination results in an Additional Cost
Rate which over- or under-compensates any Lender and shall be entitled to
assume that the information provided by any Lender pursuant to paragraphs
3, 7 and 8 above is true and correct in all respects.


 


11.                                 The Administrative Agent shall distribute the
additional amounts received as a result of the Mandatory Cost to the Lenders on
the basis of the Additional Cost Rate for each Lender based on the information
provided by each Lender pursuant to paragraphs 3, 7 and 8
above.


 


12.                                 Any determination by the Administrative Agent
pursuant to this Schedule in relation to a formula, the Mandatory Cost, an
Additional Cost Rate or any amount payable to a Lender shall, in the absence of
manifest error, be conclusive and binding on all parties hereto.


 





















 


13.                                 The Administrative Agent may from time to
time, after consultation with the Company and the Lenders, determine and notify
to all parties any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services Authority
or the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all parties hereto.


 





















 


SCHEDULE 2.01


 


COMMITMENTS


 


	
  Lender

  	
   

  	
  Tranche A

  Revolving Credit

  Commitment

  	
   

  	
  Tranche B

  Revolving Credit

  Commitment

  	
   

  	
  Term

  Commitment

  	
   

  	
  Total

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  $

  	
  45,000,000

  	
   

  	
  $

  	
  360,000,000

  	
   

  	
  $

  	
  435,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Trust Company Americas

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  $

  	
  45,000,000

  	
   

  	
  $

  	
  360,000,000

  	
   

  	
  $

  	
  435,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lehman Commercial Paper Inc.

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  37,500,000

  	
   

  	
  $

  	
  300,000,000

  	
   

  	
  $

  	
  362,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Merrill Lynch Capital Corporation

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  $

  	
  22,500,000

  	
   

  	
  $

  	
  180,000,000

  	
   

  	
  $

  	
  217,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  $

  	
  1,200,000,000

  	
   

  	
  $

  	
  1,450,000,000

  	
   

  



 





















 


SCHEDULE 10.02


 


ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES


 


COMPANY


and OTHER BORROWERS:


 


WMG Acquisition Corp.


c/o
Warner Music Group Inc.


75
Rockefeller Plaza


New
York, New York 10019


Attention:
Jos de Raaij


Telephone:
212.275.1382


Facsimile:
212.275.1391


Electronic Mail: jos.deraaij@wmg.com


 


With a cc to:


 


WMG Acquisition Corp.


c/o
Warner Music Group Inc.


75
Rockefeller Plaza


New
York, New York 10019


Attention:
Paul Robinson


Telephone:
(212) 275-2143


Facsimile:
(212) 275-3601


Electronic Mail: Paul.Robinson@wmg.com


 


ADMINISTRATIVE AGENT:


 


Administrative Agent’s Office


 


(for payments and Requests for Credit Extensions):


 


Bank
of America, N.A.


101
N. Tryon Street


Mail
Code: NC-001-15-04


Charlotte,
NC 28255-001


Attention:
Lynne Cole


Telephone:
(704) 386-9068


Facsimile:
(704) 409-0003


Electronic
Mail: lynne.b.cole@bankofamerica.com


 





















 


Bank
of America, New York, NY


Account
No. (for Dollars): 1366212250600


Ref:
Warner Music Group Attn: Credit Services


ABA#
026009593


 


Account
No. (for Euro): 65280019


Ref:
Warner Music Group, Attn: Credit Services


Swift
Address: BOFAGB22


 


Account
No. (for Sterling): _65280027


Ref:
Warner Music Group, Attn: Credit Services


London
Sort Code: 16-50-50


Swift
Address: BOFAGB22


 


Other Notices as Administrative Agent:


 


Bank
of America, N.A.


Agency
Management


1455
Market Street, 5th Floor


Mail
Code: CA5-701-05-19


San
Francisco, CA 94103


Attention:
Liliana Claar


Telephone:
(415) 436-2770


Facsimile:
(415) 503-5003


Electronic
Mail: liliana.claar@bankofamerica.com


 


With
a cc to:


 


Bank
of America, N.A.


Charlotte
PM Office


100
N. Tryon Street


Mail
Code: NC 1-007-13-06


Charlotte,
NC 28255-001


Attention:
Pete Griffith


Telephone:
(704) 386-7104


Facsimile:
(704) 386-9607


Electronic
Mail: pete.griffith@bankofamerica.com


 





















 


L/C ISSUER:


 


Bank
of America, N.A.


Trade
Operations-Los Angeles #22621


333
S. Beaudry Avenue, 19th Floor


Mail
Code: CA9-703-19-23


Los
Angeles, CA 90017-1466


Attention:  Sandra Leon


Vice
President


Telephone:
213.345.5231


Facsimile:
213.345.6694


Electronic Mail: Sandra.Leon@bankofamerica.com


 


SWING LINE LENDER:


 


Bank
of America, N.A.


101
N. Tryon Street


Mail
Code: NCI-001-15-04


Charlotte,
NC 28255-001


Attention:
Lynne Cole


Telephone:
(704) 386-9068


Facsimile:
(704) 409-0003


Electronic Mail: lynne.b.cole@bankofamerica.com


 


Account
No.: 1366212250600


Ref:
Warner Music Group


ABA#
026009593


 





















 


EXHIBIT A


 


FORM OF COMMITTED LOAN NOTICE


 


Date:                          ,
        


 


To:                              Bank of America, N.A., as Administrative
Agent


 


Ladies
and Gentlemen:


 


Reference
is made to the Amended and Restated Credit Agreement dated as of April 8, 2004
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), among WMG
Acquisition Corp., a Delaware corporation, the Overseas Borrowers from time to
time party thereto, WMG Holdings Corp., a Delaware corporation, the Lenders
from time to time party thereto, Bank of America, N.A., as Administrative
Agent, L/C Issuer and Swing Line Lender, and the other Agents named therein.


 


The
undersigned hereby requests (select one):


 


o A
Borrowing of Loans          o A conversion or continuation of Loans


 


1.                                       On                                                                                                                                                                                                                                                                                   (a Business Day).


 


2.                                       In the amount of
                                                                   .


 


3.                                       To be denominated in
                                                          .


[The
currency in which the Loans are to be denominated]


 


4.                                       Comprised of                                                                                                                     .



[Class and Type of Loan
requested]


 


5.                                       For Eurodollar Rate Loans: with an Interest
Period of             
months.


 


[The
Borrowing requested herein complies with the proviso to the first sentence of
Section 2.01(b) of the Agreement.]*


 


[Upon
acceptance of any or all of the Loans offered by the Lenders in response to
this request, the Borrower shall be deemed to have represented and warranted
that the conditions to lending specified in Sections 4.02(a) and (b) of the
Agreement have been satisfied.]*


 










*                                         Applicable with respect to a Borrowing only.


 





















 


	
   

  	
  [NAME
  OF BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


EXHIBIT B


 


FORM OF SWING LINE LOAN NOTICE


 


Date:                       ,
       


 


To:                              Bank of America, N.A., as Swing Line Lender


Bank
of America, N.A., as Administrative Agent


 


Ladies
and Gentlemen:


 


Reference
is made to that certain Amended and Restated Credit Agreement dated April 8,
2004 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), among WMG
Acquisition Corp., a Delaware corporation, the Overseas Borrowers from time to
time party thereto, WMG Holdings Corp., a Delaware corporation, the Lenders
from time to time party thereto, Bank of America, N.A., as Administrative
Agent, L/C Issuer and Swing Line Lender, and the other Agents named therein.


 


The
undersigned hereby requests a Swing Line Loan:


 


1.                                       On                                                                                                                                                                                                                                                                                                                                (a Business Day).


 


2.                                       In the amount of $                                                                         .


 


The
Swing Line Borrowing requested herein complies with the requirements of the
provisos to the first sentence of Section 2.04(a) of the Agreement.


 


Upon
acceptance of the Swing Line Loan offered by the Lenders in response to this
request, the Borrower shall be deemed to have represented and warranted that
the conditions to lending specified in Sections 4.02(a) and (b) of the
Agreement have been satisfied.


 


 


	
   

  	
  [NAME
  OF BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


EXHIBIT C-1


 


FORM OF TERM NOTE


 


                         


 


FOR
VALUE RECEIVED, the undersigned (the “Borrower”), hereby
promises to pay to
                                                
or its registered assigns (the “Term Lender”), in
accordance with the provisions of the Agreement (as hereinafter defined), the
aggregate unpaid principal amount of each Term Loan made by the Term Lender to
the Borrower under that certain Amended and Restated Credit Agreement, dated as
of April 8, 2004 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”; the
terms defined therein being used herein as therein defined), among the
Borrower, a Delaware corporation, the Overseas Borrowers from time to time
party thereto, WMG Holdings Corp., a Delaware corporation, the Lenders from
time to time party thereto, Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender, and the other Agents named therein.


 


The
Borrower promises to pay interest on the aggregate unpaid principal amount of
each Term Loan made by the Term Lender to the Borrower under the Agreement from
the date of such Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Agreement. All payments of
principal and interest shall be made to the Administrative Agent for the
account of the Term Lender in the currency in which such Term Loan was
denominated and in Same Day Funds. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.


 


This
Term Note is one of the Term Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Term Note is also entitled to the
benefits of the Parent Guaranty and the Subsidiary Guaranty and is secured by
the Collateral. Upon the occurrence and continuation of one or more of the
Events of Default specified in the Agreement, all amounts then remaining unpaid
on this Term Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Term Loans made by the Term Lender
shall be evidenced by one or more loan accounts or records maintained by the
Term Lender in the ordinary course of business. The Term Lender may also attach
schedules to this Term Note and endorse thereon the date, amount and maturity
of its Term Loans and payments with respect thereto.


 


The
Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Term Note.


 





















 


[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 





















 


THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.


 


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


TERM LOANS AND PAYMENTS WITH RESPECT THERETO


 


	
   

  	
   

  	
   

  	
   

  	
  Currency

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  and

  	
   

  	
   

  	
   

  	
  Amount of

  	
   

  	
  Outstanding

  	
   

  	
   

  
	
   

  	
   

  	
  Type of

  	
   

  	
  Amount of

  	
   

  	
  End of

  	
   

  	
  Principal or

  	
   

  	
  Principal

  	
   

  	
   

  
	
   

  	
   

  	
  Term Loan

  	
   

  	
  Term Loan

  	
   

  	
  Interest

  	
   

  	
  Interest Paid

  	
   

  	
  Balance This

  	
   

  	
  Notation

  
	
  Date

  	
   

  	
  Made

  	
   

  	
  Made

  	
   

  	
  Period

  	
   

  	
  This Date

  	
   

  	
  Date

  	
   

  	
  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


EXHIBIT C-2


 


FORM OF TRANCHE A REVOLVING CREDIT NOTE


 


                       


 


FOR
VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                                    
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the aggregate unpaid principal
amount of each Tranche A Revolving Credit Loan from time to time made by the
Lender to the Borrower under that certain Amended and Restated Credit
Agreement, dated as of April 8, 2004 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined
therein being used herein as therein defined), among WMG Acquisition Corp., a
Delaware corporation, the Overseas Borrowers from time to time party thereto,
WMG Holdings Corp., a Delaware corporation, the Lenders from time to time party
thereto, Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing
Line Lender, and the other Agents named therein.


 


The
Borrower promises to pay interest on the aggregate unpaid principal amount of
each Tranche A Revolving Credit Loan from time to time made by the Lender to
the Borrower under the Agreement from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement. All payments of principal and interest shall be made
to the Administrative Agent (or, in the case of Swing Line Loans, to the Swing
Line Lender) for the account of the Lender in Dollars and in Same Day Funds. If
any amount is not paid in full when due hereunder, such unpaid amount shall
bear interest, to be paid upon demand, from the due date thereof until the date
of actual payment (and before as well as after judgment) computed at the per
annum rate set forth in the Agreement.


 


This
Tranche A Revolving Credit Note is one of the Tranche A Revolving Credit Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein. This Tranche A Revolving Credit Note is also entitled to the benefits
of [the Parent Guaranty and the Subsidiary Guaranty]† [the Guaranty]††
and is secured by the Collateral. Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Tranche A Revolving Credit Note shall become, or may
be declared to be, immediately due and payable all as provided in the
Agreement. Tranche A Revolving Credit Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course


 










† Insert if the Borrower is the Company.


 


††
Insert if the Borrower is an Overseas Borrower.


 





















 


of
business. The Lender may also attach schedules to this Tranche A Revolving
Credit Note and endorse thereon the date, amount and maturity of its Tranche A
Revolving Credit Loans and payments with respect thereto.


 


The
Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Tranche A Revolving Credit Note.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK]


 





















 


THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.


 


	
   

  	
  [NAME
  OF BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


 


	
  Date

  	
   

  	
  Type of

  Loan Made

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  End of

  Interest

  Period

  	
   

  	
  Amount of

  Principal or

  Interest Paid

  This Date

  	
   

  	
  Outstanding

  Principal

  Balance This

  Date

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


EXHIBIT C-3


 


FORM OF TRANCHE B REVOLVING CREDIT NOTE


 


                      


 


FOR
VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                              
or registered assigns (the “Lender”), in accordance with the provisions
of the Agreement (as hereinafter defined), the aggregate unpaid principal
amount of each Tranche B Revolving Credit Loan from time to time made by the
Lender to the Borrower under that certain Amended and Restated Credit
Agreement, dated as of April 8, 2004 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined
therein being used herein as therein defined), among WMG Acquisition Corp., a
Delaware corporation, the Overseas Borrowers from time to time party thereto,
WMG Holdings Corp., a Delaware corporation, the Lenders from time to time party
thereto, Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing
Line Lender, and the other Agents named therein.


 


The
Borrower promises to pay interest on the aggregate unpaid principal amount of
each Tranche B Revolving Credit Loan from time to time made by the Lender to
the Borrower under the Agreement from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement. All payments of principal and interest shall be made
to the Administrative Agent (or, in the case of Swing Line Loans, to the Swing
Line Lender) for the account of the Lender in the currency in which such
Tranche B Revolving Credit Loan was denominated and in Same Day Funds. If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate set forth in the Agreement.


 


This
Tranche B Revolving Credit Note is one of the Tranche B Revolving Credit Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein. This Tranche B Revolving Credit Note is also entitled to the benefits
of [the Parent Guaranty and the Subsidiary Guaranty]§ [the Guaranty]**
and is secured by the Collateral. Upon the occurrence and continuation of one
or more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Tranche B Revolving Credit Note shall become, or may
be declared to be, immediately due and payable all as provided in the
Agreement. Tranche B Revolving Credit Loans made by the Lender shall be
evidenced by one


 










§  Insert if the Borrower is the Company.


 


**  Insert if the Borrower is an Overseas
Borrower.


 





















 


or
more loan accounts or records maintained by the Lender in the ordinary course
of business. The Lender may also attach schedules to this Tranche B Revolving
Credit Note and endorse thereon the date, amount and maturity of its Tranche B
Revolving Credit Loans and payments with respect thereto.


 


The
Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Tranche B Revolving Credit Note.


 


[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 





















 


THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.


 


	
   

  	
  [NAME
  OF BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


LOANS AND PAYMENTS WITH RESPECT THERETO


 


	
   

  	
   

  	
   

  	
   

  	
  Currency

  	
   

  	
   

  	
   

  	
  Amount of

  	
   

  	
  Outstanding

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  and

  	
   

  	
  End of

  	
   

  	
  Principal or

  	
   

  	
  Principal

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Type of

  	
   

  	
  Amount of

  	
   

  	
  Interest

  	
   

  	
  Interest Paid

  	
   

  	
  Balance This

  	
   

  	
  Notation

  	
   

  
	
  Date

  	
   

  	
  Loan Made 

  	
   

  	
  Loan Made

  	
   

  	
  Period

  	
   

  	
  This Date

  	
   

  	
  Date

  	
   

  	
  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


EXHIBIT D 


 


FORM OF COMPLIANCE CERTIFICATE


 


Financial Statement Date:
               ,


 


To:                              Bank of America, N.A., as Administrative
Agent


 


Ladies
and Gentlemen:


 


Reference
is made to that certain Amended and Restated Credit Agreement, dated as of
April 8, 2004 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement”; the terms defined therein being used
herein as therein defined), among WMG Acquisition Corp., a Delaware corporation
(the “Company”), the
Overseas Borrowers from time to time party thereto, WMG Holdings Corp., a
Delaware corporation, the Lenders from time to time party thereto, Bank of
America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and
the other Agents named therein.


 


The
undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the
                                                    
of the Company, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Company, and
that:


 


[Use following paragraph 1 for fiscal year-end
financial statements]


 


1.                                       Attached hereto as Schedule 1 are the
year-end audited financial statements required by Section 6.01(a) of the
Agreement for the fiscal year of the Company ended as of the above date,
together with the report and opinion of an independent certified public accountant
required by such section.


 


[Use following paragraph 1 for fiscal quarter-end
financial statements]


 


1.                                       Attached hereto as Schedule 1 are the
unaudited financial statements required by Section 6.01(b) of the Agreement for
the fiscal quarter of the Company ended as of the above date. Such financial
statements fairly present in all material respects the financial condition,
results of operations and cash flows of the Company and its Subsidiaries in
accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.


 


2.                                       The undersigned has reviewed and is familiar
with the terms of the Agreement and has made, or has caused to be made under
his/her supervision, a review of the activities of the Company during such
fiscal period.


 


[select one:]


 





















 


[To
the knowledge of the undersigned during such fiscal period, the Company
performed and observed each covenant of the Loan Documents applicable to it,
and no Default has occurred and is continuing.]


 


—or—


 


[The
following covenants or conditions have not been performed or observed and the
following is a list of each such Default and its nature and status:]


 


3.                                  The representations and warranties of the
Company contained in Article 5 of the Agreement, or which are contained
in any Loan Documents, are true and correct in all material respects on and as
of the date hereof, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true and
correct in all material respects as of such earlier date, and except that for
purposes of this Compliance Certificate, the representations and warranties
contained in subsection (a) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clause (a) of Section
6.01 of the Agreement, including the statements in connection with which this
Compliance Certificate is delivered.


 


4.                                  The financial covenant analyses and
information set forth on Schedule 2 attached hereto are delivered in compliance
with Section 6.02(b).


 


5.                                  Attached hereto as Schedule 3 are (a) a
supplement to Schedule 5.08(b) to the Agreement, (b) a description of all
events, conditions or circumstances during the fiscal quarter ended as of the
above date requiring a mandatory prepayment under Section 2.05(b) of the
Agreement [and a calculation of Excess Cash Flow]†† and (c) a list
of each Subsidiary that is a Restricted Subsidiary as of the date hereof, in
each case required by Section 6.02(f) of the Agreement.


 


IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of                              ,
                       .


 


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


 










††
Year-end only.


 





















 


For
the Quarter/Year ended
                                 
(“Statement
Date”)


 


SCHEDULE
2


to
the Compliance Certificate


($
in 000’s)


 





















 


SCHEDULE
3


to
the Compliance Certificate


(Supplement
to Schedule 5.08(b) of the Agreement and other items required by Section
6.02(f) of the Agreement)


 





















 


EXHIBIT E


 


ASSIGNMENT AND ASSUMPTION


 


                   


 


This
Assignment and Assumption (this “Assignment
and Assumption”) is dated as of the Effective Date
set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (the “Credit
Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.


 


For
an agreed consideration, the Assignor hereby irrevocably sells and assigns to
the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit, Guaranties and Swing Line
Loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor
and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.


 


1.                                       Assignor:


 


2.                                      Assignee:                                                                                          [and is an Affiliate/Approved Fund of [identify
Lender]]


 


3.                                       Borrower(s):


 





















 


 


4.                                      Administrative Agent:                         BANK OF AMERICA, NA., as the administrative
agent under the Credit Agreement


 


5.                                      Credit Agreement:                                               The Amended and Restated Credit Agreement,
dated as of April 8, 2004 among WMG ACQUISITION CORP., a Delaware corporation,
the Overseas Borrowers party thereto, WMG HOLDINGS CORP., a Delaware
corporation, the Lenders party thereto, BANK OF AMERICA, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender, and the other Agents
named therein.


 


6.                                      Assigned Interest:


 


	
  Facility Assigned

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitment/Loans

  	
   

  	
  CUSIP Number

  	
   

  
	
  Tranche A Revolving Credit Facility

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B Revolving Credit Facility

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loans

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  



 


7.                                      Trade Date: 


 


Effective
Date:
                                         ,
20   [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]


 





















 


The
terms set forth in this Assignment and Assumption are hereby agreed to:


 


	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  



 


[Consented
to and] Accepted:


 


	
  BANK OF AMERICA, N.A., as

  Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:]

  	
   

  
	
   

  	
   

  
	
  [BANK OF AMERICA, N.A., as

  L/C Issuer and Swing Line Lender

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   ]

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:

  	
   

  
	
   

  	
   

  
	
  WMG
  ACQUISITION CORP.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   ]

  	
   

  
	
  Title:

  	
   

  



 





















 


ANNEX I TO ASSIGNMENT AND
ASSUMPTION


 


STANDARD TERMS AND CONDITIONS FOR


 


ASSIGNMENT AND ASSUMPTION


 


1.                                       Representations and Warranties.


 


1.1.                              Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim, (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and (iv) the sale and assignment of the Assigned Interest is made by
this Assignment and Assumption in accordance with the terms and conditions
contained in the Credit Agreement; and (b) assumes no responsibility with
respect to (i) any statements, warranties or representations made in or in
connection with the Credit Agreement or any other Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Company, any of its Subsidiaries or Affiliates, any other
Borrower or any other Person obligated in respect of any Loan Document or (iv)
the performance or observance by the Company, any of its Subsidiaries or
Affiliates, any other Borrower or any other Person of any of their respective
obligations under any Loan Document.


 


1.2.                              Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements
of an Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the


 





















 


Assignor
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 decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.


 


2.                                       Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.


 


3.                                       General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.


 





















 


EXHIBIT I


 


FORM OF OPINION MATTERS – COUNSEL TO EACH ADDITIONAL OVERSEAS
BORROWER


 


The
matters contained in the following Sections of the Credit Agreement should be
covered by the legal opinion on behalf of each Overseas Borrower, except to the
extent reasonably agreed to by the Administrative Agent:


 


•                       Section 5.01(a), (b) and (c)


 


•                       Section 5.02


 


•                       Section 5.03


 


•                       Section 5.04


 


•                       Section 5.06


 


•                       Section 5.13(b)


 


If
as of the Closing Date, any Foreign Subsidiary shall have been designated as an
Overseas Borrower pursuant to the Credit Agreement, the legal opinion on behalf
of such Foreign Subsidiary should cover such additional matters as the
Administrative Agent shall reasonably request.


 





















 


EXHIBIT J


 


FORM OF ELECTION TO PARTICIPATE


 


                  
      ,       


 


BANK
OF AMERICA, N.A., as Administrative Agent for the Lenders party to the Amended
and Restated Credit Agreement dated as of April 8, 2004 among WMG ACQUISITION
CORP., the Overseas Borrowers referred to therein, WMG HOLDINGS CORP., such
Lenders and the other Agents named therein (the “Credit Agreement”)


 


Dear
Sirs:


 


Reference
is made to the Credit Agreement described above. Terms not defined herein which
are defined in the Credit Agreement have for purposes hereof the meanings
provided therein.


 


The
undersigned, [name of Overseas Borrower], a [jurisdiction of incorporation]
corporation, hereby elects to be an Overseas Borrower for purposes of the
Credit Agreement, effective from the date hereof until an Election to Terminate
shall have been delivered on behalf of the undersigned in accordance with the
Credit Agreement. The undersigned confirms that the representations and
warranties set forth in Section 5.18 of the Credit Agreement are true and
correct as to the undersigned as of the date hereof, and the undersigned agrees
to perform all the obligations of an Overseas Borrower under, and to be bound
in all respects by the terms of, the Credit Agreement, including without
limitation Section 10.16 thereof, as if the undersigned were a signatory party
thereto.


 


The
address to which all notices to the undersigned under the Credit Agreement
should be directed is:


 


[Address]


 


This
instrument shall be construed in accordance with and governed by the laws of
the State of New York.


 





















 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF OVERSEAS BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


 


The
undersigned confirms that [name of Overseas Borrower] is an Overseas Borrower
for purposes of the Credit Agreement described above.


 


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


 


Receipt
of the above Election to Participate is acknowledged on and as of the date set
forth above.


 


 


	
   

  	
  BANK OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


EXHIBIT K


 


FORM OF ELECTION TO TERMINATE


 


                  ,
     


 


BANK
OF AMERICA, N.A., as Administrative Agent for the Lenders party to the Amended
and Restated Credit Agreement dated as of April 8, 2004 among WMG ACQUISITION
CORP., the Overseas Borrowers referred to therein, WMG HOLDINGS CORP., such
Lenders and the other Agents named therein (the “Credit Agreement”)


 


Dear
Sirs:


 


Reference
is made to the Credit Agreement described above. Terms not defined herein which
are defined in the Credit Agreement have for purposes hereof the meanings
provided therein.


 


The
undersigned, [name of Overseas Borrower], a [jurisdiction of incorporation]
corporation, hereby elects to terminate its status as an Overseas Borrower for
purposes of the Credit Agreement, effective as of the date hereof. The
undersigned represents and warrants that all principal and interest on all
Loans made to the undersigned and all other amounts payable by the undersigned
pursuant to the Credit Agreement have been paid in full on or before the date
hereof. Notwithstanding the foregoing, this Election to Terminate shall not
affect any obligation of the undersigned heretofore incurred under the Credit
Agreement or any Note.


 


This
instrument shall be construed in accordance with and governed by the laws of
the State of New York.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF OVERSEAS BORROWER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 





















 


The
undersigned confirms that the status of [name of Overseas Borrower] as an
Overseas Borrower for purposes of the Credit Agreement described above is
terminated as of the date hereof.


 


 


	
   

  	
  WMG
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


Receipt
of the above Election to Terminate is acknowledged on and as of the date set
forth above.


 


 


	
   

  	
  BANK OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: