Document:

Exhibit 10.1

 

EXECUTION VERSION

 

Share Purchase Agreement

 

 

IGT-UK Group Limited

 

and

 

International Game Technology

 

and

 

Cyberview International, Inc.

 

and

 

Global Draw Limited

 

and

 

Scientific Games Corporation

 

 

for the sale and purchase of all of the issued shares of Barcrest Group Limited and Cyberview Technology CZ s.r.o

 

 

26 April 2011

 

[Note:  The Share Purchase Agreement contains representations and warranties made only for the purposes of such Agreement solely for the benefit of the parties thereto, and are not intended to be and should not be relied upon by any other person.  These representations and warranties should not be treated as establishing matters of fact, but rather as a way of allocating risk between the parties.  Moreover, certain of the representations and warranties may be subject to limitations agreed upon by the parties to such Agreement and are qualified by information in a confidential disclosure letter.  These representations and warranties may apply standards of materiality in a way that is different from what may be material to investors, and were made only as of the date of such Agreement or such other date or dates as may be specified in such Agreement and are subject to more recent developments.  Accordingly, investors are not third party beneficiaries under such Agreement and should not rely on the representations and warranties in such Agreement as characterizations of the actual state of facts.]

 

 

TABLE OF CONTENTS

 

	
CLAUSE
    	
 
    	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
INTERPRETATION
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
SALE AND PURCHASE
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
CONDITIONS
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
CONDUCT OF BUSINESS PRIOR TO COMPLETION AND   UNDERTAKINGS
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
COMPLETION
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
POST-COMPLETION UNDERTAKINGS
    	
 
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
COMPLETION ACCOUNTS
    	
 
    	
31
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
COMPLETION ACCOUNTS PAYMENTS
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
WARRANTIES, UNDERTAKINGS AND INDEMNITIES
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
PROTECTIVE COVENANTS
    	
 
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
INSURANCE COVENANTS
    	
 
    	
38
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
CONFIDENTIAL INFORMATION
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
ANNOUNCEMENTS
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
TERMINATION
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
PAYMENTS AND SET-OFF
    	
 
    	
43
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
ASSIGNMENT
    	
 
    	
44
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
COSTS
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
EFFECT OF COMPLETION
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
 
    	
FURTHER ASSURANCES
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
 
    	
ENTIRE AGREEMENT
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.
    	
 
    	
VARIATIONS
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
22.
    	
 
    	
WAIVER
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
23.
    	
 
    	
INVALIDITY
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
24.
    	
 
    	
NOTICES
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
25.
    	
 
    	
COUNTERPARTS
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
26.
    	
 
    	
THIRD PARTY RIGHTS
    	
 
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
27.
    	
 
    	
UK VAT GROUPING
    	
 
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
28.
    	
 
    	
SELLER GUARANTEE
    	
 
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
29.
    	
 
    	
BUYER  GUARANTEE
    	
 
    	
50
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
30.
    	
 
    	
GOVERNING LAW AND JURISDICTION
    	
 
    	
51
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
Page
    
	
 
    	
 
    
	
SCHEDULE 1 Particulars relating to the Company BARCREST   GROUP LIMITED
    	
52
    
	
 
    	
 
    
	
SCHEDULE 2 Particulars relating to Subsidiaries and   Cyberview Czech
    	
54
    
	
 
    	
 
    
	
SCHEDULE 3 The Warranties
    	
60
    
	
 
    	
 
    
	
SCHEDULE 4 Seller Protection Clauses
    	
95
    
	
 
    	
 
    
	
SCHEDULE 5 The Properties
    	
100
    
	
 
    	
 
    
	
SCHEDULE 6 Form of Completion Accounts Statement
    	
101
    
	
 
    	
 
    
	
SCHEDULE 7 Accounting Policies and Procedures for the   Completion Accounts
    	
102
    
	
 
    	
 
    
	
SCHEDULE 8 Czech Transfer Agreement
    	
105
    
	
 
    	
 
    
	
SCHEDULE 9 Required Consents
    	
109
    
	
 
    	
 
    
	
SCHEDULE 10 Resigning Directors and Officers
    	
113
    
	
 
    	
 
    
	
SCHEDULE 11 CONDUCT OF THE GROUP COMPANIES PRE-COMPLETION
    	
114
    
	
 
    	
 
    
	
SCHEDULE 12
    	
 
    
	
 
    	
 
    
	
Part A BRAND LICENSES
    	
119
    
	
 
    	
 
    
	
Part B SOFTWARE TO BE TRANSFERRED TO THE COMPANY ON OR   PRIOR TO COMPLETION
    	
120
    
	
 
    	
 
    
	
SCHEDULE 13 LEASEHOLD PROPERTY SCHEDULE
    	
122
    
	
 
    	
 
    
	
SCHEDULE 14 DEFERRED CONSIDERATION
    	
128
    

 

ii

 

THIS SHARE PURCHASE AGREEMENT (the “Agreement”) is made on 26 April 2011,

 

BETWEEN:

 

(1)                                 IGT-UK GROUP LIMITED (No. 5541397) whose registered office is at Margaret Street, Ashton-under-Lyne, Lancashire OL7 0QQ (the “Seller”);

 

(2)                                INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation whose registered office is at 9295 Prototype Drive, Reno, NV 89521-8986 (the “Seller Guarantor”);

 

(3)                                 CYBERVIEW INTERNATIONAL, INC., a Delaware corporation whose registered office is at 160 Greentree Drive, Suite 101, Dover, DE 19904 (the “Czech Seller”);

 

(4)                                 GLOBAL DRAW LIMITED (No. 03565480) whose registered office is at 99 Green Lane, Hounslow, Middlesex, TW4 6BW (the “Buyer”); and

 

(5)                                 SCIENTIFIC GAMES CORPORATION, a Delaware corporation whose registered office is at 750 Lexington Avenue, New York, NY 10022 (the “Buyer Guarantor”)

 

for the sale and purchase of all of the issued shares of BARCREST GROUP LIMITED and CYBERVIEW TECHNOLOGY CZ S.R.O.

 

THE PARTIES AGREE AS FOLLOWS:

 

1.                                      INTERPRETATION

 

1.1                               In this Agreement, including the schedules hereto, the following words and expressions and abbreviations have the following meanings, unless the context otherwise requires:

 

“2010 Accounts” means the unaudited combined financial statements of the Group comprising the combined balance sheet of the Group, the combined profit and loss statement of the Group and the combined cash flow statement of the Group as at and for the financial year ended on the 2010 Accounts Date which are annexed to the Disclosure Letter;

 

“2010 Accounts Date” means 30 September 2010;

 

“AAMS” means Amministrazione Autonoma Dei Monopoli di Stato;

 

“Accounts” means the audited financial statements of each Group Company, comprising its balance sheet, profit and loss account or, where relevant, the income statement or other equivalent financial statement required to be prepared by (in the case of the Company and the Subsidiaries) Generally Accepted Accounting Practice in the United Kingdom and (in the case of Cyberview Czech) the IFRS and Czech Accounting Standards and (in the case of Barcrest Development B.V.) Title 9, Book 2 of the Netherlands Civil Code, together in each case with the notes thereon, directors’ report and auditors’ report, as at and for the financial year ended on the Accounts Date which are annexed to the Disclosure Letter;

 

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“Accounts Date” means 30 September 2009;

 

“Acquisition” means the sale and purchase of the Shares contemplated by this Agreement, and any related matters;

 

“Action” means any action, arbitration, claim, mediation, dispute, grievance, inquiry, investigation, litigation, suit, interference, opposition, cancellation or other proceeding;

 

“Agreed Form” means, in relation to any document, the form of that document which has been initialled for the purpose of identification by the Buyer (or the Buyer’s Solicitors on behalf of the Buyer) and the Seller (or the Seller’s Solicitors on behalf of the Seller);

 

“Agreed Rate” means two per cent above the base rate from time to time of Barclays Bank plc;

 

“Bass Executive Plan” means the Bass Executive Pension Plan, operated by Bass plc, of which some employees of the Group Companies were members prior to the acquisition of Barcrest Limited by the Company in 1998;

 

“Bass Plan” means the Bass Pension Plan, operated by Bass plc, of which some employees of the Group Companies were members prior to the acquisition of Barcrest Limited by the Company in 1998;

 

“Business Day” means a day (excluding Saturdays, Sundays and public holidays) on which banks generally are open in London for the transaction of normal banking business;

 

“Business Plan” means the business plan for the Group for the financial year ending 30 September 2011 in the form appended to the Disclosure Letter at Annex II;

 

“Buyer’s Account” means the account as may be notified by the Buyer to the Seller (in writing) for the purpose from time to time

 

“Buyer’s Group” means the Buyer and its Related Persons from time to time (including, from Completion, each of the Group Companies), all of them and each of them as the context admits;

 

“Buyer Obligation” means any representation, warranty or undertaking to indemnify (including any covenant to pay pursuant to the Tax Deed) given by the Buyer to the Seller under any Transaction Agreement;

 

“Buyer’s Solicitors” means Skadden, Arps, Slate, Meagher & Flom (UK) LLP;

 

“Cash” means the aggregate amount of freely available cash and cash equivalents held by the Group with reference to the nominal ledger, and the aggregate amount held by the Group for finance lease prepayments, in each case, immediately prior to Completion, but, for the avoidance of doubt, excluding any amount in respect of any receivables (including

 

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the Extended Term Receivables), as set out in the Statement and calculated in accordance with clause 7 and on the basis of the accounting policies and procedures set out in schedule 7, and provided that in the case of a Non-Wholly Owned Subsidiary, only the Pro-rata Amount of Cash attributable to such Non-Wholly Owned Subsidiary shall be taken into account;

 

“Cirsa Matter” means any allegations, complaints or claims (including any claim of default by a Group Company or termination of the relevant Contract) by Cirsa Italia S.p.A (or any of its Related Persons) (“Cirsa”) arising out of or relating to the Company’s obligations with respect to the development and supply of video lottery terminals to Cirsa as referred to in the Disclosure Letter, to the extent based on facts and circumstances in existence as at Completion;

 

“Company” means Barcrest Group Limited (No. 03500514);

 

“Company Policies” means shall bear the meaning given to that term in paragraph 11.1(b) of schedule 3;

 

“Company Shares” means all of the issued shares in the capital of the Company;

 

“Company Game Product” means any games or gaming products (including the graphics, content, sounds, imagery, branding, paytables, formulas, math models and “look and feel” therein), software products, and any software components of any other products, that are made, sold or owned by any Group Company (including the CVT 6-7, and CVT07 software), including software-development management and game development tools used to create and manage the foregoing, object code, source code, specifications, designs, assembler code, test scripts, and manuals and other documentation related to the foregoing (but excluding, for the avoidance of doubt, commercially available “off the shelf” computer software licensed by Barcrest from third parties and the Wolf Run Math Model licensed in the New Media Game Content Agreement);

 

“Competing Business” means the sale, marketing, distribution, operating, designing, licensing, supporting or manufacturing of Products; provided that Competing Business will not include (a) any licensing or supporting Intellectual Property of Seller Guarantor and its Related Persons other than game content on land based gaming machines in Category “B-2, “B-3”, “B-4”, “C” or “D” as defined under applicable United Kingdom Gaming Commission Regulations, as in effect on the date of this Agreement nor (b) any action or any competition conducted by Seller Guarantor or its Related Persons in (i) Category “A” or (ii) Category “B-1” but excluding Categories “B-2”, “B-3”, “B-4”, “C” or “D”, in the case of each such excluded category as it is defined in such Regulations (including Video Bingo Machines), as in effect on the date of this Agreement;

 

“Completion” means the completion of the sale and purchase of the Shares in accordance with clause 5;

 

3

 

“Completion Accounts” means a document in the format set out in schedule 6 to be prepared in accordance with clause 7 and on the basis of the accounting policies and procedures set out in schedule 7;

 

“Completion Date” shall bear the meaning given to such term in clause 5.2;

 

“Completion Payment” means an amount equal to:

 

(a)                                 £32,900,000;

 

(b)                                 PLUS an amount equal to the Estimated Cash;

 

(c)                                  LESS an amount equal to the Estimated Debt; and

 

(d)                                 if the Estimated Working Capital Amount is greater than the Target Working Capital Amount, PLUS the amount of the difference, or, if the Estimated Working Capital Amount is less than the Target Working Capital Amount, LESS the amount of the difference,

 

provided that, for the purpose of calculating the Completion Payment, if and to the extent that any amount is expressed in a currency other than pounds sterling, it shall be converted into pounds sterling at the Exchange Rate as at the date which is two Business Days before the Completion Date;

 

“Conditions” has the meaning given to it in clause 3.1;

 

“Confidential Information” means

 

(a)                                 any information received or held as of the Completion Date by the Seller (or any of its Representatives) or provided pursuant to clause 7.7 where such information is confidential, proprietary, or valuable and relates to any member of the Buyer’s Group or any of the Group Companies; and

 

(b)                                 any information relating to the provisions and subject matter of, and negotiations leading to, this Agreement, the Tax Deed, and the other Transaction Agreements;

 

and includes not only written information but information transferred, held or obtained orally, visually, electronically or by any other means;

 

“Contract” means any contract, arrangement, undertaking, lease, commitment, obligation, purchase order, statement of work, license, note, mortgage, bond, indenture, arrangement, or other legally binding agreement or obligation, whether written or oral;

 

“Covered Termination” has the meaning given to it in clause 6.5;

 

“Cyberview Czech” means CYBERVIEW TECHNOLOGY CZ s.r.o. Business ID No. 27168174, whose registered office is at Prague 5, Hlubocepy, Hlubocepska 418/70,

 

4

 

Postal Code 152 00, registered in the Commercial Register administered by the Municipal Court in Prague, Section C, Insert 101493;

 

“Cyberview Czech Share” means, as of the day hereof, the 100 per cent ownership share (in Czech Obchodni podil) in Cyberview Czech corresponding to the contribution of CZK 200,000 in the registered capital of Cyberview Czech, representing 100 per cent. of the registered capital and voting rights, which shall be divided before Completion pursuant to the resolution described in clause 5.4(c) to a 90 per cent. ownership share corresponding to a contribution of CZK 180,000 and a 10 per cent. ownership share corresponding to a contribution of CZK 20,000;

 

“Czech Accounting Standards” means the accounting standards issued by the Ministry of Finance of the Czech Republic, from time to time;

 

“Czech Insolvency Act” means Act No. 182/2006 Coll., on insolvency and means of its solution (insolvency act), as amended;

 

“Czech Transfer Agreement” means the documentation required to effect transfers of the Cyberview Czech Share to the Buyer in the form attached in schedule 8;

 

“Dangerous Substance” means any natural or artificial substance, article or material (whether in the form of a solid, liquid, gas or vapour), which alone or in combination with any other substance, article or material is capable of causing harm or damage to property or to the Environment, including man, and such substance, article or material shall include radiation, PCBs, asbestos, petroleum, urea-formaldehyde and Waste;

 

“Data Room” means an internet website “Project Ben DataSite” maintained by Merrill Corp. at the direction of the Seller as of 21 April 2011, a true, complete and correct copy of all materials and information on which will be provided on DVD to the Buyer promptly after the date of this Agreement;

 

“Debt”  means the aggregate amount of indebtedness of the members of the Group, including for Financial Debt, accrued interest and penalties, accrued and/or payable dividends (including dividends payable by Red Gaming Limited to any person other than the Company), obligations with respect to bonuses or other incentive compensation not in the ordinary course (including bonuses payable to any of the directors and employees of Red Gaming Limited and bonuses payable in connection with the transactions contemplated by the Transaction Agreements), transaction fees and expenses in connection with the transactions contemplated by the Transaction Agreements, deferred consideration for any property or services, costs and accrued liabilities relating to exceptional and non-ordinary course items, retrospective discounts, convertible loan stock, provisions and accrued liabilities for Tax, in each case, immediately prior to Completion, and any guarantee or indemnity obligations incurred by any Group Company in respect of any of the foregoing, as set out in the Statement and calculated in accordance with clause 7 and on the basis of the accounting policies and procedures set out in schedule 7, together with a sum equal to the SNAI Remediation Contribution provided that in the case of a Non-Wholly Owned Subsidiary, only the Pro-rata Amount

 

5

 

of Debt attributable to such Non-Wholly Owned Subsidiary shall be taken into account and, for the avoidance of doubt, the Terminal Repurchase Obligations will not be considered Debt.

 

“Default Rate” means five per cent above the base rate from time to time of Barclays Bank plc;

 

“Deferred Consideration”  means the amounts, if any, that are paid by the Buyer to the Seller in accordance with the provisions of schedule 14;

 

“Disclosure Letter” means a letter on or prior to the date of this Agreement together with the attachments thereto addressed by the Seller to the Buyer disclosing exceptions to the Warranties which has been provided to the Buyer prior to the entry into of this Agreement;

 

“Domain Name Assignment” means the domain name assignment in the Agreed Form;

 

“Encumbrance” means any lien, pledge, encumbrance, charge (fixed or floating), mortgage, third party claim, debenture, option, right of pre-emption, rights of first or last refusal, negotiation or similar rights, royalty or revenue interests, right to acquire, assignment by way of security, trust arrangement for the purpose of providing security or other security interests of any kind whatsoever, including retention arrangements or other encumbrances and any agreement to create any of the foregoing;

 

“Endemol Matter” means any allegations, complaints or claims of infringement of any Intellectual Property by Endemol UK Plc (or any of its Related Persons) (“Endemol”) and other related allegations, complaints or claims by Endemol (e.g., breach of common law rights and “passing off”) referred to in the Disclosure Letter or the correspondence between Endemol (or its counsel) and any Group Company (or its counsel) included in the Data Room;

 

“Enterprise Act” means the Enterprise Act 2002;

 

“Environment” means all, or any of the following media, namely the air (including, without limitation, the air within buildings and the air within other natural or man-made structures above or below ground), water (including, without limitation, water under or within land and water in pipes or drains), soil and land, and any living organisms or systems supported by those media;

 

“Environmental Condition” means any presence, retention, accumulation or migration of any Dangerous Substances at, in, on, under or from the Manchester Property at any time (save to the extent that any such Dangerous Substances are first present at the Manchester Property as a result of the act or omission of the Buyer or the Buyer’s Group following the Completion Date);

 

“Environmental Matters” means the disposal, release, spillage, deposit, escape, discharge, leak or emission of substances which may be hazardous to the Environment or waste and the creation of any noise, vibration, radiation, common law or statutory

 

6

 

nuisance or other adverse impact on the Environment and any other matters in relation to the Properties and the business of the Company which are related to pollution or protection of the Environment or the protection of human health and safety in the workplace, save, for the avoidance of doubt, Environmental Matters shall not include any matter relating to town and country planning;

 

“Environmental Warranties” means the Warranties set out in paragraph 25 of schedule 3;

 

“Estimated Cash” has the meaning given to that term in clause 5.3(c);

 

“Estimated Debt” has the meaning given to that term in clause 5.3(b);

 

“Estimated Working Capital Amount” has the meaning given to that term in clause 5.3(a);

 

“Exchange Rate” means with respect to a particular currency for a particular day the spot rate of exchange (the closing mid-point) for that currency into pounds sterling on such date as published in the London edition of the Financial Times first published thereafter or, where no such rate is published in respect of that currency for such date, at the rate quoted by Barclays Bank as at the close of business in London as at such date;

 

“Extended Term Receivables” means amounts due to members of the Group from:  (i) Cirsa Italia S.P.A. for the supply of “VLT Hardware” pursuant to clause 2 of schedule 1 to the Supply, Licensing and Maintenance Agreement dated 20 November 2009 (set out in the Data Room at document reference 5.9.3.3), and in such case such amounts not to exceed Euros 3,039,870 in the aggregate; and (ii) Sceptre Leisure Solutions Limited, in connection with the Purchase Agreement effective as at 28 May 2010 (set out in the Data Room at document reference 5.9.1.53), and in such case such amounts not to exceed £2,733,145 in the aggregate, in each case where such amounts are in respect of supplies made by the Seller Group prior to Completion;

 

“fairly disclosed” shall mean fairly disclosed and in such manner to enable a reasonable person to make a reasonably informed and accurate assessment of the matter concerned and its effect and  to understand that it amounts to a breach (or potential breach) of Warranty;

 

“Financial Debt” means all borrowings and other indebtedness by way of loans, overdrafts, acceptance credit or similar facilities, letters of credit, loan stocks, bonds, debentures, notes, debt or inventory financing, finance leases or sale and lease back arrangements, hire purchase commitments or any other arrangements the purpose of which is to borrow money, together with foreign exchange, interest rate or other swaps, hedging obligations, bills of exchange, recourse obligations on factored debts and obligations under derivative instruments;

 

“Firm” shall bear the meaning given to such term in clause 7.5;

 

7

 

“Full Title Guarantee” means with the benefit of the implied covenants set out in Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 when a disposition is expressed to be made with full title guarantee;

 

“Fundamental Warranties” means the Warranties set out in paragraphs 1.1, 1.2, 1.3, 2.1, 2.2, 2.3, 10.1, 20 and 26 of schedule 3;

 

“Group” means the Company, the Subsidiaries and Cyberview Czech and “Group Company” means any one of them;

 

“Group IP” means all Intellectual Property used, or held for use, in a Group Company’s business;

 

“Governmental Authority” means any supranational (having regulatory power), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof) or any other supranational, governmental, intergovernmental, quasi-governmental authority, body, department or organisation, including the European Union, or any regulatory body appointed by any of the foregoing in each case, in any jurisdiction;

 

“HMRC” means Her Majesty’s Revenue and Customs and, where relevant, any predecessor body which carried out part of its functions;

 

“IAS Regulation” means EC Regulation No. 1606/2002 of the European Parliament and the Council of 19 July 2002 on the application of international accounting standards;

 

“IFRS” means International Financial Reporting Standards, International Accounting Standards and interpretations of those standards issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee and their predecessor bodies as adopted by the European Commission under Regulation 1606/2002 and the applicable provisions of the Companies Act 2006;

 

“Information Technology” means all computer systems (including software and hardware) owned, supported by or licensed to any of the Group Companies (except Company Game Products);

 

“Intellectual Property” means all patents, trademarks, trade dress, service marks, and other indicia of source of origin (together with all goodwill symbolized by any of the foregoing), computer software, databases and compilations, design rights, trade names, copyrights, (whether registered or not and any applications to register or rights to apply for registration of any of the foregoing), domain names, rights in inventions, Know-How, trade secrets and other Confidential Information, and all other intellectual property rights in any part of the world;

 

“Intellectual Property Assignments” means the Domain Name Assignment and the Trademark Assignment;

 

8

 

“Intellectual Property License Agreement” means the Intellectual Property License Agreement to be entered into between the Buyer Guarantor and IGT, a subsidiary of the Seller Guarantor, in the Agreed Form.

 

“Interest Element” shall bear the meaning given to such term in clause 8.1;

 

“Intra-Group Indebtedness” means all debts outstanding between any of the Group Companies, on the one hand, and any member of the Seller’s Group, on the other hand;

 

“Intra-Group Payables” means amounts owing from members of the Group to members of the Seller’s Group;

 

“Intra-Group Receivables” means amounts owing from members of the Seller’s Group to members of the Group;

 

“Insolvency Event” means, in respect of any person, the making of an order, presentation of a petition or passing of a resolution for winding up or the appointment of a provisional liquidator in respect of the person, the taking of any step (including the service of any notice, the filing of any document or the making of any order) with respect to the placing of the person in administration, the appointment of any receiver, receiver and manager or administrative receiver of the whole or part of the person’s business or assets, or the entry into, proposing or approval of any compromise or arrangement with the creditors or any class of creditors of the person (or, in each case, the equivalent or analogous proceeding or event in any relevant jurisdiction);

 

“Italy Project Costs” means any costs which the Group has incurred in assessing its potential entry into the Italian market and starting up its operations or contracts (including travel and employee costs);

 

“Know-How” means confidential or proprietary industrial, technical or commercial information and techniques in any form (including paper, electronically stored data, magnetic media, files and micro-film) including, drawings, data relating to inventions, formulae, test results, reports, research reports, project reports and testing procedures, shop practices, instruction and training manuals, market forecasts, specifications, quotations, lists and particulars of customers and suppliers, marketing methods and procedures, show-how and advertising copy;

 

“L&T Covenants Act” means the Landlord and Tenant (Covenants) Act 1995;

 

“Leasehold Properties” shall bear the meaning given to that term in schedule 13, and “Leasehold Property” shall mean any one of them;

 

“Management Accounts” means the unaudited combined management accounts of the Group comprising the combined balance sheet of the Group, the combined profit and loss statement of the Group and the combined cash flow statement of the Group as at the date of and for the financial year end-to-date period ended on the Management Accounts Date;

 

9

 

“Management Accounts Date” means 31 March 2011;

 

“Manchester Property” means the property at Margaret Street in Ashton-under-Lyne, OL7 0QQ with Title Numbers:  LA287252, GM936202, GM292918, LA188090, GM51356 and GM333399;

 

“NASDAQ” means the NASDAQ Stock Market;

 

“Non-Wholly Owned Subsidiaries” means each of Red Gaming Limited and Barcrest Development B.V.;

 

“Open Source Software” means all software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model, including, but not limited to, the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry Standards License (SISL) and the Apache License;

 

“Permitted Encumbrance” means any Encumbrance in respect of property or assets of any Group Company imposed by law, which is incurred in the ordinary course of business, such as carriers’, warehousemen’s, and mechanics’ liens arising in the ordinary course of business, in each case for amounts:

 

(a)                                  the payment of which is not yet due and payable; or

 

(b)                                 which if due and payable are not more than 30 days’ overdue;

 

“Policies” shall bear the meaning given to such term in paragraph 11.1(b) of schedule 3, and “Policy” shall mean any one of them;

 

“Pre-Closing Claim” shall bear the meaning given to such term in clause 11.2;

 

“Pre-Closing Incident” shall bear the meaning given to such term in clause 11.2;

 

“Pre-Completion Dividends” means (a) the in-kind distribution of the Manchester Property and any Intra-Group Receivables and (b) dividends to be paid by each of the Subsidiaries to the Company, by Cyberview Czech to the Czech Seller and by the Company to the Seller, in each case to the extent:  (i) that the relevant Group Company has available cash, and (ii) permissible in accordance with applicable law and the constitutional documents of the relevant Group Company, of all of the Group’s available cash, with such all dividends to be paid by no later than immediately prior to Completion in accordance with clause 4.3;

 

“Products” means land-based gaming machine products and services, including game content, that are offered to the “Category B2”, “Category B3”, “Category B4”, “Category C”, or “Category D” machine markets (including, without limitation, video bingo terminals) as such terms are defined under applicable United Kingdom Gaming Commission regulations, as in effect on the date of this Agreement;

 

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“Properties” means the properties described in schedule 5 (including the Manchester Property) or any part or parts thereof and “Property” shall mean any one of them;

 

“Proprietary Information” has the meaning given in paragraph 6.5 of schedule 3;

 

“Protected Territory” means the United Kingdom;

 

“Pro-rata Amount” means, in respect of any sum relating to a Non-Wholly Owned Subsidiary, an amount calculated by multiplying the relevant sum by a fraction the numerator of which is the number of shares in the issued share capital of the Non-Wholly Owned Subsidiary held by the Company and the denominator of which is the total number of shares in the capital of the Non-Wholly Owned Subsidiary in issue;

 

“Registered Company IP” has the meaning given in paragraph 6.1 of schedule 3;

 

“Related Person” means in relation to any person, any subsidiary undertaking or parent undertaking of that person, and any subsidiary undertaking of such parent undertaking, in each case from time to time, and all of them and each of them as the context admits;

 

“Relief” shall have the meaning given to it in the Tax Deed;

 

“Relevant Benefits” means any lump sum, pension, gratuity or other benefit provided, or to be provided on, after, in anticipation of or in connection with the retirement, or death, or any change in the nature of the service or termination of employment, of any employee or officer or former employee or former officer of a Group Company;

 

“Remedial Action” means works for preventing, removing, remedying, cleaning up, abating, containing or ameliorating the presence or effect of any Dangerous Substances and including inspections, investigations, assessments, audits, sampling or monitoring and like activities;

 

“Representatives” means in relation to a party, its respective Related Persons, and the directors, officers, employees, agents, managers, external legal advisers, accountants, consultants and financial advisers of that party and of its respective Related Persons;

 

“Sazka” means SAZKA, a.s. Business ID No. 471 16 307, whose registered office is at Prague 9, K Zizkovu 851, Postal Code 190 93, registered in the Commercial Register administered by the Municipal Court in Prague, Section B, Insert 1855;

 

“Sazka Contract” means the Operating Services Agreement dated 22 February 2005 by and among Cyberview Czech, the Czech Seller and Sazka (including any rental agreements contemplated thereby), as amended or supplemented by the side letters and memorandum of understanding referred to in schedule 9 in connection with that agreement;

 

“Sazka Insolvency Proceedings” means the court proceedings governed by the Czech Insolvency Act relating to the insolvency of Sazka, initiated by the declaration of the 

 

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Municipal Court in Prague on 17 January 2011 and in the course of which Sazka was declared insolvent on 29 March 2011;

 

“Schemes” means the:

 

(a)                                  IGT UK Group Pension Scheme; and

 

(b)                                 IGT-UK-Group Limited Group Life Assurance Plan, established by a deed dated 4 March 2010;

 

“SEC” means US Securities and Exchange Commission;

 

“Seller Obligation” means any representation, warranty or undertaking to indemnify (including any covenant to pay pursuant to the Tax Deed) given by the Seller to the Buyer under any Transaction Agreement;

 

“Seller Policies” means shall bear the meaning given to that term in paragraph 11.1(b) of schedule 3, and “Seller Policy” shall mean any one of them;

 

“Seller’s Account”  means means the account designated by the Seller to the Buyer (in writing) for the purpose at least five Business Days before the Completion;

 

“Seller’s Group” means the Seller and its Related Persons from time to time (excluding, from Completion, each of the Group Companies), all of them and each of them as the context admits;

 

“Seller’s Solicitors” means Fulbright & Jaworski International LLP of 85 Fleet Street London, EC4Y 1AE;

 

“Senior Employee”  shall mean any person who is employed by any Group Company on an annual base salary of £40,000 or more as at the date of this Agreement, and “Senior Employees” shall mean any or all of them;

 

“SG Global” means Scientific Games Global Plus Ltd., whose registered office is at 3 George Mann Road, Leeds, West Yorkshire, LS10 1DJ, United Kingdom;

 

“Share Consideration”  shall bear the meaning given to such term in clause 2.5;

 

“Shares” means each of the Company Shares and the Cyberview Czech Share;

 

“SNAI” means SNAI Spa;

 

“SNAI Remediation Contribution” means the sum of £1 million;

 

“SNAI Supply Agreement” means the Supply, License and Distribution Agreement dated 30 December 2009 between SNAI and the Company, as it may be amended from time to time;

 

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“SNAI Matter” means any allegations, complaints or claims of any nature whatsoever, whether in tort, contract or under any other principle of applicable law or legal or equitable theory (including any claim of breach of, or default under, the SNAI Supply Agreement by a Group Company, or for termination of the SNAI Supply Agreement), by SNAI (or any of its Related Persons)  arising out of, in connection with or relating to: (i) any actual or alleged failure to supply VLT Packages (as defined in the SNAI Supply Agreement), or any part thereof, in a timely manner or otherwise, (ii) any actual or alleged failure to supply a minimum quantity or level of games, game content or game source codes in a timely manner or otherwise, or (iii) any actual or alleged technical issue, anomaly, malfunction, interruption, inadequacy, instability, or non-compliance with any applicable standard or service level (including the Performance Criteria (as defined in the SNAI Supply Agreement)) relating to the VLT Packages (as defined in the SNAI Supply Agreement), or any part thereof, in any of (i), (ii) or (iii) that: (A) may have occurred or arisen at or prior to Completion, (B) has occurred or arisen at or prior to Completion and that continues or becomes apparent or manifest after Completion, or (C) that may become apparent or manifest after Completion, including any matters related to the allegations by SNAI referred to in the Disclosure Letter or the correspondence between SNAI (or its counsel) and any Group Company (or its counsel) included in the Data Room, in each such case to the extent based on facts, matters, circumstances, defects and/or failures to comply with any applicable standard or service levels (including, for example, difficulties in scalability required in order to comply with the Company’s obligations under or as contemplated by the SNAI Supply Agreement) which are in existence at Completion, but whether such facts, matters, circumstances, defects and/or failures to comply are known or unknown or manifest or otherwise at Completion (it being understood and agreed, for the avoidance of doubt, that any matters related to the allegations by SNAI referred to in the Disclosure Letter or the correspondence between SNAI (or its counsel) and any Group Company (or its counsel) included in the Data Room are in existence at Completion);

 

“Software Matter” means any allegations, complaints or claims (including any claim of default by a Group Company or termination of the relevant Contract) arising out of or relating to the defect or “bug” in software that is the same or substantially related to the defect or “bug” described in the Disclosure Letter with respect to the software supplied to Sazka s.r.o and Jamp s.r.o;

 

“Specified Covenant” means clause 4.1 insofar as it relates to the obligation to perform the obligations set out in paragraphs 1(d) or 1(n) (to the extent related to any alleged breach of paragraph 1(d)) of schedule 11;

 

“Statement”  shall bear the meaning given to such term in clause 7.1;

 

“Subsidiary” means each of the companies in schedule 2 other than Cyberview Czech, and “Subsidiaries” means all those companies;

 

“Surviving Policies” shall bear the meaning given to such term in clause 11.3;

 

“TA” means the Income and Corporation Taxes Act 1988;

 

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“Target Working Capital Amount” means £11,100,000;

 

“Tax” or “tax” shall have the meaning given to it in the Tax Deed;

 

“Tax Deed” means a deed of covenant between the Seller and the Buyer in the Agreed Form;

 

“Taxation Authority” shall have the meaning given to it in the Tax Deed;

 

“Taxation Statutes” means all statutes, statutory instruments, orders enactments, laws, by-laws, directives and regulations, whether domestic or foreign decrees, providing for or imposing any Tax;

 

“Terminal Repurchase Obligations” means the obligation or liability to repurchase any terminals under the Sazka Contract and under certain leasing Contracts to which Cyberview Czech is a party;

 

“Trademark Assignment” means the trademark assignment in the Agreed Form;

 

“Transaction Agreements” means the following:  (i) this Agreement; (ii) the Tax Deed; (iii) the Land Registry Form TR5 for the transfer of the Manchester Property from the Company to the Seller; (iv) the Land Registry Forms TR1 for the transfer of each of the Leasehold Properties, underleases for the use of office space in Birmingham, England and London, England, and property side letter; (v) the Environmental Deed; (vi) each of the Transitional Services Agreements; (vii) the Intellectual Property License Agreement; (viii) the New Media Game Content Transition Agreement, providing for the distribution and revenue sharing arrangement between the Company and the Seller; (ix) the Extended Term Receivables Agreement, providing for the payment of any Extended Term Receivables received by the Buyer and the Company after the Completion to the Seller; (x) the Intellectual Property Assignments; (xi) the Deed of Termination providing for the termination of the confidentiality agreement dated 29 September 2010 between the Seller and the Buyer, and (xii) the Czech Transfer Agreement, each in the Agreed Form;

 

“Transitional Services Agreements” means the following agreements by and among the Company, the Seller and companies in the Seller’s Group:  (i) the Transitional Services Agreement providing for the use of office space in Ashton-under-Lyne, England; and (ii) the Transitional Services Agreement providing for the use of information technology, and the provision of certain other services, each in the Agreed Form;

 

“Transfer Regulations” means the Transfer of Undertakings (Protection of Employment) Regulations 2006;

 

“TULR(C)A” means the Trade Union and Labour Relations (Consolidation) Act 1992;

 

“US GAAP” means generally accepted accounting principles in the United States;

 

“VAT” means in relation to any jurisdiction within the European Union, the value added tax provided for in Directive 2006/112/EC and charged under the provisions of any 

 

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national legislation implementing that directive or Directive 77/388/EEC together with legislation supplemental thereto and, in relation to any other jurisdiction, the equivalent Tax (if any) in that jurisdiction;

 

“VAT Legislation” means any law, statute, directive, regulation and order relating to VAT;

 

“Video Bingo Machines” means video bingo machines in the License Territory (as such term is defined in the Intellectual Property License Agreement), where bingo on such machines is implemented within the characteristics identified in the June 2009 UK Gambling Commission guidance entitled, “Key characteristics of bingo,” attached in Schedule 7.0 to the Intellectual Property License Agreement;

 

“Warranties” means the warranties set out in schedule 3 (including the Fundamental Warranties);

 

“Waste” means anything which is abandoned, unwanted or surplus, irrespective of whether it is capable of being reused, recovered or recycled;

 

“Working Capital Amount” means the aggregate value of:

 

(a)                                  the total net inventory of the Group, comprising the gross “Finished goods”, “Work in progress” and “Raw materials” balance less all inventory provisioning;

 

(b)                                 the total net trade and sundry receivables of the Group, comprising the gross trade and sundry debtors (excluding Intra-Group Receivables but including all associated VAT on such gross trade and sundry debtors) less all trade receivables provisioning;

 

(c)                                  the total prepaid expenses of the Group, and

 

(d)                                 the total of any other current assets of the Group (excluding Cash and Intra-Group Receivables),

 

less the aggregate value of:

 

(i)                                     the total trade and sundry creditors of the Group (excluding Debt, Intra-Group Payables and all Terminal Repurchase Obligations (unless and to the extent that such Terminal Repurchase Obligations are required to be settled in cash) but including all associated VAT on such total trade and sundry creditors of the Group);

 

(ii)                                  all liabilities of Cyberview Czech (other than the Terminal Repurchase Obligations (unless and to the extent that such Terminal Repurchase Obligations are required to be settled in cash));

 

(iii)                               all accrued expenses of the Group;

 

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(iv)                              all other current liabilities of the Group (other than the Terminal Repurchase Obligations (unless and to the extent that such Terminal Repurchase Obligations are required to be settled in cash)),

 

in each case, immediately prior to Completion and calculated in accordance with clause 7 and on the basis of the accounting policies and procedures set out in schedule 7, and for the avoidance of doubt, the Working Capital Amount excludes Cash and Debt, and any amount in respect of the Extended Term Receivables, the current asset shown as investment in Red Gaming Limited in the Vendor Due Diligence Report in respect of the Group prepared by KPMG dated 9 November 2010, at page 87, products issued to Ladbrokes, any Italy Project Costs, all assets and receivables of Cyberview Czech; provided that in the case of a Non-Wholly Owned Subsidiary, only the Pro-rata Amount of the items referred to in sub-paragraphs (a) to (d) and (i) to (iii) of this definition attributable to such Non-Wholly Owned Subsidiary shall be taken into account; and

 

“Working Hours” means 9.30 a.m. to 5.30 p.m. on a Business Day.

 

1.2                                 In this Agreement unless otherwise specified, reference to:

 

(a)                                  a “subsidiary undertaking” or a “parent undertaking” is to be construed in accordance with section 1162 of the Companies Act 2006 and a “subsidiary”, “holding company” or “wholly-owned  subsidiary” is to be construed in accordance with section 1159 of that Act;

 

(b)                                 “FA” followed by a stated year means the Finance Act of that year;

 

(c)                                  “includes” and “including” shall mean including without limitation;

 

(d)                                 a “party” means a party to this Agreement and includes its assignees (if any) and/or the successors in title to substantially the whole of its undertaking and, in the case of an individual, to his or her estate and personal representatives;

 

(e)                                  a “person” includes any person, individual, company, body corporate, joint venture, unincorporated association, firm, corporation, partnership, trust government, governmental body or authority, state or agency of a state or any undertaking (whether or not having separate legal personality and irrespective of the jurisdiction in or under the law of which it was incorporated or exists); and a reference to a person includes reference to that person’s successors and assigns;

 

(f)                                    a reference to a “statute”, “statutory instrument”, “accounting standard” or any law or enactment (including in this clause 1) or any of their provisions is to be construed as a reference to:

 

(i)                                     that statute or statutory instrument or accounting standard or such provision as the same may have been amended or re-enacted before the date of this Agreement;

 

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(ii)                                  any law or enactment which that law or enactment re-enacts (with or without modification); and

 

(iii)                               any subordinate legislation made (before or after signature of this Agreement) under any law or enactment, as re-enacted, amended, extended or applied, as described in paragraph (i) above, or under any law or enactment referred to in paragraph (ii) above,

 

and “law” and “enactment” includes any legislation in any jurisdiction;

 

(g)                                 a reference to a “company” shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established;

 

(h)                                 a reference to “indemnify” and “indemnifying” any person against any circumstance include indemnifying and keeping that person harmless from all actions, claims and proceedings from time to time made against that person and all loss or damage and all payments, costs or expenses made or incurred by that person as a consequence of or which would not have arisen but for that circumstance (save only for any indirect or consequential losses);

 

(i)                                     a reference to “clauses”, “paragraphs”, “sub-paragraphs”, “recitals” or “schedules” are to clauses, paragraphs sub-paragraphs, recitals of and schedules to this Agreement;

 

(j)                                     “writing” includes any methods of representing words in a legible form (other than writing on an electronic or visual display screen) or other writing in non-transitory form;

 

(k)                                  a reference to “pounds”, “sterling” or to “£” shall be construed as references to the lawful currency for the time being of England and Wales;

 

(l)                                     a reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates the English legal term in that jurisdiction and references to any English statute or enactment shall be deemed to include any equivalent or analogous laws or rules in any other jurisdiction;

 

(m)                               references to “costs” and/or “expenses” incurred by a person shall not include any amount in respect of VAT comprised in such costs or expenses for which either that person or, if relevant, any other member of the group to which that person belongs for VAT purposes is entitled to credit or repayment as VAT input tax under any applicable provisions;

 

(n)                                 a reference to the term “accrued”, with respect to a liability of a Group Company, means that an accrual would have been required to have been made in respect of 

 

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the relevant liability in accordance with US GAAP on a balance sheet of the relevant Group Company prepared as at immediately prior to Completion;

 

(o)                                 unless expressly stated to the contrary in this Agreement, any reference to (or requirement for) the execution of a document by a person includes execution on behalf of that person;

 

(p)                                 in construing this Agreement the so-called “ejusdem generis” rule does not apply and accordingly the interpretation of general words is not restricted by (i) being preceded by words indicating a particular class of acts, matters or things; or (ii) being followed by particular examples;

 

(q)                                 words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders; and

 

(r)                                    the time of day is reference to time in London, England.

 

1.3                                 The schedules form part of the operative provisions of this Agreement, and references to this “Agreement”, or to any specified provision of this Agreement, are to this Agreement as in force for the time being (including any schedule to it), as amended, modified, supplemented, varied, assigned or novated, from time to time.

 

1.4                                 The index and the headings and the descriptive notes in brackets relating to provisions of Taxation Statutes in this Agreement are for information only and are to be ignored in construing the same.

 

2.                                       SALE AND PURCHASE

 

2.1                                 Upon the terms and subject to the conditions of this Agreement and the Czech Transfer Agreement, the Seller shall sell and the Buyer shall purchase the Company Shares and the Czech Seller shall sell and the Buyer and SG Global shall purchase the Cyberview Czech Share, in each case with effect from Completion with Full Title Guarantee and free from any Encumbrance, together with all accrued benefits and rights attached thereto and the benefit of all distributions and dividends declared, paid or made after the Completion Date in respect of the Shares.

 

2.2                                 The Seller and the Czech Seller each irrevocably and unconditionally waives, and agrees to procure the waiver (from any person who is not a party to this Agreement) of, all rights or restrictions over, or in connection with, any of the Company Shares and the Cyberview Czech Share including any right of pre-emption or other restriction on transfer in respect of the Company Shares or the Cyberview Czech Share or any of them conferred on the Seller under the articles of association of the Company or the Czech Seller under the constitutional documents of Cyberview Czech, respectively, or otherwise.

 

2.3                                 The Buyer and SG Global shall not be obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed simultaneously in accordance with this Agreement, but completion of the purchase of some of the Shares will not affect the rights of the Buyer with respect to the purchase of the others.

 

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2.4                                 The total consideration for the sale and purchase of the Shares shall be the Share Consideration and the Deferred Consideration, if any.

 

2.5                                 The “Share Consideration” shall be:

 

(a)                                  £32,900,000;

 

(b)                                 PLUS the amount (if any) of the Cash;

 

(c)                                  LESS the amount (if any) of the Debt; and

 

(d)                                 if the Working Capital Amount is greater than the Target Working Capital Amount, PLUS the amount of the difference, or if the Working Capital Amount is less than the Target Working Capital Amount, LESS the amount of the difference.

 

2.6                                 Any payment made in satisfaction of any liability arising under a Seller Obligation, or a Buyer Obligation, shall (so far as legally possible) for all purposes be deemed to be and shall take effect as adjusting the consideration paid by the Buyer for the Shares, and the aggregate of the Share Consideration, as adjusted by this clause 2.6, and the Deferred Consideration, if any, shall be adopted for all tax reporting purposes.

 

2.7                                 The Buyer and Seller shall comply with their respective obligations under schedule 14, to the extent applicable.

 

3.                                       CONDITIONS

 

3.1                                 Completion is conditional upon the fulfilment of each of the conditions as follows (the “Conditions”):

 

(a)                                  the Office of Fair Trading deciding in terms satisfactory to the Buyer (acting reasonably) that the Acquisition will not be referred to the Competition Commission pursuant to section 33 of the Enterprise Act and either the expiry of the time limit within which an application may be made to the Competition Appeal Tribunal for the setting aside of such a decision without such an application having been made; or if such an application is made, the dismissal of such application by the Competition Appeal Tribunal;

 

(b)                                 in the event that the Secretary of State issues an intervention notice to the Office of Fair Trading under section 42 of the Enterprise Act, (i) the Office of Fair Trading deciding in terms satisfactory to the Buyer (acting reasonably) that the Secretary of State does not intend to refer the Acquisition to the Competition Commission on public interest grounds and (ii) either (x) the expiry of the time limit within which an application may be made to the Competition Appeal Tribunal for the setting aside of such a decision without such an application having been made; or (y) if such an application is made, the dismissal of such application by the Competition Appeal Tribunal;

 

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(c)                                  in the event that the Secretary of State serves an intervention notice to the Office of Fair Trading under section 67 of the Enterprise Act, the Office of Fair Trading (i) deciding in terms satisfactory to the Buyer (acting reasonably) that the Secretary of State does not intend to refer the Acquisition to the Competition Commission and (ii) either (x) the expiry of the time limit within which an application may be made to the Competition Appeal Tribunal for the setting aside of such a decision without such an application having been made; or (y) if such an application is made, the dismissal of such application by the Competition Appeal Tribunal;

 

(d)                                 in the event that the Office of Fair Trading decides to refer the Acquisition to the Competition Commission pursuant to sections 33, 42 or 67 of the Enterprise Act, the Competition Commission deciding to clear the Acquisition in terms satisfactory to the Buyer (acting reasonably), and either the expiry of the time limit within which an application may be made to the Competition Appeal Tribunal for the setting aside of such a decision without such an application having been made; or if such an application is made, the dismissal of such application by the Competition Appeal Tribunal;

 

(e)                                  the consents, authorisations, similar clearances and confirmations from the applicable gaming regulatory authority, law enforcement authority, regulatory body or counterparty to a Contract with a member of the Group set forth in schedule 9 having been obtained, in a form satisfactory to the Buyer (acting reasonably), and without, in the case of any consent from a counterparty to a Contract, any obligation on the part of the Buyer to pay any fee or consideration in excess of £10,000 in the aggregate, in connection therewith; and

 

(f)                                    Buyer shall have entered into a brand licensing agreement, in a form satisfactory to the Buyer, acting reasonably, of the brand licenses set forth in Part A of schedule 12 covering products in the United Kingdom.

 

3.2                                 The Seller, Czech Seller and Buyer undertake to use reasonable endeavours to ensure that the Conditions are fulfilled as soon as possible after the date of this Agreement, and shall keep each other advised of the progress towards the satisfaction of the Conditions.  For avoidance of doubt, nothing in this Agreement shall require the Buyer to offer or agree to any conditions or undertakings (or agree to any amendments to or additional obligations under Contracts) in order to fulfil any of the Conditions that would materially impair the benefit to be derived by the Buyer from the transactions contemplated by the Transaction Agreements.

 

3.3                                 The Seller, Czech Seller and Buyer shall each co-operate with each other in all relevant jurisdictions in connection with their obligations under clause 3.2, and the Seller and Czech Seller shall each promptly supply to the Buyer all information necessary or desirable for the making of (or responding to any requests for further information consequent upon) any notifications and filings (including draft versions) made in respect of this Agreement or any related transactions.

 

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3.4                                 Each of the Seller and the Buyer shall give notice to the other that a relevant Condition has been satisfied as soon as practicable and in any event within two Business Days of becoming aware of the fact.

 

3.5                                 The Buyer may waive satisfaction of any of the Conditions in its sole discretion, by written notice to the Seller.

 

3.6                                 The Buyer undertakes to the Seller that, in the event that the Office of Fair Trading decides to refer the Acquisition to the Competition Commission under any provision of the Enterprise Act, or the Secretary of State serves an intervention notice to the Office of Fair Trading under any provision of the Enterprise Act, it shall use reasonable endeavours to avoid and to minimise any disruption that would have a material effect on the normal business of the Seller or the Group Companies which may be caused by any requests for information and/or assistance which may be necessary as a result of such referral or intervention and to indemnify Seller and the Group Companies for any reasonable and properly incurred out of pocket third party costs, liabilities, or expenses incurred by any of them and which would not have been incurred but for any such referral.

 

4.                                       CONDUCT OF BUSINESS PRIOR TO COMPLETION AND UNDERTAKINGS

 

4.1                                 During the period from the date of this Agreement to Completion, the Seller and the Czech Seller, as applicable, shall perform the obligations set out in schedule 11 to this Agreement.

 

4.2                                 The Seller and the Czech Seller, as applicable, shall procure that each member of the Seller’s Group takes all such steps and actions as may be necessary to ensure that the Intra-Group Payables (including “Long Term Creditors re:  IGT US” shown on the Management Accounts) and the Intra-Group Receivables are repaid and settled in full prior to Completion, without any liability to a Group Company, so that there are no Intra-Group Payables or Intra-Group Receivables in existence at Completion and that no Group Company has any rights or obligations in respect thereof at and following Completion.  Following Completion, save pursuant to a Transaction Agreement, the Seller shall not, and shall procure that no other member of the Seller’s Group shall, make any claim or demand for payment, or take any enforcement action, of any nature whatsoever in respect of any Intra-Group Indebtedness from any Group Company, and shall indemnify the Buyer (for itself and as trustee for each of the Group Companies) against any costs, losses, claims, or expenses which the Buyer or any Group Company may suffer or incur as a result of any breach of this clause 4.2, clause 4.4 or clause 4.5.

 

4.3                                 The Seller and the Czech Seller, as applicable, shall procure that the Group Companies pay the Pre-Completion Dividends by no later than immediately prior to Completion, with the intent that all of the Group’s available and distributable cash shall have been distributed to the Seller and to the Czech Seller, as applicable, prior to Completion.

 

4.4                                 The Seller shall procure that all Contracts between a member of the Seller’s Group, on the one hand, and a Group Company, on the other hand, other than the Transaction Agreements, are terminated and cease to have effect on or prior to Completion, without

 

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any liability to a Group Company, and that all rights and obligations of the parties thereto thereunder cease to have effect by no later than that time.

 

4.5                                 The Seller and the Czech Seller, as applicable, shall procure that each Group Company shall repay or otherwise discharge, without liability to any Group Company, any and all Financial Debt of the relevant Group Company, and shall further terminate any related instruments of any Group Company, including any overdraft facility, in each case, at or prior to Completion.

 

4.6                                 The Seller or Czech Seller shall, as applicable, on or prior to Completion:

 

(a)                                  to the extent it has any of the following and to the extent not otherwise contemplated by the Transaction Agreements: (i) erase and destroy all copies, releases and versions of the Company Game Products in its possession or control and (ii) transfer all right, title and interest in the Company Game Products to the Company with Full Title Guarantee; and

 

(b)                                 execute the Intellectual Property Assignments, and transfer all right, title and interest in the Intellectual Property listed therein to the Company; and

 

(c)                                  transfer, or procure the transfer, assignment or novation, to the Company, in a form satisfactory to the Buyer, acting reasonably, the software Contracts listed in Part B of schedule 12.

 

4.7                                 Each of the Buyer and the Seller shall comply with their respective obligations under schedule 13.

 

4.8                                 Subject to the requirements of applicable law, from the date of this Agreement the Buyer and the Seller shall co-operate and work together in good faith with a view to addressing and resolving the issues that have given rise to the SNAI Matter as soon as possible, and in any event by no later than Completion, to the extent reasonably practicable. Without prejudice to the generality of the foregoing, with effect from the date of this Agreement, subject as aforesaid:

 

(a)                                  the Seller shall provide the Buyer and its Representatives with such access to the books and records, personnel and premises of the members of the Seller’s Group as the Buyer may reasonably require for these purposes;

 

(b)                                 the Buyer and its Representatives shall be given access to the products and services supplied by the Company to SNAI in order to assess the technical parameters required for implementation, and the Buyer and the Seller shall perform joint implementation, of a timely corrective action plan to bring the SNAI Supply Agreement into compliance with the requirements of SNAI;

 

(c)                                  the Seller shall continue to use all reasonable endeavours to address and resolve the issues that have given rise to the SNAI Matter and to bring the Company into compliance with the requirements of the SNAI Supply Agreement as soon as possible, and in any event by no later than Completion, to the extent reasonably

 

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practicable.  Such reasonable endeavours shall include the dedication by the Seller of a reasonable and appropriate level of internal and external resources to achieve this objective, with the quantum and nature of such resources to be determined in consultation with the Buyer and to include the allocation of up to six incremental employees or consultants with an appropriate level of relevant skills and experience to work exclusively and on a full time basis on seeking to address and resolve the issues that have given rise to the SNAI Matter and to bring the Company into compliance with the requirements of the SNAI Supply Agreement (the “Dedicated Employees”). As used in this clause 4.8(c), the term “incremental” shall mean that the allocation of the Dedicated Employees for the purposes referred to in this clause 4.8(c) shall not result in a reduction in the overall number of employees or consultants engaged in other aspects of the business of the Group; and

 

(d)                                 the Buyer and the Seller shall constitute a steering committee to supervise and provide guidance to the efforts of the Seller, the Buyer and their respective Representatives, including the Dedicated Employees, to address and resolve the issues that have given rise to the SNAI Matter as soon as possible, and in any event by no later than Completion, to the extent reasonably practicable (the “Steering Committee”).

 

4.9                                 The Buyer and the Seller shall use reasonable endeavours to procure that the Steering Committee shall:

 

(a)                                  be comprised of Robert White and Ian Timmis;

 

(b)                                 have regular access to, and include in its deliberations, the Chief Technology Officers of each of the Buyer and the Company;

 

(c)                                  meet at least once every week, or at such other times and at such other frequency as Robert White and Ian Timmis may agree, acting reasonably;

 

(d)                                 be the primary forum through which the Buyer and the Seller shall plan and implement the corrective action plan referred to in clause 4.8(b), monitor the progress of such corrective action plan and supervise and provide guidance for and oversight of the activities of the Dedicated Employees; and

 

(e)                                  reasonably confer and consult on the resources to be applied by each of the Buyer and the Seller in seeking to resolve the issues that have given rise to the SNAI Matter and to bring the Company into compliance with the requirements of the SNAI Supply Agreement, as soon as possible, and in any event by no later than Completion, to the extent reasonably practicable.

 

4.10                           For the avoidance of doubt, save only in the case of fraud, no steps or actions taken, or omissions to take any steps or to act, in each case of any nature whatsoever by the Buyer or any of its Representatives pursuant to the provisions of clauses 4.8 and/or 4.9 shall in any way limit, reduce, absolve or release any obligation or liability of the Seller to the Buyer, or reduce or limit or constitute a waiver of the rights of the Buyer, under the terms

 

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of this Agreement, including under any of clauses 6.5, 6.6 and/or 9.9, or limit or reduce the availability to the Buyer of any remedies otherwise available to it.

 

4.11                           The Seller undertakes to provide to the Buyer promptly after the date of this Agreement, and in any event by no later than five Business Days after the date of this Agreement, a DVD which will contain a true, complete and correct copy of all materials and information contained in the internet website “Project Ben DataSite” maintained by Merrill Corp. at the direction of the Seller as at 21 April 2011.

 

5.                                       COMPLETION

 

5.1                                 Completion shall take place at the offices of the Seller’s Solicitors on the Completion Date.

 

5.2                                 Subject to any extension in accordance with clause 5.7, the Completion Date means:

 

(a)                                  the fifth Business Day after all of the Conditions are satisfied or waived; or

 

(b)                                 any other date agreed in writing by Seller and Buyer.

 

5.3                                 At least five Business Days prior to the date fixed for Completion, Seller, acting reasonably and in good faith (but otherwise without liability), shall provide to Buyer a written estimate of the Completion Accounts and the Statement, including each of the following, together with a certificate from the Seller’s accountants as to the accuracy of each such estimate:

 

(a)                                  the Working Capital Amount (the “Estimated Working Capital Amount”);

 

(b)                                 the Debt (the “Estimated Debt”); and

 

(c)                                  the Cash (the “Estimated Cash”).

 

5.4                                 On Completion the Seller or the Czech Seller (as the case may be) shall deliver to or, if the Buyer shall so agree, make available to the Buyer:

 

(a)                                  an extract of the minutes of a duly held meeting of the directors (or a duly constituted committee thereof) of each of the Seller and the Czech Seller (and, to the extent available, the Seller Guarantor) authorising the execution by each of the Seller, the Czech Seller and the Seller Guarantor of this document and any document to be delivered by the Seller, the Czech Seller and/or the Seller Guarantor at or prior to Completion (including each Transaction Agreement) and, where such execution is authorised by a committee of the board of directors of the Seller, the Czech Seller and/or the Seller Guarantor, an extract of the minutes of a duly held meeting of the directors constituting such committee or the relevant extract thereof);

 

(b)                                 transfers in common form relating to all the Company Shares duly executed in favour of the Buyer (or as it may direct);

 

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(c)                                  a resolution of the Czech Seller, as the sole shareholder of Cyberview Czech, acting in the capacity of Cyberview Czech’s general meeting in accordance with Section 132 of Act No. 513/1991 Coll., Commercial Code as amended, of the Czech Republic, resolving to divide the Czech Share into two parts (consistent with the division of the Czech Share as contemplated in the Czech Transfer Agreement), such resolution being in the form of the Czech notarial deed prepared by a Czech notary in the Czech Republic, in a form acceptable to the Buyer, acting reasonably;

 

(d)                                 the Czech Transfer Agreement duly executed in favour of the Buyer and SG Global duly notarised and apostilled;

 

(e)                                  share certificates representing the Company Shares;

 

(f)                                    resignations in the Agreed Form duly executed as deeds, of the directors of any Group Company set forth on schedule 10, or as the Buyer may specify by notice to the Seller no later than 5 Business Days prior to Completion, from their offices as director any Group Company containing a confirmation that they have no claims (whether statutory, contractual or otherwise) against any Group Company;

 

(g)                                 if so required by the Buyer no later than 5 Business Days prior to Completion, the written resignations of the auditors of each Group Company containing an acknowledgement that they have no claim against any Group Company for compensation for loss of office, professional fees or otherwise and a statement under section 519(1) of the Companies Act 2006;

 

(h)                                 the common seals, certificates of incorporation and statutory books, share certificate books and cheque books of each Group Company;

 

(i)                                     an officer’s certificate executed on behalf of the Seller to the effect that (i) the Warranties are true and correct and not misleading in any respect at Completion that would give rise to a right to terminate under clause 14.1(e); and (ii) there has been no material breach by the Seller of any of its obligations under this Agreement required to be performed at or prior to Completion;

 

(j)                                     each Transaction Agreement duly executed by the Seller and each of its Related Persons that is required to be a party thereto;

 

(k)                                  title deeds and other documents relating to the Properties, excluding the Manchester Property (except to the extent that the same are in the possession of mortgagees pursuant to mortgages disclosed in schedule 5);

 

(l)                                     irrevocable powers of attorney from the Seller in a form satisfactory to the Buyer (acting reasonably) relating to the exercise of rights in respect of the Shares pending their registration in the name of the Buyer and/or its nominee;

 

(m)                               to the extent not in the possession of any Group Company all books of account concerning the businesses of that Group Company;

 

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(n)                                 to the extent not in the possession of any Group Company, copies of all licences, consents, permits and authorisations obtained by or issued to that Group Company;

 

(o)                                 to the extent not in the possession of any Group Company, all books and records of that Group Company relating to the employees and/or directors of that Group Company;

 

(p)                                 an acknowledgement from the Seller in a form satisfactory to the Buyer (acting reasonably), to the effect that:  (i) there is no Intra-Group Indebtedness owing at Completion; (ii) all Contracts between a member of the Seller’s Group, on the one hand, and a Group Company, on the other hand, other than the Transaction Agreements, have been terminated and have ceased to have effect on or prior to Completion, and that all rights and obligations of the parties thereto thereunder have ceased to have effect; (iii) the Pre-Completion Dividends have been paid prior to Completion and specifying the amount or character thereof; and (iv) no Group Company has any liability or obligation in respect of Financial Debt as at Completion;

 

(q)                                 share certificates relating to all of the issued shares that the Company owns in the capital of each of the Subsidiaries;

 

(r)                                    duly executed releases in a form acceptable to the Buyer, acting reasonably, of all Encumbrances, except Permitted Encumbrances, to which any of the Group Companies is party together with any forms or other documents to release or evidence release of such Encumbrances in any relevant jurisdiction;

 

(s)                                  the deed of amendment, substitution of principal employer and cessation of participation, in a form acceptable to the Buyer, acting reasonably, duly executed by the Seller and the Trustee of the IGT UK Group Pension Scheme;

 

(t)                                    a resolution of the Czech Seller, the sole shareholder of Cyberview Czech, acting in the capacity of Cyberview Czech’s general meeting in accordance with Section 132 of Act No. 513/1991 Coll., Commercial Code as amended, of the Czech Republic, resolving to:

 

(i)                                     remove each of the existing directors;

 

(ii)                                  appoint each of the persons as the Buyer nominates to be the directors of Cyberview Czech;

 

(iii)                               appoint such person as the Buyer nominates to be the auditor; and

 

(iv)                              amend the articles of association of Cyberview Czech in accordance with the Buyer’s instructions to: (i) change the registered office; and (ii) change the accounting reference date to 31 December;

 

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such resolution to be in the form of a Czech notarial deed prepared by a Czech notary in the Czech Republic, in a form acceptable to the Buyer, acting reasonably;

 

(u)                                 either:

 

(i)                                     an original extract from the companies register of the Czech Seller with an apostille certification, such extract showing the name, the registered office and the directors of the Czech Seller; or

 

(ii)                                  an original or certified copy of the certificate of incorporation of the Czech Seller, with an apostille certification, and an original confirmation of the Czech Seller’s company secretary (with an apostille certification) stating the name, registered office and names of directors of the Czech Seller as well as confirmation that the person who shall sign the Czech Transfer Agreement is authorized to do so (if applicable); and

 

(v)                                 if applicable, the original of a power of attorney, with an apostille certification, pursuant to which the Czech Transfer Agreement has been executed by the Czech Seller;

 

(w)                               evidence in a form acceptable to the Buyer, acting reasonably, of the termination of each overdraft facility of each Group Company; and

 

(x)                                   the deed of cessation of participation, in a form acceptable to the Buyer, acting reasonably, duly executed by the Seller and the Trustee of the IGT-UK-Group Limited Group Life Assurance Plan.

 

5.5                                 The Seller and the Czech Seller, as applicable, shall procure the passing of board resolutions of each Group Company, in a form acceptable to the Buyer, acting reasonably, at Completion (in the case of Cyberview Czech the resolution may be adopted in the Czech Republic and delivered at Completion in a copy by e-mail or facsimile, with the original being delivered to the Buyer promptly, and in any event within five Business Days, after Completion):

 

(a)                                  sanctioning for registration (subject where necessary to due stamping) the transfers in respect of the Shares, except for Cyberview Czech;

 

(b)                                 appointing such persons as the Buyer nominates to be the directors and secretary of each Group Company, except for Cyberview Czech;

 

(c)                                  appointing such persons as the Buyer nominates to be the auditors of each Group Company, except for Cyberview Czech;

 

(d)                                 revoking and/or revising all banks mandates for each Group Company as the Buyer requires, and giving authority in favour of such persons as the Buyer may nominate to operate the bank accounts thereof;

 

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(e)                                  resolving that the registered office of each Group Company be changed as the Buyer requires; and

 

(f)                                    changing the accounting reference date of each Group Company, except for Cyberview Czech, to 31 December.

 

5.6                                 By no later than 2.00 p.m. on the Completion Date, subject to the Seller having complied with all the provisions of clause 5.4 and clause 5.5, the Buyer shall:

 

(a)                                  provide for the transfer by CHAPS of the Completion Payment to the Seller’s Account and the receipt of the Seller’s Solicitors shall be a good discharge to the Buyer (and, for the avoidance of doubt, the Buyer shall be under no obligation whatsoever with respect to the apportionment of the Completion Payment between the Seller and the Czech Seller);

 

(b)                                 deliver to the Seller the Tax Deed duly executed by the Buyer; and

 

(c)                                  deliver to the Seller each other Transaction Agreement duly executed by the member of the Buyer’s Group expressed to be a party thereto (including the notarised and apostilled Czech Transfer Agreement).

 

5.7                                 If in any respect the material obligations of the Seller or the Czech Seller, on the one hand, or the Buyer on the other hand, are not complied with on Completion, the Buyer, if the Seller or Czech Seller is in default of its material obligations, or the Seller and Czech Seller if the Buyer is in default of its material obligations, shall not be obliged to complete the sale and purchase of the Shares and may, in its absolute discretion, by written notice to the other party at the time Completion would otherwise be due to take place:

 

(a)                                  terminate this Agreement; or

 

(b)                                 elect to defer Completion by not more than 20 Business Days after the original date for Completion to such other date as it may specify in such notice (in which event the provisions of this clause 5.7 shall apply, mutatis mutandis, if the Seller or the Czech Seller, on the one hand, or the Buyer, on the other, fails or is unable to perform any such obligations),

 

provided that neither the Seller nor the Czech Seller shall be able to exercise such rights if the Buyer can demonstrate to the reasonable satisfaction of the Seller that it has arranged for the transfer of the Completion Payment to the Seller’s Account, value date the Completion Date.

 

6.                                       POST-COMPLETION UNDERTAKINGS

 

6.1                                 Following Completion, the Seller and the Czech Seller, as applicable, undertake to the Buyer:

 

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(a)                                  to use reasonable endeavours to ensure that each Group Company is released from any guarantee, indemnity, bond, letter of comfort or Encumbrance or other similar obligation given or incurred by it prior to Completion which relates in whole or in part to debts or other liabilities or obligations, whether actual or contingent, of a member of the Seller’s Group and prior to such release the Seller undertakes to the Buyer (on behalf of itself and as trustee on behalf of each Group Company) to keep each Group Company fully indemnified against any failure to make any such repayment or any liability arising under any such guarantee, indemnity, bond, letter of comfort or Encumbrance;

 

(b)                                 subject to and without prejudice to the other Transaction Agreements:  (i) that no member of the Seller’s Group shall hold itself out as the owner of or being affiliated with any member of the Group or its business; and (ii) that it shall procure that within 60 days after Completion, each member of the Seller’s Group ceases in any manner whatsoever to use, or display any trade or service marks, trade or service names or logos used or held by any member of the Buyer’s Group or any confusingly similar mark, name or logo; and

 

(c)                                  that the Seller shall not unreasonably withhold consent with respect to the Buyer Group obtaining licenses under the brand licenses set forth in Part A of schedule 12 covering products in jurisdictions where members of the Seller Group from time to time are not conducting business with such brand licenses and are not contemplating conducting business with such brand licenses.

 

6.2           Following Completion the Buyer undertakes, subject to and without prejudice to the other Transaction Agreements:  (i) that no member of the Group shall hold itself out as being owned or controlled by the Seller and its businesses; and (ii) that it shall within 60 days after Completion, cease in any manner whatsoever to use, or display any trade or service marks, trade or service names or logos used or held by any member of the Seller’s Group or any confusingly similar mark, name or logo, provided that nothing herein shall prevent Buyer from using the name “Barcrest”, any Intellectual Property which is identical or similar to the phrase “Barcrest”, or any other Intellectual Property owned by a Group Company.  Notwithstanding the foregoing, Cyberview Czech may continue trading and operating under, and using, the names ‘Cyberview Technology s.r.o.’ and ‘Cyberview’ in the Czech Republic and Slovakia, until the day falling 180 days after the date on which the Buyer has obtained all necessary consents and approvals from all relevant Governmental Authorities in the Czech Republic to change the name of Cyberview Czech to such other name as the Buyer shall determine, acting reasonably.  The Buyer and the Seller shall use all reasonable endeavours to co-operate together to obtain such consents and approvals as soon as possible following Completion.

 

6.3           The Czech Seller undertakes to the Buyer that it shall take all such steps and actions as are referred to in Article IX, Section 2(d) of the Sazka Contract, including bringing and/or defending any claims, actions and/or proceedings, as the Buyer may reasonably request and in accordance with the directions of the Buyer.

 

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6.4           Each of the Seller and the Czech Seller, for itself and on behalf of each of its Representatives, hereby undertakes to the Buyer (as trustee for itself and on behalf of SG Global and each of their respective successors and assigns and any person to whom the Buyer and/or SG Global may sell any ownership interest in the registered capital of Cyberview Czech and any person to whom such a purchaser may in turn sell any ownership interest in the registered capital of Cyberview Czech and so on (any such purchaser, collectively with the Buyer, being the “Transferee”)) and each of the Buyer’s Representatives, that neither it nor any of its Representatives shall, following Completion, make, assert, allege, support, encourage, incite, assist or maintain or cause to be made, asserted, alleged, supported, encouraged, incited, assisted or maintained any claim of any kind and whether made or proposed to be made by itself or any other person:

 

(a)                                  contesting or disputing in any manner whatsoever that the act of establishment and/or incorporation of Cyberview Czech was invalid;

 

(b)                                 initiating a process of dissolution and liquidation of Cyberview Czech;

 

(c)                                  to the effect that the entry into of this Agreement and the Czech Transfer Agreement and the occurrence of Completion under this Agreement have not been fully effective to vest irrevocably and unconditionally full legal and beneficial ownership of a 90 per cent. interest in the registered capital of Cyberview Czech in the Buyer and a 10 per cent. interest in the registered capital of Cyberview Czech in SG Global; or

 

(d)                                 contesting or disputing in any manner whatsoever that any Transferee is the sole legal and beneficial owner of the relevant ownership interest in the registered capital of Cyberview Czech that was transferred to it.

 

6.5           In the event that the SNAI Supply Agreement is terminated by SNAI following Completion as a result of the SNAI Matter (a “Covered Termination”), and following such termination:

 

(a)                                  the Company either removes or transfers to a third party that is not a Related Person of the Buyer not less than 66 2/3 per cent. of the terminal hardware comprising the “VLT Packages” (within the meaning of the SNAI Supply Agreement) installed under the SNAI Supply Agreement immediately prior to such termination; and

 

(b)                                 no Contract substantially similar to the SNAI Supply Agreement is entered into between the Buyer and its Related Persons, on the one hand, and SNAI and its Related Persons, on the other, within 90 days after the removal or transfer referred to in subclause (a) above,

 

the Seller shall promptly (and, in any event, within five (5) Business Days following the 90-day period referred to in subclause (b) above) pay the sums provided for in clause 6.6 in cash to the Buyer.

 

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6.6           The Seller shall be liable to pay the following sums upon the occurrence of the events referred to in clause 6.5:

 

(a)                                  if the Covered Termination occurs in the period from the Completion Date to (and including) the day falling 180 days after the Completion Date (the “First Milestone Date”), the Seller shall pay the Buyer the sum of £8 million;

 

(b)                                 if the Covered Termination occurs in the period from the day after the First Milestone Date to (and including) the day falling 180 days after the First Milestone Date (the “Second Milestone Date”), the Seller shall pay the Buyer the sum of £5 million;

 

(c)                                  if the Covered Termination occurs in the period from the day after the Second Milestone Date to (and including) the day falling 180 days after the Second Milestone Date (the “Third Milestone Date”), the Seller shall pay the Buyer the sum of £3 million; and

 

(d)                                 the Seller’s obligation to pay any amount to the Buyer pursuant to this clause 6.6 shall cease and determine fully if no Covered Termination shall have occured by the day after the Third Milestone Date. For the avoidance of doubt, the Buyer shall be entitled to receive the amounts provided for in this clause 6.6 if: (a) a Covered Termination occurs before any of the First Milestone Date, the Second Milestone Date and the Third Milestone Date (collectively, the “Milestone Dates”); and (b) the requirements of clauses 6.5(a) and (b) are subsequently satisfied. It shall not be necessary for the removal or transfer of the terminal hardware referred to in clause 6.5(a), or any part thereof, to have been completed, or for the 90 day period referred to in clause 6.5(b) to have expired, prior any of the Milestone Dates in order for the Buyer to be so entitled.

 

7.                                       COMPLETION ACCOUNTS

 

7.1           The Buyer shall procure that the Group prepares drafts of the Completion Accounts and the Statement in the format set out in schedule 6 (the “Statement”), on the basis of the accounting policies and procedures set out in schedule 7 and delivers them to the Seller within 75 days of Completion.

 

7.2           The Seller shall notify the Buyer in writing within 45 days of receipt of such draft Completion Accounts and the Statement whether or not it accepts the draft Completion Accounts and Statement for the purposes of this Agreement.

 

7.3           If the Seller notifies the Buyer that it does not accept such draft Completion Accounts and Statement:

 

(a)                                  it shall, at the same time as it notifies the Buyer that it does not accept such draft Completion Accounts and Statement, set out in such notice in writing its reasons in reasonable detail for such non-acceptance and specify the adjustments which, in its opinion, should be made to the draft Completion Accounts and the Statement in order to comply with the requirements of this Agreement; and

 

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(b)                                 the parties shall use reasonable endeavours to:

 

(i)                                     discuss the objections of the Seller; and

 

(ii)                                  try to reach agreement upon the adjustments (if any) required to be made to the draft Completion Accounts and the Statement

 

in each case, within 20 Business Days of the Seller’s notice of non-acceptance pursuant to clause 7.2 (or such other time as the parties may agree in writing).

 

7.4                                 If the Seller is satisfied with the draft Completion Accounts and the Statement (either as originally submitted or after adjustments agreed between the Seller and the Buyer) or if the Seller fails to notify the Buyer of its non-acceptance of the draft Completion Accounts and the Statement within the 45 day period referred to in clause 7.2, then the draft Completion Accounts and the Statement (incorporating any agreed adjustments) shall constitute the Completion Accounts and the Statement for the purposes of this Agreement.

 

7.5                                 If the Seller and the Buyer do not reach agreement within the 20 Business Day period referred to in clause 7.3(b) (or such other time as the parties may agree in writing) then the matters in dispute and in respect of which reasonable details have been provided by the Seller to the Buyer at the time that it notified the Buyer that it does not accept the Completion Accounts and the Statement in accordance with clause 7.3(a) (and only those) shall be referred for determination by an expert to be agreed by the Seller and the Buyer, and failing such agreement by the Seller and the Buyer within 10 Business Days following the end of the 20 Business Day period referred to in clause 7.3(b) (or such other time as the Seller and the Buyer may agree in writing), on the application of either the Buyer or the Seller by an expert appointed by the President of the Institute of Chartered Accountants of England and Wales from time to time (the “Firm”). The following provisions shall apply to such determination:

 

(a)                                  the Buyer and/or the Buyer’s accountants and the Seller and/or the Seller’s accountants shall each promptly (and in any event within such time frame as reasonably enables the Firm to make its decision in accordance with the time frame set down in clause 7.5(b)) prepare and deliver to the Firm a written statement on the matters in dispute (together with the relevant documents);

 

(b)                                 the Firm shall be requested to give its decision within 20 Business Days (or such later date as the Buyer and the Seller and the Firm agree in writing) of the confirmation and acknowledgment by the Firm of its appointment hereunder;

 

(c)                                  in giving such determination, the Firm shall state what adjustments (if any) are necessary to the draft Completion Accounts and the Statement in respect of the matters in dispute in order to comply with the requirements of this Agreement and shall give its reasons therefor;

 

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(d)                                 the Firm shall act as an expert (and not as an arbitrator) in making any such determination, and the Completion Accounts and Statement, as adjusted by the Firm shall be deemed to be finally determined and shall be final and binding on the parties (in the absence of manifest error);

 

(e)                                  each party shall bear the costs and expenses of all counsel and other advisers, witnesses and employees retained by it and the costs and the expenses of the Firm shall be borne between the Seller and the Buyer in such proportions as the Firm shall in its discretion determine or, in the absence of any such determination, equally between the Seller and the Buyer.

 

7.6           When the Seller and the Buyer reach (or pursuant to clause 7.4 are deemed to reach) agreement on the Completion Accounts and the Statement or when the Completion Accounts and the Statement are finally determined at any stage in accordance with the procedures set out in this clause 7 (including clause 7.5):

 

(a)                                  the Completion Accounts and the Statement as so agreed or determined shall be the Completion Accounts and the Statement for the purposes of this Agreement and shall be final and binding on the parties; and

 

(b)                                 the Working Capital Amount, the Debt and the Cash, in each case, shall be as set out in the Statement.

 

7.7           Subject to any rule of law or any regulatory body or any provision of any contract entered into prior to the date of this Agreement to the contrary, the Seller shall procure that each member of the Seller’s Group shall, and the Buyer shall procure that the Group shall, promptly provide each other, their respective advisers, the Firm, the Buyer’s accountants and the Seller’s accountants with all information (in their respective possession or control) relating to the operations of the Seller’s Group and/or the Group, as the case may be, including access at all reasonable times to all the Seller’s Group and Group employees, books, records, and other relevant information and all co-operation and assistance, as may in any such case be reasonably required to:

 

(a)                                  enable the production of the Completion Accounts and the Statement; and

 

(b)                                 enable the Firm to determine the Completion Accounts and the Statement.

 

The Seller and the Buyer hereby authorise each other, their respective advisers and the Firm to take copies of all information which they have agreed to provide under this clause 7.7.

 

7.8           Subject to clause 7.5(e), the Seller and the Buyer shall each bear their own costs and expenses arising out of the preparation and review of the Completion Accounts and Statement.

 

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8.                                       COMPLETION ACCOUNTS PAYMENTS

 

8.1           Within five Business Days of the agreement or determination of the Completion Accounts and the Statement in accordance with the provisions of clause 7:

 

(a)                                  if the Completion Payment is less than the Share Consideration (excluding the Interest Element), then the Buyer shall pay to the Seller the amount of such shortfall (if such difference exceeds £1,000); or

 

(b)                                 if the Completion Payment is more than the Share Consideration (excluding the Interest Element), then the Seller shall pay to the Buyer the amount of such excess (if such difference exceeds £1,000),

 

in each case, together with an amount equal to interest on the amount so payable at the Agreed Rate per annum for the period from the Completion Date to the date of payment (both dates inclusive) (the “Interest Element”).

 

9.                                       WARRANTIES, UNDERTAKINGS AND INDEMNITIES

 

9.1           The Seller warrants to the Buyer that, as at the date of this Agreement, each of the Warranties is true and accurate and not misleading in any respect.  Each of the Warranties shall be construed as a separate and independent warranty and no Warranty shall be limited by reference to any other Warranty (except as expressly provided otherwise).

 

9.2           Subject to the limitations in schedule 4, the Seller warrants to the Buyer that the Warranties will be true and accurate and not misleading in any respect at Completion by reference to the facts and circumstances then subsisting and, for this purpose, the Warranties shall be deemed to be repeated at Completion as if any express or implied reference in the Warranties to the date of this Agreement was replaced by a reference to the Completion Date.

 

9.3           The Seller undertakes to notify the Buyer in writing promptly if it or any other member of the Seller’s Group becomes aware of any circumstance arising after the date of this Agreement which would cause any Warranty (if the Warranties were repeated with reference to the facts and circumstances then existing) to become untrue or inaccurate or misleading in any respect which is material to the financial or trading position of the Group taken as a whole.

 

9.4           In each Warranty expressed to be given “to the best of the Seller’s knowledge and belief or “so far as the Seller is aware” or otherwise qualified by reference to the knowledge of the Seller, that expression shall mean the actual knowledge of Robert Melendres and the actual knowledge of any of the following persons (collectively but excluding individuals of whom the following listed persons makes inquiry, the “Relevant Individuals”) after having reviewed records and sources of information reasonably believed by them to be relevant and making reasonable enquiries of such persons as they reasonably believe are aware of facts and circumstances relevant to the accuracy of the Warranties:  Robert White, David Jones, Alex Stephens, Timothy Kennedy, James Ramshaw, Dennis Wolstenholme, Conleth Byrne, Andrew Wagstaff, Timothy Penasack, Pierre Cadena,

 

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Chris Jones, Richard Bures and Melissa Faith.  Nothing in the foregoing will be deemed an admission that any communication with Robert Melendres or Chris Jones constitutes a waiver of any applicable privilege.  For the avoidance of doubt, all Warranties are given by the Seller and not the Relevant Individuals.

 

9.5                                 The Seller acknowledges and agrees that the Buyer has entered into this Agreement on the basis of and in reliance upon the Warranties.

 

9.6                                 Any claim under the Warranties is subject to the terms and provisions of schedule 4.

 

9.7           The Seller agrees and undertakes to the Buyer and to each individual and entity referred to in this clause 9.7 that, except in the case of fraud, neither it nor any other member of the Seller’s Group, has any rights against and hereby waives and shall not make any claim against, any present or former employee, director, agent or officer of any of the Group Companies or any member of the Buyer’s Group on whom it may have relied before agreeing any term of, or before entering into, this Agreement or any other Transaction Agreement or the Disclosure Letter, including in relation to any information supplied or omitted to be supplied by any such person in connection with the Warranties, this Agreement, any other Transaction Agreement or the Disclosure Letter.

 

9.8           The Buyer warrants to the Seller that (and each such warranty shall be construed as a separate warranty):

 

(a)                                  the execution and delivery of this Agreement and the completion of the transactions contemplated hereby, have, where required, been duly and validly authorised and no other proceedings or action on the part of the Buyer is necessary to authorise the Agreement or to complete the transactions contemplated;

 

(b)                                 no broker, finder, agent or person is entitled to receive from the Buyer a finder’s fee, brokerage or commission in connection with this Agreement for which the Seller shall be liable; and

 

(c)                                  at Completion, the Buyer will have sufficient immediately available funds to enable it to make payment of the Completion Payment without Encumbrance or delay.

 

9.9                                 The Seller hereby undertakes to indemnify and keep indemnified the Buyer (for itself and as trustee of each Group Company) against all costs (including any costs of settlement), obligations, fines, penalties, losses, liabilities (including liabilities to Tax), present and future damages, claims and expenses (including legal and other professional fees and other losses, liabilities, costs, charges, or expenses suffered or incurred in disputing, defending, investigating or providing evidence in connection with establishing its right to be indemnified pursuant to this clause) (collectively, “Losses”) suffered or incurred by the Buyer, any Group Company or any of their Related Persons in connection with or arising out of:

 

35

 

(a)                                  the Manchester Property or any matter or circumstance relating thereto, prior to, at, or following Completion (including any Losses relating to any Remedial Action or any Environmental Condition in respect of the Manchester Property and the transfer of the Manchester Property from the Company to the Seller as contemplated by certain of the Transaction Agreements);

 

(b)                                 the Leasehold Properties (other than, to the extent validly transferred or assigned in accordance with schedule 13, obligations arising from and after such transfer or assignment under the applicable Lease (as defined in schedule 13) that are not contemplated as obligations of the Seller under the applicable underlease appended to schedule 13), including Losses arising out of claims made after Completion that relate to the period at or prior to Completion, and, in the case of any claims relating to dilapidations and reinstatement of the Leasehold Properties, the Losses in respect of such claims which are determined to have arisen prior to Completion. For these purposes, the Buyer and the Seller shall each appoint one surveyor and the two surveyors shall together conduct a joint survey of the Leasehold Properties prior to Completion in order to seek to agree the likely amount of any claims for dilapidation and reinstatement of the Leasehold Properties as at Completion. In the event that the surveyors appointed by the Buyer and the Seller are unable to reach agreement within a period of ten Business Days the issue shall be referred for determination by either the Buyer or the Seller to a surveyor appointed by the President of the Royal Institution of Chartered Surveyors from time to time, who shall act as expert (and not as arbitrator), who shall be requested to render its determination of the appropriate amount of any claims for dilapidation and reinstatement of the Leasehold Properties as at Completion within 20 Business Days (or such other period as the Buyer and the Seller may agree in writing) of its appointment, whose determination shall be final and binding on the Buyer and the Seller (in the absence of manifest error) and whose costs and expenses shall be borne equally between the Buyer and the Seller;

 

(c)                                  the Endemol Matter;

 

(d)                                 the Software Matter;

 

(e)                                  the landlord’s claim for dilapidations in respect of the office and warehouse premises at 2, Hertford Street, Ashton Under Lyne, Lancashire as set forth in paragraph 6.17.1 of the Disclosure Letter or any related correspondence referred to in such paragraph;

 

(f)                                    any failure of the Warranties set forth in paragraphs 1.1 and/or 2.2(a) of schedule 3 to be true, accurate and not misleading in any respect in connection with the Czech Seller and/or the Cyberview Czech Share;

 

(g)                                 any failure by the Czech Seller or any of its Related Persons to have duly complied with the requirements of Section 105(2) of Czech Act No. 513/1991

 

36

 

Coll., Commercial Code, as amended, with respect to the incorporation or ownership of Cyberview Czech prior to Completion;

 

(h)                                 any breach of clause 6.4;

 

(i)                                     any Terminal Repurchase Obligations which are required to be settled in cash and which have not been taken into account in the determination of the Working Capital Amount for the purposes of the preparation of the Completion Accounts and the Statement;

 

(j)                                     any failure to obtain any necessary consent or authorisation in connection with the Sazka Contract related to the acquisition of Czech Seller prior to Completion as set forth in paragraph 6.10.2 of the Disclosure Letter;

 

(k)                                  all and any liabilities (whether attributable to service before, on, or after Completion) that passed to the Company or the Subsidiaries under the Transfer of Undertakings (Protection of Employment) Regulations 1981 or the Transfer Regulations and relate in any way whatsoever to pension, retirement or death benefits payable (actually, prospectively or contingently) under or in connection with an occupational pension scheme (within the meaning of section 1 of the Pension Schemes Act 1993);

 

(l)                                     any failure of Cyberview Czech to claim (in Czech přihlásit) any debt owed by Sazka to Cyberview Czech in the Sazka Insolvency Proceedings;

 

(m)                               the Cirsa Matter; and

 

(n)                                 the SNAI Matter, to the extent that the relevant Loss is suffered or incurred by the relevant Group Company in the period between the Completion Date and the second anniversary thereof, save only for Losses comprising diminution in value of the Shares or loss of revenues or loss of profit of the Buyer, any Group Company or any of their Related Persons arising from a Covered Termination

 

10.                                 PROTECTIVE COVENANTS

 

10.1         The Seller undertakes to the Buyer and to each of the Buyer’s Related Persons that the Seller shall not, and shall procure that each other member of the Seller’s Group that is a subsidiary undertaking of the Seller Guarantor shall not, (whether alone or jointly with another and whether directly or indirectly) carry on or be engaged in any manner in, any Competing Business in the Protected Territory during a period of two years after Completion.

 

10.2         Notwithstanding anything contained in this Agreement or the other Transaction Agreements to the contrary, the restrictions set forth in this clause 10 shall not in any way prohibit or restrict the Seller or any of its Related Persons from, directly or indirectly:

 

(a)                                  acquiring beneficial ownership after the date of this Agreement of any interest in any person or business (however such acquisition is structured) that, directly or

 

37

 

indirectly (including without limitation, through any Related Person of such person or business) owns, manages, operates or engages in a Competing Business; provided that (i) such business does not constitute the principal business of such person or business and its Related Persons, taken as a whole (based on the revenues of the relevant person or business during the four full calendar quarters immediately preceding the date on which the acquisition is consummated) and (ii) if, in the financial year immediately preceding the date on which the acquisition is consummated, such Competing Business was responsible for or the source of revenues of more than £10,000,000, the Seller shall cause the divestiture of that portion of such person or business that engages in such Competing Business within 12 months after the consummation of such acquisition; or

 

(b)                                 acquiring or holding beneficial ownership of securities or other equity interests (i) representing not more than three percent of the outstanding voting power of any person that has voting securities traded on a national securities exchange, the Nasdaq Stock Market or the over-the-counter market, (ii) in any person through any employee benefit plan or (iii) in Buyer Guarantor or any successor person.

 

10.3         The Seller undertakes to the Buyer and to each of the Buyer’s Related Persons that the Seller shall not, and shall procure that each other member of Seller’s Group shall not, within a period of one year after Completion (whether alone or jointly with another and whether directly or indirectly) solicit or endeavour to entice away from any member of the Buyer’s Group, offer employment to or employ, or offer to conclude any contract for services with (together “solicit or employ”), any person who was employed by any Group Company on an annual salary of £40,000 or more on the Completion Date. This clause 10.3 shall not prevent any member of the Seller’s Group from employing any person who responds to a public advertisement for the relevant vacancy placed by or on behalf of the relevant member of the Seller’s Group or soliciting or employing persons contacted through bona fide search firms not targeting Group personnel if there has been no previous contact (specifically made with a view to allowing the relevant member of the Seller’s Group to take advantage of the proviso to this clause) between such member of the Seller’s Group (or any person acting on its behalf) and such person, or soliciting or employing any person whose employment was terminated by a Group Company after Completion.

 

10.4         The Seller acknowledges and agrees that each of clauses 10.1 to 10.3 (inclusive) constitutes an entirely separate and independent restriction and that the duration, extent and application of each of the respective restrictions are no greater than is reasonable and necessary for the protection of the interests of the Buyer and its Related Persons but that, if any such restriction shall be adjudged by any court or authority of competent jurisdiction to be void or unenforceable but would be valid if part of the wording thereof were to be deleted and/or the period thereof were to be reduced and/or the area dealt with thereby were to be reduced then (without prejudice to its continued application elsewhere) the said restriction shall apply within the jurisdiction of that court or competent authority with such modifications as may be necessary to make it valid and effective in that jurisdiction.

 

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11.           INSURANCE COVENANTS

 

11.1         The Seller shall keep, or cause to be kept, all Seller Policies and Company Policies (or replacement policies on substantially similar terms) in full force and effect until Completion.

 

11.2         If, prior to Completion, any matter, event, circumstance or incident occurs or arises in relation to any of the Group Companies or any of their assets, businesses or operations (a “Pre-Closing Incident”) and any Group Company or any other member of the Seller’s Group becomes aware that it has any right to make a claim in respect of it under the terms of any Policy (a “Pre-Closing Claim”), the Seller undertakes to, or to procure that the relevant member of the Seller’s Group shall, use reasonable endeavours to make such Pre-Closing Claim prior to Completion under the relevant Policy and pursue and obtain recovery under the relevant Policy in respect of any such Pre-Closing Claim. The Seller shall procure (both prior to and following Completion, as may be applicable) that any proceeds in respect of any such Pre-Closing Claim together with the amount of any deductible, co-payment or insurance cost incurred or applicable with respect to such Pre-Closing Claim (collectively, the “Pre-Closing Claim Amount”) is applied to the remediation, restoration or replacement of the relevant insured asset(s), business or operation of the relevant Group Company or the satisfaction of the relevant claim, liability or obligation of the relevant Group Company (as applicable) or that such Pre-Closing Claim Amount is passed to the Buyer (on behalf of the relevant Group Company) (without duplication of any other obligation under this Agreement).  The foregoing obligation to remit to the Buyer any Pre-Closing Claim Amount shall arise only to the extent that any member of the Buyer’s Group has made payment or incurred liability with respect to any such claim or the subject matter thereof.

 

11.3         From Completion onwards, the Seller shall, and shall procure that the Seller’s Group shall use reasonable endeavours to continue in force on the same terms (a) all Seller Policies to the extent that they provide coverage in relation to any Pre-Closing Incident under any “occurrence-based” Policies under which claims may be made relating to Pre-Closing Incidents both prior to and following Completion and (b) any Policies for which “tail” coverage is to be obtained as contemplated by the immediately following sentence (the Policies referred to in this clause 11.3 being the “Surviving Policies” and claims to be made under such Surviving Policies following Completion being the “Post Closing Claims”).  At the Buyer’s request, the Seller will use reasonable endeavors to obtain “tail” coverage in respect of such Policies as the Buyer may specify for the period after Completion, with the premiums for such coverage paid in advance (and not by means of any offset) by the Buyer, including providing information reasonably requested by Buyer in connection therewith (including a schedule of any Pre-Closing Incidents, which the Seller shall use reasonable endeavours to procure sets forth details of the Pre-Closing Incidents identified in accordance with clause 11.5 which are accurate and complete in all material respects so far as the Representatives of the Seller who are responsible for the preparation of such schedule are actually aware, provided that the provision of such a schedule shall not be deemed to constitute a representation or warranty by the Seller to the Buyer that such schedule sets forth a complete and comprehensive listing of all actual and contingent liabilities of the Group Companies as at Completion).  Notwithstanding 

 

39

 

the foregoing, to the extent that any member of the Seller’s Group reasonably incurs any incremental out-of-pocket cost as a result of the maintenance in force of the Surviving Policies following Completion to the extent such costs relate to Post-Closing Claims, which incremental out-of-pocket costs would not have been incurred but for the maintenance in force of the Surviving Policies from Completion in respect of the Post-Closing Claims as contemplated by this clause 11.3, such incremental out-of-pocket costs shall be borne by the Buyer.  In the event that the Buyer desires to terminate its obligation to pay such expenses in respect of one or more (or all) Post-Closing Claims, it may give the Seller written notice to such effect, after which time the Buyer shall have no future obligations to reimburse any such expenses incurred after the date of notice, and the Seller shall be under no obligation to pursue any such Post-Closing Claims after the date of such notice.

 

11.4         From Completion onwards, the Seller shall, and shall procure that each member of the Seller’s Group shall, take such steps as are reasonably required by the Buyer to make and pursue any claims under the Policies with respect to the Pre-Closing Incidents as are reasonably required (including giving notice of the claim to the insurer at the request of the Buyer) or to assist any Group Company or any member of the Buyer’s Group in the making of that claim (and the Buyer shall indemnify the Seller for any cost, expense, liability, obligation incurred by the Seller in acting in accordance with the Buyer’s instructions under this clause 11.4).  The Seller shall pay to the Buyer (on behalf of the relevant Group Company) any proceeds actually received in connection with such claim promptly after their receipt (but shall not be required to remit to Buyer any related deductible, co-payment or insurance cost incurred or applicable).  After Completion, the Seller shall have no responsibility for insurance of the Group Companies except as expressly set forth in this clause 11.

 

11.5         Prior to Completion, the Seller shall use reasonable endeavours in order to identify any and all Pre-Closing Incidents which could reasonably be expected to give rise to a claim in order to pursue such Pre-Closing Incidents under clause 11.2.  The Seller shall provide a draft of the schedule of Pre-Closing Incidents referred to in clause 11.3 to the Buyer by no later than 5 Business Days prior to Completion.

 

12.           CONFIDENTIAL INFORMATION

 

12.1         The Seller undertakes that it shall (and shall procure that each of its Representatives shall) maintain Confidential Information in confidence and not disclose that Confidential Information to any person except as permitted by this clause 12 or with the prior written consent of the Buyer.

 

12.2         Clause 12.1 does not apply to:

 

(a)           disclosure of Confidential Information to or at the written request of the Buyer;

 

(b)           use or disclosure of Confidential Information required to be disclosed by law, legal process, or the rules or standards of the New York Stock Exchange, 

 

40

 

NASDAQ, the SEC, or the rules or requirements of any gaming regulatory authority, law enforcement authority, or any other regulatory body;

 

(c)           disclosure of Confidential Information to Representatives if it is reasonably required for the purposes of exercising the rights or performing the obligations under this Agreement or the other Transaction Agreements and only if the Representatives are informed of the confidential nature of the Confidential Information; or

 

(d)           Confidential Information which becomes publicly known other than by the Seller’s breach (including a breach in respect of a failure of any Representative) of clause 12.1.

 

12.3         The Buyer undertakes that it shall not unreasonably withhold its written consent to the disclosure of Confidential Information by the Seller to persons discussing or evaluating potential transactions with Seller or its Related Persons or to actual or potential financing sources of the Seller and their Representatives, in each case where such persons are bound by confidentiality agreements which are enforceable by the Buyer and otherwise in a form acceptable to the Buyer, acting reasonably.

 

12.4         The provisions of this clause 12 shall survive the termination and/or Completion of this Agreement.

 

13.           ANNOUNCEMENTS

 

13.1         No party shall make any public announcement concerning the existence of this Agreement or its terms or the existence or the terms of any Transaction Agreement (except those matters set out in a press release in the Agreed Form) and each party shall procure that each of its Related Persons shall not make any such public announcement, without the prior consent of the other party, except to the extent required by law or the rules or standards of the New York Stock Exchange, NASDAQ or the SEC or the rules or requirements of any gaming regulatory authority, law enforcement authority, or any other Governmental Authority, provided that this clause 13.1 shall not prevent disclosure by a party of the existence or the terms of any Transaction Agreement to its lenders or financiers, or the public filing by the Seller Guarantor of this Agreement or any other Transaction Agreement with the SEC.

 

13.2         The restrictions contained in clause 13.1 shall apply without limit of time.

 

14.           TERMINATION

 

14.1         This Agreement may be terminated at any time prior to Completion:

 

(a)           by the written agreement of each of Seller and Buyer;

 

(b)           by either the Buyer or the Seller if any of the Conditions are not satisfied or waived in accordance with the terms of this Agreement on or prior to the date falling 180 days after the date of this Agreement;

 

41

 

(c)           by either the Buyer or the Seller if any gaming regulatory authority, law enforcement authority or other Governmental Authority enjoins or denies approval of or otherwise prohibits or renders unlawful the consummation of the Acquisition or the completion of any of the transactions contemplated by this Agreement, provided that this right of termination may only be exercised if such enjoinment, denial, prohibition or rendering unlawful remains in effect as at the date that all Conditions have been satisfied or waived in accordance with clause 3;

 

(d)           by either the Seller or the Buyer in accordance with clause 5.7(a);

 

(e)           by the Buyer if, before Completion:

 

(i)          there is a breach of any of the Warranties (other than any of the Fundamental Warranties or the Warranty set forth at paragraph 4.2(h) of schedule 3) as given on the date of this Agreement, the effect of which, individually or in the aggregate, is or would reasonably be expected to be material and adverse to the Group, taken as a whole, and which, if capable of remedy, is not remedied to the satisfaction of the Buyer (acting reasonably) within 20 days of notice from the Buyer to do so, or a breach of any of the Fundamental Warranties or the Warranty set forth in paragraph 4.2(h) of schedule 3, as given on the date of this Agreement, which, if capable of remedy, is not remedied to the satisfaction of the Buyer (acting reasonably) within 20 days of notice from the Buyer to do so, provided that, for the purposes of this clause 14.1(e)(i), in determining whether a breach of any Warranty has occurred and whether the right to terminate this Agreement may be exercised, each Warranty, other than the Warranty set forth at paragraph 4.2(h) of schedule 3, shall be read and construed so that any qualification of such Warranty by reference to materiality, for example by the inclusion therein of the words “material”, “in any material respect”, “to an extent which is material in the context of a Group Company”, “to an extent which is material in the context of the Group” or any similar formulation or expression qualifying a Warranty by reference to a threshold of materiality, shall be disregarded and deemed to be deleted from such Warranty; or

 

(ii)         any event occurs which, if the Warranties were repeated at any time before Completion by reference to the facts and circumstances then existing as if reference in the Warranties to the date of this Agreement were references to the relevant date, would constitute a breach of any of the Warranties (other than any of the Fundamental Warranties or the Warranty set forth in paragraph 4.2(h) of schedule 3), the effect of which, individually or in the aggregate, is or would reasonably be expected to be material and adverse to the Group, taken as a whole, or which would constitute a breach of any of the Fundamental Warranties or the Warranty set forth at paragraph 4.2(h) of schedule 3, and which, if capable of remedy, is not remedied to the satisfaction of the Buyer (acting reasonably) within 20 days of notice from the Buyer to do so, provided that, for the purposes of this clause 14.1(e)(ii), 

 

42

 

in determining whether a breach of any Warranty has occurred and whether the right to terminate this Agreement may be exercised, each Warranty other than the Warranty set forth at paragraph 4.2(h) of schedule 3, shall be read and construed so that any qualification of such Warranty by reference to materiality, for example by the inclusion therein of the words “material”, “in any material respect”, “to an extent which is material in the context of a Group Company”, “to an extent which is material in the context of the Group” or any similar formulation or expression qualifying a Warranty by reference to a threshold of materiality, shall be disregarded and deemed to be deleted from such Warranty; or

 

(iii)        there is any material breach or non-fulfilment by the Seller of any of its material obligations under this Agreement to be performed prior to Completion which, if capable of remedy, is not remedied to the satisfaction of the Buyer (acting reasonably) within 15 days of notice from the Buyer to do so,

 

provided that, in respect of any right of termination in clauses 14.1(b), (c), (d) or (e), such termination right may only be exercised by the terminating party providing written notice of termination to the other party, prior to the Completion Date.

 

14.2         In the event of termination of this Agreement by either Seller or Buyer as provided in clause 14.1, this Agreement shall become void and have no effect, without liability or obligation on the part of the Seller or the Buyer or their respective officers or directors (save in respect of any rights and liabilities which have accrued before termination), except as provided for in clause 14.3 below and as set forth in clause 12 and clause 30 or in the confidentiality agreement dated 29 September 2010 between Seller and Buyer, which shall survive termination of this Agreement by either Seller or Buyer as provided in clause 14.1.

 

14.3         Unless agreed otherwise by the parties, the following provisions shall survive termination:  clause 1 (Interpretation), clause 9.7 (Warranties, Undertakings, Indemnities), clause 12 (Confidential Information), clause 13 (Announcements), clause 17 (Costs), clause 20 (Entire Agreement), clause 21 (Variations), clause 22 (Waiver), clause 23 (Invalidity), clause 24 (Notices), clause 26 (Third party rights) and clause  30 (Governing law and jurisdiction).

 

14.4         Upon any termination of this Agreement, each of the parties shall bear its own legal, accountancy and other costs, charges and expenses connected therewith.

 

15.           PAYMENTS AND SET-OFF

 

15.1         Unless otherwise expressly stated in this Agreement or any other Transaction Agreement, every amount payable under this Agreement or  any of the other Transaction Agreements by one party  (the “Paying Party”) to another (the “Receiving Party”) shall be free and clear of deduction or withholding of any kind other than any deduction or withholding required by law, provided that the Paying Party shall be entitled to set-off against and 

 

43

 

deduct from any payment to be made by it or any of its Related Persons to the Receiving Party or any of its Related Persons under any of the Transaction Agreements any amount which it reasonably and in good faith considers to be due to it or any of its Related Persons under the terms of this Agreement or any of the other Transaction Agreements.

 

15.2         Unless otherwise expressly stated in this Agreement or any of the other Transaction Agreements, all payments to be made under this Agreement or any of the other Transaction Agreements shall be made in sterling by way of electronic funds transfer of immediately available funds:

 

(a)           in the case of payments to the Seller, to the Seller’s Account; and

 

(b)           in the case of payments to the Buyer, to the Buyer’s Account;

 

15.3         Subject to clause 15.1, if any sum due for payment under or in accordance with this Agreement or any of the other Transaction Agreements by one party to another is not paid on the due date, the party in default shall pay interest thereon (at the same time and payment is made) at the Default Rate for the period from the due date to the date of actual payment (both dates inclusive).

 

15.4         If a party is required by law to make a deduction or withholding from any payment referred to in clause 15.1 where that payment is made in satisfaction of any liability arising under a Seller Obligation or a Buyer Obligation, that party (or the Seller Guarantor or Buyer Guarantor, as the case may be) shall pay such sum as will, after the making of any such deduction or withholding, leave the recipient of the payment with the same amount as it would have received had no deduction or withholding been made.  For the avoidance of doubt, the immediately preceding sentence shall not apply to the exercise of set-off rights in accordance with the proviso in clause 15.1.

 

15.5         If any sum payable by a party under this Agreement or under the Tax Deed (where that payment is made in satisfaction of any liability arising under a Seller Obligation or Buyer Obligation), shall be subject to Tax in the hands of the recipient of the payment (ignoring the availability of any Relief), the same obligation to make an increased payment as is referred to in clause 15.4 shall apply in relation to such liability to Tax as if it were a deduction or withholding required by law.

 

16.           ASSIGNMENT

 

This Agreement is personal to the parties and accordingly no party, without the prior written consent of the others, shall assign, transfer, charge or declare a trust of the benefit of all or any of any other party’s obligations, by operation of law or otherwise, nor any benefit arising under this Agreement nor shall any party delegate any of its obligations under this Agreement to any person, provided that the Buyer may assign the benefit of this Agreement (in whole or in part), after Completion, to any of its Related Persons, to a successor to all or substantially all the business of the Group and/or to any purchaser of any of its Related Persons or of any significant portion of the business of the Group, and, at any time, as collateral for bona fide debt obligations, in each case without the prior consent of any other party; provided, further, subject to the Buyer Guarantor confirming  

 

44

 

to the Seller that the provisions of clause 29 shall apply to the obligations and liabilities of the relevant delegate and that the delegating party remains fully liable for all of its obligations under this Agreement, the Buyer may delegate any or all of the obligation or liabilities of the Buyer under this Agreement to a Related Person of the Buyer without the prior written consent of any other party.  If the Buyer assigns the benefit of this Agreement (in whole or in part) in accordance with the provisions of this clause 16, the liability of the Seller and the Seller Guarantor under this Agreement shall be no greater than such liabilities would have been had the assignment not occurred.

 

17.           COSTS

 

Unless expressly otherwise provided in this Agreement each of the parties shall bear its own legal, accountancy and other costs, charges and expenses connected with the sale and purchase of the Shares.  For the avoidance of doubt, the Buyer shall bear any fees required to be paid to any regulatory authority in connection with the satisfaction of the Conditions.

 

18.           EFFECT OF COMPLETION

 

The terms of this Agreement (insofar as not performed at Completion and subject as specifically otherwise provided in this Agreement) shall continue in force after and notwithstanding Completion.

 

19.           FURTHER ASSURANCES

 

19.1         Each of the parties shall from time to time upon request from the other do or procure the doing of all acts and/or execute or procure the execution of all such documents in so far as each is reasonably able and in a form reasonably satisfactory to the party concerned for the purpose of transferring to the Buyer the Shares and otherwise giving the other party the full benefit of this Agreement.

 

20.           ENTIRE AGREEMENT

 

20.1         Each party on behalf of itself and as agent for each of its Related Persons acknowledges and agrees with the other party that:

 

(a)           this Agreement together with any other documents referred to in this Agreement, including without limitation the other Transaction Agreements and the confidentiality agreement dated 29 September 2010 between the Seller and the Buyer constitute the entire and only agreement between the parties and their respective Related Persons relating to the subject matter of the Transaction Agreements and such confidentiality agreement;

 

(b)           neither it nor any of its Related Persons have been induced to enter into any Transaction Agreement in reliance upon, nor have they been given, any oral or written warranty, representation, statement, information disclosures, projection of future financial or business prospects, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature whatsoever (express or 

 

45

 

implied) other than as are expressly set out in the Transaction Agreements and, to the extent that any of them have been, it (acting on behalf of itself and as agent on behalf of each of its Related Persons) unconditionally and irrevocably waives any claims, rights or remedies which any of them might otherwise have had in relation thereto; and

 

(c)           save as expressly provided in this Agreement or any of the other Transaction Agreements, the only remedies available to it in respect of the Transaction Agreements (and, where appropriate, to its Related Persons) are damages for breach of contract and, for  the avoidance of doubt, following Completion neither it (nor its Related Persons, where appropriate) have any  right to  rescind  or terminate any Transaction Agreements either for breach of contract or for negligent or innocent misrepresentation or otherwise;

 

PROVIDED THAT the provisions of this clause 20 shall not exclude any liability or remedy (including any right to rescind this Agreement) which any of the parties or, where appropriate, their Related Persons would otherwise have, in respect of another party or, where appropriate, to any other party’s Related Persons, in respect of any fraud, fraudulent misrepresentation or fraudulent concealment by any of them.

 

21.           VARIATIONS

 

This Agreement may be varied only by a document signed by or on behalf of each of the Seller and the Buyer.

 

22.           WAIVER

 

22.1         A waiver of any term, provision or condition of, or consent granted under, this Agreement shall be effective only if given in writing and signed by the waiving or consenting party and then only in the instance and for the purpose for which it is given.

 

22.2         No failure or delay on the part of any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

 

22.3         No breach of any provision of this Agreement shall be waived or discharged except with the express written consent of the Seller and the Buyer.

 

23.           INVALIDITY

 

23.1         If any provision of this Agreement is or becomes invalid, illegal, void or unenforceable in any respect under the law of any jurisdiction:

 

(a)           such provision shall:

 

(i)                                     to the extent that it is illegal, void, invalid or unenforceable be given no effect and shall be deemed not to be included in this Agreement; and

 

46

 

(ii)                                  not affect or impair the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or the legality, validity or enforceability under the law of any other jurisdiction of such provision or any other provision of this Agreement; and

 

(b)           the parties shall use reasonable endeavours to replace such a provision with a valid and enforceable substitute provision which carries out, as closely as possible, the intentions of the parties under this Agreement.

 

24.           NOTICES

 

24.1         Any notice, demand or other communication given or made under or in connection with the matters contemplated by this Agreement shall be in writing and shall be delivered personally or sent by fax or prepaid first class post (air mail if posted to or from a place outside the United Kingdom):

 

	
In the case of the Buyer to:
    
	
 
    	
 
    	
Global   Draw Limited
    
	
 
    	
 
    	
99 Green   Lane
    
	
 
    	
 
    	
Hounslow,   Middlesex
    
	
 
    	
 
    	
TW4 6BW
    
	
Fax:
    	
 
    	
+44 208   917 9113
    
	
Attention:
    	
 
    	
Company   Secretary
    
	
 
    	
 
    	
 
    
	
In the case of the Buyer Guarantor to:
    
	
 
    	
 
    	
Scientific   Games Corporation
    
	
 
    	
 
    	
750   Lexington Avenue, 25th Floor
    
	
 
    	
 
    	
New York,   New York 10022
    
	
Fax:
    	
 
    	
+1 (212)   754 2372
    
	
Attention:
    	
 
    	
General   Counsel
    
	
 
    	
 
    	
 
    
	
In the case of the Seller, the Czech Seller or the   Seller Guarantor to:
    
	
 
    	
 
    	
IGT-UK   Group Limited
    
	
 
    	
 
    	
Margaret   Street, Ashton-under-Lyne
    
	
 
    	
 
    	
Lancashire   OL7 0QQ
    
	
Fax:
    	
 
    	
+44 161   308 2580
    
	
Attention:
    	
 
    	
Managing   Director
    
	
 
    	
 
    	
 
    
	
With a   copy to:
    	
 
    	
 
    
	
 
    	
 
    	
IGT
    
	
 
    	
 
    	
6335   South Buffalo Drive
    
	
 
    	
 
    	
Las   Vegas, NV 89113
    
	
Fax:
    	
 
    	
1-702-669-7904
    
	
Attention:
    	
 
    	
Chief   Legal Officer
    

 

and shall be deemed to have been duly given or made as follows:

 

(a)           if personally delivered, upon delivery at the address of the relevant party;

 

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(b)           if sent by international courier, upon delivery at the address of the relevant party; and

 

(c)           if sent by fax, when despatched;

 

provided that if, in accordance with the above provisions, any such notice, demand or other communication would otherwise be deemed to be given or made outside 9.00 a.m. — 5 p.m. on a Business Day such notice, demand or other communication shall be deemed to be given or made at 9.00 a.m. on the next Business Day.

 

24.2         A party may notify the other party to this Agreement of a change to its name, relevant addressee, address or fax number for the purposes of clause 24.1 provided that such notification shall only be effective:

 

(a)           on the date specified in the notification as the date on which the change is to take place; or

 

(b)           if no date is specified or the date specified is less than five Business Days after the date on which notice is given, the date falling five Business Days after notice of any such change has been given.

 

25.           COUNTERPARTS

 

25.1         This Agreement may be executed in any number of counterparts which together shall constitute one agreement.  Any party may enter into this Agreement by executing a counterpart and this Agreement shall not take effect until it has been executed by all parties.

 

25.2         Delivery of an executed signature page of a counterpart by facsimile transmission or in AdobeTM Portable Document Format (PDF) sent by electronic mail shall take effect as delivery of an executed counterpart of this Agreement.  If either method is adopted, without prejudice to the validity of such agreement, each party shall provide the other with the original of such page as soon as reasonably practicable thereafter.

 

26.           THIRD PARTY RIGHTS

 

26.1         Except for the provisions of clauses 6.4 and 9.7, which shall be enforceable by the persons expressly referred to in such clauses (each such person who is not also party to this Agreement, a “Third Party”) pursuant to the Contracts (Rights of Third Parties) Act 1999, the parties do not intend that any term of this Agreement should be enforceable by any person who is not a party to this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999 or otherwise.

 

26.2         Notwithstanding the provisions of clause 26.1 or any benefits conferred by this Agreement on any third party by virtue of the Contracts (Rights of Third Parties) Act 1999, the parties may (subject to the other provisions of this Agreement) amend, vary, waive or terminate this Agreement at any time and in any way without the consent of any Third Party.

 

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27.           UK VAT GROUPING

 

27.1         The Seller and the Buyer shall notify HMRC as soon as reasonably practicable that IGT Gaming UK Limited and the Seller are required to be excluded from the Company’s UK VAT group and shall co-operate to ensure that such exclusion is sought to have effect from Completion (or such other date as is agreed by the parties acting reasonably and in good faith) (that date from which such exclusion has effect being the “Effective Date”).  The Seller shall procure that IGT Gaming UK Limited and the Seller shall be registered for VAT from (or as soon as is reasonably practicable after) the Effective Date and shall from the Effective Date, not issue any invoices containing the VAT registration number of the Company’s UK VAT Group.

 

27.2         If HMRC request any information or documentation pursuant to an investigation, audit or otherwise into or in respect of the Company’s UK VAT group which relates to the period in which IGT Gaming UK Limited and the Seller were members of the Company’s UK VAT group, the Seller shall provide, and undertakes to procure that IGT Gaming UK Limited shall provide, the Company (as representative member of the relevant UK VAT group) or their duly authorised agents with access to such  information and documentation as is required to be provided to HMRC in accordance with applicable laws.

 

27.3         The Buyer covenants with the Seller that, if the Company (as representative member of the relevant UK VAT group) is entitled to be paid by HMRC an amount of credit for input tax (where no output tax is due) or the amount by which any credit for input tax exceeds the relevant output tax (in either case the “Credit”) the Buyer shall procure that the Company shall pay to IGT Gaming UK Limited or the Seller (as the case may be) a sum equal to the Credit within five Business Days of receipt of such Credit.  References to “input tax” in this clause 27.3 are to input tax in respect of any supply of goods or services made to IGT Gaming UK Limited or the Seller or any importation or acquisition made by IGT Gaming UK Limited or the Seller before the Effective Date and after the last day of the last prescribed accounting period of IGT Gaming UK Limited or the Seller (as appropriate) to end before the Effective Date.

 

27.4         The Seller covenants to pay to the Buyer an amount equal to any VAT for which the Company (as representative member of the relevant UK VAT group) is liable to account for in respect of any supply of goods or services or any acquisition or importation made by IGT Gaming UK Limited or IGT UK Group Limited after the last day of the last prescribed accounting period of IGT Gaming UK Limited or IGT UK Group Limited (as appropriate) to end before the Effective Date and before the Effective Date.

 

28.           SELLER GUARANTEE

 

28.1         The Seller Guarantor as primary obligor unconditionally and irrevocably:

 

(a)                                  guarantees by way of continuing guarantee to the Buyer the due and punctual performance by the Seller, the Czech Seller and their Related Persons of their

 

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respective obligations under or pursuant to this Agreement and each other Transaction Agreement;

 

(b)           agrees that if and each time that the Seller, the Czech Seller or any of their Related Persons fails to make any payment when it is due under or pursuant to this Agreement or any other Transaction Agreement, the Seller Guarantor shall on demand (without requiring the Buyer first to take steps against the Seller or any other person) pay that amount to the Buyer.

 

28.2         Each payment to be made by the Seller Guarantor under this clause shall be made in the currency in which the relevant amount is payable by the Seller, free and clear of all deductions or withholdings of any kind.

 

28.3         The Seller Guarantor’s obligations under this clause shall not be affected by any matter or thing which but for this provision might operate to affect or prejudice those obligations, including without limitation:

 

(a)                                  any time or indulgence granted to, or composition with, the Seller, the Czech Seller or any other person;

 

(b)                                 the taking, variation, renewal or release of, or neglect to perfect or enforce this Agreement, any other Transaction Agreement or any right, guarantee, remedy or security from or against the Seller, the Czech Seller or any other person; or

 

(c)                                  any unenforceability or invalidity of any obligation of the Seller or the Czech Seller, so that this clause shall be construed as if there were no such unenforceability or invalidity.

 

29.           BUYER  GUARANTEE

 

29.1         The Buyer Guarantor as primary obligor unconditionally and irrevocably:

 

(a)                                  guarantees by way of continuing guarantee to the Seller the due and punctual performance by the Buyer and its Related Persons of their respective obligations under or pursuant to this Agreement and each other Transaction Agreement;

 

(b)                                 agrees that if and each time that the Buyer or any of its Related Persons fails to make any payment when it is due under or pursuant to this Agreement or any other Transaction Agreement, the Buyer Guarantor shall on demand (without requiring the Seller first to take steps against the Buyer or any other person) pay that amount to the Seller.

 

29.2         Each payment to be made by the Buyer Guarantor under this clause shall be made in the currency in which the relevant amount is payable by the Buyer, free and clear of all deductions or withholdings of any kind.

 

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29.3         The Buyer Guarantor’s obligations under this clause shall not be affected by any matter or thing which but for this provision might operate to affect or prejudice those obligations, including without limitation:

 

(a)           any time or indulgence granted to, or composition with, the Buyer or any other person;

 

(b)           the taking, variation, renewal or release of, or neglect to perfect or enforce this Agreement, any other Transaction Agreement or any right, guarantee, remedy or security from or against the Buyer or any other person; or

 

(c)           any unenforceability or invalidity of any obligation of the Buyer, so that this clause shall be construed as if there were no such unenforceability or invalidity.

 

30.           GOVERNING LAW AND JURISDICTION

 

This Agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this Agreement or its formation) shall be governed by and construed in accordance with English law.  The Courts of England shall have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to non-contractual obligations arising from or in connection with this Agreement, or a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity).

 

IN WITNESS whereof this Agreement has been executed on the date first above written.

 

 

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SCHEDULE 3

 

The Warranties

 

In this schedule 3, any reference to any legislation of the European Union or the United Kingdom shall be deemed to include a reference to any similar legislation, or legislation covering similar issues, in any jurisdiction in which a Group Company carries on business or otherwise derives revenue and unless another definition is provided, a “Material Contract” means a Contract which involves revenue or expenditure in excess of £100,000 per annum exclusive of VAT or other sales taxes and includes any Contract referred to in paragraph 12.2 of this schedule 3.

 

1.                                       SELLER’S CAPACITY

 

1.1                                 Each of the Seller, the Seller Guarantor and the Czech Seller, and each of their relevant Related Persons, has the requisite power and authority, and has obtained all corporate authorisations and all other applicable governmental, statutory, regulatory or other consents, licences, waivers or exemptions required to enter into and to perform its obligations under this Agreement, the Tax Deed and each of the other Transaction Agreements to which it is a party.

 

1.2                                 Each Transaction Agreement to which the Seller, the Seller Guarantor or the Czech Seller, or any of their Related Persons is a party constitutes or will, when executed, constitute legally valid and binding obligations on the Seller, the Seller Guarantor or the Czech Seller (as the case may be), and/or such Related Person, enforceable against such person in accordance with its terms except as enforceability may be affected by bankruptcy, insolvency, and similar laws affecting creditors’ rights and except as the availability of certain remedies may be limited by principles of equity.

 

1.3                                 Compliance with the terms of each Transaction Agreement to which any of the Seller, the Seller Guarantor or the Czech Seller, or any of their Related Persons is a party does not and will not conflict with or constitute a default or breach under any provision of:

 

(a)                                  the memorandum or articles of association (or equivalent documents) of the Seller, the Seller Guarantor or the Czech Seller (as the case may be) or the relevant Related Person; or

 

(b)                                 any order, judgment, award, injunction, decree or regulation or any other restriction of any kind or character by which it is bound or submits to an extent which would prohibit, prevent, delay, impede or restrict the consummation of the transactions contemplated by any of the Transaction Agreements.

 

2.                                       THE COMPANY, THE SHARES AND THE SUBSIDIARIES

 

2.1                                 Incorporation and existence

 

The Seller, the Company and each of the Subsidiaries are limited companies incorporated under English law or (in the case of Barcrest Development B.V.) the law of the

 

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Netherlands, and have been in continuous existence since incorporation.  Cyberview Czech is a limited liability company incorporated under the law of the Czech Republic, and has been in continuous existence since incorporation.

 

2.2                                 The Shares

 

(a)                                  The Seller is the only legal and beneficial owner of the Company Shares.  The Czech Seller is the only legal and beneficial owner of the Cyberview Czech Share.  Upon the delivery and payment of the Completion Payment at Completion, the Buyer will receive from the Seller and the Czech Seller, good and valid title to the Company Shares and the Cyberview Czech Share, respectively, free from any Encumbrances.

 

(b)                                 The Company has not issued or allotted any shares other than the Company Shares and the Company Shares are fully paid or credited as fully paid.  Cyberview Czech has not increased its registered capital nor has the Czech Seller decided on such increase; the Cyberview Czech Share represents 100% of the registered capital of Cyberview Czech and is fully paid.

 

(c)                                  There is no Encumbrance over or affecting any Shares, nor is there any commitment to give or create such an Encumbrance, and, so far as the Seller is aware, no person has claimed to be entitled to such an Encumbrance.

 

(d)                                 Other than this Agreement, there is no agreement or obligation requiring, and no claim has been made requesting:

 

(i)                                     the allotment, sale, transfer, redemption or repayment of, or the grant to a person of the right (conditional or not) to require the issue, allotment, sale, transfer, redemption or repayment of, a share in the capital of the Company or Cyberview Czech (including an option or right of pre-emption or conversion); or

 

(ii)                                  the issue or grant to a person of a right (conditional or not) to require the issue of loan capital,

 

either now or at any future date.

 

2.3                                 The Group Companies

 

(a)                                  The particulars relating to the Group Companies set out in schedules 1 and 2 to this Agreement are true and accurate.

 

(b)                                 Save as shown in schedule 2, the Company is the only legal and beneficial owner of the shares in the capital of the Subsidiaries.  The Company does not have any subsidiary undertakings other than the Subsidiaries.  The Czech Seller is the only legal and beneficial owner of the Cyberview Czech Share.  Cyberview Czech does not have any subsidiaries.  Each of the Subsidiaries is a wholly-owned subsidiary of the Company (unless otherwise indicated in schedule 2) and each of

 

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the shares of each Group Company has been properly allotted and issued and is fully paid or credited as fully paid.

 

(c)                                  There is no Encumbrance over or affecting any shares in the capital of any Group Company, nor is there any commitment to give or create such an Encumbrance, and so far as the Seller is aware no person has claimed to be entitled to such an Encumbrance.

 

(d)                                 Other than this Agreement, there is no Contract requiring the allotment, sale, transfer, redemption or repayment of, or the grant to a person of the right (conditional or not) to require the allotment, sale, transfer, redemption or repayment of, a share in the capital of any of the Subsidiaries (including an option or right of pre-emption or conversion).

 

(e)                                  No Group Company owns any shares or stock in the capital of, nor does it have any other ownership interest in, any company or business organisation of whatever nature other than, (in the case of the Company,) the Subsidiaries, nor does the Company nor any other Group Company control or take part in the management of, or is or has agreed to become a member of, any other company, partnership, unincorporated association, joint venture or other business organisation or has outside the United Kingdom any branch or any permanent establishment (as that expression is defined in the respective Double Taxation Relief Orders current at the date of this agreement).

 

2.4                                 Corporate Structure

 

The diagram of the corporate structure of the Group attached to the Disclosure Letter is true and accurate.

 

2.5                                 Confidentiality agreements

 

The Company is a party to, or otherwise is a beneficiary of and is able to enforce the terms of, any confidentiality agreement that may have been entered into by a third party who has participated as a potential purchaser of the Shares in the process in respect of the Group that has culminated in the entry into of this Agreement.

 

3.                                       ACCOUNTS

 

3.1                                 General

 

(a)                                  The Accounts of each Group Company:

 

(i)                                     have been prepared in accordance with applicable laws (including the Companies Act 1985, the Companies Act 2006 and, in the case of the Accounts of Cyberview Czech, the Act No. 563/1991 Coll., on accounting, as amended, of the Czech Republic, and as applicable) and (in the case of the Accounts for each of the Company and the Subsidiaries) Generally Accepted Accounting Practice in the United Kingdom and (in

 

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the case of the Accounts of Cyberview Czech) the IFRS and the Czech Accounting Standards, the IAS Regulations and (in the case of Barcrest Development B.V.) Title 9, Book 2 of the Netherlands Civil Code, and, subject thereto and save as expressly stated in the Accounts, on a basis consistent with that adopted in preparing the audited accounts in respect of the relevant Group Company for and during the previous two financial periods;

 

(ii)                                  give a true and fair view of the assets, liabilities and state of affairs of that Group Company as at the Accounts Date and of the profit or loss and (where applicable) cash flow of that Group Company for the period ended on the Accounts Date;

 

(iii)                               contain provision adequate to cover all liabilities (including all contingent liabilities (except for contingent liabilities not required to be set forth in the Accounts) or deferred liability for Tax) of that Group Company as at the Accounts Date as required (in the case of the Accounts for each of the Company and the Subsidiaries) by Generally Accepted Accounting Practice in the United Kingdom and (in the case of the Accounts for Cyberview Czech) by the IFRS and Czech Accounting Standards; and

 

(iv)                              make provision reasonably regarded at that time as adequate for all bad and doubtful debts as at the Accounts Date on a basis consistent (in the case of the Accounts for each of the Company and the Subsidiaries) with Generally Accepted Accounting Practice in the United Kingdom and (in the case of the Accounts for Cyberview Czech) by the IFRS and Czech Accounting Standards.

 

(b)                                 The 2010 Accounts:

 

(i)                                     have been prepared in accordance with applicable laws and US GAAP;

 

(ii)                                  give a true and fair view of the combined assets, liabilities and state of affairs of the Group as at the 2010 Accounts Date and of the combined profit or loss and (where applicable) cash flow of the Group for the period ended on the 2010 Accounts Date;

 

(iii)                               contain provision adequate to cover all combined liabilities (including all contingent liabilities (except for contingent liabilities not required to be set forth in the 2010 Accounts) or deferred liability for Tax) of the Group as at the 2010 Accounts Date as required by US GAAP; and

 

(iv)                              make provision reasonably regarded at that time as adequate for all bad and doubtful debts as at the 2010 Accounts Date on a basis consistent with US GAAP.

 

(c)                                  The Management Accounts have been prepared diligently, in good faith and in accordance with US GAAP (having regard to their status as management accounts

 

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and that the normal period end adjustments which would arise on an audit have not been made), fairly represent the combined assets and liabilities, combined profits and losses and combined cash flow of the Group (taken as a whole) as at and for the fiscal year-to-date period ended on the Management Accounts Date, and are not misleading in any material respect.

 

3.2                                 Accounting and other records

 

(a)                                  The books of account and other records of each Group Company are up-to-date and have been maintained in all material respects in accordance with (in the case of the Company and the Subsidiaries) the law and applicable standards, principles and practices generally accepted in the United Kingdom including, where relevant, International Accounting Standards and (in the case of Cyberview Czech) the IFRS and the IAS Regulations.

 

(b)                                 All material deeds and documents (properly stamped where stamping is necessary for enforcement thereof) belonging to each Group Company and which by law ought to be in the possession of the respective Group Company are in the possession of such Group Company.

 

3.3                                 Accounting reference date

 

The accounting reference date for each of the Group Companies under section 391 of the Companies Act 2006, section 224 of the Companies Act 1985, or, in the case of Cyberview Czech, the Act No. 563/1991 Coll., on accounting, as amended, of the Czech Republic (as applicable) is, and during the last three years has always been 30 September.

 

3.4                                 Government grants

 

No Group Company is liable to pay or repay an investment with other grants or subsidy made to it by any Governmental Authority.

 

3.5                                 Loans

 

No Group Company had lent any money which was outstanding as at the 2010 Accounts Date or has lent any money since the 2010 Accounts Date (excluding intra-group debt between Group Companies) which has not been repaid to it and no Group Company owns the benefit of any debt (whether present or future) other than debts accrued to it in the ordinary course of its business consistent with past practice.

 

3.6                                 Bank accounts

 

The Group Companies do not have any bank or deposits accounts other than the bank accounts set forth in the statement attached to the Disclosure Letter.  Since the date of that statement there have been no payments out of any of the accounts except for payments made in the ordinary course of business consistent with past practice.

 

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4.                                       CHANGES SINCE THE 2010 ACCOUNTS DATE

 

4.1                                 General

 

Since the 2010 Accounts Date, each Group Company has carried on its business in the ordinary and usual course consistent with past practice so as to maintain the business as a going concern.

 

4.2                                 Specific

 

Since the 2010 Accounts Date:

 

(a)                                  no Group Company has made, or agreed to make, capital expenditure exceeding in total £250,000 or incurred, or agreed to incur, a commitment or connected commitments involving capital expenditure exceeding in total £100,000 or incurred extended payment terms with customers over £100,000;

 

(b)                                 no substantial supplier or substantial customer (being a supplier or customer who in any of the last two years the Group paid to or received from in excess of £350,000) has ceased or substantially reduced its trade with the Group or has altered the terms of trade to the Group’s material disadvantage or has informed any Group Company in writing or, as far as the Seller is aware, has otherwise indicated, that it will or is likely to terminate any contract with any Group Company or cease to deal with or to reduce the level of business it does with any Group Company;

 

(c)                                  no Group Company has declared, paid or made a dividend or other distribution (including a distribution within the meaning of the TA) except to the extent provided in the Accounts or as provided for in this Agreement;

 

(d)                                 no resolution of the shareholders of the Group has been passed (except for those representing the ordinary business of an annual general meeting);

 

(e)                                  no Group Company has repaid or redeemed share or loan capital, or made (whether or not subject to conditions) an agreement or undertaken an obligation to do any of those things;

 

(f)                                    no Group Company has paid nor is under an obligation to pay any management charges;

 

(g)                                 no Group Company has entered into any Material Contract outside the ordinary course of business consistent with past practice;

 

(h)                                 there has been no material adverse change in the turnover, financial or trading position or, so far as the Seller is aware, prospects of the Group taken as a whole;

 

(i)                                     no Group Company has assumed or incurred any liabilities (excluding contingent liabilities which would not be required to be accrued, provided or reserved for on

 

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a balance sheet of the relevant Group Company in accordance with US GAAP), otherwise than in the ordinary course of carrying on its business consistent with past practice; and

 

(j)                                     there have been no material changes in the accounting policies of any Group Company (including any change in depreciation or amortisation policies) and no revaluation of any Group Company’s properties or assets.

 

5.                                       ASSETS

 

5.1                                 Title

 

(a)                                  There are no Encumbrances, nor has the Group agreed to create or give any such Encumbrance, over any part of the material assets, property, undertaking, goodwill or uncalled capital of any Group Company (other than Permitted Encumbrances).

 

(b)                                 Each material asset included in the 2010 Accounts or acquired by it since the 2010 Accounts Date (other than assets sold or otherwise disposed of in the ordinary course of business):

 

(i)                                     is legally and beneficially owned by a Group Company; and

 

(ii)                                  where capable of possession, in the possession of a Group Company, except where such asset is kept elsewhere in the ordinary course of business consistent with past practice.

 

(c)                                  The property, rights, Intellectual Property and assets owned by the Group or leased or licensed by the Group Companies (other than from the Seller Group) or otherwise to be provided to the Group Companies pursuant to the Transaction Agreements comprise all the property, rights, Intellectual Property and assets reasonably necessary for the carrying on of the business of the Group Companies to the extent to which it is conducted as at the date of this Agreement.

 

(d)                                 All material tangible personal property owned or leased by any of the Group Companies is located on the Properties except where such property is kept elsewhere in the ordinary course of its business, consistent with past practice.

 

5.2                                 Hire purchase and leased assets

 

Copies of the material parts of any bill of sale or any hiring or leasing agreement, hire purchase agreement, credit or conditional sale agreement, agreement for payment on deferred terms or any other similar agreement to which any Group Company is a party and which are material to the operation of its business are described in the Disclosure Letter.

 

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6.                                       INTELLECTUAL PROPERTY

 

6.1                                 General

 

(a)                                  The Disclosure Letter contains a complete and accurate list of all Intellectual Property which is registered in or applied for in the name of any Group Company (complete and accurate in all material respects in respect of the foregoing Intellectual Property)  or that is subject to the Intellectual Property Assignments (all the foregoing, collectively “Registered Company IP”), setting forth as to each such item of Intellectual Property, as applicable, the item or title, the application or registration number, the jurisdiction in which such item is registered or pending, and its current status. All Registered Company IP is valid and enforceable, free from Encumbrances (except Permitted Encumbrances), and a member of the Group is the sole and exclusive owner of all right, title and interest in and to the Registered Company IP (or in the case of Intellectual Property subject to the Intellectual Property Assignments, will be the sole and exclusive owner of all right, title and interest therein prior to the Completion Date).  There are no actual (nor have there been since January 1, 2008) or, to the Seller’s knowledge, threatened oppositions, re-examinations, cancellations, or interferences in any jurisdiction challenging the validity, enforceability, registration, existence or ownership of any material (individually or in the aggregate) Intellectual Property owned by a Group Company, or which is owned by a member of Seller’s Group and used in the business of a Group Company.

 

(b)                                 Each Group Company owns, or has a valid and enforceable right to use (in each case free and clear of all Encumbrances), all Intellectual Property used in its business that is material (individually or in the aggregate) to the business of such Group Company.

 

6.2                                 Renewals/Maintenance

 

So far as the Seller is aware all registration and renewal fees have been paid in relation to the Intellectual Property which is registered or applied for in the name of any Group Company and so far as the Seller is aware there is no reason why such registrations should be revoked or declared invalid.

 

6.3                                 Licences and other Contracts

 

(a)                                  Details of all written material Contracts pursuant to which any third party is granted a right to use Intellectual Property owned by any Group Company are set out in the Disclosure Letter.  The Seller is not aware of any material breach of any such Contracts.

 

(b)                                 Details of all material Contracts granting any right, title or interest with respect to any Intellectual Property to a Group Company or relating to the Intellectual Property used in the business of a Group Company are set out in the Disclosure Letter.  There has been no material breach of any such Contracts, nor is there any fact or matter which is reasonably likely to constitute a breach of any of such

 

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Contracts by (i) a Group Company; the effect of which is or would reasonably be expected to be material to the Group, taken as a whole or would reasonably be expected to interfere in any material respect with the conduct of the business of the Group, taken as a whole, or (ii) to the Seller’s knowledge, by any other party to such Contracts.

 

(c)                                  Except as set forth in the Disclosure Letter, no Group Company or any member of the Seller Group is subject to any outstanding judgments, governmental orders, consents, forbearances to sue, settlement agreements or other similar arrangements that restrict the right to use or prohibit the use of any Intellectual Property that is material (individually or in the aggregate) to the operation of a Group Company’s business.

 

6.4                                 Infringement

 

(a)                                  Except as would not reasonably be expected to be material to the Group or to interfere in any material respect with the conduct of the business of the Group, taken as a whole, the business of the Group as currently conducted, and the use by any Group Company of any Intellectual Property owned by a member of Seller’s Group or any member of the Group, does not infringe, misappropriate or violate the Intellectual Property of any other person, and, since January 1, 2008, no Action has been threatened in writing or asserted to allege (including by invitations to license and other communications) any infringement, misappropriation or other violation by a Group Company of any person’s Intellectual Property.

 

(b)                                 So far as the Seller is aware no third party is infringing, misappropriating, violating, or overtly threatening to infringe, misappropriate or violate any Group IP, and since January 1, 2008 no Action has been threatened in writing or asserted by a Group Company or any member of Seller’s Group to allege that any person is or has infringed, misappropriated or violated any Group IP.

 

6.5                                 Confidentiality

 

The Seller’s Group and the Group Companies have taken commercially reasonable steps to protect, preserve and maintain the confidentiality and secrecy of, and to restrict the improper use of the Trade Secrets and other Confidential Information used in the business of any member of the Group (“Proprietary Information”), and the security of their computer systems and networks, and so far as Seller is aware, there has not been any material loss or material compromise of any of the foregoing.  So far as the Seller is aware:  (i) no material Proprietary Information has been disclosed or authorised to be disclosed to any person other than pursuant to a non-disclosure agreement that provides reasonable protection to such Proprietary Information, (ii) no party to any non-disclosure agreement relating to the Proprietary Information is in material breach or default thereof, and (iii) no Action has been asserted or threatened against any Group Company or member of Seller’s Group alleging a material violation of any person’s privacy, or personal data rights under applicable law or regulation.

 

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6.6                               Effect of Transaction on Intellectual Property

 

(a)                                  The consummation of the transactions contemplated in this Agreement will not:  (i) result in the material loss or impairment of, or give rise to any right of any person to terminate or materially restrict, or (ii) require payment of any material additional amounts or the consent of any Governmental Authority or third person in respect of, or (iii) result in the grant or transfer to any other person of, in each case, any Group Company’s right to own or use any material (individually or in the aggregate) Group IP.

 

(b)                                 Except as expressly provided in the Transaction Agreements, none of Seller’s Group will have upon consummation of the transactions contemplated by this Agreement:  (i) any ownership of any Group IP, or (ii) any license to or any other right, title or interest in or to any Group IP owned by any member of the Group.

 

7.                                     EFFECT OF SALE

 

7.1                               General

 

(a)                                  Neither the execution nor performance of any Transaction Agreement or any document to be executed at or before Completion will:

 

(i)                                     conflict with, or result in a breach of a Material Contract to which any Group Company is a party or by which any Group Company is bound, or of any other Contract to which a Group Company is a party or by which any Group Company is bound, which conflict or breach of any such other Contract, individually or in the aggregate, is or would reasonably be expected to be, material to the Group taken as a whole, or would reasonably be expected to interfere in any material respect with the conduct of the business of the Group, taken as a whole; or

 

(ii)                                 constitute a default under any provision of any lien, lease, order, judgment, award, injunction, decree, law or regulation or any other analogous requirements of any kind or character by which any Group Company is bound; or

 

(iii)                             give rise to a contractual right allowing any customer under a Material Contract to cease dealing with any Group Company, or give rise to a contractual right allowing any other customer to cease dealing with any Group Company, except as would not, individually or in the aggregate (with respect to such other customers) reasonably be expected to be material to the Group taken as a whole, or to interfere in any material respect with the conduct of the business of the Group, taken as a whole; or

 

(iv)                              give rise to a contractual right allowing any supplier under a Material Contract to cease dealing with any Group Company, or give rise to a contractual right allowing any other supplier to cease dealing with any Group Company, except as would not, individually or in the aggregate

 

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(with respect to such other suppliers) reasonably be expected to be material to the Group taken as a whole, or to interfere in any material respect with the conduct of the business of the Group, taken as a whole; or

 

(v)                                 save as provided, in the Transaction Agreements, make any Group Company liable to transfer or purchase any assets, including shares held by it in other bodies corporate under their articles of association or any agreement; or

 

(vi)                              result in the creation or imposition of any Encumbrance on any of the property or assets of any Group Company or permit any party to enforce any such Encumbrance; or

 

(vii)                           permit any insurer to terminate any Policy.

 

(b)                                 No director or Senior Employee has provided notice in writing to any Group Company or the Seller of any intention to terminate his employment, whether as a consequence of the proposed acquisition of the Shares by the Buyer or otherwise.

 

8.                                     LARGE RELATIONSHIPS

 

There is annexed to the Disclosure Letter a true and correct list showing the ten largest customers and suppliers (by cash amount of sale) of the Group during the 12 months to the date of this Agreement and all suppliers (other than public utilities) who are the sole source of supply of products of a material nature.

 

9.                                     ABSENCE OF CLAIMS; BUSINESS RELATIONSHIPS WITH RELATED PERSONS

 

Except as contemplated under the Transaction Agreements, the Seller and its Related Persons (other than the Group Companies) do not own any property or right, tangible or intangible, used by any Group Company.

 

10.                               CONSTITUTION

 

10.1                         Intra vires

 

Each Group Company has the power to carry on its business as now conducted.

 

10.2                         Memorandum and articles

 

(a)                                  The memorandum and articles of association or other constitutional documents of each Group Company except for Cyberview Czech in the form annexed to the Disclosure Letter are true and complete and have embodied therein or annexed thereto copies of all resolutions and agreements as are referred to in section 30 of the Companies Act 2006.

 

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(b)                                 The articles of association or other constitutional documents of Cyberview Czech in the form annexed to the Disclosure Letter are true, complete and up-to-date and comply with all statutory requirements under the Act No. 513/1991 Coll., the commercial code, as amended, of the Czech Republic.

 

10.3                         Powers of attorney

 

The Company has not executed any power of attorney or conferred on any person other than its directors, officers and employees any authority to enter into any transaction on behalf of or to bind the Company in any way and which power of attorney remains in force or was granted or conferred within one year of the date of this Agreement.

 

10.4                         Statutory books and filings

 

(a)                                  The register of members and other statutory books and registers of each Group Company are up to date, in its possession and are true and complete in accordance with the law.

 

(b)                                 All resolutions, annual returns and other documents required to be delivered by a Group Company to the Registrar of Companies (or other relevant company authority) have been properly prepared and duly filed or delivered and neither the Seller nor any Group Company has received any notice that any is incorrect or should be rectified.  The common seal of the Company is in its possession.

 

(c)                                  The Collection of Deeds (in Czech Sbírka listin) of the Czech Commercial Register contains all documents and filings of Cyberview Czech required to be published in it under Czech law.

 

11.                               INSURANCE

 

11.1                         Policies

 

(a)                                  All the tangible assets, businesses and operations of each Group Company which are capable of being insured (other than those where a third party is liable to insure such assets) have at all times since the 2010 Accounts Date been and are insured with persons other than members of the Seller’s Group in amounts and subject to reasonable excesses or deductibles or both, reasonably regarded as adequate against risks normally insured against by companies carrying on similar businesses and each Group Company has been at all times since the 2010 Accounts Date and is insured in amounts and subject to reasonable excesses or deductibles or both, reasonably regarded as adequate against accident, physical loss or damage, third party liability (including product liability), environmental liability, and other risks normally covered by insurance by companies carrying on similar businesses (to the extent that insurance is reasonably available at reasonable cost).

 

(b)                                 The Disclosure Letter contains a list that is complete and correct and particulars of current insurance and indemnity policies in respect of which any Group

 

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Company has an interest or which provide coverage in respect of any of the assets, properties or business of any Group Company (together the “Policies”), identifying therein which of such policies are held or maintained by one or more Group Companies (together the “Company Policies”).  All Policies that are not Company Policies are referred to herein as “Seller Policies.”

 

(c)                                  All of the Policies are currently in full force and effect, all premiums have been duly paid to date, and, so far as the Seller is aware, nothing has been done or omitted to be done which could make any Policy void or voidable.  As of the date of this Agreement, in relation to any of the Group Companies or any of their assets, businesses or operations, there are no claims outstanding under any Policy and, as of Completion, there will be no claims outstanding under any Policy which in the aggregate (for all such claims under all such Policies) exceed £25,000 under all such Policies or which arise out of a single circumstance or event or related series of circumstances or events which exceed £10,000 under any such Policy.

 

(d)                                 The Disclosure Letter sets forth a list that is true and correct in all material respects of all insurance loss runs and claims over £2,500 of any of the Group Companies for the past five (5) years under any Policy.

 

11.2                         Claims

 

No claim is outstanding under any of the Policies and so far as the Seller is aware no matter exists which could reasonably be expected to give rise to a claim under any of the Policies.

 

12.                               CONTRACTUAL MATTERS

 

12.1                         Validity of agreements

 

(a)                                  No party with whom any Group Company has entered into any Material Contract has given notice of its intention to terminate, or has notified the Seller or any Group Company that it is seeking to repudiate or disclaim, such Material Contract.

 

(b)                                 So far as the Seller is aware no party with whom any Group Company has entered into a Material Contract is in material breach of such Material Contract.  So far as the Seller is aware no matter exists which might give rise to such material breach.

 

(c)                                  No Group Company is in breach of any Material Contract and so far as the Seller is aware no matter exists which could reasonably be expected to give rise to such breach.

 

(d)                                 No orders or similar instructions have been made by any court or other competent authority requiring the modification of any Material Contract to which any Group Company is party and the Seller is not aware of any circumstances which could

 

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reasonably be expected to give rise to any such order or similar instruction in the future.

 

12.2                         Material Contracts

 

(a)                                  Set forth in the Data Room at paragraphs 5.9 and 5.17 are true and correct copies of each Contract to which any Group Company is a party or under which any Group Company is liable which:

 

(i)                                     was entered into other than by way of a bargain at arm’s length; or

 

(ii)                                  involves or is likely to involve obligations or restrictions on the part of a Group Company of an unusual or exceptional nature and not in the ordinary and usual course of business; or

 

(iii)                               is of a long term (meaning that the agreement is not capable of performance within its terms within 12 months after the date on which it was entered into or undertaken or cannot be terminated on less than 12 months’ notice) or unusual nature; or

 

(iv)                              involves an aggregate outstanding expenditure or other liability by any Group Company of more than £350,000 (or equivalent); or

 

(v)                                 is a Contract by which any Group Company is a member of a joint venture, consortium, partnership or association (other than a bona fide trade association); or

 

(vi)                              is any agency, distributorship, sales representative, marketing, purchasing, manufacturing or licensing Contract; or

 

(vii)                           is a Contract which restricts in any respect its freedom to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit.

 

12.3                         Anti-competitive arrangements

 

(a)                                  No Group Company is a party to any Contract or business practice which:

 

(i)                                     amounts to an infringement of any laws relating to anti-competitive activities and no director is engaged in any activity which would be an offence or infringement under such law; or

 

(ii)                                  is void or unenforceable (whether in whole or in part) or may render any Group Company liable to proceedings under any such legislation as is referred to in subparagraph (a) above.

 

(b)                                 No Group Company is party to any Contract or business practice which infringes any provision of the Competition Act 1998 or, in the case of Cyberview Czech,

 

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Act No. 143/2001 Coll., on protection of competition, as amended, of the Czech Republic, or any undertaking or, so far as the Seller is aware, order made against or pursuant to any anti-trust or similar legislation in any jurisdiction in which it carries on business or has assets or sales.

 

(c)                                  No Group Company is a party to any Contract or business practice or is involved in any business practice in respect of which:

 

(i)                                     any request for information, statement of objections or similar matter has been received from any Governmental Authority; or

 

(ii)                                  an application for negative clearance or exemption has been made to the Commission of the European Communities or any other Governmental Authority.

 

12.4                         Miscellaneous

 

(a)                                  The Disclosure Letter contains a list that is complete and correct of the material commercial terms offered to customers of any Group Company under the in gaming trials.

 

(b)                                 No material changes have been made to the terms on which any Group Company provides its services and products to customers since the 2010 Accounts Date.

 

13.                               INFORMATION TECHNOLOGY

 

13.1                         Breakdowns

 

In the twelve months prior to the date hereof the Group has not suffered and so far as the Seller is aware no other person has suffered any material failures or bugs in or breakdowns of any Information Technology used in connection with the business of the Group which have caused any substantial disruption or substantial interruption in or to its use.

 

13.2                         Ownership

 

(a)                                  Except as otherwise set forth in the Transaction Agreements, the Information Technology owned by or licensed to each Group Company:

 

(i)                                     comprise all material computer hardware and software systems used in the operation of the business of the Group Companies as carried on at the date of this Agreement;

 

(ii)                                  have not during the twelve months prior to the date of this Agreement failed to perform in any way that materially and adversely affected the business of the Group Companies taken as a whole; and

 

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(iii)                               have been maintained consistently with the Company’s plans for that system, except as would not be material to the Group taken as a whole.

 

13.3                         Company Game Products

 

Except as otherwise set forth in, or provided for in, the Transaction Agreements:

 

(a)                                  a Group Company is the exclusive owner of all right, title and interest in and to all material Company Game Products, and no third party (except Seller’s Group) has been granted access to any of the Company Game Products, and no third party has any escrow right, conditional right, royalty, honoraria or other payment, license, covenant not to sue or other right, title or interest to any of the Company Game Products (including source code or object code), except for non-exclusive rights to:  (i) contractors solely for purposes of providing services to the Group; (ii) distributors of the material Company Game Products for marketing, distributing and supporting customers’ use of the Company Game Products; and (iii) the Group’s customers to use the Company Game Products, in each case that are granted in the ordinary course of business;

 

(b)                                 each of Group Companies owns and possesses all source code necessary to compile all executable versions of the Company Game Products that are used by or to support any Group customers or that are in development;

 

(c)                                  the Company Game Products operate in accordance with their applicable technical and functional specifications; and

 

(d)                                 Except as would not reasonably be expected to be material to the Group taken as a whole or to interfere in any material respect with the conduct of the business of the Group, taken as a whole,  no Group Company has used Open Source Software in a manner that creates, or purports to create, any obligation on any Group Company to distribute or otherwise make available the source code to any software owned by any Group Company.

 

14.                               PRODUCT CLAIMS

 

14.1                           The standard terms of the Group’s warranty obligations, provided to customers in connection with the sale or distribution of products or services, are, save for warranties implied by applicable law, set out in the Disclosure Letter and there are no other product warranties and guarantees save:

 

(a)                                  as set out in Section 5.9 of the Data Room; or

 

(b)                                 for those which are not, individually or in the aggregate, material to the Group taken as a whole concerned and which are capable of being claimed against only in the 12 months after delivery.

 

14.2                          Each of the products and services sold by any Group Company prior to the date of this Agreement meets all standards for quality and workmanship and other technical and/or

 

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certification standards prescribed by law or regulation (including applicable gaming regulations), or contractual agreements, and no Group Company has received notice of any claim that any of its products does not meet such standards in the two years prior to the date of this Agreement.

 

14.3                           No changes or modifications are required to be made to the products or services provided by any Group Company prior to the date of this Agreement in order to ensure compliance with the requirements of any applicable law or regulation or, save as provided in Contracts set forth in Section 5.9 of the Data Room, any Contract to which any Group Company is a party.

 

14.4                           Except as described in the Disclosure Letter:

 

(a)                                  no claims have been made or are, to the knowledge of the Seller, threatened under the product warranties or indemnification obligations of any Group Company, other than routine warranty claims at such levels and for reasons as may be reasonably expected in the ordinary course of business consistent with past practice;

 

(b)                                 so far as the Seller is aware, there exists no event or circumstance, which after notice or the passage of time or both, would reasonably be expected to create or result in liabilities or obligations with respect to products or services provided by a Group Company prior to the date of this Agreement under any of the product warranties or indemnification obligations of any Group Company, in excess of the liabilities and obligations incurred under such product warranties in the ordinary course consistent with past practice over the past two years;

 

(c)                                  so far as the Seller is aware, there is no design, manufacturing or other defect in any model or type of product or product specification of any Group Company which has been sold, licensed, leased, supplied or otherwise provided prior to the date of this Agreement; and

 

(d)                                 there have not been any mandatory or voluntary product recalls with respect to any products of any Group Company within the past six years and so far as the Seller is aware, there is no fact relating to any product of any Group Company that would reasonably be expected to impose a duty on any Group Company to recall any product or warn customers of a defect in any product of any Group Company.

 

14.5                           So far as the Seller is aware, no Group Company has any liabilities (except contingent liabilities which would not be required to be accrued, provided or reserved for on a balance sheet of the relevant Group Company in accordance with US GAAP) arising out of any injury to individuals or damage to tangible or real property as a result of the ownership, possession, or use of any product manufactured, sold, leased, or delivered by the Group Company prior to the date hereof.

 

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15.                               IMPROPER PAYMENTS

 

15.1                           No member of the Seller’s Group nor any of the Group Companies, nor, so far as the Seller is aware, any director, trustee, officer, employee, beneficiary, agent or representative of any of them, nor, any person associated with or acting for, or on behalf of, any of them, has directly or indirectly:

 

(a)                                  made, in violation of any applicable law, any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any person, private or public, regardless of what form, whether in money, property, or services:

 

(i)                                     to obtain favourable treatment for the Group Companies or contracts secured;

 

(ii)                                  to pay for favourable treatment for the Group Companies or contracts secured;

 

(iii)                               to obtain special concessions or for special concessions already obtained; or

 

(iv)                              in violation of any legal requirement, in breach of applicable law or

 

(b)                                 established or maintained any fund or asset that is required by applicable law or regulation to have been recorded in the books and records of the Group Companies that has not been recorded in the books or records of the Group Companies.

 

16.                               LIABILITIES

 

16.1                           Save as disclosed in the 2010 Accounts, no Group Company has any liabilities, except commercial liabilities incurred since the 2010 Accounts Date in the ordinary course of business consistent with past practice and except contingent liabilities which would not be required to be set forth on a balance sheet of the relevant Group Company in accordance with US GAAP, none of which, individually or in the aggregate, is material in the context of the Group.

 

16.2                         Borrowings

 

(a)                                  The total amount borrowed, raised, or hedged by each Group Company from its bankers or other financial institutions or borrowed, issued or otherwise raised in the capital markets does not exceed its overdrafts, loans, borrowings and other financial facilities as set out in the Disclosure Letter.

 

(b)                                 In respect of any Financial Debt of any Group Company, no material event of default, refinancing event, credit event, default or acceleration of indebtedness has occurred thereunder and no Group Company has received any notice to repay thereunder.

 

(c)                                  No steps for the enforcement of any Encumbrances constituted or created in connection with Financial Debt of any Group Company have been taken and no

 

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event or circumstance has occurred that entitles any person to enforce any such Encumbrance.

 

16.3                         Guarantees

 

(a)                                  No Group Company is a party to or has delivered (or arranged for delivery of) any guarantee or suretyship, performance bond, letter of credit, keep-well or reimbursement arrangement or similar arrangement, with respect to another person’s obligations other than those of another Group Company.

 

(b)                                 No part of the loan capital or Financial Debt of a Group Company is dependent on the guarantee of, or security provided by, another person other than another Group Company.

 

(c)                                  No Group Company has any liability or obligation (actual or contingent) to Ian Rodden save for his right to receive accrued dividends of not more than £600,000 in aggregate from Red Gaming Limited.

 

17.                               PERMITS

 

17.1                           The Group has all licences, permissions, permits, and other governmental authorisations and consents (including licences, permissions, permits, authorisations and consents related to gaming) necessary to own and operate its assets and required for carrying on its business in the places and in the manner in which such business is currently carried on, including a licence issued by the Alderney Gambling Control Commission in accordance with the Alderney eGambling Ordinance, 2009 (the “Alderney Licence”).

 

17.2                           The licences, permissions, permits, and other governmental authorisations and consents referred to in paragraph 17.1 (including the Alderney Licence) are in full force and effect, have been complied with in all material respects, and all fees payable pursuant to any such licence, permission, permit, and other governmental authorisation or consent have been fully paid, and, so far as the Seller is aware, no facts exist that would reasonably be expected to result in the revocation, suspension or modification of any of those.

 

18.                               INSOLVENCY

 

18.1                         Winding up

 

No order has been made, petition presented or resolution passed for the winding up of any Group Company or for the appointment of a provisional liquidator to any Group Company.

 

18.2                         Administration

 

No Group Company has been or is in administration (as defined in schedule Bl of the Insolvency Act 1986) and no step (including but without limitation the service of any notice, the filing of any document(s) or the making of any administrative order) has been

 

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taken under schedule Bl of the Insolvency Act 1986 by any person to place any Group Company in administration.

 

18.3                         Receivership

 

No receiver, receiver and manager or administrative receiver has been appointed of the whole or part of any Group Company’s business or assets.

 

18.4                         Compromises with creditors

 

(a)                                  No voluntary arrangement under section 1 of the Insolvency Act 1986 has been proposed or approved in respect of any Group Company.

 

(b)                                 No compromise or arrangement under section 895 of the Companies Act 2006 has been proposed, agreed to or sanctioned in respect of any Group Company.

 

(c)                                  No reorganisation under the Czech Insolvency Act has been proposed, agreed to or sanctioned in respect of Cyberview Czech.

 

(d)                                 No Group Company has not entered into any compromise or arrangement with its creditors or any class of its creditors generally.

 

18.5                         Distress

 

No distress or execution or other process has been levied on any Group Company or (if applicable) any material part of its assets or undertaking.

 

18.6                         Insolvency

 

No Group Company is insolvent or unable to pay its debts as they fall due within the meaning of the Insolvency Act 1986 or any other insolvency legislation applicable to the relevant Group Company and so far as the Seller is aware, no Insolvency Event has occurred in respect of a substantial supplier or substantial customer as defined in paragraph 4.2(b) of this schedule 3.

 

18.7                         General

 

No circumstances exist which would be reasonably expected to give rise to any of the matters listed in paragraphs 18.1 to 18.6 in respect of any Group Company or, so far as the Seller is aware, any substantial supplier or substantial customer (as defined above).

 

19.                               LITIGATION AND COMPLIANCE WITH LAW

 

19.1                         Litigation

 

(a)                                  No Group Company (or, any person for whose acts or defaults any Group Company is vicariously liable) during the two years ending on the date of this Agreement has been involved in any civil, criminal, arbitration, administrative or other proceeding in any jurisdiction.  No civil, criminal, arbitration, administrative

 

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or other proceeding in any jurisdiction is pending or, so far as the Seller is aware, threatened by or against any member of the Group.

 

(b)                                 The Seller does not know of anything which would reasonably be expected to result in any civil, criminal, arbitration, administrative or other proceeding in any jurisdiction by or against any Group Company (or any person for whose acts or defaults any Group Company is vicariously liable) which proceedings are likely to involve an individual claim in excess of £10,000 (or equivalent) or claims in aggregate in excess of £100,000 (or equivalent) (including any such proceeding against or by the Seller or any Related Person of the Seller).

 

(c)                                  There is no outstanding or unsatisfied judgment, order, injunction, decree, stipulation or award (whether rendered by a court, administrative agency or other Governmental Authority, by arbitration or otherwise) in any jurisdiction against any Group Company or any material part of its assets or undertaking.  Neither the Seller nor any Related Person of the Seller has any claim or right of action against any Group Company.

 

19.2                         Compliance with law

 

Each Group Company has conducted its business and dealt with its assets in all material respects in accordance with applicable legal and administrative requirements in all relevant jurisdictions.

 

19.3                         Investigations

 

So far as the Seller is aware, no Group Company (or any person for whose acts or defaults any Group Company is vicariously liable) is,and no Group Company has been, subject to any investigation, enquiry, disciplinary or enforcement proceeding by any Governmental Authority (whether judicial, quasi-judicial or otherwise) in any jurisdiction.  No Group Company has received any request for information from, any court or Governmental Authority (including any national competition authority and the Commission of the European Communities and the EFTA Surveillance Authority) under any anti-trust or similar legislation in any jurisdiction.  So far as the Seller is aware, no matter exists which could reasonably be expected to give rise to such an investigation, enquiry, proceeding or request for information.

 

20.                               BROKERAGE OR COMMISSIONS

 

No broker, finder, agent or other person is entitled to receive from any Group Company a fee, brokerage, commission or any other sum in connection with this Agreement or anything in it.

 

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21.                               DIRECTORS, OFFICERS AND EMPLOYEES

 

21.1                         Particulars of directors, officers and employees

 

A list that is accurate of all directors, officers and Senior Employees and a list that is accurate in all material respects of all other employees of each Group Company has been provided to the Buyer, and sets out the employing Group Company, job title, date of commencement of continuous employment, date of birth, and notice period (or if the contract is fixed term, the length of the term) of every such officer, director and employee.  Such list also particularises, in all material respects:

 

(a)                                  (excluding names) any person who has accepted an offer of employment by any Group Company but whose employment has not yet started who would on employment become a Senior Employee and any current Senior Employee who is under notice of termination of employment or who has so far as the Seller is aware threatened to give notice;

 

(b)                                 the number of employees who are currently absent from any Group Company and have been so for a period in excess of 30 days and the number of employees who so far as the Seller is aware are due to be absent on maternity leave or annual leave for a period in excess of 30 days together with the reason for absence in each case; and

 

(c)                                  the country in which such officer, director or employee is employed or paid, if not the United Kingdom.

 

21.2                         Remuneration and benefits

 

The particulars listed below have been provided to the Buyer, and show:

 

(a)                                  all remuneration and benefits actually provided to any officer, director or employee of any Group Company (including salary, bonuses, commissions, profit-sharing arrangements, incentive payments, share option schemes, insurance schemes, and any other contractual benefits); and

 

(b)                                 all remuneration and other benefits which the Company is bound to provide (whether now or in the future) to each officer, director and employee of the Company, including but not limited to on termination of employment or in relation to sickness absence.

 

21.3                         Terms and conditions

 

(a)                                  The particulars listed below have been provided to the Buyer, and contain:

 

(i)                                     examples of all the standard written terms and conditions and staff handbooks which apply to officers directors and employees of each Group Company and all officers, directors and employees are engaged on such standard written terms and conditions;

 

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(ii)                                 in respect of each Group Company a copy of the terms and conditions of employment of each Senior Employee; and

 

(iii)                             so far as the Seller is aware, details of any Contract or of any practice that has been applied in the last two years pursuant to which employees who are redundant are paid redundancy payments whether contractual or customary in excess of the level required to be made under the Employment Rights Act 1996 section 135.

 

(b)                                 There are no terms and conditions in any Contract with any officer, director or employee of the Company pursuant to which such person will be entitled to receive any payment or benefit or such person’s rights will change as a direct consequence of the transaction contemplated by this Agreement.

 

(c)                                  There are no share incentives or share option schemes or arrangements or bonus or other incentive schemes in existence in relation to any officer, director or employee of any Group Company.

 

21.4                         Employees

 

(a)                                  In respect of all employees and former employees, each Group Company has:

 

(i)                                     complied with all applicable laws (whether statutory, common law or otherwise) material to the relations between it and its employees;

 

(ii)                                 maintained adequate and suitable records regarding the service of each such employees;

 

(iii)                             complied with all contractual obligations, codes of conduct and customs and practices relevant to the relations between it and its employees including but not limited to the terms of reference and meeting minutes for 2010 to the date of this Agreement of their information and consultation committee(s); and

 

(iv)                             complied with all judgments and relevant orders and awards made by the Central Arbitration Committee or ACAS.

 

(b)                                 Each Group Company has in its possession a copy of an original document evidencing the right of each of its employees who works in the United Kingdom to work for it in the United Kingdom and no Group Company employee working in the United Kingdom is not entitled to work in the United Kingdom under the Immigration, Asylum and Nationality Act 2006.

 

(c)                                  No Group Company uses the services of agency workers, consultants or persons treated as self employed, or agents.

 

(d)                                 No Group Company has entered into any contractual outsourcing agreements with a third party with an annual value of more than £40,000 under which the Group

 

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Company has agreed to provide services to a third party or has agreed to the provision of services to it by a third party in either case in circumstances in which the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply other than as set forth in the Data Room.

 

(e)                                  Save for intra-group secondments of persons to and from Group Companies, no person is currently seconded to any Group Company and no Group Company is under any obligation to have any person seconded to it.

 

(f)                                    Other than those disclosed in the Disclosure Letter, all subsisting contracts of employment to which any Group Company is a party are terminable by it, on six months’ notice or less without compensation (other than compensation pursuant to the Employment Rights Act 1996).

 

21.5                         Changes since the 2010 Accounts Date

 

Since the 2010 Accounts Date no Group Company has made any changes or given any contractual commitment to make any changes in the future to the terms of employment emoluments or benefits of or any bonus to any of its officers, directors or employees or made any material gratuitous payment or benefit to any employee or former employee or to any of their respective dependants.

 

21.6                         Loans

 

There are no amounts owing or agreed to be loaned or advanced by any Group Company to any directors, officers or, to employees of any Group Company (other than amounts representing remuneration accrued due for the current pay period, accrued holiday pay for the current holiday year or for reimbursement of expenses).

 

21.7                         Payment up to Completion

 

All salaries, wages, other benefits, PAYE (defined below in paragraph 24.4) and national insurance in respect of all employees or former employees of any Group Company have, to the extent due, been paid or discharged in full.

 

21.8                         Industrial relations

 

(a)                                  No trade union, staff association or any other body representing workers is recognised by any Group Company for the purposes of collective bargaining.  No Group Company has received any request from a trade union for recognition within the 12 months prior to this Agreement.

 

(b)                                 No Group Company has received or issued any request for the establishment of information and consultation arrangements, under the Information and Consultation of Employees Regulations 2004 or the Transactional Information and Consultation of Employees Regulations 1999 within the 12 months prior to this Agreement.

 

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(c)                                  The Disclosure Letter contains copies of any collective agreements between each Group Company and any trade union, staff association or any other body representing workers.

 

(d)                                 No Group Company is engaged or involved in any trade dispute (as defined in section 218 of the TULR(C)A) with any employee, trade union, staff association or any other body representing workers.

 

21.9                         Disputes, investigations and collective redundancies

 

(a)                                  No past or present director, officer, or employee of any Group Company is engaged in any formal grievance procedure with any Group Company.

 

(b)                                 No past or present director, officer, or employee of any Group Company or any predecessor in business has instigated any claim or right of action against the Company in respect of any accident or injury which remains outstanding and which is not fully covered by insurance and so far as the Seller is aware there are no circumstances which are likely to give rise to such claim or right of action.

 

(c)                                  No Group Company has received notification from any court of competent jurisdiction of proceedings issued against the Group Company by any past or present director, officer or employee in relation to his office or employment which remain outstanding.

 

(d)                                 No Group Company has any current disciplinary proceedings or appeals in respect of any of its employees or former employees or has taken any disciplinary action against such employees in the 12 months preceding this Agreement and so far as the Seller is aware there are no circumstances which are likely to give rise to such disciplinary proceedings.

 

(e)                                  No formal complaint about any Group Company has been notified to any Group Company in the two year period prior to the date of this Agreement by the Commission for Racial Equality, the Equal Opportunities Commission, the Disability Rights Commission, any health and safety enforcement body, or any similar Governmental Authority in respect of any act, event, omission or other matter arising out of or in connection with:

 

(i)                                     any application for employment by any person; or

 

(ii)                                  the employment (including terms of employment, working conditions, benefits and practices) or termination of employment of any person.

 

(f)                                    During the 12 months prior to the date of this Agreement no Group Company has given notice of any redundancies to the Secretary of State (or such similar governmental agencies) or started consultations with any representative body under Chapter II, Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992.

 

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(g)                                 All amounts agreed to be paid by a Group Company to any employee in respect of redundancy (whether statutory or contractual) have been paid or have been accrued in full in the accounts of the relevant Group Company.

 

(h)                                 No Group Company has announced or provided in its accounts for any redundancies to take effect on any date after the Management Accounts Date.

 

21.10                   Transfer regulations

 

In the past 12 months preceding the date of this Agreement no Group Company has entered into any agreement further to which it has acquired any undertaking or part of one such that the Transfer Regulations apply thereto.

 

22.                               PROPERTIES

 

22.1                         All Property

 

No Group Company owns, uses or occupies any freehold or leasehold estate other than the Properties, and the Properties comprise:

 

(a)                                  all the land and premises owned or occupied by any Group Company; and

 

(b)                                 all the rights vested in any Group Company and all agreements whereby a Group Company has any financial entitlement relating to any land at the date hereof.

 

22.2                         No other liabilities

 

No Group Company has any actual or contingent obligations or liabilities (in any capacity including as principal contracting party or guarantor) in relation to any lease, licence or other interest in, or agreement relating to, land apart from the Properties.

 

22.3                         Title to the Properties

 

(a)                                  One of the Group Companies is the sole legal and beneficial owner in possession of the whole of each of the Properties and no other person, save for other Group Companies, is in or entitled to occupation of any of the Properties.

 

(b)                                 One of the Group Companies has in its possession or unconditionally held to its order all the necessary documents of title to all of the Properties.

 

(c)                                  The Properties (excluding the Manchester Property) are not subject to or affected by any mortgage or charge, debenture, lien, pledge or other form of security interest including any which secure the payment of money or relate to any other obligation or liability of any third party.

 

(d)                                 All material formalities have been discharged in each relevant jurisdiction in which each relevant Property is located, to ensure that all legal requirements (whether statutory, regulatory or otherwise) appropriate to that jurisdiction to

 

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register the title (if registerable) of a relevant Group Company to the relevant Property have been complied with.

 

22.4                         Leasehold Properties

 

(a)                                  Each of the Properties which is leasehold is held under the lease brief details of which are set out in schedule 5.

 

(b)                                 Any lease of any of the Properties which is a new tenancy for the purposes of the L&T Covenants Act is stated so to be in schedule 5.

 

(c)                                  The Company has paid the principal rent due and has received no notice from the landlord claiming any outstanding breach of any of the other covenants and obligations on the part of the tenant contained in the relevant lease.

 

(d)                                 In relation to each of the Properties which is leasehold, there has been no written complaint by the landlord received by the tenant alleging any breach nor any refusal to accept rent.

 

(e)                                  There are no outstanding notices given by the landlord or the tenant or proceedings pursuant to the Landlord and Tenant Act 1954 or, in the case of Cyberview Czech, the Act No. 116/1990 Coll., on lease of non-residential premises, as amended, of the Czech Republic.

 

(f)                                    Any consents required for the granting of any lease were duly obtained.

 

22.5                         Occupational interests

 

All such leases, tenancies, licences and agreements to which the Properties are subject are correctly summarised in the particulars thereof set out in schedule 5 specifying which of such leases is a new tenancy for the purposes of the L&T Covenants Act.

 

22.6                         Use

 

The existing use of each of the Properties is only that specified in schedule 5.

 

22.7                         Disputes

 

No Group Company has received written notice of any current contingent or anticipated notice, actions, disputes, claims, liabilities or demands regarding boundaries, easements, covenants or other matters materially affecting any Property or its use.

 

22.8                         Notices, orders and proposals

 

Neither the Seller nor any Group Company has received any written notice or order affecting any Property from any Governmental Authority which remains outstanding.

 

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22.9                         Particulars of Properties

 

The particulars relating to the Properties set out in schedule 5 are true and accurate in all material respects.

 

23.                               PENSIONS

 

(a)                                  Except for the Schemes, the Group Companies do not have any liability (including any contingent liability) to contribute to any scheme or arrangement for the provision of Relevant Benefits.

 

(b)                                 The Group Companies do not have any liability to the Bass Plan or the Bass Executive Plan.

 

(c)                                  All contributions and expenses and premiums payable to or in respect of the Schemes, relating to any period up to and including Completion, have been paid.

 

(d)                                 All benefits payable in the event of the death or accident, injury or sickness of an employee in service of a Group Company are fully insured with an insurance company authorised under the Financial Services and Markets Act 2000 with permission under that Act to effect and carry out such insurance.

 

(e)                                  All material information and documents in respect of the Schemes have been provided to the Buyer including full details of the names of all the members of the Schemes and the contributions which are made by any Group Company in respect of those members.  There are no other employees of any Group Company who are currently eligible for or who have been offered membership of the Schemes.

 

(f)                                    No undertaking or assurance (whether or not legally enforceable) has been given or discretion or power exercised by or on behalf of any Group Company or the trustees or provider of the Schemes:

 

(i)                                     to any person that any benefits under the Schemes (other than lump sum benefits on death in service) will be calculated by reference to any person’s remuneration or length of service or will be approximately or exactly any amount;

 

(ii)                                 to any person as to the continuance of the Schemes or the continuance, increase or improvement of any benefit provided by, or contribution to, the Schemes; or

 

(iii)                             to admit to membership any person who would not normally be eligible for membership of the Schemes or on terms other than those that would normally be applicable under the Schemes.

 

(g)                                 The participating Group Companies and, so far as Seller is aware, the trustee and scheme administrator have operated the Schemes in compliance with their governing documentation and all applicable laws and regulations.

 

(h)                                 The Schemes are registered pension schemes under the Finance Act 2004.

 

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(i)                                     So far as the Seller is aware, the records of the Schemes have been properly, fully and accurately maintained.

 

(j)                                     No person has made or threatened any claim (other than a routine claim for benefits under the Schemes) against any Group Company or, so far as the Seller is aware, against the trustees or administrator of the Schemes or made a complaint or report to the Pensions Regulator in respect of the Schemes.  So far as the Seller is aware, there are no circumstances which may give rise to any such claim, complaint or report being made.

 

(k)                                  All benefits (other than lump sum benefits on death in service) payable under the Schemes are money purchase benefits (as defined in section 181 of the Pension Schemes Act 1993).

 

(l)                                     There are no circumstances which could result in any penalty for failure to comply with Part I of the Welfare Reform and Pensions Act 1999 or the Stakeholder Pension Schemes Regulations 2000 becoming payable by any Group Company.

 

(m)                               No employee or former employee of any Group Company has had his contract of employment transferred to such Group Company from another employer in circumstances where:

 

(i)                                     the Transfer of Undertakings (Protection of Employment) Regulations 1981 or the Transfer Regulations applied; and

 

(ii)                                  the employee or former employee was entitled to defined benefit occupational pension scheme rights in respect of his employment before such transfer to such Group Company.

 

(n)                                 No Group Company is or has been connected with, or an associate of, an employer (within the meaning of sections 249 and 435 of the Insolvency Act 1986 respectively) in relation to a defined benefit occupational pension scheme.

 

(o)                                 The employees listed in document 2.31 in the Data Room are the only employees who transferred to the Company and the Subsidiaries, under the Transfer of Undertakings (Protection of Employment) Regulations 1981 or the Transfer Regulations, as a result of:

 

(i)                                     the sale and purchase agreement dated 16 March 1998 by which there was a transfer of Barcrest Limited from Bass Machine Holdings Limited to the Company; and

 

(ii)                                  the agreement dated 2 August 1997 by which there was a transfer of trade and assets by Gala Holdings Limited to Barcrest Limited.

 

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24.                               TAX

 

24.1                         Returns and Disputes

 

(a)                                  Each Group Company has made all returns and supplied all information and given all notices to HMRC or other Taxation Authority as reasonably requested or required by law within any requisite period and all such returns and information and notices were correct and accurate in all material respects.

 

(b)                                 No Group Company is, nor so far as the Seller is aware is it reasonably likely to be, involved in any dispute in relation to Tax and neither HMRC nor any other Taxation Authority has in the past six years investigated or indicated in writing that it intends to investigate the Tax affairs of a Group Company.

 

24.2                         Accounts

 

The Accounts make full provision or reserve in respect of any period ended on or before the Accounts Date for all Tax assessed or liable to be assessed on each Group Company or for which a Group Company is accountable at the Accounts Date whether or not a Group Company has or may have any right of reimbursement against any other person.

 

24.3                         Payment of Tax

 

Each Group Company has paid all Tax which it has become liable to pay and has not paid or become liable to pay any penalty, interest, surcharge or other payment in connection with any claim for Tax.

 

24.4                         Pay As You Earn

 

(a)                                  Each Group Company has properly operated the Pay As You Earn system or non-UK equivalent (“PAYE”) system, deducted Tax as required by law, duly accounted to the relevant Taxation Authority for Tax under PAYE, and complied with its reporting obligations to such Taxation Authority including in relation to payments made to contractors.  No PAYE audit in respect of a Group Company has been made by a Taxation Authority nor has any Group Company been notified that any such audit will be made.

 

24.5                         Value Added Tax

 

(a)                                  The Company is a registered taxable person for the purpose of the relevant VAT Legislation and is the representative member of a VAT group comprising the Company, Red Gaming Limited, IGT UK Gaming Limited and IGT UK Group Limited.

 

(b)                                 The Company and any Group Company that is not part of the VAT group referred to above has complied in all respects with the requirements and provisions of relevant VAT Legislation and has made and maintained accurate and up to date records, invoices, accounts and other documents required by or necessary for the

 

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purposes of such VAT Legislation and the Company and any such Group Company has punctually made all payments and returns required thereunder.

 

(c)                                  Neither the Company nor any Group Company have made any exempt supplies.

 

24.6                         Stamp Duty

 

All documents to which a Group Company is a party and under which form part of a Group Company’s title to any material owned by it have been duly stamped.

 

24.7                         Foreign Element

 

Each Group Company has always been resident in the territory in which it was incorporated and has never been resident in any other territory or treated as so resident for the purposes of any double Tax agreement.  No Group Company is or has ever been subject to Tax in any jurisdiction other than its place of incorporation by virtue of having a permanent establishment or other place of business in that jurisdiction.

 

24.8                         Close Group Company

 

No Group Company is nor has it ever been a close company as defined by section 439 Corporation Tax Act 2010.

 

24.9                         Group Relief and Consortium Relief

 

The Disclosure Letter contains particulars of all arrangements made in the last four accounting periods relating to Relief surrendered or claimed pursuant to Part 5 Corporation Tax Act 2010 (“group relief”) to which a Group Company is or has been a party and in that period:

 

(i)                                     all claims by a Group Company for such Relief were when made and are now valid and have been or will be allowed by way of relief from corporation tax;

 

(ii)                                 no Group Company has made nor is liable to make any payment for group relief otherwise than in consideration for the surrender of group relief allowable to the Group Company in question by way of relief from corporation tax;

 

(iii)                             each Group Company has received all payments due to it under any agreement for surrender of group relief by it for periods prior to the Accounts Date;

 

(iv)                             no such payment exceeds or could exceed the amount permitted by section 183 Corporation Tax Act 2010.

 

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24.10                   Secondary Liability

 

No Group Company has within the last six years entered into any indemnity, guarantee or covenant under which it has agreed to meet or pay a sum equivalent to or by reference to another person’s liability to Tax.

 

24.11                   Clearances and Consent

 

No action has been taken by a Group Company in respect of which any consent or clearance from any Taxation Authority was required save in circumstances where such consent or clearance was validly obtained, and where any conditions attaching thereto were and will, immediately following Completion, continue to be met.

 

24.12                   Special Arrangements

 

No Taxation Authority is operating any special arrangement (being an arrangement which is not based on relevant legislation or any published practice) in relation to the affairs of any Group Company.

 

24.13                   Withholdings

 

Each Group Company has duly and punctually complied with its obligations to deduct, withhold or retain amounts of or on account of Tax from any payments made by it and to account for such amounts to the relevant Taxation Authority and has complied with all its reporting obligations to such Taxation Authority in connection with any such payments made.

 

24.14                   Transfer Pricing

 

All transactions entered into by each Group Company have been entered into on an arm’s length basis and the consideration (if any) charged or received or paid by each Group Company on all transactions entered into by it has been equal to the consideration which might have been expected to be charged, received or paid (as appropriate) between independent persons dealing at arm’s length and no notice or enquiry by any Taxation Authority has been made in connection with any such transaction.

 

24.15                   Capital Allowances and Chargeable Gains

 

Copies of all claims for relief and elections made by a Group Company in respect of gains having been realised and rolled over, or held over (as the case may be) in the current period and the preceding five periods have been provided to the Buyer.

 

24.16                   Intra-Group Transactions

 

(a)                                  No Group Company has acquired any asset other than trading stock from any member of the Seller’s Group.

 

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(b)                                 All related party transactions to which Cyberview Czech is or has been a party have always been made in accordance with Section 196a of the Commercial Code of the Czech Republic.

 

24.17                   Employment related securities

 

In relation to any employment related securities acquired by an employee of a Group Company prior to Completion, such Group Company and employee have entered into a valid election under section 431 of Income Tax (Earnings and Pensions) Act 2003 in respect of such securities.

 

24.18                   Avoidance

 

No Group Company has entered into any notifiable arrangements for the purposes of Part 7 of the Finance Act 2004 or any notifiable schemes for the purposes of Schedule 11A to the VATA 1994.

 

24.19                   Tax Computations

 

Copies of the tax computations and related documents for each Group Company for the accounting period ending 29 September 2009 are contained in the Data Room.

 

24.20                   US Matters

 

(a)                                  Each of Red Gaming Limited and Cyberview Czech is treated as a controlled foreign corporation as defined under section 957 of the Code and the regulations thereunder.  Other than the Company and Barcrest Group Technology Limited, no Group Company has an election in effect for purposes of section 7701 of the Code, and the regulations thereunder, to be treated as something other than a corporation for US federal income tax purposes.

 

(b)                                 No Group Company has an account for the purposes of section 952(c) of the Code, and the regulations thereunder.

 

25.                               ENVIRONMENTAL MATTERS

 

25.1                         In this paragraph:

 

(a)                                  “Environmental Law” means all statutes, subordinate legislation, common law, civil codes, criminal codes, regulations, judgments and statutory guidance notes that are or were in force and binding on any Group Company at or prior to the date of this Agreement and that concern Environmental Matters;

 

(b)                                 “Environmental Licence” means any permit, licence, authorisation, consent or other approval, or any notification, registration or waiver, required at the date of this Agreement under Environmental Law for the carrying on of the business of any Group Company or in relation to any Property, as such business is carried on, or as such Property is used by the business, as at the date of this Agreement; and

 

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(c)                                  “Future Environmental Law” means all statues, subordinate legislation, common law, civil codes, criminal codes, regulations, judgments and statutory guidance notes that are or will be in force and binding on any Group Company within one year immediately following the date of this Agreement, that concern Environmental Matters and which the Seller is aware of as at the date of this Agreement.

 

25.2                         Compliance

 

(a)                                  Each Group Company is at the date of this Agreement in compliance and, during the three years immediately prior to the date of this Agreement, has complied, with all applicable Environmental Law and with the terms and conditions of all Environmental Licences.

 

(b)                                 Each Group Company has obtained all Environmental Licences, and all such Environmental Licences are valid and subsisting.

 

(c)                                  So far as the Seller is aware, no material operating or capital expenditure is required now, or in the three years immediately following the date of this Agreement, in relation to the business of any Group Company as carried on at the date of the Agreement, in order to comply with, extend, renew or obtain any Environmental Licence or in order to comply with (i) any Environmental Law, or (ii) any Future Environmental Law.

 

(d)                                 Neither the Seller nor any Group Company has received any written notice or claim or other formal written communication which is outstanding at the date of this Agreement and under which any Group Company is in violation of any Environmental Law or Environmental Licence, or which states that any further Environmental Licence is likely to be required, or that any existing  Environmental Licence may be revoked, suspended, varied or limited.

 

(e)                                  So far as the Seller is aware, no Group Company is in breach of, or has a liability under, Environmental Law and which is, in either case, outstanding at the date of the Agreement and which relates to:

 

(i)                                     any soil or groundwater contamination present at any Property at the date of this Agreement; or

 

(ii)                                  any property (other than a Property) which has been owned or occupied by any Group Company.

 

(f)                                    All audits, assessments, reports and other reviews concerning Environmental Matters in the possession or control of the Seller or any Group Company, which have been commissioned in the three years immediately prior to the date of this Agreement, and relating to the operation of the business of any Group Company or any Property have been disclosed to the Buyer.

 

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25.3                         Litigation

 

There are no civil, criminal, arbitration or administrative or other formal proceedings pending or, so far as the Seller is aware, threatened against any Group Company in relation to any breaches of Environmental Law or of the terms and conditions of any Environmental Licences which are material to the operation of its business and which are outstanding as at the date of this Agreement.

 

26.                               DATA ROOM DVD

 

The DVD to be provided by the Seller to the Buyer promptly after the date of this Agreement, and in any event by no later than five Business Days after the date of this Agreement, as referred to in clause 4.11 of this Agreement, will contain a true, complete and correct copy of all materials and information contained in the internet website “Project Ben DataSite” maintained by Merrill Corp. at the direction of the Seller as at 21 April 2011, and will not contain any materials or information which were not made available by the Seller to the Buyer on that website as at that date.

 

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SCHEDULE 4

 

Seller Protection Clauses

 

1.                                       Save in the case of fraud, fraudulent misrepresentation or fraudulent concealment by the Seller, the Seller shall be under no liability in respect of any claim under the Warranties (other than the Fundamental Warranties, a claim in respect of which shall not be restricted in any manner under this paragraph 1) or under the Tax Deed and any such claim shall be wholly barred and unenforceable unless written notice setting out a brief summary of the material facts giving rise to the potential claim which are then reasonably and readily available to the Buyer, shall have been served upon the Seller by the Buyer after it becomes likely that such a claim will be made, and in any event:

 

1.1                                 in the case of a claim under the Warranties other than the Tax Warranties, as defined below (the “Non-Tax Warranties”), and other than the Warranties relating to Intellectual Property, as set forth in paragraph 6 of schedule 3 (the “IP Warranties”), by no later than 5.00 p.m. on the date falling 18 months after the Completion Date;

 

1.2                                 in the case of a claim under the IP Warranties, by not later than 5.00 p.m. on the third anniversary of the Completion Date; and

 

1.3                                 in the case of a claim under the Warranties in paragraph 24 of schedule 3 (the “Tax Warranties”) or under the Tax Deed by not later than 5.00 p.m. on the sixth anniversary of the date falling three months after Completion,

 

1.4                                and the liability of the Seller for any claim specified in such notice shall absolutely determine and cease if either (unless the amount payable in respect of the relevant claim has been agreed by the Seller within six months of the date of such written notice), legal proceedings have not been instituted in respect of such claim by the due service of process on the Seller within:  (i) in the case of a claim under a Non-Tax Warranty, six months of the date of such written notice; or (ii) in the case of a claim under a Tax Warranty, twelve months of the date of such written notice. Where a claim is made in respect of a matter where the loss to the Buyer or to a Group Company is uncertain, or such claim is unascertainable or otherwise contingent on another event, such legal action need not be brought until six months after the first to occur of the loss becoming ascertained or ascertainable or ceasing to be contingent.

 

2.                                       Save in the case of fraud, fraudulent misrepresentation or fraudulent concealment by the Seller, the Seller shall be under no liability in respect of any claim under the Warranties (other than the Fundamental Warranties with respect to paragraph 2.2 below):

 

2.1                                 where the liability of the Seller in respect of that claim, when aggregated with other claims arising from the same or similar subject matter, facts, events or circumstances would (but for this paragraph) have been less than £10,000; or

 

2.2                                 unless and until and only to the extent that the liability in respect of that claim (not being a claim for which liability is excluded under, paragraph 2.1 above) when aggregated with the liability of the Seller in respect of all other such claims shall exceed £250,000, in

 

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which event the Seller shall be liable for the full amount of all such qualifying claims, and not just the excess over £250,000.

 

3.                                       Save in the case of fraud, fraudulent misrepresentation or fraudulent concealment by the Seller, the aggregate liability of the Seller (before any netting off or set off of any liability of the Buyer) in respect of all claims whatsoever under the Warranties, a claim for a breach of the Specified Covenant (other than a claim for a bad faith breach of the Specified Covenant), claims under the Tax Deed and claims under the indemnity set forth at clause 9.9(k) shall not in any circumstances exceed:

 

(a)                                  £16,500,000 for all claims under the Non-Tax Warranties, the Specified Covenant and claims under the indemnity set forth at clause 9.9(k), other than claims for breach of the Fundamental Warranties and the Environmental Warranties and claims for bad faith breaches of the Specified Covenant; and

 

(b)                                 the aggregate of the Share Consideration and any Deferred Consideration that has been paid by the Buyer to the Seller at the relevant time, for breaches of the Fundamental Warranties, the Tax Warranties, the Environmental Warranties, claims against the Seller for breach of the Specified Covenant (other than claims for bad faith breaches of the Specified Covenant), claims under the Tax Deed and claims under the indemnity set forth at clause 9.9(k), provided that, and without prejudice to the provisions of (a) above, the aggregate of all claims under or arising out of the Warranties, for breach of the Specified Covenant (other than claims for bad faith breaches of the Specified Covenant), under the Tax Deed and claims under the indemnity set forth at clause 9.9(k) shall in no case exceed the aggregate of the Share Consideration and any Deferred Consideration that has been paid by the Buyer to the Seller at the relevant time.

 

4.                                       The Seller shall be under no liability in respect of any claim under the Warranties given as at the date of this Agreement to the extent that the facts or circumstances giving rise thereto are fairly disclosed in the Disclosure Letter.  Without prejudice to the Buyer’s right under clause 14.1(e) to terminate this Agreement in the circumstances provided for therein, the Seller shall be under no financial liability in respect of any claim under the Warranties given as at Completion to the extent that the facts or circumstances giving rise thereto occur or arise after the date of this Agreement and are outside the control of the Seller or any of its Related Persons, each acting in good faith and with a reasonable level of skill and diligence, and are fairly and duly disclosed in writing to the Buyer by no later than the day which is five Business Days prior to the Completion Date. Nothing in the Disclosure Letter shall constitute a representation or warranty as to the accuracy of the information forming part of the Disclosure Letter.

 

5.                                       No liability (whether in contract, tort or otherwise) shall attach to the Seller in respect of any claim under the Warranties (other than the Fundamental Warranties) to the extent that:

 

5.1                                the claim is based upon a liability which is contingent only, unless and until such contingent liability becomes an actual liability (subject to paragraph 3);

 

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5.2                                 specific provision or reserve in respect of the matter giving rise to the claim shall have been made in the Completion Accounts and shall have been taken into account in the calculation of the Share Consideration in accordance with the provisions of clause 7 and schedule 7;

 

5.3                                 the claim occurs wholly or partly out of or the amount thereof is increased as a result of:

 

(a)                                  any change in the accounting principles or practices of any member of the Buyer’s Group introduced or having effect after the Completion Date unless the same is introduced to bring the accounting principles and practices into line with the generally accepted accounting principles and practices of the relevant jurisdiction including, where relevant, International Accounting Standards, in relation to a business of the type carried on by the Company or the Group Companies; or

 

(b)                                 save in relation to any Future Environmental Law (but only to the extent required for the purpose of paragraph 25.2(c) of Schedule 3), any change in law or regulation or in its interpretation or administration by the English courts or by any other fiscal, monetary or regulatory authority (whether or not having the force of law) introduced or having effect after the Completion Date; or

 

5.4                                 the loss or damage giving rise to the claim is actually recovered by the Buyer’s Group under any policy of insurance maintained by a Group Company as at Completion.

 

6.                                       In assessing any liabilities damages or other amounts recoverable by the Buyer as a result of any claim under the Warranties there shall be taken into account any benefit accruing to the Buyer’s Group including, without prejudice to the generality of the foregoing, any amount of any Relief obtained, utilised and retained by the Buyer’s Group or the net present value of any amount by which any Taxation for which the Buyer’s Group is liable to be assessed or accountable is reduced or extinguished, arising directly in consequence of the matter which gives rise to such claim.

 

7.                                       No liability will arise and no claim may be made under any of the Warranties to the extent that the matter giving rise to such claim is remediable, unless such matter shall not have been remedied to the reasonable satisfaction of the Buyer within the period of 15 days following the date of service of notice by the Buyer to the Seller.

 

8.                                       8.1                                 This paragraph 8 shall apply in circumstances where:

 

(a)                                  any claim is made against the Buyer’s Group by a third party which may give rise to a claim by the Buyer’s Group against the Seller under the Non-Tax Warranties or the indemnities set forth in clause 9.9; or

 

(b)                                 the Buyer’s Group is or may be entitled to make recovery from some other person any sum in respect of any facts or circumstances by reference to which the Buyer’s Group has or may have a claim against the Seller under the Non-Tax Warranties or the indemnities set forth in clause 9.9; or

 

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(c)                                  the Seller shall have paid to the Buyer’s Group an amount in respect of a claim under the Non-Tax Warranties or the indemnities set forth in clause 9.9 and subsequent to the making of such payment the Buyer’s Group becomes or shall become entitled to recover from some other person a sum which is referable to that payment.

 

8.2                                 The Buyer, subject to it being indemnified to its reasonable satisfaction by the Seller in respect of any losses or costs it may suffer pursuant to the Seller’s actions in accordance with this paragraph 8, shall and shall procure that the Buyer’s Group shall:

 

(a)                                  (prior to taking any action against the Seller under the Non-Tax Warranties or the indemnities set forth in clause 9.9 in the case of paragraph 8.1(a) and paragraph 8.1(b)) promptly and diligently take all such action as the Seller may reasonably request including the institution of proceedings and the instruction of professional advisers approved by the Seller and acceptable to the Buyer (acting reasonably) to act on behalf of the Buyer to avoid, dispute, resist, compromise, defend or appeal against any such claim against the Buyer’s Group as is referred to in paragraph 8.1(a) or to make such recovery by the Buyer’s Group as is referred to in paragraph 8.1(b) or paragraph 8.1(c), as the case may be, in accordance with the reasonable instructions of the Seller; and

 

(b)                                 not settle or compromise any liability or claim to which such action is referable without the prior written consent of the Seller which consent shall not be unreasonably withheld or delayed; and

 

(c)                                  in the case of paragraph 8.1(c) only, promptly following receipt of the relevant sum, repay to the Seller an amount equal to the amount so recovered (less any costs, expenses and tax incurred by the Buyer and its Related Persons in connection with the recovery of such amount) or, if lower, the amount paid by the Seller to the Buyer,

 

provided that neither the Buyer nor any of its Related Persons shall be under any obligation to take any steps or action that the Buyer reasonably considers would, or would be reasonably likely to, be prejudicial to its business or to the business of any of its Related Persons.

 

9.                                       Nothing in this Agreement shall or shall be deemed to relieve the Buyer of any common law duty to mitigate any loss or damage incurred by it as a result of a breach of Warranty.

 

10.                                 For the avoidance of doubt, save to the extent expressly provided for in this schedule 4, any claim under the Tax Warranties shall be governed by the Tax Deed.

 

11.                                 The limitations of liability contained in this schedule 4 shall not apply to any liability for any claim to the extent that the same is attributable to fraud, fraudulent misrepresentation or fraudulent concealment on the part of the Seller or any of its Representatives or to any claim of any nature whatsoever under this Agreement other than a claim under the Warranties, save, in the case of paragraph 3 of this schedule 4, for a claim for a breach of the Specified Covenant other than such a claim for a bad faith breach of the Specified

 

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Covenant and for claims under the indemnity set forth at clause 9.9(k) and, in the case of paragraph 8 of this schedule 4, for claims under the indemnities set forth in clause 9.9.

 

12.           Any failure by the Buyer or any of its Related Persons to comply with the requirements of this schedule (other than the specified time limit for the notification of claims or commencement of legal action as set out in paragraph 1) shall not absolve or release the Seller or any member of the Seller’s Group from liability, but shall entitle the Seller to claim a deduction from its liability to pay any claim in respect of a breach of Warranty to the extent it is financially prejudiced by such failure, and provided that the Seller shall have taken reasonable steps to mitigate such financial prejudice.

 

99

 

SCHEDULE 11

 

CONDUCT OF THE GROUP COMPANIES PRE-COMPLETION

 

1.             From the date of this Agreement until Completion, the Seller and the Czech Seller, as applicable, shall except as required by clauses 4.8 and 4.9 of this Agreement:

 

(a)           procure that each Group Company carries on its business only in the ordinary and usual course consistent with past practice;

 

(b)           procure that all reasonable steps are taken to preserve and protect the assets of each of the Group Companies and to preserve and retain the goodwill of their businesses (including the existing relationships with customers, employees and suppliers);

 

(c)           subject to clause 12 (Confidential Information) and the requirements of applicable law, procure that the Buyer’s Representatives shall be allowed, upon reasonable notice and during Working Hours, access to:  (i) the books and records (or those parts of such books and records) of each Group Company, including all statutory books, minute books, leases, contracts, supplier lists and customer lists, any notice or communication received from, or provided to, any Governmental Authority in connection with the business of any member of the Group, any communication received from a distributor, supplier or customer which is or could reasonably be expected to be material to the business of any Group Company or the Group, and any other information relating to the business, assets, operations or financial and trading position of any of the Group Companies, as the Buyer may reasonably request from time to time (but excluding any information that relates to the sale or divestiture process with respect to the Company or the Shares conducted by the Seller Guarantor and its Affiliates up to and including Completion, including strategy, other potential interested parties, negotiations, projections, or other information related thereto), together with the right to take copies (provided that such information is returned to the Seller promptly in the event that Completion does not occur); and (ii) with the prior consent of the Seller (not to be unreasonably withheld) the premises (including the Properties) used by, and management of, the Group Companies on such terms as are agreed between the Seller and the Buyer provided, however, that (i) the Buyer shall schedule such access through a designated officer of the Seller and in such a way as to avoid disrupting the normal business of the Group Companies, (ii) the Seller shall not be required to take any action which would, in the Seller’s judgment, constitute a waiver of the attorney client or other privilege, and (iii) the Seller need not supply any information which it is under a legal obligation not to supply;

 

(d)           not knowingly do or procure, and shall ensure that no Group Company or other member of the Seller Group shall knowingly do or procure, any act or omission which could be prevented with the exercise of reasonable diligence which would constitute or give rise to a breach of any Warranty (in the knowledge that such act 

 

114

 

or omission would constitute or give rise to such a breach) when the Warranties are repeated at Completion as provided in this Agreement;

 

(e)           make prompt disclosure to the Buyer of all relevant information which comes to the notice of the Seller or any other member of the Seller’s Group in relation to any fact or matter (whether existing on or before the date of this Agreement or arising afterwards) which the Seller reasonably believes constitutes, or would reasonably be expected to constitute a breach of any Warranty when the Warranties are repeated at Completion as provided in this Agreement;

 

(f)            procure that there is no declaration, authorisation, making or payment of a dividend or other distribution of any kind (other than the Pre-Completion Dividends) nor any reduction of its paid-up share capital by any Group Company;

 

(g)           procure that no share or loan capital or other security is created, allotted or issued or agreed to be created, allotted or issued by any Group Company and that no option over or other right to subscribe for any share or loan capital or other security is granted by any Group Company;

 

(h)           procure that there is no sale, purchase, redemption or repurchase by any Group Company or any member of the Seller Group of any share or loan capital or other security of any Group Company;

 

(i)            procure that each Group Company continues to make capital expenditures as contemplated by the Business Plan and that no Group Company makes any material capital expenditure not contemplated by the Business Plan;

 

(j)            procure that no Senior Employee is given notice of the termination of his or her employment or is dismissed (except for incompetence or gross misconduct or other reasonable cause justifiable in law) without the prior consent of the Buyer;

 

(k)           continue each Policy and not do or omit to do anything; which would make a Policy void or voidable;

 

(l)            procure that no amendment or other modification is made, and no waiver or consent is granted, under any of the constitutional documents of any of the Group Companies, and that no Group Company changes the nature or scope of its business;

 

(m)          procure that a claim is filed by Cyberview Czech as a creditor of Sazka in the Sazka Insolvency Proceedings in accordance with the requirements of the Czech Insolvency Act, in particular within the time limit for submission of claims by creditors provided for under that Act, and keep the Buyer fully and promptly informed of all material developments in the Sazka Insolvency Proceedings, including providing the Buyer with all material correspondence, communications and documents received by a Group Company in connection with the Sazka Insolvency Proceedings, including written legal advice in connection therewith; and

 

115

 

(n)           procure that no Contract to do, engage or cause any act or thing that would constitute a breach of any of the foregoing is entered into or approved by the Seller, any Group Company or any of their Related Persons.

 

2.             From the date of this Agreement until Completion, the Seller shall procure that, save with the prior written consent of the Buyer (such consent not to be unreasonably withheld):

 

(a)           none of the following are done, permitted or agreed to be done by or in relation to the Group Companies except as required by clauses 4.8 or 4.9 of this Agreement:

 

(i)            the reorganisation of any Group Company, or the discontinuance of any line of the business of any Group Company;

 

(ii)           any entry into or material modification of or termination of, any Significant Contract or a Contract of a long term or unusual nature, or any material modification of any Contract which would cause the relevant Contract to become a Significant Contract or a Contract of a long term or unusual nature.  For the purposes of this paragraph (ii), “Significant Contract” means a Contract which does or could reasonably be expected to generate annual revenues of at least, or involve annual expenditure in excess of, £100,000, and a “Contract of a long term or unusual nature” means a Contract that:  (A) is not capable of performance within its terms within twelve months after the date on which it is entered into or undertaken; (B) cannot be terminated on less than twelve months’ notice; (C) could involve an obligation or a liability for expenditure in excess of £100,000; or (D) may result in any material  change in the nature or scope of the operations of any Group Company;

 

(iii)          the giving of or entry into any individual guarantee, indemnity or other agreement to secure an obligation of a third party;

 

(iv)          any increase in the amount of any Intra-Group Payables owed by any Group Company at the date of this Agreement or the creation of any new Intra-Group Payables or Receivables, in each case other than in the ordinary course of trading consistent with past practice;

 

(v)           the institution or settlement of, or agreement to settle, any litigation, where the institution or settlement would result in a payment to or by a Group Company of £50,000 or more, or the institution of any litigation against any customer of or supplier to any Group Company;

 

(vi)          the entry into, or the variation, termination of waiver of any rights in respect of, any transaction between a Group Company and any member of the Seller’s Group;

 

(vii)         the entry into or the material modification of any subsisting agreement with any trade union or other body representing its employees or relating to any works council;

 

116

 

(viii)        the creation of any Encumbrance over the Shares or the shares or (save for any Permitted Encumbrance) assets (including any Intellectual Property) of any Group Company, or any of them, in each case which are not released within 30 days of their creation;

 

(ix)           incur Financial Debt (except pursuant to facilities disclosed in the Disclosure Letter where the Financial Debt does not exceed the amount available to be drawn by each Group Company under those facilities);

 

(x)            the acquisition of, or entry into an agreement to acquire, or the disposal (whether by sale, license, lease or otherwise) of, or entry into an agreement to dispose (whether by sale, license, lease or otherwise) of, any asset (including any Intellectual Property) involving consideration, expenditures or liabilities in excess of £50,000 or of any stock, in each case, other than in the ordinary course and consistent with past practice or as contemplated by any Transaction Agreement;

 

(xi)           the adoption or change in any accountancy method relating to Tax (unless required by applicable accounting standards) or the making of or change to any election relating to Tax or settlement of any claim or assessment relating to Tax (unless and to the extent that the making or changing of election or settlement of claim or assessment is reflected in a provision for Tax in the Completion Accounts) or as required pursuant to the Tax Deed;

 

(xii)          the extension for a period longer than seven days of the period of time within which amounts due to any Group Company may be paid;

 

(xiii)         except for replacement of departing employees, employing or agreeing to employ any new persons full-time on terms that would result in compensation expenses of more than £50,000 per annum in the aggregate; or engaging any part-time employee or consultant whose employment or consulting contract cannot be terminated with no prior notice and without liability to any Group Company from and after Completion;

 

(xiv)        materially changing or amending the terms of employment (including pension fund commitments) of, or providing any new, increased or accelerated remuneration or benefits to, any employee, other than as required by law (in which case the Seller shall notify the Buyer of such change, increase or acceleration);

 

(xv)         the taking of any material step or action in connection with the Sazka Insolvency Proceedings, including exercising any voting rights at meetings of creditors of Sazka in the course of the Sazka Insolvency Proceedings;

 

(xvi)        agreeing to vary, amend or terminate the Sazka Contract or to waive any rights thereunder; and

 

117

 

(xvii)       entering into or approving any Contract to do, engage or cause any of the foregoing.

 

(b)           save as contemplated by the Transaction Agreements, none of the following things are done, permitted or agreed to be done in relation to the Properties:

 

(i)            termination or serving of any notice to terminate, surrender or accept any surrender of or waiving the terms of any lease, tenancy or licence;

 

(ii)           agreeing any new rent or fee payable under any lease, tenancy or licence;

 

(iii)          entering into or in any material respect varying any agreement, lease, tenancy, licence or other commitment; and

 

(iv)          entering into or approving any Contract to do, engage or cause any of the foregoing.

 

(c)           the members of the Seller Group providing services to any Group Company of a nature similar to those services described in the Transitional Services Agreements shall continue to provide such services in the ordinary course and consistent with past practice over a period of three months prior to the date of this Agreement.

 

118

 

	
Signed by   
    	
)
    	
 
    
	
for and   on behalf of IGT-UK GROUP 
    	
)
    	
/s/ Patti   S. Hart 
    
	
LIMITED  
    	
)
    	
Patti S.   Hart 
    
	
in the   presence of:  
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Jill   P. Reith  
    
	
 
    	
 
    	
Jill P.   Reith  
    
	
 
    	
 
    	
Witness  
    

 

[Signature page to Share Purchase Agreement]

 

 

	
Signed by
    	
)
    	
 
    
	
for and   on behalf of  
    	
)
    	
/s/ Patti   S. Hart 
    
	
INTERNATIONAL GAME 
    	
)
    	
Patti S.   Hart 
    
	
TECHNOLOGY
    	
)
    	
 
    
	
in the   presence of:
    	
)
    	
/s/ Jill   P. Reith  
    
	
 
    	
 
    	
Jill P.   Reith  
    
	
 
    	
 
    	
Witness  
    

 

[Signature page to Share Purchase Agreement]

 

 

 

	
Signed by
    	
)
    	
 
    
	
for and   on behalf of CYBERVIEW 
    	
)
    	
/s/ Patti   S. Hart 
    
	
INTERNATIONAL, INC.
    	
)
    	
Patti S.   Hart 
    
	
 
    	
)
    	
 
    
	
in the   presence of :
    	
)
    	
 
    

 

 

County of Clark

 

State of NEVADA

 

I, Jill P. Reith, a Notary Public for said County and State, do hereby certify that Patti S. Hart, personally appeared before me this day and acknowledged the due execution of the foregoing instrument.

 

Witness my hand and official seal, this 25th day of April, 2011.

 

 

(Seal)

	
 
    	
 
    	
 
    	
 
    	
 
    	
/s/ Jill P. Reith
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
My commission expires:  August 31, 2012
    

 

[Signature page to Share Purchase Agreement]

 

 

	
Signed by
    	
)
    	
 
    
	
for and on behalf of GLOBAL DRAW 
    	
)
    	
/s/ Ian   Timmis
    
	
LIMITED
    	
)
    	
Ian   Timmis
    
	
in the presence of :
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Phil   Horne
    
	
 
    	
 
    	
Phil   Horne
    
	
 
    	
 
    	
Witness
    

 

[Signature page to Share Purchase Agreement]

 

 

	
Signed by
    	
)
    	
 
    
	
for and on behalf of SCIENTIFIC 
    	
)
    	
/s/   Jeffrey S. Lipkin
    
	
GAMES CORPORATION
    	
)
    	
Jeffrey   S. Lipkin
    
	
in the presence of :
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Alana   J. Cohen
    
	
 
    	
 
    	
Alana J.   Cohen
    
	
 
    	
 
    	
Witness
    

 

 

I hereby certify that the above signature, signed before me, is the true signature of Jeffrey S. Lipkin, who appeared before me and whose identity I have verified.

 

 

	
/s/ Carol L. Gilmore
    	
 
    	
 
    
	
A Notary Public in and for the
    	
 
    
	
State of New York
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Seal)
    	
 
    

 

[Signature page to Share Purchase Agreement]Exhibit 10.1

 

EXECUTION COPY

 

CREDIT AGREEMENT

 

dated as of
 October 9, 2007

 

VH MERGERSUB, INC.
 (to be merged with and into GUITAR CENTER, INC.)

 

As Borrower

 

THE FACILITY GUARANTORS NAMED HEREIN

 

JPMORGAN CHASE BANK, N.A.
 As Administrative Agent and Collateral Agent

 

EACH SYNDICATION AGENT AND CO-DOCUMENTATION AGENT NAMED HEREIN

 

THE LENDERS
 NAMED HEREIN

 

And

 

J.P. MORGAN SECURITIES INC.
 As Arranger and Book Runner

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    	
1
    
	
SECTION 1.01
    	
Definitions
    	
1
    
	
SECTION 1.02
    	
Terms Generally
    	
50
    
	
SECTION 1.03
    	
Accounting Terms
    	
51
    
	
SECTION 1.04
    	
Rounding
    	
51
    
	
SECTION 1.05
    	
Times of Day
    	
52
    
	
SECTION 1.06
    	
Certifications
    	
52
    
	
 
    	
 
    	
 
    
	
ARTICLE II AMOUNT AND TERMS   OF CREDIT
    	
52
    
	
SECTION 2.01
    	
Commitment of the Lenders
    	
52
    
	
SECTION 2.02
    	
Incremental Credit Extensions
    	
52
    
	
SECTION 2.03
    	
Procedure for Term Loan Borrowing
    	
54
    
	
SECTION 2.04
    	
Repayment of Term Loans
    	
55
    
	
SECTION 2.05
    	
Reserved
    	
55
    
	
SECTION 2.06
    	
Reserved
    	
55
    
	
SECTION 2.07
    	
Notes
    	
55
    
	
SECTION 2.08
    	
Interest on Term Loans
    	
56
    
	
SECTION 2.09
    	
Conversion and Continuation of Term Loans
    	
56
    
	
SECTION 2.10
    	
Alternate Rate of Interest for Term Loans
    	
57
    
	
SECTION 2.11
    	
Change in Legality
    	
58
    
	
SECTION 2.12
    	
Default Interest
    	
58
    
	
SECTION 2.13
    	
Reserved
    	
58
    
	
SECTION 2.14
    	
Increased Costs
    	
58
    
	
SECTION 2.15
    	
Reserved
    	
59
    
	
SECTION 2.16
    	
Optional Prepayment of Term Loans; Reimbursement of Lenders
    	
59
    
	
SECTION 2.17
    	
Mandatory Prepayment
    	
61
    
	
SECTION 2.18
    	
Reserved
    	
63
    
	
SECTION 2.19
    	
Fees
    	
63
    
	
SECTION 2.20
    	
Maintenance of Loan Account; Statements of Account
    	
63
    
	
SECTION 2.21
    	
Payments; Sharing of Setoff
    	
63
    
	
SECTION 2.22
    	
Reserved
    	
64
    
	
SECTION 2.23
    	
Taxes
    	
64
    
	
SECTION 2.24
    	
Mitigation Obligations; Replacement of Lenders
    	
67
    
	
SECTION 2.25
    	
Reserved
    	
67
    
	
SECTION 2.26
    	
Security Interests in Collateral
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE III REPRESENTATIONS   AND WARRANTIES
    	
68
    
	
SECTION 3.01
    	
Organization; Powers
    	
68
    
	
SECTION 3.02
    	
Authorization; Enforceability
    	
68
    
	
SECTION 3.03
    	
No Conflicts
    	
68
    
	
SECTION 3.04
    	
Financial Condition
    	
69
    
	
SECTION 3.05
    	
Properties
    	
69
    
	
SECTION 3.06
    	
Litigation and Environmental Matters
    	
70
    
	
SECTION 3.07
    	
Compliance with Laws and Agreements
    	
71
    

 

i

 

	
SECTION 3.08
    	
Investment Company Status
    	
71
    
	
SECTION 3.09
    	
Taxes
    	
71
    
	
SECTION 3.10
    	
ERISA
    	
71
    
	
SECTION 3.11
    	
Disclosure
    	
72
    
	
SECTION 3.12
    	
Subsidiaries
    	
72
    
	
SECTION 3.13
    	
Reserved
    	
72
    
	
SECTION 3.14
    	
Labor Matters
    	
72
    
	
SECTION 3.15
    	
Security Documents
    	
73
    
	
SECTION 3.16
    	
Federal Reserve Regulations
    	
73
    
	
SECTION 3.17
    	
Solvency
    	
73
    
	
SECTION 3.19
    	
Subordination of Junior Financing
    	
74
    
	
 
    	
 
    	
 
    
	
ARTICLE IV CONDITIONS
    	
74
    
	
SECTION 4.01
    	
Closing Date
    	
74
    
	
 
    	
 
    	
 
    
	
ARTICLE V AFFIRMATIVE COVENANTS
    	
76
    
	
SECTION 5.01
    	
Financial Statements and Other Information
    	
76
    
	
SECTION 5.02
    	
Notices of Material Events
    	
79
    
	
SECTION 5.03
    	
Information Regarding Collateral
    	
80
    
	
SECTION 5.04
    	
Existence; Conduct of Business
    	
80
    
	
SECTION 5.05
    	
Payment of Obligations
    	
80
    
	
SECTION 5.06
    	
Maintenance of Properties
    	
80
    
	
SECTION 5.07
    	
Insurance
    	
81
    
	
SECTION 5.08
    	
Books and Records; Inspection and Audit Rights; Accountants
    	
82
    
	
SECTION 5.09
    	
Reserved
    	
82
    
	
SECTION 5.10
    	
Compliance with Laws
    	
83
    
	
SECTION 5.11
    	
Use of Proceeds
    	
83
    
	
SECTION 5.12
    	
Additional Subsidiaries
    	
84
    
	
SECTION 5.13
    	
Further Assurances
    	
84
    
	
SECTION 5.14
    	
Corporate Separateness
    	
85
    
	
SECTION 5.15
    	
Designation of Subsidiaries
    	
85
    
	
SECTION 5.16
    	
Mortgages
    	
85
    
	
SECTION 5.17
    	
Post-Closing Matters
    	
86
    
	
 
    	
 
    	
 
    
	
ARTICLE VI NEGATIVE   COVENANTS
    	
86
    
	
SECTION 6.01
    	
Indebtedness and Other Obligations
    	
86
    
	
SECTION 6.02
    	
Liens
    	
86
    
	
SECTION 6.03
    	
Fundamental Changes
    	
86
    
	
SECTION 6.04
    	
Investments, Unrestricted Subsidiaries
    	
87
    
	
SECTION 6.05
    	
Asset Sales
    	
88
    
	
SECTION 6.06
    	
Restricted Payments; Certain Payments of Indebtedness
    	
88
    
	
SECTION 6.07
    	
Transactions with Affiliates
    	
91
    
	
SECTION 6.08
    	
Restrictive Agreements
    	
92
    
	
SECTION 6.09
    	
Amendment of Material Documents
    	
92
    
	
SECTION 6.10
    	
Fiscal Year
    	
92
    
	
SECTION 6.11
    	
Financial Performance Covenants
    	
93
    

 

ii

 

	
ARTICLE VII EVENTS OF   DEFAULT
    	
94
    
	
SECTION 7.01
    	
Events of Default
    	
94
    
	
SECTION 7.02
    	
Remedies on Default
    	
97
    
	
SECTION 7.03
    	
Application of Proceeds
    	
97
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII THE AGENTS
    	
98
    
	
SECTION 8.01
    	
Appointment and Administration by Administrative Agent
    	
98
    
	
SECTION 8.02
    	
Appointment of Collateral Agent
    	
98
    
	
SECTION 8.03
    	
Sharing of Excess Payments
    	
99
    
	
SECTION 8.04
    	
Agreement of Applicable Lenders
    	
99
    
	
SECTION 8.05
    	
Liability of Agents
    	
100
    
	
SECTION 8.06
    	
Notice of Default
    	
101
    
	
SECTION 8.07
    	
Credit Decisions
    	
101
    
	
SECTION 8.08
    	
Reimbursement and Indemnification
    	
101
    
	
SECTION 8.09
    	
Rights of Agents
    	
102
    
	
SECTION 8.10
    	
Notice of Transfer
    	
102
    
	
SECTION 8.11
    	
Successor Agents
    	
102
    
	
SECTION 8.12
    	
Relation Among the Lenders
    	
103
    
	
SECTION 8.13
    	
Financial Statements
    	
103
    
	
SECTION 8.14
    	
Agency for Perfection
    	
103
    
	
SECTION 8.15
    	
Reserved
    	
103
    
	
SECTION 8.16
    	
Collateral Matters
    	
104
    
	
SECTION 8.17
    	
Syndication Agent and Arranger
    	
104
    
	
 
    	
 
    	
 
    
	
ARTICLE IX MISCELLANEOUS
    	
104
    
	
SECTION 9.01
    	
Notices
    	
104
    
	
SECTION 9.02
    	
Waivers; Amendments
    	
105
    
	
SECTION 9.03
    	
Expenses; Indemnity; Damage Waiver
    	
108
    
	
SECTION 9.04
    	
Successors and Assigns
    	
109
    
	
SECTION 9.05
    	
Survival
    	
112
    
	
SECTION 9.06
    	
Counterparts; Integration; Effectiveness
    	
113
    
	
SECTION 9.07
    	
Severability
    	
113
    
	
SECTION 9.08
    	
Right of Set-off
    	
113
    
	
SECTION 9.09
    	
Governing Law; Jurisdiction; Consent to Service of Process
    	
114
    
	
SECTION 9.10
    	
WAIVER OF JURY TRIAL
    	
114
    
	
SECTION 9.11
    	
Press Releases and Related Matters
    	
115
    
	
SECTION 9.12
    	
Headings
    	
115
    
	
SECTION 9.13
    	
Interest Rate Limitation
    	
115
    
	
SECTION 9.14
    	
Additional Waivers
    	
115
    
	
SECTION 9.15
    	
Confidentiality
    	
117
    
	
SECTION 9.16
    	
Patriot Act
    	
117
    
	
SECTION 9.17
    	
Foreign Asset Control Regulations
    	
118
    
	
SECTION 9.18
    	
Intercreditor Agreement
    	
118
    

 

iii

 

EXHIBITS

 

	
Exhibit A:
    	
 
    	
Form of   Assignment and Acceptance
    
	
Exhibit B-1:
    	
 
    	
Form of   Borrowing Request
    
	
Exhibit B-2:
    	
 
    	
Form of   Conversion/Continuation Notice
    
	
Exhibit C:
    	
 
    	
Form of   Note
    
	
Exhibit D:
    	
 
    	
Form of   Joinder
    
	
Exhibit E:
    	
 
    	
Form of   Compliance Certificate
    
	
Exhibit F:
    	
 
    	
Intercreditor   Agreement
    

 

iv

 

SCHEDULES

 

	
Schedule   1.1(a):
    	
 
    	
Lenders   and Commitments
    
	
Schedule   1.1(b):
    	
 
    	
Business   Segments
    
	
Schedule   3.01:
    	
 
    	
Organization   Information
    
	
Schedule   3.05(b):
    	
 
    	
Intellectual   Property
    
	
Schedule   3.05(c)(i):
    	
 
    	
Owned   Real Property
    
	
Schedule   3.06(a):
    	
 
    	
Disclosed   Matters
    
	
Schedule   3.12:
    	
 
    	
Subsidiaries;   Joint Ventures
    
	
Schedule   3.14:
    	
 
    	
Collective   Bargaining Agreements
    
	
Schedule   5.16(a):
    	
 
    	
Mortgaged   Properties
    
	
Schedule   5.17:
    	
 
    	
Post-Closing   Matters
    
	
Schedule   6.01:
    	
 
    	
Existing   Indebtedness
    
	
Schedule   6.02:
    	
 
    	
Existing   Encumbrances
    
	
Schedule   6.04:
    	
 
    	
Permitted   Investments
    
	
Schedule   6.05:
    	
 
    	
Permitted   Dispositions
    
	
Schedule   6.07:
    	
 
    	
Affiliate   Transactions
    

 

v

 

CREDIT AGREEMENT dated as of October 9, 2007 among:

 

VH MERGERSUB, INC. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), a corporation organized under the laws of the State of Delaware, to be merged (the “Merger”) with and into GUITAR CENTER, INC. (“Guitar Center” and, after the Merger, the “Borrower”), a corporation organized under the laws of the State of Delaware;

 

The FACILITY GUARANTORS from time to time party hereto;

 

JPMORGAN CHASE BANK, N.A., a national banking association, having a place of business at 270 Park Avenue, New York, New York 10017, as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity, the “Collateral Agent”), for its own benefit and the benefit of the other Secured Parties;

 

The LENDERS party hereto; and Each SYNDICATION AGENT AND CO-DOCUMENTATION AGENT (as defined herein);

 

in consideration of the mutual covenants herein contained and benefits to be derived herefrom, the parties hereto agree as follows:

 

ARTICLE I

 

SECTION 1.01                    Definitions.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABL Agreement” means that certain credit agreement dated October 9, 2007 by and among the Borrower, as the lead borrower, the other borrowers named therein, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders identified therein.

 

“ABL Borrowings Amount” means, as of any date (the “Reference Date”), an amount equal to (a) the sum of the aggregate amount of all Loans (as such term is defined under the ABL Agreement) outstanding for the period of four consecutive Fiscal Quarters most recently ended on or prior to the Reference Date divided by (b) four.

 

“ABL Facility” means the revolving credit loan facility established pursuant to the ABL Agreement in a principal amount of commitments and loans thereunder not to exceed $375,000,000 (which amount may be increased or reduced in accordance with the provisions of the ABL Agreement as in effect on the Closing Date), as amended, modified, supplemented, refinanced or replaced from time to time, provided  that any such refinancing constitutes a Permitted Refinancing.

 

“Account(s)” means “accounts” as defined in the UCC, and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, or (c) arising out of the use of a credit or charge card or information contained on or for use with the card.  The term “Account” does not include (a) rights to payment evidenced by chattel paper or an instrument, (b) commercial tort claims, (c) deposit accounts, (d) investment property, or (e) letter-of-credit rights or letters of credit.

 

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“Account Debtor” means any Person obligated on an Account.

 

“Acquired EBITDA” means, with respect to any entity or business acquired in a Permitted Acquisition (any of the foregoing, an “Acquired Entity”) for any period, the amount of Consolidated EBITDA of such Acquired Entity for such period (determined using such definition as if references to Holdings and its Restricted Subsidiaries therein were to such Acquired Entity and its Restricted Subsidiaries), all as determined on a Consolidated basis for such Acquired Entity in accordance with GAAP.

 

“Acquired Entity” has the meaning provided in the definition of “Acquired EBITDA.”

 

“Acquisition” means, with respect to a specified Person, (a) an Investment in or a purchase of a 50% or greater interest in the Capital Stock of any other Person, (b) a purchase or acquisition of all or substantially all of the assets of any other Person, (c) a purchase or acquisition of a Real Estate portfolio or Stores from any other Person, or (d) any merger or consolidation of such Person with any other Person or other transaction or series of transactions resulting in the acquisition of all or substantially all of the assets, or a 50% or greater interest in the Capital Stock of, any Person, in each case in any transaction or group of transactions which are part of a common plan.

 

“Acquisition Agreement” means the Agreement and Plan of Merger among Guitar Center, Holdings and Merger Sub dated as of June 27, 2007, together with the schedules, exhibits and annexes thereto.

 

“Acquisition Charges” means the transaction costs, fees and expenses incurred in connection with the VH Acquisition and the financing therefor (including those related to this Agreement, the Senior Initial Loan Facility, the Holdco Initial Loan Facility and the ABL Facility).

 

“Acquisition Documents” means the Acquisition Agreement and all other agreements, documents, certificates and instruments executed and/or delivered in connection therewith, each as modified, amended, supplemented or restated, and in effect from time to time.

 

“Additional Lender” has the meaning specified in SECTION 2.02.

 

“Adjusted LIBO Rate” means, with respect to any LIBO Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.  The Adjusted LIBO Rate will be adjusted automatically as to all LIBO Borrowings then outstanding as of the effective date of any change in the Statutory Reserve Rate.

 

“Administrative Agent” has the meaning provided in the preamble to this Agreement.

 

“Advisory Agreement” means the Advisory Agreement dated as of October 9, 2007 by and among Holdings, the Borrower and Bain Capital Partners, LLC, a Delaware limited liability company, as amended and in effect from time to time.

 

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“Advisory Fees” means financial advisory fees, closing fees, transaction fees, monitoring fees, oversight fees and similar fees, expenses and indemnities payable by the Loan Parties pursuant to the Advisory Agreement, but in the case of any such fees not to exceed the amounts payable in respect thereof under the Advisory Agreement as in effect on the Closing Date.

 

“Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with the Person specified.

 

“Agents” means collectively, the Administrative Agent and the Collateral Agent.

 

“Agreement” means this Credit Agreement, as modified, amended, supplemented or restated, and in effect from time to time.

 

“Agreement Value” means for each Hedge Agreement, on any date of determination, an amount determined by the Borrower (unless otherwise specified in this definition) equal to:

 

(a)                                  In the case of a Hedge Agreement documented pursuant to an ISDA Master Agreement, the net amount, if any, that would be payable by any Loan Party to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on such date of determination and (ii) such Loan Party was the sole “Affected Party” (as therein defined);

 

(b)                                 In the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss, if any, on such Hedge Agreement to the Loan Party which is party to such Hedge Agreement, based on the settlement price of such Hedge Agreement on such date of determination; or

 

(c)                                  In all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss, if any, on such Hedge Agreement to the Loan Party that is party to such Hedge Agreement determined as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party exceeds (ii) the present value of the future cash flows to be received by such Loan Party, in each case pursuant to such Hedge Agreement.

 

“Applicable Law” means as to any Person: (a) all laws, statutes, rules, regulations, orders, codes, ordinances or other requirements having the force of law; and (b) all court orders, decrees, judgments, injunctions, enforceable notices, binding agreements and/or rulings, in each case of or by any Governmental Authority which has jurisdiction over such Person, or any property of such Person.

 

“Applicable Lenders” means the Required Lenders or all Lenders, as applicable.

 

“Applicable Margin” means a percentage per annum equal to, in the case of any Prime Rate Loan, 2.50%, and in the case of any LIBO Loan, 3.50%.

 

“Arranger” means J.P. Morgan Securities Inc.

 

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“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that advises, administers or manages a Lender.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by SECTION 9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A, or any other form approved by the Administrative Agent.

 

“Bankruptcy Code” means Title 11, U.S.C.

 

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

 

“Borrower” has the meaning set forth in the preamble to this Agreement.

 

“Borrowing” means the incurrence of Term Loans of a single Type having, in the case of LIBO Loans, a single Interest Period.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with SECTION 2.03.

 

“Breakage Costs” has the meaning provided in SECTION 2.16(b).

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed; provided, however, that when used in connection with a LIBO Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” means, with respect to Holdings and its Restricted Subsidiaries for any period, the additions to property, plant and equipment and other capital expenditures of Holdings and its Restricted Subsidiaries that are (or would be) set forth in a Consolidated statement of cash flows of Holdings and its Restricted Subsidiaries for such period prepared in accordance with GAAP; provided that “Capital Expenditures” shall not include (i) any such expenditures which constitute capital expenditures relating to the construction or acquisition of any property which subsequent to such capital expenditures has been transferred to a Person other than Holdings or any of its Restricted Subsidiaries pursuant to a sale-leaseback transaction permitted under this Agreement, (ii) any additions to property, plant and equipment and other capital expenditures made with (A) the proceeds of any equity securities issued or capital contributions received or Capital Lease Obligations incurred by Holdings or any of its Restricted Subsidiaries in connection with such  capital expenditures, (B) the proceeds from any casualty insurance or condemnation or eminent domain, to the extent that the proceeds therefrom are utilized for capital expenditures within twelve months of the receipt of such proceeds, or (C) the proceeds or consideration received from any sale, trade in or other disposition of Holdings’ or any of its Restricted Subsidiaries’ assets (other than assets constituting Collateral consisting of Inventory and Accounts), to the extent that the proceeds and/or consideration therefrom are

 

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utilized for capital expenditures within twelve months of the receipt of such proceeds, (iii) any such expenditures which constitute a Permitted Acquisition, (iv) any such expenditures which constitute expenditures that are accounted for as capital expenditures of such Person and that actually are paid for by a third party (excluding Holdings or any of its Restricted Subsidiaries) and for which  neither Holdings nor any of its  Restricted Subsidiaries 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), (v) any such expenditures which constitute 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 (A) 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 (B) such book value shall have been included in Capital Expenditures when such asset was originally acquired, (vi) any such expenditures which constitute the purchase price of equipment purchased during such period to the extent the consideration therefor consists of any combination of (A) used or surplus equipment traded in at the time of such purchase and (B) the proceeds of a concurrent sale of used or surplus equipment, in each case, in the ordinary course of business, (vii) any such expenditures which constitute 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, (viii) any such expenditures which constitute normal replacement and maintenance programs charged to current results or (ix) any expenditures which are contractually required to be, and are, reimbursed to Holdings or any of its Restricted Subsidiaries in cash by a third party (including landlords) during such period of calculation.

 

“Capital Lease Obligations” means, with respect to any Person for any period, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP (except for temporary treatment of construction related expenditures under EITF 97-10, “The Effects of Lessee Involvement in Asset Construction” which will ultimately be treated as operating leases upon a sale-leaseback transaction).

 

“Capital Stock” shall mean, as to any Person that is a corporation, the authorized shares of such Person’s capital stock, including all classes of common, preferred, voting and nonvoting capital stock, and, as to any Person that is not a corporation or an individual, the membership or other ownership interests in such Person, including, without limitation, the right to share in profits and losses, the right to receive distributions of cash and other property, and the right to receive allocations of items of income, gain, loss, deduction and credit and similar items from such Person, whether or not such interests include voting or similar rights entitling the holder thereof to exercise Control over such Person, collectively with, in any such case, all warrants, options and other rights to purchase or otherwise acquire, and all other instruments convertible into or exchangeable for, any of the foregoing.

 

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“Cash Collateral Account” means an interest bearing account established by the Loan Parties with the Collateral Agent, for its own benefit and the benefit of the other Secured Parties, under the sole and exclusive dominion and control of the Collateral Agent, in the name of the Collateral Agent or as the Collateral Agent shall otherwise direct, in which deposits are required to be made in accordance with SECTION 2.17(f).

 

“Cash Equivalents” means Permitted Investments set forth in clauses (a) through (e) and clause (s) in the definition thereof.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.

 

“Change in Control” means, at any time:

 

(a)                                  any “change in/of control” or similar event as defined in any documents governing the Senior Initial Loan Facility or the Holdco Initial Loan Facility;

 

(b)                                 during a period of up to twelve (12) consecutive months, occupation of a majority of the seats (other than vacant seats) on the board of directors (or other body exercising similar management authority) of Holdings by Persons who were neither (i) nominated by the board of directors of Holdings (or prior to the consummation of a Qualifying IPO, the Sponsors) nor (ii) appointed by directors so nominated;

 

(c)                                  after the consummation of a Qualifying IPO, any person or “group” (within the meaning of the Securities and Exchange Act of 1934, as amended), other than any one or more of the Sponsor Group, is or becomes the beneficial owner (within the meaning of Rule 13d-3 or 13d-5 of the Securities and Exchange Act of 1934, as amended, except that such person shall be deemed to have “beneficial ownership” of all Capital Stock that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of (i) thirty-five percent (35%) or more (on a fully diluted basis) of the total then outstanding Capital Stock of Holdings entitled to vote for the election of directors of Holdings, and (ii) Capital Stock of Holdings entitled to vote for the election of directors of Holdings in an amount greater than the number of shares of such Capital Stock beneficially owned by the Sponsor Group (or over which the Sponsor Group has voting control);

 

(d)                                 prior to the consummation of a Qualifying IPO, a change in the Control of Holdings such that the Loan Parties are not Controlled by any one or more of the Sponsor Group; or

 

(e)                                  Holdings fails at any time to own, directly or indirectly (i) 100% of the Capital Stock of the Borrower or (ii) 100% of the Capital Stock of each of its other Subsidiaries (other than Subsidiaries that are directly or indirectly owned by the Borrower), in each case, free and clear of all Liens (other than those Liens specified in clauses (a), (e), (i), (l) and (r) of the definition of Permitted Encumbrances), except, in the case of clause (ii), where such failure is as a result of a transaction permitted by the Loan Documents.

 

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“Change in Law” means (a) the adoption of any Applicable Law after the Closing Date, (b) any change in any Applicable Law or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance by any Credit Party (or, for purposes of SECTION 2.14, by any lending office of such Credit Party or by such Credit Party’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date applicable to the Loan Parties.

 

“Charges” has the meaning provided in SECTION 9.13.

 

“Charter Document” means as to any Person, its partnership agreement, certificate of incorporation, certificate of formation, operating agreement, membership agreement or similar constitutive document or agreement or its by-laws.

 

“Closing Date” means October 9, 2007.

 

“Closing Date Representations and Warranties” means, solely with respect to the Borrower and its Subsidiaries, (a) those representations and warranties set forth in the Acquisition Agreement that (i) are material to the interests of the Lenders and (ii) a breach of any of which would permit Holdings or Merger Sub to terminate their respective obligations thereunder,(b) those representations and warranties set forth in the first and second sentence of SECTION 3.01 to the extent the same relate to the entering into and performance of the Loan Documents, SECTION 3.02, SECTION 3.08, SECTION 3.16 and SECTION 3.19 hereof and (c) the deemed representation and warranty that before and after giving effect to the Term Loans to be made on the Closing Date, no Default or Event of Default shall have occurred and be continuing in respect of the provisions of SECTION 5.11 hereof.

 

“Code” means the Internal Revenue Code of 1986 and the Treasury regulations promulgated thereunder.

 

“Co-Documentation Agent” means each financial institution accorded such title by the Arranger in consultation with Borrower in connection with the initial syndication of Commitments.

 

“Collateral” means any and all “Collateral”, “Pledged Collateral” or words of similar intent as defined in any applicable Security Document.

 

“Collateral Access Agreement” means an agreement reasonably satisfactory in form and substance to the Collateral Agent executed by (a) a bailee or other Person in possession of Collateral, and (b) each landlord of real property leased by any Loan Party, pursuant to which such Person (i) acknowledges the Collateral Agent’s Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the Collateral held by such Person or located on such real property, (iii) agrees to furnish the Collateral Agent with access to the Collateral in such Person’s possession or on the real property for the purposes of conducting a Liquidation and (iv) makes such other agreements with the Collateral Agent as the Collateral Agent may reasonably require.

 

“Collateral Agent” has the meaning provided in the preamble to this Agreement.

 

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“Commitment” shall mean, as to any Lender, the obligation of such Lender to make a Term Loan to the Borrowers in the amount set forth opposite its name on Schedule 1.1(a) hereto or as may subsequently be set forth in the Register from time to time, as the same may be increased or reduced from time to time pursuant to the terms of this Agreement.

 

“Commitment Letter” means the Commitment Letter dated June 27, 2007, from JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. to Merger Sub and Holdings.

 

“Commitment Percentage” shall mean, with respect to each Lender, that percentage of the Commitments of all Lenders hereunder to make Term Loans to the Borrower, in the amount set forth opposite such Lender’s name on Schedule 1.1(a) hereto or as may subsequently be set forth in the Register from time to time, as the same may be increased or reduced from time to time pursuant to the terms of this Agreement.

 

“Compliance Certificate” has the meaning provided in SECTION 5.01(d).

 

“Consolidated” means, when used to modify a financial term, test, statement, or report of a Person, the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries.

 

“Consolidated Current Assets” means, at any date, all amounts (other than cash, Cash Equivalents and the current portion of deferred income taxes) that would, in conformity with GAAP, be included in the caption “total current assets” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date.

 

“Consolidated Current Liabilities” means, at any date, all amounts that would, in conformity with GAAP, be included in the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of Holdings and its Subsidiaries, (b) without duplication of clause (a) above, all Indebtedness consisting of Loans (as defined in the ABL Agreement) otherwise included therein, (c) the current portion of deferred income taxes and (d) any liability in respect of net obligations pursuant to Hedge Agreements related solely to interest rate protection.

 

“Consolidated EBITDA” means, with respect to Holdings and its Restricted Subsidiaries on a Consolidated basis for any period, (i) the sum (without duplication) of (a) Consolidated Net Income for such period, plus in each case without duplication and to the extent deducted in determining Consolidated Net Income for such period, (b) depreciation, amortization (including goodwill impairment charges), and all other non-cash charges, non-cash expenses or non-cash losses (including, but not limited to, amortization of deferred financing fees, non-cash rent expense, non-cash expense from any employee benefit or stock option plan, loss on sale or disposition of fixed assets and subsequent non-cash impairment charges), (c) provisions for Consolidated Taxes based on income, (d) Consolidated Interest Expense, (e) Acquisition Charges, (f) non-recurring and other one time costs (including, without limitation, legal, consulting and other advisory fees) in connection with the corporate restructuring of Holdings and its Restricted Subsidiaries which are incurred within twelve (12) months after the Closing

 

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Date, (g) expenses and indemnities paid to directors, (h) all costs, fees, expenses and any one time payments made related to the VH Acquisition, (i) all costs, fees, expenses and any one time payments made related to any Permitted Investments and Permitted Acquisitions, issuance of equity, recapitalization, reorganization, Permitted Disposition or issuance of Permitted Indebtedness, and any reasonably identifiable and factually supportable cost savings in an aggregate amount for any consecutive four Fiscal Quarter period not to exceed in the aggregate with any Pro Forma Adjustments for such period (or any portion thereof) an amount equal to 5% of Consolidated EBITDA of Holdings and its Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended on or prior to the date of determination and certified by the chief financial officer of the Borrower as having been determined in good faith to be reasonably anticipated to be realizable in respect thereof within twelve (12) months following any such Permitted Acquisition or Permitted Disposition or recapitalization or reorganization to the extent (A) such cost savings would be permitted to be reflected in financial statements prepared in compliance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended, or (B) the Administrative Agent shall, in its sole discretion, have approved an adjustment in respect of such cost savings, (j) all one time compensation charges, including, without limitation, stay bonuses paid to existing management and severance costs, (k) to the extent not already included in Consolidated Net Income, proceeds from business interruption insurance, (l) to the extent not already included in Consolidated Net Income and actually indemnified or reimbursed, any expenses and charges that are covered by indemnification or reimbursement provisions in connection with any Permitted Acquisition or any Permitted Disposition, (m) cash receipts (or reduced cash expenditures) in respect of income received in connection with subleases to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to clause (ii)(b) below for any previous period, (n) non-cash charges, expenses or losses relating to the vesting of warrants, (o) any one time expenses relating to enhanced accounting functions, (p) any non-cash increase in expenses (1) resulting from the revaluation of inventory (including any impact of changes to inventory valuation policy methods, including, without limitation, changes in capitalization of variances) or (2) due to purchase accounting associated with the Transactions, (q) costs related to implementation of inventory management and point of sale solutions and other systems and technology initiatives (provided that the amount of any cash costs added-back in the calculation of Consolidated EBITDA pursuant to this clause (q) for such period, in the aggregate with the amount of any add-backs of such cash costs for preceding periods, shall not exceed $4,000,000), (r) annual Advisory Fees whether accrued or paid in cash (provided that to the extent any non-cash expense added back under this clause (r) becomes a cash charge in any subsequent period, such cash charge shall not be deducted in determining Consolidated Net Income for such subsequent period), (s) cash expenses incurred as a result of litigation against any Loan Party or any of its Subsidiaries to the extent not reimbursed in such period from insurance proceeds or by other third parties (provided that the amount of any such reimbursement in respect of such expenses received in a subsequent period shall be deducted in calculating Consolidated EBITDA for such subsequent period) in an amount not to exceed $3,000,000 in the aggregate with the amount of add-backs for preceding periods pursuant to this clause (s), (t) annual non-cash bonus expense in the period recorded (provided that to the extent any non-cash expense added back under this clause (t) becomes a cash expense in any subsequent period, such cash expense shall be deducted in calculating Consolidated EBITDA for such subsequent period) and (u) unusual, nonrecurring or extraordinary expenses, losses or charges as reasonably approved by the Administrative Agent

 

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(such approval not to be unreasonably withheld or delayed), minus (ii) the sum of (a) any Restricted Payment made in cash during such period to any Person (other than a Loan Party) having an interest in any Restricted Subsidiary of a Loan Party, (b) non-cash gains for such period to the extent included in Consolidated Net Income, and (c) cash payments made during such period on account of non-cash charges added back in the calculation of Consolidated EBITDA pursuant to clause (i)(b) above for any previous period.

 

“Consolidated Interest Expense” means, with respect to Holdings and its Restricted Subsidiaries on a Consolidated basis for any period, (a) total interest expense (including that attributable to Capital Lease Obligations in accordance with GAAP but excluding any imputed interest as a result of purchase accounting) of Holdings and its Restricted Subsidiaries on a Consolidated basis with respect to all outstanding Indebtedness of Holdings and its Restricted Subsidiaries, including, without limitation, the Obligations and all commissions, discounts and other fees and charges owed with respect thereto, but excluding (i) any non-cash or deferred interest financing costs and (ii) any non-cash amortization or write-down of any deferred financing fees (including bridge facility fees), all as determined on a Consolidated basis in accordance with GAAP.  For purposes of the foregoing, interest expense of any Person shall be determined after giving effect to any net payments made or received by such Person with respect to interest rate Hedge Agreements.

 

“Consolidated Net Income” means, with respect to Holdings and its Restricted Subsidiaries for any period, the net income (or loss) of Holdings and its Restricted Subsidiaries on a Consolidated basis for such period taken as a single accounting period determined in accordance with GAAP (including any Acquired EBITDA); provided, however, that there shall be excluded (a) the income (or loss) of any Person in which Holdings and any of its Restricted Subsidiaries has a joint interest, except to the extent of the amount of dividends or other distributions actually paid in cash to Holdings or such Restricted Subsidiary during such period, and (b) the income of any direct or indirect Restricted Subsidiary of Holdings or any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its Charter Documents or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary

 

“Consolidated Secured Net Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (a) the sum of (i) Consolidated Total Debt (other than any portion of such Consolidated Total Debt that is attributed to Loans (as such term is defined under the ABL Agreement) outstanding at such date) that is secured by a Lien on any asset of Holdings or any of its Subsidiaries plus (ii) the ABL Borrowings Amount on such date, minus (iii) the aggregate amount of unrestricted cash and Cash Equivalents on hand of Holdings and its Subsidiaries subject to a first priority (other than (i) Permitted Encumbrances of the type described in clause (q) of the definition thereof and (ii) Permitted Encumbrances arising by operation of law) perfected Lien in favor of the Collateral Agent for the benefit of the Secured Parties, to (b) Consolidated EBITDA of Holdings and its Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended on and prior to such date, taken as one accounting period.

 

“Consolidated Taxes” means, as of any date for the applicable period ending on such date with respect to Holdings and its Restricted Subsidiaries on a Consolidated basis, the aggregate of

 

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all income, withholding, franchise and similar taxes and foreign withholding taxes, as determined in accordance with GAAP, to the extent the same are paid or accrued during such period.

 

“Consolidated Total Debt” means, at any date, the aggregate amount of all Indebtedness of Holdings and its Subsidiaries outstanding at such date in the amount that would be reflected on a balance sheet prepared on such date in accordance with GAAP (excluding any such Indebtedness pursuant to Hedge Agreements).

 

“Consolidated Working Capital” means, at any date, the excess of Consolidated Current Assets on such date over Consolidated Current Liabilities on such date.

 

“Control” means the possession, directly or indirectly, of the power (a) to vote 50% or more of the securities having ordinary voting power for the election of directors (or any similar governing body) of a Person, or (b) to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power or by contract.  The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

“Cost” means the cost of purchases, as reported on the applicable Loan Party’s financial stock ledger based upon the Loan Parties’ accounting practices in effect on the Closing Date or thereafter consented to by the Administrative Agent, whose consent will not be unreasonably withheld.  “Cost” does not include inventory capitalization costs or other non-purchase price charges (except for freight charges with respect to all Inventory to the extent treated consistently with the Loan Parties’ accounting practices in effect on the Closing Date) used in the applicable Loan Party’s calculation of cost of goods sold.

 

“Credit Party” means (a) the Lenders, (b) the Agents and their respective Affiliates and branches, (c) the Arranger and (d) the successors and permitted assigns of each of the foregoing.

 

“Credit Party Expenses” means, without limitation, all of the following to the extent incurred in connection with this Agreement and the other Loan Documents: (a) all reasonable documented out-of-pocket expenses incurred by the Agents and the Arranger, including the reasonable documented fees, charges and disbursements of one counsel for the Agents and the Arranger (plus one local counsel in any other jurisdiction to the extent reasonably necessary), in connection with the preparation and administration of the Loan Documents, the syndication of the credit facilities provided for herein, or any amendments, modifications or waivers requested by a Loan Party of the provisions hereof or thereof (whether or not any such amendments, modifications or waivers shall be consummated), (b) all reasonable documented out-of-pocket expenses incurred by the Agents or, subject to the proviso below, any Lender and their respective Affiliates and branches, including the reasonable documented fees, charges and disbursements of one counsel for the Agents, the Lenders and their respective Affiliates (plus one local counsel in any other jurisdiction to the extent reasonably necessary) in connection with the enforcement and protection of their rights in connection with the Loan Documents, including all such reasonable documented out-of-pocket expenses incurred during any workout, restructuring or related negotiations in respect of the Term Loans; provided that the Agent, the Lenders and their Affiliates shall be entitled to reimbursement for no more than one counsel representing all such Lenders (plus one local counsel in any other jurisdiction to the extent reasonably necessary); and

 

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provided further that in the case of an actual conflict of interest the Agents, the Lenders and their respective Affiliates may engage and shall be reimbursed for additional counsel (plus additional local counsel in any other jurisdiction to the extent reasonably necessary); and provided further that the foregoing shall in no event limit the right of the Agents, the Arranger, the Lenders and their respective Affiliates to reimbursement of expenses of counsel under the ABL Facility.  Credit Party Expenses shall not include the allocation of any overhead expenses of any Credit Party.

 

“Cure Amount” has the meaning provided in SECTION 7.01.

 

“Cure Right” has the meaning provided in SECTION 7.01.

 

“Default” means any event or condition described in SECTION 7.01 that constitutes an Event of Default or that upon notice, lapse of any cure period set forth in SECTION 7.01, or both, would, unless cured or waived, become an Event of Default.

 

“Default Rate” has the meaning provided in SECTION 2.12.

 

“Designated Hedge Agreement” means each Hedge Agreement between any Loan Party or any of its Restricted Subsidiaries and any Person that is a Lender or an Affiliate of a Lender on the Closing Date or on the date such Hedge Agreement was entered into designated in writing by the Borrower to the Agents as a “Term Loan Pari Passu Hedge Agreement”, as each may be amended from time to time.

 

“Disqualified Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) is mandatorily redeemable in whole or in part prior to the Maturity Date, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for Indebtedness or any Capital Stock referred to in (a) above prior to the Maturity Date, or (c) contains any mandatory repurchase obligation which comes into effect prior to the Maturity Date, provided that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem such Capital Stock upon the occurrence of a Change in Control shall not constitute Disqualified Capital Stock.

 

“Disqualified Institution” means (a) any bank, financial institution or other Person or any competitor of the Borrower and its Subsidiaries, in each case as identified in writing by the Borrower to the Administrative Agent prior to the Closing Date, and (b) any Excluded Institution.

 

“Documents” has the meaning assigned to such term in the Security Agreement.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Earn-Out Obligations” means the maximum amount of all obligations incurred or to be incurred in connection with any Acquisition of a Person pursuant to a Permitted Acquisition

 

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under non-compete agreements, consulting agreements, earn-out agreements and similar deferred purchase agreements.

 

“ECF Percentage” means, with respect to any Fiscal Year of Holdings ending on or after December 31, 2008, 50%; provided that the ECF Percentage shall be reduced to (i) 25%, if the Consolidated Secured Net Leverage Ratio as of the last day of such Fiscal Year is less than or equal to 2.75 to 1.0 and greater than or equal to 1.0 to 1.0, or (ii) 0%, if the Consolidated Secured Net Leverage Ratio as of the last day of such Fiscal Year is less than 1.0 to 1.0.

 

“Eligible Assignee” means (a) any Credit Party, any Affiliate of any Credit Party and any Related Fund (any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof), and (b) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buy loans in the ordinary course, provided that in any event, “Eligible Assignee” shall not include (x) any natural person, or (y) the Sponsor Group or any of their respective Affiliates (other than any fund that makes debt investments in the ordinary course of business and is managed or administered by Sankaty Advisors LLC or any of its Subsidiaries).

 

“Environmental Laws” means all Applicable Laws issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the protection of human health from environmental hazards, to the protection of the environment, to the handling, treatment, storage, disposal of Hazardous Materials or to the assessment or remediation of any Release or threatened Release of any Hazardous Material to the environment.

 

“Environmental Liability” means any liability, contingent or otherwise (including, without limitation, any liability for damages, natural resource damage, costs of environmental remediation, administrative oversight costs, fines, penalties or indemnities), of any Loan Party or any Subsidiary 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.

 

“Equipment” has the meaning set forth in the Security Documents.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) of the Code.

 

“ERISA Event” means: (a) any Reportable Event; (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), and, on and after the effectiveness of the Pension Act, any failure by any Plan to

 

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satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, the failure to make by its due date a required installment under Section 412(m) of the Code with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by any of the Loan Parties or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) on and after the effectiveness of the Pension Act, a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Title IV of ERISA); (f) the receipt by any of the Loan Parties or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (g) the incurrence by any of the Loan Parties or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by any of the Loan Parties or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any of the Loan Parties or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization or in endangered or critical status, within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA.

 

“Event of Default” has the meaning provided in SECTION 7.01.  An “Event of Default” shall be deemed to have occurred and to be continuing unless and until that Event of Default has been duly waived in writing by the Administrative Agent in accordance with the terms of this Agreement.

 

“Excess Cash Flow” means, for any Fiscal Year of Holdings, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) the amount of all non-cash charges (including Consolidated depreciation and amortization) deducted in arriving at such Consolidated Net Income to the extent such non-cash charges do not result in a cash payment in a future period, (iii) decreases in Consolidated Working Capital for such Fiscal Year, and (iv) the aggregate net amount of non cash loss on the sale, transfer or other disposition of any assets by Holdings and its Subsidiaries during such Fiscal Year (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income over (b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at such Consolidated Net Income, (ii) without duplication of any such amount deducted in determining Excess Cash Flow for any preceding Fiscal Year of Holdings, the aggregate amount actually paid during such Fiscal Year (or, with respect to Permitted Investments, committed to be invested pursuant to a legally binding agreement) by Holdings and its Subsidiaries in cash on account of Capital Expenditures or Permitted Investments (excluding the principal amount of Indebtedness incurred (or, with respect to not yet paid for Permitted Investments, to be incurred) to finance such expenditures or Investments (but including repayments of any such Indebtedness incurring during such period or any prior period) and any such expenditures or Permitted Investments financed with the proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of all regularly scheduled or optional principal payments of Funded Debt (excluding optional prepayments of the Term Loans) of Holdings and its Subsidiaries made during such Fiscal Year (other than (i) in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder

 

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and (ii) any such principal prepayments financed with the proceeds of other Indebtedness), (v) increases in Consolidated Working Capital for such Fiscal Year, (vi) the aggregate net amount of non-cash gain on the on the sale, transfer or other disposition of any assets by Holdings and its Subsidiaries during such Fiscal Year (other than sales of inventory in the ordinary course of business), to the extent included in arriving at such Consolidated Net Income, (vii) cash payments made in respect of long-term liabilities of Holdings and its Subsidiaries other than Indebtedness, and (viii) all interest (whether accrued or paid in cash or added to principal) due in respect of the Holdco Initial Loan Facility Indebtedness during such Fiscal Year.

 

“Excess Cash Flow Application Date” has the meaning provided in SECTION 2.17(d).

 

“Excluded Institution” means (a) any institution engaged as a principal primarily in private equity or venture capital and (b) any institution engaged directly or indirectly in the sale of Guitar Center and its Subsidiaries on or before the Closing Date.

 

“Excluded Net Proceeds” means (i) with respect to any Net Proceeds received from the incurrence of any Indebtedness of Holdings or any of its Restricted Subsidiaries, such portion of such Net Proceeds that are then required to be paid to the holders of the Senior Initial Loans pursuant to the terms thereof and are permitted to be so paid pursuant to Section 6.06, and (ii) with respect to any Net Proceeds received from the incurrence of any Indebtedness of Holdings, such amount of such Net Proceeds as is required to prepay the Holdco Initial Loans pursuant to the terms thereof and are permitted to be so paid pursuant to Section 6.06.

 

“Excluded Subsidiary” shall mean (a) any Subsidiary that is not a wholly owned Subsidiary, (b) any Immaterial Subsidiary, (c) any Subsidiary that is prohibited by Applicable Law from guaranteeing the Obligations, (d) any Unrestricted Subsidiary, (e) any direct or indirect Domestic Subsidiary of a direct or indirect Foreign Subsidiary, (f) any Subsidiary that is a special purpose entity and (g) any other Subsidiary with respect to which in the reasonable judgment of the Administrative Agent and the Borrower, the cost or burden of providing a Guarantee of the Obligations outweighs the benefits to be obtained by the Lenders therefrom (it being agreed that, the cost and burden of a Foreign Subsidiary providing a Guarantee outweighs the benefits).

 

“Excluded Taxes” means, with respect to the Agents, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Loan Parties hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located (or any political subdivision thereof), (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located (or any political subdivision thereof), (c) in the case of a U.S. Lender, any United States back-up withholding tax imposed on amounts payable to such U.S. Lender that is attributable to such U.S. Lender’s failure to comply with SECTION 2.23(f), and (d) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under SECTION 2.24(a)), any United States withholding tax that is imposed on amounts payable to such Foreign Lender (i) at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office other than at the request

 

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of the Borrower under SECTION 2.24), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Loan Parties with respect to such withholding tax pursuant to SECTION 2.23(a), or (ii) is attributable to such Foreign Lender’s failure to comply with SECTION 2.23(e).

 

“Existing Credit Agreement” means that certain Second Amended and Restated Loan and Security Agreement dated December 21, 2001 entered into by and among Wells Fargo Retail Finance, LLC, as the arranger and administrative agent for the lenders thereto, Fleet Retail Group Inc., as documentation agent, the lenders thereto, Guitar Center, Guitar Center Stores, Inc. and Musician’s Friend, Inc., as amended by that certain Consent and Amendment dated June 9, 2003, as further amended by that certain Second Amendment dated December 5, 2003, as further amended by that certain Third Amendment dated February 8, 2005 and as further amended by that certain Fourth Amendment dated April 26, 2006.

 

“Facility Guarantee” means any Guarantee of the Obligations executed by Holdings and its Subsidiaries (other than any Excluded Subsidiary) which are or hereafter become Facility Guarantors in favor of the Agents and the other Secured Parties and reasonably satisfactory in form and substance to the Administrative Agent.

 

“Facility Guarantors” means any Person executing a Facility Guarantee.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of one percent (1%)) of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of one percent (1%)) of the quotations for such day for such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by the Administrative Agent.

 

“Fee Letter” means the Fee Letter dated June 27, 2007 from JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc. to Merger Sub and Holdings.

 

“Financial Officer” means, with respect to any Loan Party, the chief financial officer, chief accounting officer, treasurer, assistant treasurer, controller or assistant controller of such Loan Party.

 

“Financial Performance Covenant” means the covenant of the Borrower set forth in SECTION 6.11(a).

 

“Fiscal Month” means any fiscal month of any Fiscal Year, which month shall end on the last day of each calendar month in accordance with the fiscal accounting calendar of Holdings and its Subsidiaries.

 

“Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarter shall end on the last day of each March, June, September and December of such Fiscal Year in accordance with the fiscal accounting calendar of Holdings and its Subsidiaries.

 

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“Fiscal Year” means any period of twelve consecutive months ending on December 31 of any calendar year.

 

“Fixed Assets” means Equipment and Real Estate.

 

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

 

“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia, or any of its territories or possessions.

 

“Funded Debt” means, as to any Person, all Indebtedness for borrowed money of such Person that matures more than one year from the date of its creation 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 year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of Holdings and its Subsidiaries, in any event including Indebtedness in respect of the Term Loans and the “Loans” (as such term is defined in the ABL Agreement and for the avoidance of doubt including all amounts drawn or paid under letters of credit issued or deemed issued under the ABL Facility for which the applicable issuing bank has not yet been reimbursed), the Senior Initial Loan Facility Indebtedness and the Holdco Initial Loan Facility Indebtedness.

 

“Funding Office” means the office of the Administrative Agent specified in SECTION 9.01 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

 

“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America which are consistent with those promulgated or adopted by the Financial Accounting Standards Board and its predecessors (or successors) in effect and applicable to that accounting period in respect of which reference to GAAP is being made.

 

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

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition

 

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or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations, including but not limited to, those in effect on the Closing Date or entered into in connection with any Permitted Acquisition or Permitted Disposition (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.

 

“Guitar Center” has the meaning set forth in the Preamble to this Agreement.

 

“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,  mold, fungi or similar bacteria, and all other substances or wastes of any nature regulated pursuant to any Environmental Law because of their dangerous or deleterious properties, including any material listed as a hazardous substance under Section 101(14) of CERCLA.

 

“Hedge Agreement” means any derivative agreement, or any interest rate protection agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement designed to hedge against fluctuations in interest rates or foreign exchange rates or commodity prices.

 

“Holdco Initial Loan Agreement” means the Senior Holdings Initial Loan Credit Agreement, dated as of the Closing Date, among Holdings, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as such agreement may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Holdings Initial Loan Agreement or other credit agreements, indentures (including any Holdco Notes Indenture) or otherwise).

 

“Holdco Initial Loan Documents” means the “Loan Documents” as such term is defined in the Holdco Initial Loan Agreement, as the same may be amended, supplemented, waived, otherwise modified, extended, renewed, refinanced or replaced from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Holdco Initial Loan Documents or other loan documents, indentures (including any Holdco Notes Indenture) or otherwise).

 

“Holdco Initial Loan Facility” means the collective reference to the Holdco Initial Loan Agreement, any Holdco Initial Loan Documents, any notes issued pursuant thereto and any guarantee agreement, and other guarantees and other instruments and documents, executed and

 

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delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Holdco Initial Loan Agreement or other credit agreements, indentures (including any Holdco Notes Indenture) or otherwise).  Without limiting the generality of the foregoing, the term “Holdco Initial Loan Facility” shall include (x) any Holdco Notes Indenture and (y) any agreement (i) changing the maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder, (iii) otherwise altering the terms and conditions thereof or (iv) evidencing or governing any Indebtedness incurred pursuant to any Required Holdco Initial Loan Refinancing.

 

“Holdco Initial Loan Facility Indebtedness” means any Holdco Initial Loans, and any Indebtedness incurred under the Holdco Initial Loan Facility, including any Holdco Notes so incurred to refinance (whether in whole or in part) any Holdco Initial Loans.  Notwithstanding the foregoing, the stated maturity of the Holdco Initial Loan Facility Indebtedness (including, without limitation, any Holdco Notes) shall not be earlier than eight and a half years after the Closing Date.

 

“Holdco Initial Loans” means any loans made pursuant to the Holdco Initial Loan Agreement on the Closing Date.

 

“Holdco Notes” means (a) any Holdco Notes of Holdings to be issued after the Closing Date upon the conversion or exchange of the Holdco Initial Loans for such Holdco Notes, or to refinance in whole or in part the Holdco Initial Loans or any notes issued to refinance or upon the conversion or exchange of any Holdco Initial Loans, and (b) any substantially similar Holdco Notes (whether registered under the Securities Act or otherwise) that have been exchanged for any such other Holdco Notes; in each case as any such Holdco Notes may be amended, supplemented, waived or otherwise modified from time to time.

 

“Holdco Notes Indenture” means any indenture governing any Holdco Notes, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

“Holdings” means Guitar Center Holdings, Inc., a Delaware corporation.

 

“Immaterial Subsidiary” means a Subsidiary of Holdings for which (a) the assets of such Subsidiary constitute less than or equal to 1% of the total assets of Holdings and its Subsidiaries on a Consolidated basis and collectively with all Immaterial Subsidiaries, less than or equal to 5% of the total assets of Holdings and its Subsidiaries on a Consolidated basis and (b) the Consolidated EBITDA attributable to such Subsidiary accounts for less than or equal to 1% of Consolidated EBITDA of Holdings and its Subsidiaries and collectively with all Immaterial Subsidiaries, less than or equal to 5% of Consolidated EBITDA of Holdings and its Subsidiaries.  In no event shall the Borrower be deemed an “Immaterial Subsidiary.”

 

“Incremental Amendment” has the meaning specified in SECTION 2.02(a).

 

“Incremental Facility” has the meaning specified in SECTION 2.02(a).

 

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“Incremental Facility Closing Date” has the meaning specified in SECTION 2.02(c).

 

“Incremental Term Loans” has the meaning specified in SECTION 2.02(a).

 

“Indebtedness” of any Person means, without duplication:

 

(a)                                  All obligations of such Person for borrowed money (including any obligations which are without recourse to the credit of such Person);

 

(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 acquired by such Person;

 

(d)                                 All obligations of such Person in respect of the deferred purchase price of property or services (excluding accrued expenses and accounts payable incurred in the ordinary course of business);

 

(e)                                  All Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed or is limited in recourse;

 

(f)                                    All Guarantees by such Person of Indebtedness of others;

 

(g)                                 All Capital Lease Obligations of such Person;

 

(h)                                 All obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty;

 

(i)                                     All obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances;

 

(j)                                     The Agreement Value of all Hedge Agreements;

 

(k)                                  The principal and interest portions of all rental obligations of such Person under any Synthetic Lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP;

 

(l)                                     Indebtedness consisting of Earn-Out Obligations in connection with Permitted Acquisitions but only to the extent that the contingent consideration relating thereto is not paid within thirty (30) days after the amount due is finally determined; and

 

(m)                               All mandatory obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Capital Stock of such Person

 

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(including, without limitation, Disqualified Capital Stock), other than upon any change of control or sale of all or substantially all assets of such Person;

 

Indebtedness shall not include (A) any sale-leaseback transactions to the extent the lease or sublease thereunder is not required to be recorded under GAAP as a Capital Lease, (B) any obligations relating to overdraft protection and netting services, (C) any preferred stock required to be included as Indebtedness in accordance with GAAP, (D) items that would appear as a liability on a balance sheet prepared in accordance with GAAP as a result of the application of EITF 97-10, “The Effects of Lessee Involvement in Asset Construction” or (E) Guarantees by the Borrower of lease obligations of its Subsidiaries (other than Capital Lease Obligations).

 

The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

 

“Indemnitee” has the meaning provided in SECTION 9.03(b).

 

“Information” has the meaning provided in SECTION 9.15.

 

“Informational Website” has the meaning provided in SECTION 5.01.

 

“Installment” has the meaning provided in SECTION 2.04(a).

 

“Installment Date” has the meaning provided in SECTION 2.04(a).

 

“Instruments” has the meaning assigned to such term in the Security Agreement.

 

“Intellectual Property” means all present and future: trade secrets, know-how and other proprietary information; trademarks, Internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing), indicia and other source and/or business identifiers, all of the goodwill related thereto, and all registrations and applications for registrations thereof; works of authorship and other copyrighted works (including copyrights for computer programs), and all registrations and applications for registrations thereof; inventions (whether or not patentable) and all improvements thereto; patents and patent applications, together with all continuances, continuations, divisions, revisions, extensions, reissuances, and reexaminations thereof; industrial design applications and registered industrial designs; and all other recognized forms of intellectual property throughout the world.

 

“Intellectual Property Security Agreement” means each short form intellectual property security agreement dated as of the Closing Date among the Loan Parties and the Collateral Agent for its own benefit and for the benefit of the other Credit Parties, granting a Lien in the Intellectual Property of the Loan Parties, as amended and in effect from time to time.

 

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“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of the date hereof by and among the Agents, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent under the ABL Facility, and the Loan Parties and attached hereto as Exhibit F.

 

“Interest Payment Date” means (a) with respect to any Prime Rate Loan, the last day of each Fiscal Quarter and (b) with respect to any LIBO Loan, the last day of the Interest Period applicable to the Borrowing of which such LIBO Loan is a part, and, in addition, if such LIBO Loan has an Interest Period of greater than ninety (90) days, the last day of every third month of such Interest Period.

 

“Interest Period” means, with respect to any LIBO Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one (1), two (2), three (3), or six (6), and, if available to all relevant Lenders, two (2) weeks or nine (9) or twelve (12) months thereafter as the Borrower may elect by notice to the Administrative Agent in accordance with the provisions of this Agreement; provided, however, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period of one month or more that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month during which such Interest Period ends) shall end on the last Business Day of the calendar month of such Interest Period, and (c) any Interest Period that would otherwise end after the Termination Date shall end on the Termination Date. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Inventory” has the meaning assigned to such term in the Security Agreement.

 

“Investment” means with respect to any Person, any direct or indirect acquisition or investment by such Person, whether by means of:

 

(a)                                  Any Capital Stock of another Person, evidence of Indebtedness or other security of another Person, including any option, warrant or right to acquire the same;

 

(b)                                 Any loan, advance, contribution to capital, extension of credit (except for current trade and customer accounts receivable for inventory sold or services rendered in the ordinary course of business and deposits in connection with leases that are not required to be classified and accounted for as capital leases on a balance sheet of such Person in accordance with GAAP) to, or guaranty of Indebtedness of, another Person; and

 

(c)                                  Any Acquisition;

 

in all cases whether now existing or hereafter made.  For purposes of calculation,  the amount of any Investment outstanding at any time shall be the aggregate cash Investment less all cash returns, cash dividends and cash distributions (or the fair market value of any non-cash returns, dividends and distributions) received by such Person in respect of such Investment.  For

 

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purposes of the definition of “Unrestricted Subsidiary” and SECTION 6.04, (a) “Investments” shall include the portion (proportionate to the Borrower’s direct or indirect equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the Borrower’s “Investment” in such Subsidiary at the time of such redesignation, less (ii) the portion (proportionate to the Borrower’s direct or indirect equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation, and (b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Borrower.

 

“ISDA Master Agreement” means the form entitled “2002 ISDA Master Agreement” or such other replacement form then currently published by the International Swap and Derivatives Association, Inc., or any successor thereto.

 

“Joinder Agreement” shall mean an agreement, in substantially the form attached hereto as Exhibit D, pursuant to which, among other things, a Person becomes a party to, and bound by the terms of, this Agreement and/or the other Loan Documents in the same capacity and to the same extent as a Facility Guarantor, as the Administrative Agent may determine.

 

“Junior Financing” means any Indebtedness that is or is required to be subordinated to the Obligations pursuant to the terms of the Loan Documents.

 

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

 

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A. and its Subsidiaries and Affiliates.

 

“Lease” means any written agreement pursuant to which a Loan Party is entitled to the use or occupancy of any space in a structure, land, improvements or premises for any period of time.

 

“Lender” means each Person holding a Commitment or Term Loans from time to time or at any time, and each assignee that becomes a party to this Agreement as set forth in SECTION 9.04(b) and each Additional Lender that becomes a party to this Agreement as set forth in SECTION 2.02.

 

“LIBO Borrowing” means a Borrowing comprised of LIBO Loans.

 

“LIBO Loan” shall mean any Term Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II.

 

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“LIBO Rate” means, with respect to any LIBO Borrowing for any Interest Period,

 

(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 Moneyline Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (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 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 (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 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 for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBO Borrowing being made, continued or converted by JPMorgan Chase Bank and with a term equivalent to such Interest Period would be offered by JPMorgan Chase Bank to major banks in the London interbank eurodollar market in London, England at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Liquidation” means the exercise by the Agents of those rights and remedies accorded to the Agents under the Loan Documents and Applicable Law as a creditor of the Loan Parties, including (after the occurrence and during the continuation of an Event of Default) the conduct by any Loan Party, acting with the consent of the Administrative Agent, of any public, private or “Going-Out-Of-Business Sale” or other disposition of Collateral for the purpose of liquidating the Collateral.  Derivations of the word “Liquidation” (such as “Liquidate”) are used with like meaning in this Agreement.

 

“Loan Account” has the meaning provided in SECTION 2.20.

 

“Loan Documents” means this Agreement, the Notes, the Fee Letter, the Security Documents, the Facility Guarantee, the Intercreditor Agreement, and any other instrument or

 

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agreement now or hereafter executed and delivered in connection herewith (excluding agreements entered into in connection with any transaction arising out of any Designated Hedge Agreement), each as amended and in effect from time to time.

 

“Loan Party” or “Loan Parties” means the Borrower and the Facility Guarantors.

 

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” means any event, facts, or circumstances, which has a material adverse effect on (i) the business, assets, or financial condition of the Loan Parties taken as a whole or (ii) the validity or enforceability of this Agreement or the other Loan Documents, taken as a whole, or the rights or remedies of the Secured Parties hereunder or thereunder, taken as a whole.

 

“Material Indebtedness” means Indebtedness (other than the Obligations) of the Loan Parties, individually or in the aggregate, having an aggregate principal amount exceeding $35,000,000.  In any event, all Senior Initial Loan Facility Indebtedness, Holdco Initial Loan Facility Indebtedness and Indebtedness under the ABL Facility shall be deemed Material Indebtedness, regardless of the outstanding balance thereunder from time to time.

 

“Maturity Date” means October 9, 2014.

 

“Maximum Rate” has the meaning provided in SECTION 9.13.

 

“Merger” has the meaning set forth in the Preamble to this Agreement.

 

“Merger Sub” has the meaning set forth in the Preamble to this Agreement.

 

“Minority Lenders” has the meaning provided in SECTION 9.02(c).

 

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

 

“Mortgages” means the mortgages and deeds of trust and any other security documents granting a Lien on Real Estate between the Loan Party owning the Real Estate encumbered thereby and the Collateral Agent for its own benefit and the benefit of the other Secured Parties.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA and subject to ERISA.

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event, including (i) any cash received in respect of any non-cash proceeds or amounts escrowed pursuant to clause (b)(iv) of this definition, but only as and when received, (ii) in the case of a casualty, insurance proceeds, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, in each case net of (b) the sum of (i) all fees and out-of-pocket fees and expenses (including appraisals, and brokerage, legal, title and recording or transfer tax expenses and commissions) paid by any Loan Party or a Subsidiary to third parties (other than Affiliates, except to the extent permitted under SECTION 6.07 hereof) in connection with such event, (ii) in the case of a sale or other disposition of an asset (including

 

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pursuant to a casualty or condemnation), the amount of all payments required to be made by any Loan Party or any of their respective Subsidiaries as a result of such event to repay (or to establish an escrow for the repayment of) any Indebtedness (other than the Obligations) secured by a Permitted Encumbrance on such asset that is senior to the Lien of the Collateral Agent on such asset, (iii) capital gains or other income taxes paid or payable as a result of any such sale or disposition (after taking into account any available tax credits or deductions), and (iv) any funded escrow established pursuant to the documents evidencing any such sale or disposition to secure any indemnification obligations or adjustments to the purchase price associated with any such sale or disposition.

 

“New Lending Office” has the meaning provided in SECTION 2.23(e).

 

“Non-Cash Pay Debt” means any Subordinated Indebtedness incurred by a Loan Party in connection with a Permitted Acquisition, which Subordinated Indebtedness does not require the payment in cash of principal, interest, fees, or any amount (other than on account of expense reimbursements and indemnities) payable to the holder of such Subordinated Indebtedness as a holder of debt pursuant to the documents governing such Subordinated Indebtedness prior to the Maturity Date, has a maturity which extends beyond the date that is six months after the later of the Maturity Date and the maturity date under the ABL Facility, and is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent.

 

“Non-Core Business Segment” means any business segment or separate department of the Loan Parties which contributed less than 5% of the Consolidated EBITDA of Holdings and its Subsidiaries as of the Fiscal Year immediately prior to the date of such calculation.  As of the Closing Date, “business segments” shall mean the businesses set forth on Schedule 1.1(b).

 

“Note” means any promissory note of the Borrower substantially in the form of Exhibit C, payable to the order of the applicable Lender, evidencing the Term Loan(s) made by such Lender to the Borrower.

 

“Obligations” means (a) (i) the principal of, and interest (including all interest that accrues after the commencement of any case or proceeding by or against the Borrower or any Facility Guarantor under the Bankruptcy Code or any state or federal bankruptcy, insolvency, receivership or similar law, whether or not allowed in such case or proceeding) on the Term Loans and Facility Guarantees and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise, of the Loan Parties to the Secured Parties under this Agreement and the other Loan Documents, (b) the due and punctual payment and performance of all the covenants, agreements, obligations and liabilities of each Loan Party under or pursuant to this Agreement and the other Loan Documents, and (c) the Other Liabilities.

 

“Other Liabilities” means outstanding liabilities of any Loan Party or any Subsidiary thereof with respect to or arising from, at the option of the Borrower, any Designated Hedge Agreement.

 

“Other Taxes” means any and all current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under

 

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any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

 

“Participant” shall have the meaning provided in SECTION 9.04(e).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 

“Pension Act” means the Pension Protection Act of 2006.

 

“Permitted Acquisition” means an Acquisition in which each of the following conditions are satisfied:

 

(a)                                  No Event of Default then exists or would arise from the consummation of such Acquisition;

 

(b)                                 For an Acquisition with an aggregate purchase price in excess of $5,000,000, such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and in any event (regardless of the purchase price of such Acquisition) such Person shall not have announced that it will oppose such Acquisition and shall not have commenced any action which alleges that such Acquisition will violate Applicable Law;

 

(c)                                  The Borrower shall have furnished the Administrative Agent with ten (10) days’ prior notice of such intended Acquisition and shall have furnished the Administrative Agent with (i) a current draft of the acquisition agreement and other acquisition documents relating to the Acquisition and (ii) to the extent the purchase price relating to the Acquisition is in excess of $25,000,000 (excluding such portion of the purchase price consisting of Capital Stock of a Loan Party, Non-Cash Pay Debt or contingent Earn Out Obligations), a summary of any due diligence undertaken by the Loan Parties in connection with such Acquisition, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a Consolidated basis with Holdings and its Restricted Subsidiaries) and such other information readily available to the Loan Parties as the Administrative Agent shall reasonably request;

 

(d)                                 To the extent the purchase price relating to the acquisition is in excess of $25,000,000 (excluding such portion of the purchase price consisting of Capital Stock of a Loan Party, Non-Cash Pay Debt, or under contingent Earn Out Obligations), either (i) the legal structure of the Acquisition shall be acceptable to the Administrative Agent in its reasonable discretion, or (ii) the Loan Parties shall have provided the Administrative Agent with a solvency opinion from an unaffiliated third party valuation firm reasonably satisfactory to the Administrative Agent;

 

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(e)                                  If the Acquisition is an Acquisition of Capital Stock, a Loan Party (i) shall acquire and own, directly or indirectly, a majority of the Capital Stock in the Person being acquired and (ii) shall Control a majority of any voting interests or otherwise Control the governance of the Person being acquired;

 

(f)                                    Any material assets acquired shall be utilized in, and if the Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged in, a business otherwise permitted to be engaged in by the Borrower under this Agreement;

 

(g)                                 If the Person which is the subject of such Acquisition will be maintained as a Subsidiary of a Loan Party, or if the assets acquired in an acquisition will be transferred to a Subsidiary which is not then a Loan Party, such Subsidiary shall have been joined as a “Loan Party” hereunder, to the extent required by SECTION 5.12, and the Collateral Agent shall, subject to the limitations set forth in SECTION 5.13 and the Security Documents, have received a first priority security and/or mortgage interest in respect of such Subsidiary’s assets (subject only to Permitted Encumbrances (x) having priority by operation of Applicable Law on all Term Priority Collateral, or (y) in favor of the agent under the ABL Facility on any Revolver Priority Collateral), in order to secure the Obligations; and

 

(h)                                 (A) If each Person which is the subject of such Permitted Acquisition and any Indebtedness incurred in connection therewith will become a Loan Party (or the assets of each such Person will be acquired by a Loan Party), upon the consummation of such Permitted Acquisition, on a Pro Forma Basis, Holdings would be in compliance, as of the last day of the Fiscal Quarter most recently ended for which financial statements were required to have been delivered hereunder, with SECTION 6.11(a) or (B) if any Person which is the subject of such Permitted Acquisition will not become a Loan Party upon the consummation of such Permitted Acquisition, on a Pro Forma Basis, the Consolidated Secured Net Leverage Ratio would be at least 0.25 to 1.0 less than the maximum Consolidated Secured Net Leverage Ratio then permitted under SECTION 6.11(a), if applicable, as of the last day of the Fiscal Quarter most recently ended for which financial statements were required to have been delivered hereunder (such compliance to be confirmed by a certificate of a Responsible Officer of the Borrower in a form reasonably satisfactory to the Administrative Agent, which certificate shall be furnished to the Administrative Agent).

 

“Permitted Cure Security” means common equity securities of the Borrower or other equity securities of the Borrower having terms reasonably acceptable to the Administrative Agent.

 

“Permitted Disposition” means any of the following:

 

(a)                                  licenses of Intellectual Property of a Loan Party or any of its Subsidiaries entered into in the ordinary course of business;

 

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(b)                                 licenses for the conduct of licensed departments within the Stores of a Loan Party or any of its Subsidiaries in the ordinary course of business;

 

(c)                                  as long as no Specified Default hereof then exists or would arise therefrom, bulk sales or other dispositions of the Inventory of a Loan Party or any of its Subsidiaries not in the ordinary course of business in connection with Store closings, at arm’s length, provided that (i) such Store closures and related Inventory dispositions shall not exceed, in any Fiscal Year of Holdings and its Subsidiaries, 15% of the number of the Loan Parties’ Stores as of the beginning of such Fiscal Year (net of Store relocations (A) occurring substantially contemporaneously, but in no event later than ten (10) Business Days after the related Store closure date, or (B) wherein a binding lease has been entered into prior to the related Store closure date) as set forth in the Compliance Certificate delivered pursuant to SECTION 5.01(d), and (ii) as of any date after the Closing Date, the aggregate number of such Store closures since the Closing Date shall not exceed, when taken together with (but without duplication of) any Stores disposed of or leased pursuant to clauses (g) and (o)(i) of this definition, 30% of the greater of (x) the number of the Loan Parties’ Stores in existence as of the Closing Date or (y) the number of the Loan Parties’ Stores as of the first day of any Fiscal Year beginning after the Closing Date (net of Store relocations (A) occurring substantially contemporaneously, but in no event later than ten (10) Business Days after the related Store closure date or (B) wherein a binding lease has been entered into prior to the related Store closure date) as set forth in the Compliance Certificate delivered pursuant to SECTION 5.01(d); provided that all sales of Inventory in connection with Store closings in a transaction or series of related transactions which in the aggregate involve Inventory having a Cost greater than $1,000,000 or involve all or substantially all Inventory of any Store shall be in accordance with liquidation agreements and with professional liquidators reasonably acceptable to the Agents; and provided further that all Net Proceeds received in connection therewith are applied to the Term Loans, if then required in accordance with SECTION 2.17(a) hereof;

 

(d)                                 without duplication of the provisions of clause (c) of this definition, terminations of Leases in the ordinary course of business;

 

(e)                                  dispositions of assets (other than Real Estate), including abandonment of or failure to maintain Intellectual Property, in the ordinary course of business that is worn, damaged, obsolete, uneconomical or, in the judgment of a Loan Party, no longer used or useful or necessary in, or material to, its business;

 

(f)                                    sales, transfers and dispositions among the Loan Parties, so long as the Collateral Agent has a perfected first priority lien on the property so sold, transferred to disposed of (subject only to Permitted Encumbrances having priority pursuant to Applicable Law) after giving effect to such exchange, transfer or swap;

 

(g)                                 sales and transfers (including sale-leaseback transactions) of Real Estate of any Loan Party as long as (A) no Specified Default then exists or would arise therefrom, and (B) such sale or transfer is made for fair market value and (1) if the sale is made to a Person which is not an Affiliate, the consideration received for such sale or

 

29

 

transfer is at least 85% cash or (2) if the sale or transfer is to an Affiliate, the entire consideration for such sale or transfer is paid in cash; provided that in the case of any sale-leaseback transaction permitted under this clause (g), the Collateral Agent shall have received from such purchaser or transferee a Collateral Access Agreement reasonably satisfactory to the Collateral Agent); provided further that the aggregate amount of all Stores disposed of pursuant to this clause (g), when taken together with (but without duplication of) any Stores closed or leased pursuant to clauses (c) and (o)(i) of this definition shall not exceed 30% of the greater of (x) the number of the Loan Parties’ Stores in existence as of the Closing Date or (y) the number of the Loan Parties’ Stores as of the first day of any Fiscal Year beginning after the Closing Date (net of Store relocations (A) occurring substantially contemporaneously, but in no event later than ten (10) Business Days after the related Store closure date, or (B) wherein a binding lease has been entered into prior to the related Store closure date) as set forth in the Compliance Certificate delivered pursuant to SECTION 5.01(d); and provided further that all Net Proceeds received in connection therewith are applied to the Term Loans if then required in accordance with SECTION 2.17(a);

 

(h)                                 sales, discounting or forgiveness of Accounts in the ordinary course of business or in connection with the collection or compromise thereof;

 

(i)                                     leases, subleases, licenses and sublicenses of real or personal property (other than Intellectual Property) entered into by Loan Parties and their Subsidiaries in the ordinary course of business at arm’s length;

 

(j)                                     sales of non-core assets acquired in connection with Permitted Acquisitions and sales of Real Estate acquired in a Permitted Acquisition which, within thirty (30) days of the date of acquisition, are designated in writing to the Administrative Agent as being held for sale and not for the continued operation of a Store;

 

(k)                                  as long as no Event of Default then exists or would arise therefrom, sales or other dispositions of Permitted Investments described in clauses (a) through and including (d) and clause (s) of the definition thereof;

 

(l)                                     any disposition of Real Estate to a Governmental Authority as a result of a condemnation of such Real Estate;

 

(m)                               the making of Permitted Investments and payments permitted under SECTION 6.06;

 

(n)                                 sales, transfers and dispositions as set forth on Schedule 6.05;

 

(o)                                 (i) Leasing of Real Estate (other than any subleases described in subclause (ii) of this clause (o)) no longer used or useful in the business of the Loan Parties or their Subsidiaries to the extent not otherwise prohibited hereunder; provided that the aggregate amount of all Stores leased pursuant to this clause (o)(i), when taken together with (but without duplication of) any Stores closed or disposed of pursuant to clauses (c) and (g) of this definition, shall not exceed 30% of the greater of (x) the number of the Loan Parties’ Stores in existence as of the Closing Date or (y) the number of the Loan Parties’ Stores as

 

30

 

of the first day of any Fiscal Year beginning after the Closing Date (net of Store relocations (A) occurring substantially contemporaneously, but in no event later than ten (10) Business Days after the related Store closure date, or (B) wherein a binding lease has been entered into prior to the related Store closure date) as set forth in the Compliance Certificate delivered pursuant to SECTION 5.01(d) and (ii) subleasing of partial interests in Real Estate (a portion of which shall continue to be used in the business of Holdings or any of its Subsidiaries) in the ordinary course of business and which does not materially interfere with the business of Holdings and its Subsidiaries;

 

(p)                                 forgiveness of Permitted Investments described in clause (g) of the definition thereof to the extent not prohibited by the ABL Agreement;

 

(q)                                 exchanges or swaps, including, but not limited to, transactions covered by Section 1031 of the Code, of Leases and Real Estate of the Loan Parties or their Subsidiaries so long as such exchange or swap is made for fair market value and on an arm’s length basis, provided, that (i) upon the completion of any such exchange or swap (x) the Collateral Agent has a perfected Lien having the same priority as any Lien held on the Leases or Real Estate so exchanged or swapped and (y) all Net Proceeds, if any, received in connection with any such exchange or swap are applied to the Term Loans if then required in accordance with SECTION 2.17(a) and (ii) the aggregate amount of such exchanges or swaps shall not exceed 20% of the greater of (x) the aggregate number of the Loan Parties’ and their Subsidiaries’ Stores in existence as of the Closing Date or (y) the aggregate number of the Loan Parties’ and their Subsidiaries’ Stores as of the first day of any Fiscal Year beginning after the Closing Date as set forth in the Compliance Certificate delivered pursuant to SECTION 5.01(d);

 

(r)                                    sales, transfers and dispositions of non-Collateral assets;

 

(s)                                  sales of any business segment which is a Non-Core Business Segment or any portion thereof, in each case, as long as (A) no Specified Default then exists or would arise therefrom, and (B) such sale or transfer is made for fair market value and (1) if the sale is made to a Person which is not an Affiliate, the consideration received for such sale or transfer is at least 85% cash or (2) if the sale or transfer is to an Affiliate, the entire consideration for such sale or transfer is paid in cash, and provided that, all Net Proceeds, if any, received in connection with any such sales are applied to the Term Loans if then required in accordance with SECTION 2.17(a);

 

(t)                                    not more than once during the term of this Agreement, the sale of any business segment or separate department of the Loan Parties which contributed less than 10% of the Consolidated EBITDA of Holdings and its Subsidiaries as of the Fiscal Year immediately prior to the date of such calculation, as long as (A) no Specified Default then exists or would arise therefrom and (B) such sale is made for fair market value and (1) if the sale is made to a Person which is not an Affiliate, the consideration received for such sale is at least 85% cash or (2) if the sale is to an Affiliate, the entire consideration for such sale is paid in cash, and provided that all Net Proceeds, if any, received in connection with any such sales are applied to the Obligations to the extent required in

 

31

 

accordance with SECTION 2.17(a), and further provided that no Proceeds Reinvestment shall be permitted in respect of any such Net Proceeds; and

 

(u)                                 other dispositions of assets (other than Leases and Real Estate) in an aggregate amount for all Loan Parties and their Subsidiaries not to exceed (i) $5,000,000 in any Fiscal Year and (ii) $25,000,000 since the Closing Date, in each case, as long as (A) no Specified Default then exists or would arise therefrom, and (B) such sale or transfer is made for fair market value and (1) if the sale is made to a Person which is not an Affiliate, the consideration received for such sale or transfer is at least 85% cash or (2) if the sale or transfer is to an Affiliate, the entire consideration for such sale or transfer is paid in cash, and provided that, all Net Proceeds, if any, received in connection with any such sales are applied to the Term Loans if then required in accordance with SECTION 2.17(a) hereof.

 

“Permitted Encumbrances” means:

 

(a)                                  Liens imposed by law for Taxes that are not required to be paid pursuant to SECTION 5.05;

 

(b)                                 Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s and other like Liens imposed by Applicable Law, (i) arising in the ordinary course of business and securing obligations that are not overdue by more than sixty (60) days, (ii) (A) that are being contested in good faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (C) such contest effectively suspends collection of the contested obligation and enforcement of any Lien securing such obligation, or (iii) the existence of which would not reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  Pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

 

(d)                                 Deposits to secure or relating to the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory obligations, surety and appeal bonds, performance bonds (and Liens arising in accordance with Applicable Law in connection therewith), and other obligations of a like nature, in each case in the ordinary course of business;

 

(e)                                  Judgment Liens in respect of judgments that do not constitute an Event of Default under SECTION 7.01(j);

 

(f)                                    Easements, covenants, conditions, restrictions, building code laws, zoning restrictions, other land use laws, rights-of-way, development, site plan or similar agreements and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property when used in a manner consistent with current usage or materially interfere with the ordinary conduct of business

 

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of a Loan Party as currently conducted and such other minor title defects, or survey matters that are disclosed by current surveys, but that, in each case, do not interfere with the current use of the affected property in any material respect;

 

(g)                                 Any Lien on any property or asset of any Loan Party (other than Holdings) or any Subsidiary of it set forth on Schedule 6.02, provided that, if such Lien secured Indebtedness, such Lien shall secure only the Indebtedness listed on Schedule 6.01 as of the Closing Date (and extensions, renewals and replacements thereof permitted under SECTION 6.01);

 

(h)                                 Liens on fixed or capital assets acquired by any Loan Party or any of its Subsidiaries to secure Indebtedness permitted under clause (e) of the definition of Permitted Indebtedness so long as (i) such Liens and the Indebtedness secured thereby are incurred prior to or within two hundred and seventy (270) days after such acquisition or the completion of the construction or improvement thereof (other than refinancings thereof permitted hereunder), (ii) the Indebtedness secured thereby does not exceed 100% of the cost of acquisition or improvement of such fixed or capital assets, and (iii) such Liens shall not extend to any other property or assets of the Loan Parties or any of their Subsidiaries;

 

(i)                                     Liens in favor of the Collateral Agent, for its own benefit and the benefit of the other Secured Parties;

 

(j)                                     Landlords’ and lessors’ Liens in respect of rent not in default for more than sixty (60) days or the existence of which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect;

 

(k)                                  Possessory Liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and other Permitted Investments, provided that such liens (a) attach only to such Investments or other Investments held by such broker or dealer and (b) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing;

 

(l)                                     Liens arising solely by virtue of any statutory or common law provisions relating to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries;

 

(m)                               Liens attaching solely to cash earnest money deposits in connection with any letter of intent or purchase agreement in connection with a Permitted Acquisition;

 

(n)                                 Liens arising from precautionary UCC filings regarding “true” operating leases or the consignment of goods to a Loan Party;

 

(o)                                 voluntary Liens on Fixed Assets in existence at the time such Fixed Assets are acquired pursuant to a Permitted Acquisition or on Fixed Assets of a Subsidiary of the Borrower in existence at the time such Subsidiary is acquired pursuant to a Permitted

 

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Acquisition; provided that such Liens are not incurred in connection with or in anticipation of such Permitted Acquisition and do not attach to any other assets of any Loan Party or any of its Subsidiaries;

 

(p)                                 Liens in favor of customs and revenues authorities imposed by Applicable Law arising in the ordinary course of business in connection with the importation of goods and securing obligations (i) that are not overdue by more than sixty (60) days, (ii)(A) that are being contested in good faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (C) such contest effectively suspends collection of the contested obligation and enforcement of any Lien securing such obligation, or (iii) the existence of which would not reasonably be expected to result in a Material Adverse Effect;

 

(q)                                 Liens granted by the Loan Parties to the secured parties under the ABL Facility and any refinancings thereof permitted hereunder;

 

(r)                                    any interest or title of a licensor, sublicensor, lessor or sublessor under any license or operating or true lease agreement;

 

(s)                                  leases or subleases granted to third Persons in the ordinary course of business;

 

(t)                                    licenses or sublicenses of Intellectual Property granted in the ordinary course of business;

 

(u)                                 the replacement, extension or renewal of any Permitted Encumbrance; provided that such Lien shall at no time be extended to cover any assets or property other than such assets or property subject thereto on the Closing Date or the date such Lien was incurred, as applicable;

 

(v)                                 Liens on insurance proceeds incurred in the ordinary course of business in connection with the financing of insurance premiums;

 

(w)                               Liens on securities which are the subject of repurchase agreements incurred in the ordinary course of business;

 

(x)                                   Liens arising by operation of law under Article 4 of the UCC in connection with collection of items provided for therein;

 

(y)                                 Liens arising by operation of law under Article 2 of the UCC in favor of a reclaiming seller of goods or buyer of goods;

 

(z)                                   Liens on deposit accounts or securities accounts in connection with overdraft protection and netting services;

 

(aa)                            Security given to a public or private utility or any Governmental Authority as required in the ordinary course of business;

 

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(bb)                          Liens in the nature of the right of setoff in favor of counterparties to contractual agreements with the Loan Parties in the ordinary course of business; and

 

(cc)                            Other Liens not securing Indebtedness in an amount not to exceed $2,500,000 in the aggregate at any time outstanding;

 

provided, however, that, except as provided in any one or more of clauses (a) through (cc) above, the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness for borrowed money.

 

“Permitted Indebtedness” means each of the following:

 

(a)                                  Indebtedness created under the Loan Documents;

 

(b)                                 Indebtedness set forth on Schedule 6.01;

 

(c)                                  (i) Indebtedness of any Loan Party to any other Loan Party (excluding Holdings) or Guarantees by any Loan Party of Indebtedness or other obligations of any other Loan Party (excluding Holdings), (ii) Indebtedness of any Subsidiary of a Loan Party to any other Subsidiary of a Loan Party or Guarantees by any Subsidiary of a Loan Party of Indebtedness or other obligations of any other Subsidiary of a Loan Party (iii) Indebtedness of any Loan Party to any Subsidiary of a Loan Party or, subject to compliance with SECTION 6.04, Guarantees by any Loan Party of Indebtedness or other obligations of any Subsidiary of a Loan Party, provided that any such Indebtedness is subordinated in right of payment to the Obligations, and (iv) subject to compliance with SECTION 6.04, Indebtedness of any Subsidiary of a Loan Party to any Loan Party (excluding Holdings) or Guarantees by any Subsidiary of a Loan Party of Indebtedness or other obligations of any Loan Party (excluding Holdings);

 

(d)                                 Purchase money Indebtedness of any Loan Party or any Subsidiary of it to finance the acquisition or improvement of any fixed or capital assets (including Real Estate), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, provided that the aggregate principal amount of Indebtedness permitted by this clause (d) (i) outstanding at any time shall not exceed the greater of $40,000,000 or 4% of the book value of the Consolidated tangible assets of Holdings and its Subsidiaries determined in accordance with GAAP;

 

(e)                                  Indebtedness under Hedge Agreements, other than for speculative purposes, entered into in the ordinary course of business;

 

(f)                                    Contingent liabilities under surety bonds, customs and appeal bonds, governmental contracts and leases or similar instruments incurred in the ordinary course of business;

 

(g)                                 any Indebtedness constituting Senior Initial Loan Facility Indebtedness, provided that in no event shall the principal amount of such at any time outstanding, in the aggregate with the principal amount of any Holdco Initial Loan Facility Indebtedness

 

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outstanding at such time, exceed the aggregate principal amount outstanding as of the Closing Date of Senior Initial Loan Facility Indebtedness and Holdco Initial Loan Facility Indebtedness (except by the amount of (i) any accrued interest and reasonable closing costs, expenses, fees and premia paid in connection with any renewal, refinancing, replacement, conversion or exchange of any such Indebtedness and (ii) any increase in the principal of Holdco Initial Loan Facility Indebtedness resulting from payments of interest in kind pursuant to the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture), and provided  further, that any renewal, refinancing (whether in whole or in part), replacement, conversion or exchange of any such Indebtedness shall only be permitted under this clause (g) to the extent it constitutes a Permitted Refinancing (disregarding clauses (i) and (ii)(B) of the definition of Permitted Refinancing);

 

(h)                                 Indebtedness under the ABL Facility, provided that in no event shall the principal amount of such Indebtedness exceed $450,000,000 at any time outstanding;

 

(i)                                     Indebtedness with respect to the deferred purchase price for any Permitted Acquisition, provided that such Indebtedness does not require the payment in cash of principal (other than in respect of working capital adjustments) prior to the Maturity Date, has a maturity which extends beyond the date that is six months after the later of the Maturity Date and the maturity date under the ABL Facility, and is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent;

 

(j)                                     [Reserved];

 

(k)                                  Subordinated Indebtedness with an aggregate principal amount not exceeding $100,000,000; provided that the proceeds of such Subordinated Indebtedness are used (i) to pay closing and other transactional costs in connection with a Permitted Acquisition, (ii) to prepay the Term Loans in accordance with SECTION 2.17(c), or (iii) to permanently reduce, retire or refinance (whether in whole or in part)  the Senior Initial Loan Facility Indebtedness to the extent permitted under clause (g) of this definition; and further provided that such Subordinated Indebtedness (a) shall not have a maturity date or be subject to amortization, mandatory repurchase or redemption (except pursuant to customary asset sale and change of control provisions requiring such redemption or repurchase if and only to the extent permitted hereunder) prior to the date that is six months after the later of the Maturity Date and the maturity date under the ABL Facility, and (b) shall not be exchangeable or convertible into Disqualified Capital Stock or any other Indebtedness (other than any Indebtedness of the same obligor that is otherwise permitted to be incurred under this Agreement at the time of such exchange or conversion);

 

(l)                                     Indebtedness incurred in the ordinary course of business in connection with the financing of insurance premiums;

 

(m)                               Indebtedness of any Loan Party or any Subsidiary acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time and as a result of a Permitted

 

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Acquisition); provided that in each case such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition;

 

(n)                                 Indebtedness relating to surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(o)                                 Unsecured Indebtedness owed to the Sponsors, Sponsor Related Parties, and/or other stockholders of Holdings and their respective Affiliates (other than the Borrower and its Subsidiaries) provided that such Indebtedness, (i) does not require the payment in cash of principal prior to the Maturity Date in excess of an aggregate amount per annum equal to 10% of the original principal amount thereof, (ii) does not require the payment in cash of interest prior to the Maturity Date at a rate in excess of 10% per annum, (iii) has a maturity which extends beyond the date that is six months after the later of the Maturity Date and the maturity date under the ABL Facility, and (iv) is subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent; and provided further that extensions, renewals and replacements of such Indebtedness shall be permitted under this clause (o) to the extent constituting a Permitted Refinancing and in compliance with the requirements of clause (ii) of the preceding proviso;

 

(p)                                 Indebtedness constituting the obligation to make customary purchase price adjustments for working capital and indemnities in connection with Permitted Acquisitions and the VH Acquisition;

 

(q)                                 Guarantees and letters of credit and surety bonds (other than Guarantees of, or letters of credit and surety bonds related to, Indebtedness) issued in connection with Permitted Acquisitions and Permitted Dispositions;

 

(r)                                    without duplication of any other Indebtedness, non-cash accruals of interest, accretion or amortization of original issue discount and payment-in-kind interest with respect to Indebtedness permitted hereunder;

 

(s)                                  Indebtedness due to any landlord in connection with the financing by such landlord of leasehold improvements;

 

(t)                                    any Indebtedness of Holdings constituting Holdco Initial Loan Facility Indebtedness, provided that in no event shall the principal amount of such Indebtedness at any time outstanding, in the aggregate with the principal amount of any Senior Initial Loan Facility Indebtedness outstanding at such time, exceed the aggregate principal amount outstanding as of the Closing Date of Senior Initial Loan Facility Indebtedness and Holdco Initial Loan Facility Indebtedness (except by (i) the amount of any accrued interest and reasonable closing costs, expenses, fees and premia paid in connection with any renewal, refinancing, replacement, conversion or exchange of any such Indebtedness and (ii) any increase in the principal of Holdco Initial Loan Facility Indebtedness resulting from payments of interest in kind pursuant to the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture); and provided further that any

 

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renewal, refinancing (whether in whole or in part), replacement, extension, conversion or exchange of any such Indebtedness shall only be permitted under this clause (t) to the extent it constitutes a Permitted Refinancing (disregarding clauses (i) and (ii)(B) of the definition of Permitted Refinancing);

 

(u)                                 unsecured notes issued by Holdings to stockholders in connection with the repurchase of shares of Capital Stock of Holdings or any of its Subsidiaries;

 

(v)                                 without duplication of, or accumulation with, other categories of Indebtedness permitted hereunder, other unsecured Indebtedness (other than Subordinated Indebtedness) in an aggregate principal amount, not exceeding $100,000,000 at any time outstanding; and

 

(w)                               extensions, renewals and replacements of any such Indebtedness described in clauses (b), (c), (d), (e), (h), (i), (k), (m), (s) and (u) above, provided  that such Indebtedness constitutes a Permitted Refinancing.

 

“Permitted Investments” means each of the following:

 

(a)                                  Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America) or any state or state agency thereof, in each case maturing within one (1) year from the date of acquisition thereof;

 

(b)                                 Investments in commercial paper maturing within one (1) year from the date of acquisition thereof and having, at the date of acquisition, the highest or next highest credit rating obtainable from S&P or from Moody’s;

 

(c)                                  Investments in certificates of deposit, banker’s acceptances and time deposits maturing within one (1) year from the date of acquisition thereof which are issued or guaranteed by, or placed with, and demand deposit and money market deposit accounts issued or offered by, any Lender or any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

(d)                                 Master demand notes and fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above (without regard to the limitation on maturity contained in such clause) and entered into with a financial institution satisfying the criteria described in clause (c) above or with any primary dealer;

 

(e)                                  Shares of any money market or mutual fund that has substantially all of its assets invested in the types of investments referred to in clauses (a) through (d), above;

 

(f)                                    Investments existing or contemplated on the Closing Date and set forth on Schedule 6.04;

 

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(g)                                 capital contributions or loans made by (i) any Loan Party (with respect to loans, excluding Holdings) to any other Loan Party, (ii) any Subsidiary of a Loan Party to any other Subsidiary of a Loan Party or to any Loan Party or (iii) as long as no Specified Default then exists or would arise therefrom, any Loan Party to any Subsidiary or Affiliate of any Loan Party (other than to any Loan Party, any of the Sponsors, any of the Sponsor Related Parties, any other stockholder, member or partner of Holdings or any Affiliate of any thereof in which Holdings does not have a direct or indirect ownership interest) in an aggregate amount not to exceed $15,000,000 at any time outstanding, provided that the aggregate amount of all Investments of the type described in this clause (g)(iii) and clause (t) of this definition may not exceed $15,000,000 in the aggregate outstanding at any time;

 

(h)                                 Guarantees constituting Permitted Indebtedness;

 

(i)                                     Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

 

(j)                                     Loans or advances to employees made in the ordinary course of business, provided that all such loans and advances to employees shall not exceed $2,500,000 in the aggregate at any time outstanding, and determined without regard to any write-downs or write-offs thereof;

 

(k)                                  Investments received from purchasers of assets pursuant to dispositions permitted pursuant to SECTION 6.05;

 

(l)                                     (A) Permitted Acquisitions, provided that the aggregate consideration in respect of such Permitted Acquisitions paid by any of the Loan Parties and their Subsidiaries since the Closing Date shall not exceed the greater of (x) $125,000,000 and (y) 4% of the book value of Consolidated total assets of Holdings and its Subsidiaries determined in accordance with GAAP and (B) existing Investments of the Persons acquired in connection with Permitted Acquisitions so long as such Investment was not made in contemplation of such Permitted Acquisition;

 

(m)                               Hedging Agreements entered into in the ordinary course of business for non-speculative purposes;

 

(n)                                 To the extent permitted by Applicable Law, notes from officers and employees in exchange for equity interests of the Parent purchased by such officers or employees pursuant to a stock ownership or purchase plan or compensation plan;

 

(o)                                 Earnest money required in connection with Permitted Acquisitions;

 

(p)                                 Investments in deposit accounts opened in the ordinary course of business;

 

(q)                                 Investments in new Subsidiaries subject to the provisions of SECTION 5.12;

 

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(r)                                    Capital Expenditures;

 

(s)                                  Investments with foreign governmental entities which are members of the OECD or foreign banks organized under the laws of countries which are members of the OECD, in each case similar to the Investments set forth in clauses (a), (b), and (c) above, so long as such foreign bank has combined capital and surplus of a Dollar equivalent of no less than $500,000,000;

 

(t)                                    Guarantees of Indebtedness under clause (g)(ii) above of Subsidiaries that are not Loan Parties not in excess of $15,000,000 in the aggregate at any time outstanding, provided that the aggregate amount of all Investments of the type described in this clause (t) and clause (g)(iii) of this definition may not exceed $15,000,000 in the aggregate outstanding at any time;

 

(u)                                 a purchase or acquisition of all or substantially all of the assets of, or a Real Estate portfolio or Stores from, any other Loan Party or any Subsidiary thereof; and

 

(v)                                 without duplication of, or accumulation with, other categories of Investments permitted hereunder, other Investments in an amount not to exceed $25,000,000 in the aggregate outstanding at any time;

 

provided, however, that for purposes of calculation, the amount of any Investment held by any Person outstanding at any time shall be the aggregate cash Investment less all cash returns, cash dividends and cash distributions (or the fair market value of any non-cash returns, dividends and distributions) received by such Person in respect of such Investment and less all liabilities expressly assumed by another Person in connection with the sale of such Investment.

 

“Permitted Refinancing” means any Indebtedness that replaces or refinances (whether in whole or in part) any other Permitted Indebtedness, as long as, after giving effect thereto (i) the principal amount of the Indebtedness outstanding at such time is not increased (except by the amount of any accrued interest and reasonable closing costs, expenses, fees and premia paid in connection with such extension, renewal or replacement), (ii) the result of such refinancing of or replacement shall not be (A) an earlier maturity date or (B) decreased weighted average life, (iii) the holders of such refinancing Indebtedness are not afforded covenants, defaults, rights or remedies, taken as a whole, which are materially more burdensome to the obligor or obligors than those contained in the Indebtedness being extended, renewed or replaced, (iv) the obligor or obligors under any such refinancing Indebtedness and the collateral, if applicable, granted pursuant to any such refinancing Indebtedness are the same (or in the case of collateral, the same or less than) as the obligor(s) and collateral under the Indebtedness being extended, renewed or replaced, (v) the subordination, to the extent applicable, and other material provisions of the refinancing Indebtedness are no less favorable to the Lenders than those terms of the Indebtedness being refinanced, and (vi) the refinancing Indebtedness is not exchangeable or convertible into any other Indebtedness which does not comply with clauses (i) through (v) above.

 

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

 

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“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any of the Loan Parties or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge Agreement” means the Pledge Agreement dated as of the Closing Date among the Loan Parties party thereto and the Collateral Agent for its own benefit and the benefit of the other Secured Parties, as amended and in effect from time to time.

 

“Post Acquisition Period” means, with respect to any Permitted Acquisition the period beginning on the date such Permitted Acquisition is consummated and ending on the last day of the fourth full consecutive Fiscal Quarter immediately following the date on which such Permitted Acquisition is consummated.

 

“Prepayment Event” means the occurrence of any of the events described in SECTIONS 2.17(a) through (c).

 

“Prime Rate” means, as to any Borrowing, for any day, the higher of: (a) the variable annual rate of interest then determined by JPMorgan Chase Bank, N.A. at its principal office in New York, New York as its “Prime Rate”; and (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% (0.50%) per annum.  If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations thereof in accordance with the terms hereof, the Prime Rate shall be determined without regard to clause (b) of the first sentence of this definition, until the circumstances giving rise to such inability no longer exist. Any change in the Prime Rate due to a change in JPMorgan Chase Bank’s Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in JPMorgan Chase Bank’s Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Prime Rate Loan” means any Term Loan bearing interest at a rate determined by reference to the Prime Rate in accordance with the provisions of Article II.

 

“Proceeds Reinvestment” has the meaning provided in SECTION 2.17(a).

 

“Pro Forma Adjustments” means, with respect to any Permitted Acquisition, for any applicable period that includes all or any part of a Fiscal Quarter included in any Post-Acquisition Period, with respect to the Acquired EBITDA of the applicable Acquired Entity or the Consolidated EBITDA of Holdings and its Subsidiaries, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, certified by the chief financial officer of the Borrower as having been determined in good faith to be reasonably anticipated to be realizable within twelve (12) months following any such Permitted Acquisition as a result of (a) actions taken during such Post-Acquisition Period for the purposes of realizing reasonably identifiable and factually supportable cost savings or (b) any additional costs incurred during such Post-Acquisition Period, in each case in connection with the combination of the operations of such Acquired Entity with the operations of Holdings

 

41

 

and its Subsidiaries; provided that (i) so long as such actions are taken during such Post-Acquisition Period or such costs are incurred during such Post-Acquisition Period, as applicable, the cost savings related to such actions or such additional costs, as applicable, it may be assumed, for purposes of projecting such pro forma increase or decrease in such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, that such costs savings will be realizable during the entirety of such period, or such additional costs, as applicable, will be incurred during the entirety of such period and (ii) any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, shall be without duplication for cost savings or additional costs already included in such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, for such period; provided further that any such increase, decrease and other adjustments of such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, either (x) would be permitted to be included in pro forma financial statements prepared in accordance with Regulation S-X under the Securities Act of 1933, as amended, or (y) shall have been approved by the Administrative Agent in its sole discretion; and provided, further, that the aggregate amount of any such increase and other like adjustments of such Acquired EBITDA or such Consolidated EBITDA of Holdings and its Subsidiaries, as the case may be, shall not in the aggregate with any adjustments to Consolidated EBITDA for such period (or any portion thereof) for projected cost savings pursuant to clause (i) of the definition of “Consolidated EBITDA” exceed an amount equal to 5% of Consolidated EBITDA of Holdings and its Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended on or prior to the date of determination.

 

“Pro Forma Basis” means, with respect to compliance with any test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustments shall have been made and (B) all Specified Transactions 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 test or covenant:  (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a designation of a Restricted Subsidiary as an Unrestricted Subsidiary or the Disposition of all or substantially all equity interests in any Subsidiary of Holdings or any division, product line, or facility used for operations of Holdings 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 Holdings or any of its 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 any such test or covenant solely to the extent that such adjustments are consistent with the definition of Consolidated EBITDA and give effect to events (including operating expense reductions) that are consistent with the definition of Pro Forma Adjustments.

 

“Qualifying IPO” means an equity issuance by Holdings consisting of an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) of its common stock (i) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act of 1933 as amended (whether alone or in connection

 

42

 

with a secondary public offering) and (ii) resulting in gross proceeds to Holdings of at least $100,000,000.

 

“Real Estate” means all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned by any Loan Party, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and occupancies thereof related to such owned property.

 

“Register” has the meaning provided in SECTION 9.04(c).

 

“Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“Reinvestment Period” has the meaning provided in SECTION 2.17(a).

 

“Related Fund” means, with respect to any Lender that is an Approved Fund, any other Approved Fund that is managed, administered or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Reinvestment Deferred Amount” means, with respect to a Prepayment Event described in SECTION 2.17(a) or (b), the aggregate Net Proceeds received by any Loan Party in connection therewith that are not applied to prepay the Term Loans in accordance with the provisos in SECTION 2.17(a) or (b), as applicable.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Release” has the meaning provided in Section 101(22) of CERCLA without giving effect to the exclusions set forth in subsections (A), (B), (C) and (D) thereof.

 

“Replacement Lender” has the meaning provided in SECTION 9.02(c).

 

“Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder, other than those events as to which the 30-day notice period referred to in Section 4043(c) of ERISA has been waived, with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

 

“Reports” has the meaning provided in SECTION 8.13.

 

“Required Holdco Initial Loan Refinancing” means any offering or issuance of indebtedness or securities of Holdings pursuant to the original Holdco Initial Loan Agreement.

 

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“Required Initial Loan Refinancing” means any offering or issuance of indebtedness or securities of the Borrower or any of its Subsidiaries pursuant to the original Senior Initial Loan Agreement.

 

“Required Lenders” means, at any time, Lenders having Commitments aggregating more than 50% of the Total Commitments, or if the Commitments have been terminated, Lenders whose percentage of the outstanding Term Loans aggregate more than 50% of all such Term Loans.

 

“Responsible Officer” of any Person shall mean any executive officer or financial officer of such Person and any other officer or similar official thereof with responsibility for the administration of the obligations of such Person in respect of this Agreement.

 

“Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any class of Capital Stock of a Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Capital Stock of a Person or any option, warrant or other right to acquire any Capital Stock of a Person or on account of any return of capital to the Person’s stockholders, partners or members, and (b) any principal or interest payment (or other distribution, whether in cash, securities or other property) on, or redemption, repurchase, defeasance or other acquisition or retirement for value of, in each case prior to any scheduled payment, sinking fund payment or maturity, of any  Indebtedness due to Holdings, any of the Sponsors, Sponsor Related Parties and/or other stockholders, partners or members of Holdings or any of their respective Affiliates (other than Indebtedness due to the Borrower or any Restricted Subsidiary of it).  “Restricted Payments” shall not include any dividends payable solely in Capital Stock of a Loan Party.

 

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

 

“Revolver Priority Collateral” means all “ABL Priority Collateral” (as such term is defined in the Intercreditor Agreement).

 

“Revolving Credit Loans” has the meaning set forth in the ABL Agreement.

 

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

 

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

 

“Secured Party” means (a) each Credit Party, (b) at the option of the Borrower, any Person (other than any Loan Party or any of its Subsidiaries) party to a Designated Hedge Agreement, (c) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (d) the successors and, subject to any limitations contained in this Agreement, assigns of each of the foregoing.

 

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“Security Agreement” means the Security Agreement dated as of the Closing Date among the Loan Parties and the Collateral Agent for its benefit and for the benefit of the other Secured Parties, as amended and in effect from time to time.

 

“Security Documents” means the Security Agreement, the Mortgages, the Intellectual Property Security Agreements, the Pledge Agreement, the Facility Guarantee, and each other security agreement or other instrument or document executed and delivered pursuant to this Agreement or any other Loan Document that creates a Lien in favor of the Collateral Agent to secure any of the Obligations.

 

“Senior Initial Loan Agreement” means the Senior Initial Loan Credit Agreement, dated as of the Closing Date, among the Lead Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as such agreement may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Initial Loan Agreement or other credit agreements, indentures (including any Senior Notes Indenture) or otherwise).

 

“Senior Initial Loan Documents” means the “Loan Documents” as such term is defined in the Senior Initial Loan Agreement, as the same may be amended, supplemented, waived, otherwise modified, extended, renewed, refinanced or replaced from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Initial Loan Documents or other agreements, indentures (including any Senior Notes Indenture) or otherwise).

 

“Senior Initial Loan Facility” means the collective reference to the Senior Initial Loan Agreement, any Senior Initial Loan Documents, any notes issued pursuant thereto and any guarantee agreement, and other guarantees and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Initial Loan Agreement or other credit agreements, indentures (including any Senior Notes Indenture) or otherwise).  Without limiting the generality of the foregoing, the term “Senior Initial Loan Facility” shall include (x) any Senior Notes Indenture and (y) any agreement (i) changing the maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii) adding Subsidiaries of the Borrower as additional borrowers or guarantors thereunder, (iii) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder, (iv) otherwise altering the terms and conditions thereof or (v) evidencing or governing any Indebtedness incurred pursuant to any Required Initial Loan Refinancing.

 

“Senior Initial Loan Facility Indebtedness” means any Senior Initial Loans, and any Indebtedness incurred under the Senior Initial Loan Facility, including any Senior Notes so incurred to refinance (whether in whole or in part) any Senior Initial Loans.  Notwithstanding the

 

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foregoing, the stated maturity of the Senior Initial Loan Facility Indebtedness (including, without limitation, any Senior Notes) shall not be earlier than eight years after the Closing Date.

 

“Senior Initial Loans” means any loans made pursuant to the Senior Initial Loan Agreement on the Closing Date.

 

“Senior Notes” means (a) any Senior Notes of the Borrower to be issued after the Closing Date upon the conversion or exchange of the Senior Initial Loans for such Senior Notes, or to refinance in whole or in part the Senior Initial Loans or any notes issued to refinance or upon the conversion or exchange of any Senior Initial Loans, and (b) any substantially similar Senior Notes (whether registered under the Securities Act or otherwise) that have been exchanged for any such other Senior Notes; in each case as any such Senior Notes may be amended, supplemented, waived or otherwise modified from time to time.

 

“Senior Notes Indenture” means any indenture governing any Senior Notes, as the same may be amended, supplemented, waived or otherwise modified from time to time.

 

“Software” has the meaning assigned to such term in the Security Agreement.

 

“Solvent” means, with respect to any Person on a particular date, that on such date (a) at fair valuation on a going concern basis, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable value of the properties and assets of such Person on a going concern basis is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its properties and assets and generally pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to generally pay as such debts mature, and (e) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged.

 

“Specified Default” means the occurrence of any Event of Default specified in SECTION 7.01(a), SECTION 7.01(b), SECTION 7.01(c) (but only with respect to any representation made or deemed to be made by or on behalf of any Loan Party in any certificate of a Financial Officer accompanying any financial statement), SECTION 7.01(d) (but only with respect to SECTION 5.07, SECTION 5.11 and SECTION 6.11), SECTION 7.01(f), SECTION 7.01(h), or SECTION 7.01(i).

 

“Specified Indebtedness” means (a) all (i) Senior Initial Loan Facility Indebtedness, (ii) Holdco Initial Loan Facility Indebtedness and (iii)  Indebtedness under the ABL Facility and (b) any Indebtedness that replaces or refinances any of the foregoing (including pursuant to successive refinancings) pursuant to a Permitted Refinancing.

 

“Specified Transaction” means any (a) disposition of all or substantially all the assets or Capital Stock of any Subsidiary or of any division or product line of Holdings or any of its Subsidiaries, (b) designation of a Restricted Subsidiary as an Unrestricted Subsidiary, (c)

 

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Permitted Acquisition or (d) proposed incurrence of Indebtedness in respect of which compliance with the financial covenant set forth in SECTION 6.11(a) is by the terms of this Agreement required to be calculated on a Pro Forma Basis.

 

“Sponsors” means collectively, Bain Capital Partners, LLC, Highland Capital Partners, LLC and their respective Affiliates.

 

“Sponsor Group” means the Sponsors and the Sponsor Related Parties.

 

“Sponsor Related Parties” means, with respect to the Sponsors, (a) any Controlling stockholder or partner thereof (including in the case of an individual Person who possesses Control, the spouse or immediate family member of such Person provided such Person retains Control of the voting rights, by stockholders agreement, trust agreement or otherwise of the Capital Stock owned by such spouse or immediate family member) or (b) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a 51% or more Controlling interest of which consist of such Person and/or such Persons referred to in the immediately preceding clause (a).

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D.  LIBO Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Store” means any retail store (which includes any real property, fixtures, equipment, inventory and other property related thereto) operated, or to be operated, by any Loan Party.

 

“Subordinated Indebtedness” means Indebtedness which is expressly subordinated in right of payment to the prior payment in full of the Obligations on terms reasonably acceptable to the Agents.

 

“Subsidiary” means with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which Capital Stock representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  With respect to each Loan Party, each reference to a “Subsidiary” thereof shall be deemed to exclude Unrestricted Subsidiaries unless expressly noted otherwise.

 

“Syndication Agent” means the financial institution accorded such title by the Arranger in consultation with the Borrower in connection with the initial syndication of Commitments.

 

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“Synthetic Lease” means any lease or other agreement for the use or possession of property creating obligations which do not appear as Indebtedness on the balance sheet of the lessee thereunder but which, upon the insolvency or bankruptcy of such Person, may be characterized as Indebtedness of such lessee without regard to the accounting treatment.

 

“Taxes” means any and all current or future income, stamp or other taxes, levies, imposts, duties (including stamp duties), deductions, fees, charges (including ad valorem charges) or withholdings now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and any and all interest and penalties related thereto.

 

“Term Loan” has the meaning provided in SECTION 2.01.

 

“Termination Date” means the earlier to occur of (i) the Maturity Date, or (ii) the date on which the maturity of the Obligations (other than the Other Liabilities) is accelerated in accordance with Article VII.

 

“Term Priority Collateral” has the meaning set forth in the Intercreditor Agreement.

 

“Threshold Lenders” has the meaning provided in SECTION 9.02(c).

 

“Total Commitments” means the aggregate of the Commitments of all Lenders.  On the Closing Date, the Total Commitments are $650,000,000.

 

“Type”, when used in reference to any Term Loan or Borrowing, refers to whether the rate of interest on such Term Loan, or on the Term Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Prime Rate, as applicable.

 

“U.S. Lender” means any Lender that is a “United States person,” as that term is defined in Section 7701(a)(30) of the Code.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if a term is defined in Article 9 of the Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set forth in Article 9; provided  further that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.

 

“Unanimous Consent” means the consent of Lenders holding 100% of the Commitments or Term Loans.

 

“Unrestricted Subsidiaries” means, at any time, (a) each Subsidiary of the Borrower that at such time is an Unrestricted Subsidiary (as designated by the board of directors of the Borrower (as provided below) as an Unrestricted Subsidiary) and (b) any Subsidiary of an Unrestricted Subsidiary.

 

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Any Subsidiary of the Borrower (including any existing Restricted Subsidiary and any newly acquired or newly formed Subsidiary) so designated by the board of directors of the Borrower shall constitute an Unrestricted Subsidiary; provided that (i) both before and after giving effect to such designation, no Event of Default shall have occurred and be continuing; (ii) both before and after giving effect to such designation, all outstanding Investments of the Loan Parties in such Subsidiary, valued at an amount determined as set forth in the last sentence of the definition of “Investments”, would constitute Permitted Investments; (iii) at all times, shares of the Capital Stock of such Subsidiary entitled to cast at least a majority of the votes that may be cast by all shares or equity interests having ordinary voting power for the election of directors or other governing body are owned, directly or indirectly, by the Borrower; (iv) at no time shall such Subsidiary nor any of its Subsidiaries own any Capital Stock or Indebtedness of, or own or hold any Lien on, the assets of, Holdings or any of its Subsidiaries (other than any Subsidiary of the Subsidiary to be so designated); (v) at no time shall such Subsidiary nor any of its Subsidiaries create, incur, issue, assume, guarantee or otherwise be or become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of Holdings, the Borrower or any Subsidiary of the Borrower (other than any Subsidiary of the Subsidiary to be so designated); and (vi) at no time shall such Subsidiary be designated or treated as a “Restricted Subsidiary” (or a similar concept) for the purpose of the ABL Facility or any Junior Financing.

 

The Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (i) both before and after giving effect to such designation, no Event of Default shall have occurred and be continuing; (ii) both before and after giving effect to such designation, all Indebtedness of such Subsidiary outstanding at such time would constitute Permitted Indebtedness; (iii) both before and after giving effect to such designation, Holdings shall be in compliance with SECTION 6.11(a) on a Pro Forma Basis, as of the last day of the then most recently ended Fiscal Quarter (as demonstrated by the Loan Parties to the Administrative Agent to its reasonable satisfaction); and (iv) both before and after giving effect to such designation, all Liens on any property or asset such Subsidiary would constitute Permitted Encumbrances.

 

“VH Acquisition” means the Acquisition of Guitar Center and its Subsidiaries in accordance with the Acquisition Documents.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness multiplied by the amount of such payment, by (2) the sum of all such payments.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.

 

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SECTION 1.02                    Terms Generally.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Charter Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (vii) all references to “$” or “dollars” or to amounts of money and all calculations of permitted “baskets” and other similar matters shall be deemed to be references to the lawful currency of the United States of America, and (viii) references to “knowledge” of any Loan Party means the actual knowledge of a Responsible Officer.

 

(b)                                 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.”

 

(c)                                  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.

 

(d)                                 This Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Loan Parties and the Administrative Agent and are the product of discussions and negotiations among all parties.  Accordingly, this Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Lenders merely on account of the Administrative Agent’s or any Lender’s involvement in the preparation of such documents.

 

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SECTION 1.03                    Accounting Terms.

 

(a)                                  Generally.  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 applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements described in SECTION 3.04, except as otherwise specifically prescribed herein.  All amounts used for purposes of financial calculations required to be made shall be without duplication.  Notwithstanding anything to the contrary herein, for purposes of determining compliance with any test or covenant contained in this Agreement with respect to any period during which any Specified Transaction occurs, the Consolidated Secured Net Leverage Ratio shall be calculated with respect to such period and such Specified Transaction on a Pro Forma Basis.

 

(b)                                 Issues Related to GAAP.  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 Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower 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 Borrower shall provide to the Administrative Agent and the Lenders as reasonably requested hereunder a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.  In addition, the definitions set forth in the Loan Documents and any financial calculations required by the Loan Documents shall be computed to exclude (a) the effect of purchase accounting adjustments, including the effect of non-cash items resulting from any amortization, write-up, write-down or write-off of any assets or deferred charges (including, without limitation, intangible assets, goodwill and deferred financing costs in connection with the VH Acquisition, any Permitted Acquisition or any merger, consolidation or other similar transaction permitted by this Agreement), (b) the application of FAS 133, FAS 150 or FAS 123r (to the extent that the pronouncements in FAS 123r result in recording an equity award as a liability on the Consolidated balance sheet of Holdings and its Subsidiaries in the circumstance where, but for the application of the pronouncements, such award would have been classified as equity), (c) any mark-to-market adjustments to any derivatives (including embedded derivatives contained in other debt or equity instruments under FAS 133), and (d) any non-cash compensation charges resulting from the application of FAS 123r.

 

SECTION 1.04                    Rounding. 

 

(a)                                  Any financial ratios required to be maintained pursuant to 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).

 

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SECTION 1.05                    Times of Day.

 

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

 

SECTION 1.06                    Certifications.

 

(a)                                  All certifications to be made hereunder by an officer or representative of a Loan Party shall be made by such person in his or her capacity solely as an officer or a representative of such Loan Party, on such Loan Party’s behalf and not in such person’s individual capacity.

 

ARTICLE II

 

Amount and Terms of Credit

 

SECTION 2.01                    Commitment of the Lenders.  Subject to the terms and conditions hereof, each Lender severally agrees to make a term loan (a “Term Loan”) to the Borrower on the Closing Date in an amount not to exceed the amount of the Commitment of such Lender.  Any amount borrowed under this SECTION 2.01 and subsequently repaid or prepaid may not be reborrowed.  Each Lender’s Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Commitment.  The Term Loans may from time to time be LIBO Loans or Prime Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with SECTIONS 2.03 and 2.09.

 

SECTION 2.02                    Incremental Credit Extensions.

 

(a)                                  The Borrower may at any time or from time to time after the Closing Date, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request one or more additional tranches of term loans to be made hereunder (each, an “Incremental Facility”), provided that both at the time of any such request and upon the effectiveness of any Incremental Amendment referred to below, (i) no Default or Event of Default shall exist or would arise therefrom, (ii) each Incremental Facility shall be in an aggregate principal amount that is not less than $10,000,000 (provided that such amount may be less than $10,000,000 if such amount represents all remaining availability under the limit set forth in the next sentence), and (iii) the aggregate amount of any Incremental Facility, when taken together with all other Incremental Facilities to date, shall not exceed the sum of (A) $50,000,000 plus (B) the amount available at the time of incurrence so long as, on a Pro Forma Basis after giving effect to the incurrence of all Indebtedness under any such Incremental Facility, the Consolidated Secured Net Leverage Ratio is less than or equal to 2.75 to 1.00.  The Administrative Agent and the Borrower shall determine the effective date of such Incremental Facility and any such Incremental Facility shall be first made available to all existing Lenders on a pro rata basis.  To the extent that the existing Lenders in a timely fashion relative to the Incremental Facility Closing Date (as defined below) decline to issue commitments in respect of such Incremental Facility in the amount requested by the Borrower, the Administrative Agent, in consultation with the Borrower, will use its reasonable best efforts to arrange for other Persons (which Person may be suggested by the Borrower) to become a Lender hereunder and to issue commitments in an aggregate amount equal to the amount of the Incremental Facility requested by the Borrower for which the existing Lenders decline to issue commitments (each Person issuing a commitment under an Incremental Facility, an “Additional Lender”), provided,

 

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however, that (i) no Lender shall be obligated to provide a commitment in respect of such Incremental Facility as a result of any such request by the Borrower, (ii) any Additional Lender which is not an existing Lender shall be subject to the approval of the Administrative Agent and the Borrower (which approval shall not be unreasonably withheld), and (iii) without the consent of the Administrative Agent, at no time shall the commitment of any Additional Lender in respect of such Incremental Facility be less than $5,000,000.  The term loans made under such Incremental Facility (“Incremental Term Loans”) (a) shall rank pari passu in right of payment and of security with the Term Loans, (b) shall not mature earlier than the Maturity Date with respect to the Term Loans, (c) shall be treated the same as the Term Loans (in each case, including with respect to mandatory and voluntary prepayments), (d) the yield (including, for the avoidance of doubt, any upfront fees, original issue discount and similar amounts paid to Lenders under the Incremental Facility) on the Incremental Term Loans shall not exceed the corresponding interest rate on the Term Loans by more than 25 basis points (it being understood that this condition may be satisfied by including a provision in the respective Incremental Amendment in respect of such Incremental Term Loans pursuant to which the Applicable Margin in respect of the Term Loans is increased to the extent necessary to reduce any such excess to no more than 25 basis points) and (e) the amortization schedule applicable to the Incremental Term Loans shall provide for a Weighted Average Life to Maturity of the Incremental Term Loans no shorter than the Weighted Average Life to Maturity of the Term Loans.  Each notice from the Borrower pursuant to this Section shall set forth the requested amount and proposed terms of the requested Incremental Facility.  Commitments in respect of Incremental Term Loans shall become Commitments under this Agreement pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Additional Lender and the Administrative Agent.  The Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be mutually agreed by the Administrative Agent and the Borrower to effect the provisions of this Section.  The Administrative Agent and the Lenders hereby agree that the pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.  The provisions of this SECTION 2.02 shall supersede any provisions in SECTION 2.21 or 9.02 to the contrary.

 

(b)                                 No Incremental Amendment shall become effective unless and until each of the following conditions has been satisfied or waived:

 

(i)                                     All representations and warranties contained in this Agreement and the other Loan Documents or otherwise made in writing in connection herewith or therewith shall be true and correct in all material respects on and as of the Incremental Facility Closing Date with the same effect as if made on and as of such date, other than representations and warranties that relate solely to an earlier date (it being understood and agreed that the Borrower’s maintenance of its Incremental Facility request shall be deemed a representation and warranty by the Loan Parties to all Lenders and all Additional Lenders that the condition specified in this subclause (i) is satisfied as of the Incremental Facility Closing Date);

 

(ii)                                  The Loan Parties shall have demonstrated, to the reasonable satisfaction of the Administrative Agent, that both before and after giving effect to such

 

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Incremental Amendment and any Incremental Term Loans and Investments made in connection therewith, Holdings shall be in compliance with SECTION 6.11(a) on a Pro Forma Basis, as of the last day of the then most recently ended Fiscal Quarter;

 

(iii)                               The Borrower, Administrative Agent, and each Additional Lender shall have executed and delivered the Incremental Amendment and such other amendments to the Loan Documents as the Administrative Agent shall reasonably require;

 

(iv)                              The Borrower shall have paid such fees and other compensation to the Additional Lenders and to the Administrative Agent as the Borrower, such Additional Lenders and the Administrative Agent shall agree;

 

(v)                                 The Borrower shall deliver to the Administrative Agent and the Lenders an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Borrowers and dated such date;

 

(vi)                              A promissory note (to the extent requested) will be issued at the Borrower’s expense, to each such Additional Lender, to be in conformity with requirements of SECTION 2.07 (with appropriate modification); and

 

(vii)                           The Borrower and each Additional Lender shall have delivered such other instruments, documents and agreements as the Administrative Agent may reasonably have requested in order to effectuate the documentation of the foregoing.

 

(c)                      The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Amendment (with each date of such effectiveness being referred to herein as an “Incremental Facility Closing Date”).

 

SECTION 2.03                    Procedure for Term Loan Borrowing.

 

(a)                                  The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 1:00 P.M., (i) in the case of Prime Rate Loans, one Business Day prior to the anticipated Closing Date and (ii) in the case of LIBO Loans, one Business Day prior to the anticipated Closing Date) requesting that the Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed.  Such notice shall be irrevocable (except to the extent set forth in SECTION 2.10 or SECTION 2.11 hereof) and shall specify whether the requested Borrowing is to be a Borrowing of Prime Rate Loans or of LIBO Loans and, if LIBO Loans, the Interest Period with respect thereto.  If no election is made as to the Type of Borrowing or, in the case of request for a Borrowing of LIBO Loans, is not accompanied by a funding indemnity letter reasonably satisfactory to the Administrative Agent in form and substance, such notice shall be deemed to request a Borrowing of Prime Rate Loans.  Upon receipt of such notice the Administrative Agent shall promptly notify each Lender thereof.  Not later than 12:00 Noon, on the Closing Date each Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan to be made by such Lender.  The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the

 

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amounts made available to the Administrative Agent by the Lenders in immediately available funds.

 

(b)                                 Except as set forth in SECTION 2.09, SECTION 2.10 and SECTION 2.11, Term Loans shall be either Prime Rate Loans or LIBO Loans as the Borrower may request (which request shall substantially be made in the form attached hereto as Exhibit B-1) subject to and in accordance with this SECTION 2.03.  Each Lender may fulfill its Commitment with respect to any Term Loan by causing any lending office of such Lender to make such Term Loan; provided, however, that any such use of a lending office shall not affect the obligation of the Borrower to repay such Term Loan in accordance with the terms of the applicable Note.  Each Lender shall, subject to its overall policy considerations, use reasonable efforts to select a lending office which will not result in the payment of increased costs by the Borrower.  Subject to the other provisions of this SECTION 2.03 and the provisions of SECTION 2.11, Borrowings of Term Loans of more than one Type may be incurred at the same time, but in any event no more than ten (10) Borrowings of LIBO Loans may be outstanding at any time.

 

SECTION 2.04                    Repayment of Term Loans.  The principal amount of the Term Loans shall be repaid in consecutive quarterly installments (each, an “Installment”) of 0.25% of the original aggregate principal amount thereof (to be decreased in accordance with SECTION 2.16 or 2.17(f) in the event of any voluntary or mandatory prepayments of the Term Loans made hereunder), each payable on the last day of each Fiscal Quarter (each, an “Installment Date”) commencing on the first Installment Date that occurs after the first anniversary of the Closing Date through the last Installment Date occurring prior to the seventh anniversary of the Closing Date.  The remaining principal amount of the Term Loans shall be repaid on the Maturity Date.

 

Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with SECTION 2.16 or 2.17(f), as applicable; and (y) the Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Maturity Date.

 

SECTION 2.05                    Reserved.

 

SECTION 2.06                    Reserved.

 

SECTION 2.07                    Notes.

 

(a)                                  Upon the request of any Lender, the Term Loans made by such Lender shall be evidenced by a Note, duly executed on behalf of the Borrower, dated the Closing Date, payable to the order of such Lender in an aggregate principal amount equal to such Lender’s Commitment.

 

(b)                                 Each Lender is hereby authorized by the Borrower to endorse on a schedule attached to each Note delivered to such Lender (or on a continuation of such schedule attached to such Note and made a part thereof), or otherwise to record in such Lender’s internal records, an appropriate notation evidencing the date and amount of each Term Loan from such Lender, each payment and prepayment of principal of any such Term Loan, each payment of interest on any such Term Loan and the other information provided for on such schedule; provided, however,

 

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that the failure of any Lender to make such a notation or any error therein shall not affect the obligation of the Borrower to repay the Term Loans made by such Lender in accordance with the terms of this Agreement and the applicable Notes.

 

(c)                                  Upon receipt of an affidavit and indemnity of a Lender as to the loss, theft, destruction or mutilation of such Lender’s Note and upon cancellation of such Note, the Borrower will issue, in lieu thereof, a replacement Note in favor of such Lender, in the same principal amount thereof and otherwise of like tenor at such Lender’s expense.

 

SECTION 2.08                    Interest on Term Loans.

 

(a)                                  Subject to SECTION 2.12, each Prime Rate Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as applicable) at a rate per annum that shall be equal to the then Prime Rate plus the Applicable Margin for Prime Rate Loans.

 

(b)                                 Subject to SECTION 2.09 through SECTION 2.12, each LIBO Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal, during each Interest Period applicable thereto, to the Adjusted LIBO Rate for such Interest Period, plus the Applicable Margin for LIBO Loans.

 

(c)                                  Accrued interest on all Term Loans shall be payable in arrears on each Interest Payment Date applicable thereto, upon prepayment, at maturity (whether by acceleration or otherwise) and after such maturity on demand.

 

SECTION 2.09                    Conversion and Continuation of Term Loans.

 

(a)                                  The Borrower shall have the right at any time, on three (3) Business Days’ prior notice to the Administrative Agent (which notice shall be in the form of Exhibit B-2 hereto and, to be effective, must be received by the Administrative Agent not later than 1:00 p.m. on the third Business Day preceding the date of any conversion), (i) to convert any outstanding Borrowings of Prime Rate Loans to Borrowings of LIBO Loans, or (ii) to continue an outstanding Borrowing of LIBO Loans for an additional Interest Period, or (iii) to convert any outstanding Borrowings of LIBO Loans to a Borrowing of Prime Rate Loans, subject in each case to the following:

 

(i)                                     No Borrowing of Term Loans may be converted into, or continued as, LIBO Loans at any time when any Event of Default has occurred and is continuing (nothing contained herein being deemed to obligate the Borrower to incur Breakage Costs upon the occurrence and during the continuance of an Event of Default unless the Obligations are accelerated);

 

(ii)                                  If less than a full Borrowing of Term Loans is converted, such conversion shall be made pro  rata among the Lenders based upon their Commitment Percentages in accordance with the respective principal amounts of the Term Loans comprising such Borrowing held by such Lenders immediately prior to such conversion;

 

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(iii)                               The aggregate principal amount of Prime Rate Loans being converted into or continued as LIBO Loans shall be in an integral of $1,000,000 and at least $5,000,000;

 

(iv)                              Each Lender shall effect each conversion by applying the proceeds of its new LIBO Loan or Prime Rate Loan, as the case may be, to its Term Loan being so converted;

 

(v)                                 The Interest Period with respect to a Borrowing of LIBO Loans effected by a conversion or in respect to the Borrowing of LIBO Loans being continued as LIBO Loans shall commence on the date of conversion or the expiration of the current Interest Period applicable to such continuing Borrowing, as the case may be;

 

(vi)                              A Borrowing of LIBO Loans may be converted only on the last day of an Interest Period applicable thereto, unless the applicable Borrower pays all Breakage Costs incurred in connection with such conversion; and

 

(vii)                           Each request for a conversion or continuation of a Borrowing of LIBO Loans which fails to state an applicable Interest Period shall be deemed to be a request for an Interest Period of one (1) month.

 

(b)                                 If the Borrower does not give notice to convert any Borrowing of LIBO Loans, or does not give notice to continue, or does not have the right to continue, any Borrowing as LIBO Loans, in each case as provided in SECTION 2.09(a) above, such Borrowing shall automatically be converted to, or continued as, as applicable, a Borrowing of Prime Rate Loans, at the expiration of the then-current Interest Period.  The Administrative Agent shall, after it receives notice from the Borrower, promptly give each Lender notice of any conversion, in whole or part, of any Term Loan made by such Lender.

 

SECTION 2.10                    Alternate Rate of Interest for Term Loans.  If prior to the commencement of any Interest Period for a LIBO Borrowing, the Administrative Agent:

 

(a)                                  Reasonably determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate (in accordance with the terms of the definition thereof) for such Interest Period; or

 

(b)                                 Is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Required Lenders of making or maintaining their Term Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the applicable Lenders that the circumstances giving rise to such notice no longer exist (which notice the Administrative Agent shall deliver promptly upon obtaining knowledge of the same), (i) any Borrowing Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a LIBO Borrowing shall be ineffective and

 

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(ii) if any Borrowing Request requests a LIBO Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate Loans unless withdrawn by the Borrower.

 

SECTION 2.11                    Change in Legality.

 

(a)                                  Notwithstanding anything to the contrary contained elsewhere in this Agreement, if any Change in Law occurring after the Closing Date shall make it unlawful for a Lender to make or maintain a LIBO Loan or to give effect to its obligations as contemplated hereby with respect to a LIBO Loan, then, by written notice to the Borrower, such Lender may (x) declare that LIBO Loans will not thereafter be made by such Lender hereunder, whereupon any request by the Borrower for a LIBO Borrowing shall, as to such Lender only, be deemed a request for a Prime Rate Loan unless such declaration shall be subsequently withdrawn; and (y) require that all outstanding LIBO Loans made by such Lender be converted to Prime Rate Loans, in which event all such LIBO Loans shall be automatically converted to Prime Rate Loans as of the effective date of such notice as provided in SECTION 2.09(b).  In the event any Lender shall exercise its rights hereunder, all payments and prepayments of principal which would otherwise have been applied to repay the LIBO Loans that would have been made by such Lender or the converted LIBO Loans of such Lender, shall instead be applied to repay the Prime Rate Loans made by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans.

 

(b)                                 For purposes of this SECTION 2.11, a notice to the Borrower pursuant to SECTION 2.11(a) above shall be effective, if lawful, and if any LIBO Loans shall then be outstanding, on the last day of the then-current Interest Period; and otherwise such notice shall be effective on the date of receipt by the Borrower.

 

SECTION 2.12                    Default Interest.  Effective upon written notice from the Administrative Agent (which notice shall be given only at the direction of the Required Lenders after the occurrence and during the continuance of an Event of Default under SECTION 7.01 (a) SECTION 7.01(b), SECTION 7.01(h) or SECTION 7.01(i)) and at all times thereafter while such Event of Default is continuing, interest shall accrue on all Term Loans and other amounts owing by the Loan Parties (after as well as before judgment, as and to the extent permitted by law) at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days as applicable) (the “Default Rate”) equal to (a) with respect to overdue principal of any Term Loan, the rate (including the Applicable Margin) otherwise applicable thereto plus two percent (2.00%) per annum and (b) with respect to any other overdue amount, the rate then applicable to Prime Rate Loans plus two percent (2.00%) per annum.  Such interest shall be payable on each Interest Payment Date (or any earlier maturity of the Term Loans).

 

SECTION 2.13                    Reserved.

 

SECTION 2.14                    Increased Costs.

 

(a)                                  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any holding company of any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

 

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(ii)                                  impose on any Lender or the London interbank market any other condition affecting LIBO Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost in any material amount in excess of those incurred by similarly situated lenders to such Lender of making or maintaining any LIBO Loan or to increase the cost in any material amount in excess of those incurred by similarly situated lenders to such Lender or to reduce the amount in any material respect of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)                                 If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Term Loans made by such Lender to a level below that which such Lender or such Lender’s holding company would have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)                                  A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this SECTION 2.14 and setting forth in reasonable detail the manner in which such amount or amounts were determined shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within fifteen (15) Business Days after receipt thereof.

 

(d)                                 Failure or delay on the part of any Lender to demand compensation pursuant to this SECTION 2.14 shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 90 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor, and provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 90 day period referred to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.15                    Reserved.

 

SECTION 2.16                    Optional Prepayment of Term Loans; Reimbursement of Lenders.

 

(a)                                  The Borrower shall have the right at any time and from time to time to prepay without premium or penalty (except as set forth in clause (c) below and subject to payment of Breakage Costs as provided herein) outstanding Term Loans in whole or in part, (x) with respect to LIBO Loans, upon at least three (3) Business Days’ prior written, telex or facsimile notice to the Administrative Agent, prior to 1:00 p.m., and (y) with respect to Prime Rate Loans, on the

 

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same Business Day if written, telex or facsimile notice is received by the Administrative Agent prior to 1:00 pm, subject in each case to the following limitations:

 

(i)                                     All prepayments shall be paid to the Administrative Agent for application (except as otherwise directed by the Borrower) on a pro rata basis to reduce the scheduled remaining Installments of principal of the Term Loans;

 

(ii)                                  Subject to the foregoing, outstanding Prime Rate Loans of the Borrower shall be prepaid before outstanding LIBO Loans of the Borrower are prepaid (except as otherwise directed by the Borrower).  Each partial prepayment of LIBO Loans shall be in an integral multiple of $1,000,000 (but in no event less than $5,000,000).  No prepayment of LIBO Loans shall be permitted pursuant to this SECTION 2.16 other than on the last day of an Interest Period applicable thereto, unless the Borrower reimburses the Lenders for all Breakage Costs associated therewith within five (5) Business Days of receiving a written demand for such reimbursement which sets forth the calculation of such Breakage Costs in reasonable detail.  No partial prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal amount of the LIBO Loans remaining outstanding pursuant to such Borrowing being less than $5,000,000 (unless all such outstanding LIBO Loans are being prepaid in full); and

 

(iii)                               Each notice of prepayment shall specify the prepayment date, the principal amount and Type of the Term Loans to be prepaid and, in the case of LIBO Loans, the Borrowing or Borrowings pursuant to which such Term Loans were made.  Each notice of prepayment shall be revocable, provided that, within ten (10) Business Days of receiving a written demand for such reimbursement which sets forth the calculation of such Breakage Costs in reasonable detail, the Borrower shall reimburse the Lenders for all Breakage Costs associated with the revocation of any notice of prepayment.  The Administrative Agent shall, promptly after receiving notice from the Borrower hereunder, notify each applicable Lender of the principal amount and Type of the Term Loans held by such Lender which are to be prepaid, the prepayment date and the manner of application of the prepayment.

 

(b)                                 The Borrower shall reimburse each Lender as set forth below for any loss incurred or to be incurred by the Lenders in the reemployment of the funds (i) resulting from any prepayment (for any reason whatsoever, including, without limitation, conversion to Prime Rate Loans or acceleration by virtue of, and after, the occurrence and during the continuance of an Event of Default) of any LIBO Loan required or permitted under this Agreement, if such Term Loan is prepaid other than on the last day of the Interest Period for such Term Loan, or (ii) in the event that after the Borrower delivers a notice of borrowing under Section 2.03 in respect of LIBO Loans, or any notice of conversion to LIBO Loans under Section 2.09, such Term Loans are not made on the first day of the Interest Period specified in such notice of borrowing or such notice of conversion, for any reason other than a breach by such Lender of its obligations hereunder or the delivery of any notice pursuant to Section 2.09(a)(i), Section 2.10 or Section 2.11, or (iii) in the event that after the Borrower delivers a notice of prepayment under this Section 2.16 in respect of LIBO Loans, such prepayments are not made on the day specified in such notice of prepayment. Such loss shall be the amount (herein, collectively, “Breakage Costs”) as reasonably determined by such Lender as the excess, if any, of (A) the amount of

 

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interest which would have accrued to such Lender on the amount so paid, not prepaid or not borrowed at a rate of interest equal to the Adjusted LIBO Rate for such Term Loan (but specifically excluding any Applicable Margin), for the period from the date of such payment or failure to borrow or convert or failure to prepay to the last day (x) in the case of a payment or refinancing of a LIBO Loan with Prime Rate Loans other than on the last day of the Interest Period for such Term Loan or the failure to prepay a LIBO Loan, of the then current Interest Period for such Term Loan or (y) in the case of such failure to borrow or convert, of the Interest Period for such LIBO Loan which would have commenced on the date of such failure to borrow or convert, over (B) the amount of interest which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the London interbank market.  Any Lender demanding reimbursement for such loss shall deliver to the Borrower from time to time one or more certificates setting forth the amount of such loss as determined by such Lender and setting forth in reasonable detail the manner in which such amount was determined and such amounts shall be due within ten (10) Business Days after the receipt of such notice.

 

(c)                                  Any optional prepayment of the Term Loans pursuant to Section 2.16(b) made on or prior to the first anniversary of the Closing Date from the net cash proceeds of a substantially concurrent issuance or incurrence of senior secured Indebtedness (other than pursuant to Section 2.02) by Holdings or any of its Subsidiaries (including Unrestricted Subsidiaries) shall be accompanied by a prepayment premium of 1% on the amount of Term Loans so prepaid.

 

(d)                                 Whenever any partial prepayment of Term Loans are to be applied to LIBO Loans, such LIBO Loans shall be prepaid in the chronological order of their Interest Payment Dates or as the Borrower may otherwise designate in writing.

 

SECTION 2.17                    Mandatory Prepayment.  The outstanding Obligations shall be subject to prepayment as follows:

 

(a)                                  If on any date any Loan Party or any of its Subsidiaries shall have received Net Proceeds in excess of $2,500,000 from any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction ) of any of its assets (other than the sale of assets (other than Real Estate, Capital Stock and Intellectual Property) in the ordinary course of business and the transfer of any assets among Stores and other locations of the Loan Parties or any of their Subsidiaries), to the extent that such Net Proceeds are not required to be applied to the payment of obligations of the Borrower or other borrowers under the ABL Facility, an amount equal to 100% of such Net Proceeds shall be applied within five (5) Business Days after such date toward the prepayment of Term Loans as set forth in SECTION 2.17(f) unless the proceeds therefrom are utilized for purposes of replacing or repairing the assets in respect of which such proceeds were received or reinvesting in assets used in any Loan Party’s or any of its Subsidiaries’ business (any such application of proceeds, a “Proceeds Reinvestment”) within twelve (12) months of the receipt of such proceeds (or if a letter of intent or other binding commitment to reinvest such proceeds is entered into within the later of twelve (12) months of receipt of such proceeds and 180 days from the date of such letter of intent or other binding commitment) (such time period, with respect to such proceeds, the “Reinvestment Period”); or

 

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(b)                                 If on any date any Loan Party or any of its Subsidiaries shall have received Net Proceeds in excess of $2,500,000 from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation, expropriation or similar proceeding of, any of its assets, to the extent that such Net Proceeds are not required to be applied to the payment of obligations of the Borrower or other borrowers under the ABL Facility, an amount equal to 100% of such Net Proceeds shall be applied within five (5) Business Days after such date toward the prepayment of Term Loans as set forth in SECTION 2.17(f) unless (i) the proceeds therefrom are required to be paid to the holder of a Lien on such property or asset having priority over the Lien of the Collateral Agent, or (ii) the proceeds therefrom are utilized for purposes of replacing or repairing the assets in respect of which such proceeds, awards or payments were received or reinvesting in assets used in any Loan Party’s or any of its Subsidiaries’ business within twelve (12) months of the receipt of such proceeds (or if a letter of intent or other binding commitment to reinvest such proceeds is entered into within the later of twelve (12) months of receipt of such proceeds and 180 days from the date of such letter of intent or other binding commitment);

 

(c)                                  If on any date any Loan Party or any of its Subsidiaries shall have received Net Proceeds (other than Excluded Net Proceeds) from the incurrence of any Indebtedness of the Borrower or any of its Restricted Subsidiaries (other than Permitted Indebtedness (other than Permitted Indebtedness as described in clause (k)(ii)), an amount equal to 100% of such Net Proceeds shall be applied within five (5) Business Days after such date toward the prepayment of Term Loans as set forth in SECTION 2.17(f);  and

 

(d)                                 If, for any Fiscal Year of Holdings commencing with the Fiscal Year ending December 31, 2008, there shall be Excess Cash Flow, the Loan Parties shall, on the relevant Excess Cash Flow Application Date (as defined below), apply the difference of (i) the ECF Percentage of such Excess Cash Flow less (ii) the aggregate amount of all optional prepayments of the Term Loans during such Fiscal Year, toward the prepayment of the Term Loans as set forth in SECTION 2.17(f).  Each such prepayment shall be made on a date (an “Excess Cash Flow Application Date”) no later than five (5) Business Days after the date on which Consolidated financial statements of Holdings and its Subsidiaries have been delivered pursuant to SECTION 5.01(a).

 

(e)                                  Reserved.

 

(f)                                    Any prepayment of any Term Loans pursuant to SECTIONS 2.17(a) through (d) above shall be applied to the remaining scheduled Installments of principal in the chronological order of the Installment Dates.  Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid.  No prepayment of LIBO Loans shall be permitted pursuant to this SECTION 2.17 other than on the last day of an Interest Period applicable thereto, unless the Borrower reimburses the Lenders for all Breakage Costs associated therewith within ten (10) Business Days of receiving a written demand for such reimbursement which sets forth the calculation of such Breakage Costs in reasonable detail.  In order to avoid such Breakage Costs, as long as no Specified Default has occurred and is continuing, at the request of the Borrower, the Administrative Agent shall hold all amounts required to be applied to LIBO Loans in a Cash Collateral Account and will apply such funds to the applicable LIBO Loans at the end of the then pending Interest Period therefor (provided that the foregoing shall in

 

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no way limit or restrict the Agents’ rights upon the occurrence and during the continuance of any Event of Default).

 

SECTION 2.18                    Reserved.

 

SECTION 2.19                    Fees.

 

(a)                                  The Borrower shall pay to the Agents, for their respective accounts, (i) the fees set forth in the Fee Letter as and when payment of such fees is due as therein set forth and (ii) such other fees in the amounts and at the times separately agreed upon between the Borrower and the Agents.

 

(b)                     All fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for the account of the Administrative Agent and other Credit Parties as provided herein.  Once due, all fees shall be fully earned and shall not be refundable under any circumstances (except to the extent set forth in the Fee Letter).

 

SECTION 2.20                    Maintenance of Loan Account; Statements of Account.  The Administrative Agent shall maintain an account on its books in the name of the Borrower (each, the “Loan Account”) which will reflect (i) all Term Loans made by the Lenders to the Borrower or for the Borrower’s account and (ii) any and all other monetary Obligations that have become payable.  The Loan Account will be credited with all amounts received by the Administrative Agent from the Borrower or from other Persons for the Borrower’s account, and the amounts so credited shall be applied as set forth in and to the extent required by SECTION 2.17(f) or 7.03, as applicable.

 

SECTION 2.21                    Payments; Sharing of Setoff.

 

(a)                                  The Borrower shall make each payment required to be made hereunder or under any other Loan Document (whether of principal, interest, fees, amounts payable under SECTIONS 2.14, 2.16(b) or 2.23, or otherwise) prior to 3:00 p.m. on the date when due, in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its Funding Office, except that payments pursuant to SECTIONS 2.14, 2.16(b), 2.23 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein.  The Administrative Agent shall distribute any such payments to the appropriate recipient promptly following receipt thereof.  If any payment under any Loan Document shall be due on a day that is not a Business Day, except with respect to LIBO Borrowings, the date for payment shall be extended to the next succeeding Business Day, and, if any payment due with respect to LIBO Borrowings shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, unless that succeeding Business Day is in the next calendar month, in which event, the date of such payment shall be on the last Business Day of subject calendar month, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.

 

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(b)                                 All funds received by and available to the Administrative Agent to pay principal, interest, fees and other amounts then due hereunder, shall be applied in accordance with the provisions of SECTION 2.17(f) or 7.03 ratably among the parties entitled thereto in accordance with the amounts of principal, interest, fees and other amounts then due to such respective parties.

 

(c)                                  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.

 

SECTION 2.22                    Reserved.

 

SECTION 2.23                    Taxes.

 

(a)                                  Any and all payments by or on account of any obligation of the Loan Parties hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, however, that if a Loan Party or an Agent or a Lender shall be required to deduct or remit any such Taxes from such payments, then (i) in the case of any Indemnified Taxes or Other Taxes, the sum payable shall be increased as necessary so that after making all required deductions or remittances for such Taxes (including deductions applicable to additional sums payable under this SECTION 2.23) the applicable Credit Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Loan Party shall make such deductions and (iii) the Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

 

(b)                                 In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

 

(c)                                  The Loan Parties shall indemnify each Credit Party, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid or payable by such Credit Party on or with respect to any payment by or on account of any obligation of the Loan Parties hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this SECTION 2.23) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto; provided that if the Borrower reasonably believes that such Taxes were not correctly or legally asserted, each Lender will use reasonable efforts to cooperate with the Borrower to obtain a refund of such taxes so long as such efforts would not, in the sole determination of such Lender, result in any additional costs, expenses or risks or be otherwise disadvantageous to it; provided further, that the Borrowers shall not be required to compensate any Lender pursuant to this SECTION 2.23 for any amounts payable by such Lender in any

 

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fiscal year of such Lender if such Lender does not furnish notice of such claim within one (1) year from the end of such fiscal year; provided further, that if the law giving rise to such claim has a retroactive effect, then such one (1) year period shall be extended to include such period of retroactive effect.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Credit Party, or by the Administrative Agent on its own behalf or on behalf of any other Credit Party, setting forth in reasonable detail the manner in which such amount was determined, shall be conclusive absent manifest error.

 

(d)                                 As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Any Foreign Lender that is entitled to an exemption from or reduction in United States withholding tax shall deliver to the Borrower and the Administrative Agent two (2) copies of (i) either United States Internal Revenue Service Form W-8BEN (claiming a treaty benefit) or Form W-8ECI, or any subsequent versions thereof or successors thereto, or, (ii) in the case of a Foreign Lender claiming exemption from or reduction in U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a (A) Form W-8BEN, or any subsequent versions thereof or successors thereto and (B) a certificate representing that such Foreign Lender (1) is not a bank for purposes of Section 881(c) of the Code, (2) is not a 10 percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Loan Party and (3) is not a controlled foreign corporation related to the Loan Parties (within the meaning of Section 864(d)(4) of the Code)), in all cases, properly completed and duly executed by such Foreign Lender claiming, as applicable, complete exemption from or reduced rate of, U.S. Federal withholding tax on payments by the Loan Parties under this Agreement and the other Loan Documents. Such forms shall be delivered by each Foreign Lender on or before the date it becomes a party to this Agreement (or, in the case of a transferee that is a participation holder, on or before the date such participation holder becomes a transferee hereunder) and on or before the date, if any, such Foreign Lender changes its applicable lending office by designating a different lending office (a “New Lending Office”).  In addition, each Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender.  Notwithstanding any other provision of this SECTION 2.23(e), a Foreign Lender shall not be required to deliver any form pursuant to this SECTION 2.23(e) that such Foreign Lender is not legally able to deliver.

 

(f)                                    Any U.S. Lender that is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c) shall deliver to the Borrower and the Administrative Agent two (2) properly completed and duly executed copies of Internal Revenue Service Form W-9 or any successor form that such person is entitled to provide at such time in order to comply with United States back-up withholding requirements.

 

(g)                                 The Loan Parties shall not be required to indemnify any Foreign Lender or to pay any additional amounts to any Foreign Lender in respect of U.S. Federal withholding tax pursuant to paragraph (a) or (c) above to the extent that the obligation to pay such additional amounts would not have arisen but for a failure by such Foreign Lender to comply with the

 

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provisions of paragraph (e) above.  Should a Lender become subject to Taxes because of its failure to deliver a form required hereunder, the Loan Parties shall, at such Lender’s expense, take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes.

 

(h)                                 If any Loan Party shall be required pursuant to this SECTION 2.23 to pay any additional amount to, or to indemnify, any Credit Party to the extent that such Credit Party becomes subject to Taxes subsequent to the Closing Date (or, if applicable, subsequent to the date such Person becomes a party to this Agreement) as a result of any change in the circumstances of such Credit Party (other than a change in Applicable Law), including without limitation a change in the residence, place of incorporation, principal place of business of such Credit Party or a change in the branch or lending office of such Credit Party, as the case may be, such Credit Party shall use reasonable efforts to avoid or minimize any amounts which might otherwise be payable pursuant to this SECTION 2.23(h); provided, however, that such efforts shall not include the taking of any actions by such Credit Party that would result in any tax, costs or other expense to such Credit Party (other than a tax, cost or other expense for which such Credit Party shall have been reimbursed or indemnified by the Loan Parties pursuant to this Agreement or otherwise) or any action which would or might in the reasonable opinion of such Credit Party have an adverse effect upon its business, operations or financial condition or otherwise be disadvantageous to such Credit Party.

 

(i)                                     If any Lender is entitled to a reduction in (and not complete exemption from) the applicable withholding tax, the Borrower may withhold from any interest payment to such Lender an amount equivalent to the applicable withholding tax after taking into account such reduction.

 

(j)                                     If any Credit Party, in its sole discretion, determines in good faith that it has actually and finally realized, by reason of a refund, deduction or credit of any Taxes paid or reimbursed by the Loan Parties pursuant to subsection (a) or (c) above in respect of payments under the Loan Documents (which refund, deduction or credit is provided by the jurisdiction imposing such Taxes), a current monetary benefit that it would otherwise not have obtained and that would result in the total payments under this SECTION 2.23 exceeding the amount needed to make such Credit Party whole, such Credit Party shall pay to the Borrower, with reasonable promptness following the date upon which it actually realizes such benefit, an amount equal to the amount of such refund, deduction or credit (but only to the extent of the amount of any Taxes paid or reimbursed by the Loan Parties), net of all reasonable out of pocket expenses incurred in securing such refund, deduction or credit; provided, however, that the Borrower, upon the request of the Administrative Agent or such Credit Party, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Credit Party in the event the Administrative Agent or such Credit Party is required to repay such refund, deduction or credit to such Governmental Authority.  This SECTION 2.23(i) shall not be construed to require any Credit Party to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to any Loan Party.

 

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SECTION 2.24                    Mitigation Obligations; Replacement of Lenders.

 

(a)                                  If any Lender requests compensation under SECTION 2.14 or cannot make Term Loans under SECTION 2.11, or if the Loan Parties are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to SECTION 2.23, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Term Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to SECTION 2.14 or SECTION 2.23, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment; provided, however, that the Borrower shall not be liable for such costs and expenses of a Lender requesting compensation if (i) such Lender becomes a party to this Agreement on a date after the Closing Date and (ii) the relevant Change in Law occurs on a date prior to the date such Lender becomes a party hereto.

 

(b)                                 If any Lender requests compensation under SECTION 2.14 or cannot make Term Loans under SECTION 2.11 for thirty (30) consecutive days, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to SECTION 2.23, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in SECTION 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, however, that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Term Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under SECTION 2.14 or payments required to be made pursuant to SECTION 2.23, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

SECTION 2.25                    Reserved.

 

SECTION 2.26                    Security Interests in Collateral.  To secure their Obligations under this Agreement and the other Loan Documents, the Borrower shall, and shall cause each other Loan Party to, grant to the Collateral Agent, for its benefit and the benefit of the other Secured Parties, a first-priority security interest in (subject only to Permitted Encumbrances (x) having priority by operation of Applicable Law on all Term Priority Collateral, or (y) in favor of the agent under the ABL Facility on any Revolver Priority Collateral), all of the Collateral pursuant hereto and to the Security Documents, provided that the Collateral shall secure amounts owing with respect to the Other Liabilities only to the extent as agreed to by the Borrower.

 

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ARTICLE III

 

Representations and Warranties

 

To induce the Credit Parties to make the Term Loans, the Loan Parties executing this Agreement or a Joinder hereto, jointly and severally, make the following representations and warranties to each Credit Party with respect to each Loan Party and its Subsidiaries on the Closing Date, assuming the effectiveness of the transactions contemplated under the Acquisition Documents and in each case as of the date such representation and warranty is made unless an earlier date is specified:

 

SECTION 3.01                    Organization; Powers.  Each Loan Party and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite corporate or other applicable entity power and authority to own its property and assets and to carry on its business as now conducted, except, in each case, where the failure to do so, or so possess, individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect.  Each Loan Party has all requisite organizational power and authority to execute and deliver and perform all its obligations under all Loan Documents to which such Loan Party is a party.  Each Loan Party and each of its Subsidiaries is qualified to do business in, and is in good standing (where such concept exists) in, every jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, except where the failure to be so qualified or in good standing individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect.  Schedule 3.01 annexed hereto sets forth, as of the Closing Date, each Loan Party’s and each of its Subsidiaries’ name as it appears in official filings in its state of incorporation or organization, its state of incorporation or organization, organization type, organization number, if any, issued by its state of incorporation or organization, and its federal employer identification number.

 

SECTION 3.02                    Authorization; Enforceability.  The transactions contemplated hereby and by the other Loan Documents to be entered into by each Loan Party are within such Loan Party’s corporate powers and have been duly authorized by all necessary corporate, membership, partnership or other necessary action.  This Agreement has been duly executed and delivered by each Loan Party that is a party hereto or thereto and constitutes, and each other Loan Document to which any Loan Party is a party, when executed and delivered by such Loan Party will constitute, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.03                    No Conflicts.  The transactions to be entered into and contemplated by the Loan Documents (a) will not violate any Applicable Law (except to the extent that such violation would not reasonably be expected to result in a Material Adverse Effect) or the Charter Documents of any Loan Party or any of its Subsidiaries, (b) do not violate or result in a default (with due notice, lapse of grace period or both) under any indenture or any other material agreement or instrument, except to the extent that such default would not reasonably be expected to result in a Material Adverse Effect, and (c) will not result in the

 

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creation or imposition of any Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens created under the Loan Documents and Permitted Encumbrances.

 

SECTION 3.04                    Financial Condition.

 

(a)                                  The Borrower has heretofore furnished to the Agents the Consolidated balance sheet, and statements of operations, stockholders’ equity, and cash flows for the Borrower and its Subsidiaries (i) as of and for the Fiscal Years ended December 31, 2004, December 31, 2005 and December 31, 2006, in each case audited by KPMG, LLP, independent public accountants, and (ii) as of and for the Fiscal Quarters ended March 31, 2007 and June 30, 2007.  Such financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Borrower and its Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes.  Since December 31, 2006, there has been no event, change, condition or development that has had or could reasonably be expected to have, individually or in the aggregate, (i) as of the Closing Date, a Company Material Adverse Effect (as defined in the Acquisition Agreement) or (ii) a Material Adverse Effect.

 

(b)                                 The Borrower has heretofore furnished to the Agents the pro forma financial statements required pursuant to SECTION 4.01(i) hereof.  Such pro forma financial statements have been prepared in good faith by the Borrower, are based on assumptions believed by the Borrower to be reasonable at the time of preparation, accurately reflect in all material respects all adjustments required to be made to give effect to the VH Acquisition and present fairly in all material respects on a pro forma basis the estimated Consolidated financial position of the Borrower and its Subsidiaries as of such date and for the periods reflected therein, assuming that the VH Acquisition had actually occurred at such date; it being understood that such pro forma financial statements are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, that no assurance can be given that any particular financial projections will be realized, that actual results may differ and that such differences may be material.

 

SECTION 3.05                    Properties.

 

(a)                                  Each Loan Party and each of its Subsidiaries has title to, or valid leasehold interests in or right to use, all its real and personal property material to its business, except for defects which would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Schedule 3.05(b) sets forth with respect to each Loan Party and each of its Subsidiaries a list of all registrations and issuances of the Intellectual Property owned by such Loan Party and each of its Subsidiaries and all applications for the registrations or issuance thereof.  Each such registration, issuance and application that is material to the business of such Loan Party or such Subsidiary is subsisting, has not expired or been abandoned or cancelled, and to the knowledge of each Loan Party, is valid and enforceable.  To the knowledge of each Loan Party, no proceeding is pending against any Loan Party challenging the ownership, registration, validity, enforceability or use of any item of Intellectual Property.  Each Loan Party and each of its Subsidiaries owns or is licensed to use, all Intellectual Property used in its business, free and clear of all Liens other than Permitted Encumbrances, except to the extent that the failure to so

 

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own or have the right to use would not reasonably be expected to have a Material Adverse Effect, and each Loan Party’s and each of its Subsidiaries’ conduct of its business and its use of the Intellectual Property owned by such Loan Party or such Subsidiary does not infringe upon, misappropriate, dilute or otherwise violate the rights of any other Person, except for any such infringements, misappropriations, dilutions or other violations that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No proceeding is pending (or to the knowledge of each Loan Party, threatened) in which any Person is alleging that a Loan Party or any of its Subsidiaries is infringing, misappropriating, diluting, or otherwise violating the Intellectual Property rights of any Person in any material respect.  Each Loan Party and each of its Subsidiaries have taken reasonable actions to maintain and protect their material Intellectual Property.

 

(c)                                  Schedule 3.05(c)(i) sets forth the address (including county) of all Real Estate that is owned by the Loan Parties and their Subsidiaries as of the Closing Date.

 

SECTION 3.06                    Litigation and Environmental Matters.

 

(a)                                  Except as set forth on Schedule 3.06(a), there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the actual knowledge of Responsible Officers of a Loan Party, threatened in writing against or affecting any Loan Party or any of its Subsidiaries (i) as to which there is a reasonable expectation of an adverse determination which, if adversely determined, would reasonably be expected individually or in the aggregate to result in a Material Adverse Effect or (ii) that involve any of the Loan Documents, the Senior Initial Loan Documents, the Holdco Initial Loan Documents or the Acquisition Agreement.

 

(b)                                 No Loan Party nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any actual or potential claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability, which, in each case, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

 

(c)                                  No Real Estate or facility owned, operated or leased by any Loan Party or any of its Subsidiaries is listed or, to the knowledge of the Loan Parties, proposed for listing on the National Priorities List promulgated pursuant to CERCLA or similar state “Superfund” list except to the extent that such filings, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

(d)                                 No Lien has been recorded or, to the knowledge of any Loan Party, threatened under any Environmental Law with respect to any Real Estate of the Loan Parties or any of their Subsidiaries.

 

(e)                                  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not require any notification, registration, filing, reporting, disclosure, investigation, remediation or cleanup pursuant to any

 

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Governmental Real Property Disclosure Requirements or any other applicable Environmental Law, except for any requirement the noncompliance with which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(f)                                    The Borrower has made available to the Agents and the Lenders all material documents, studies, and reports in the possession, custody or control of the Borrower and their Subsidiaries concerning compliance with or liability under Environmental Law, including those concerning the actual or suspected existence of Hazardous Material at Real Estate or facilities currently or formerly owned, operated, leased or used by the Borrower or any of its Subsidiaries.

 

(g)                                 Hazardous Materials are not present at or about any of the Real Estate or any other facility currently owned, operated or leased by any Loan Party or any of its Subsidiaries in amount or condition that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.07                    Compliance with Laws and Agreements.  Other than as set forth on Schedule 3.06(a), each Loan Party and each of its Subsidiaries is in compliance with all Applicable Law and all Material Indebtedness, and no event of default has occurred and is continuing thereunder, except in each case where the failure to comply or the existence of a default, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  Without limiting the generality of the foregoing, each Loan Party and each of its Subsidiaries has obtained all permits, licenses and other authorizations which are required with respect to the ownership and operations of its business, except where the failure to obtain such permits, licenses or other authorizations, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Each Loan Party and each of its Subsidiaries is in compliance with all terms and conditions of all such permits, licenses, orders and authorizations, except where the failure to comply with such terms or conditions, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.08                    Investment Company Status.  No Loan Party nor any of its Subsidiaries is an “investment company” as defined in, and subject to regulation under, the Investment Company Act of 1940, as amended.

 

SECTION 3.09                    Taxes.  Each Loan Party and each of its Subsidiaries has timely filed or caused to be filed all tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings, for which such Loan Party or such Subsidiary has set aside on its books adequate reserves in accordance with GAAP, and as to which no Lien has arisen or (b) to the extent that the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10                    ERISA.  Except as would not reasonably be expected to result in a Material Adverse Effect: (i) each of the Loan Parties and their ERISA Affiliates is in compliance with the applicable provisions of ERISA and the provisions of the Code relating to Plans and the regulations and published interpretations thereunder; (ii) the present value of all benefit liabilities under each Plan of each of the Loan Parties and their ERISA Affiliates (based on those assumptions used to fund such Plan) does not exceed the value of the assets of such Plan and the

 

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present value of all accrued benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) does not exceed the value of the assets of all such underfunded Plans; (iii) no ERISA Event has occurred or is reasonably expected to occur; and (iv) none of the Loan Parties or the ERISA Affiliates has received any written notification that any Multiemployer Plan is in reorganization or is in endangered or critical status or has been terminated within the meaning of Title IV of ERISA, or has knowledge that any Multiemployer Plan is reasonably expected to be in reorganization or in endangered or critical status or to be terminated.

 

SECTION 3.11                    Disclosure.  As of the Closing Date, none of the reports, financial statements, certificates or other written information (other than any projections, pro formas, budgets and general market information) concerning any of the Loan Parties or any of their Subsidiaries furnished by or on at the direction of any Loan Party to any Credit Party in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished), when taken as a whole, contains, as of the date furnished, 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 in light of the circumstances under which such statements were made.

 

SECTION 3.12                    Subsidiaries.

 

(a)                                  Schedule 3.12 sets forth the name of, and the ownership interest of each Loan Party and each of its Subsidiaries in, each Subsidiary as of the Closing Date; there is no other Capital Stock of any class outstanding as of the Closing Date.  To the knowledge of the Loan Parties, all such shares of Capital Stock as of the Closing Date are validly issued, fully paid, and, with respect to corporate shares, non-assessable.

 

(b)                                 Except as set forth on Schedule 3.12, no Loan Party nor any of its Subsidiaries is party to any joint venture, general or limited partnership, or limited liability company agreements as of the Closing Date.

 

SECTION 3.13                    Reserved.

 

SECTION 3.14                    Labor Matters.  As of the Closing Date, there are no strikes, lockouts or slowdowns against any Loan Party or any of its Subsidiaries pending or, to the actual knowledge of any Responsible Officer of any Loan Party, threatened, except to the extent that strikes, lockouts or slowdowns would not reasonably be expected to result in a Material Adverse Affect.  The hours worked by and payments made to employees of any of the Loan Parties and any of their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters to the extent that any such violation could reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 3.06(a) or except to the extent that such liability would not reasonably be expected to have a Material Adverse Effect, all payments due from any Loan Party or any Subsidiary thereof, or for which any claim may be made against any Loan Party or any Subsidiary thereof, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued in accordance with GAAP as a liability on the books of such

 

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Loan Party or such Subsidiary.  Except as set forth on Schedule 3.14, as of the Closing Date no Loan Party nor any Subsidiary thereof is a party to or bound by any material collective bargaining agreement, bonus, restricted stock, stock option, or stock appreciation plan or agreement or any similar plan, agreement or arrangement.  As of the Closing Date, there are no representation proceedings pending or, to the actual knowledge of any Responsible Officer of any Loan Party, threatened to be filed with the National Labor Relations Board or other applicable Governmental Authority, and no labor organization or group of employees of any Loan Party or any Subsidiary thereof has made a pending demand in writing for recognition.  As of the Closing Date, the consummation of the transactions contemplated by the Loan Documents will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Loan Party or any Subsidiary thereof is bound to the extent that such would be reasonably expected to result in a Material Adverse Effect.

 

SECTION 3.15                    Security Documents.  The Security Documents create in favor of the Collateral Agent, for the benefit of the Collateral Agent and the other Secured Parties, a legal, valid and enforceable security or mortgage interests in the Collateral (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law), and the Security Documents constitute, or will upon the filing of financing statements or other instruments within the time periods prescribed under Applicable Law and/or the obtaining of “control”, in each case with respect to the relevant Collateral as required under the applicable Uniform Commercial Code or similar legislation of any jurisdiction, to the extent security interests in such Collateral can be perfected by such filings or control, the creation of a fully perfected and opposable first priority Lien on, and security interest in, all right, title and interest of the Loan Parties and their Subsidiaries thereunder in such Collateral (to the extent required under the Security Documents), in each case prior and superior in right to any other Person, except for Permitted Encumbrances (x) having priority by operation of Applicable Law, or (y) in favor of the agent under the ABL Facility on any Revolver Priority Collateral.

 

SECTION 3.16                    Federal Reserve Regulations.

 

(a)                                  No Loan Party nor any Subsidiary thereof is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

 

(b)                                 No part of the proceeds of any Term Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, (i) to buy or carry Margin Stock or to extend credit to others for the purpose of buying or carrying Margin Stock or to refund indebtedness originally incurred for such purpose in violation of Regulation U or X or (ii) for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation U or Regulation X.

 

SECTION 3.17                    Solvency.  The Loan Parties and their Subsidiaries, on a Consolidated basis, are Solvent on and as of the Closing Date.  No transfer of property is being made by any Loan Party or any Subsidiary thereof and no obligation is being incurred by any

 

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Loan Party or any Subsidiary thereof in connection with the transactions contemplated by the VH Acquisition or this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Loan Party or any Subsidiary thereof.

 

SECTION 3.19                    Subordination of Junior Financing.  The Obligations are “Senior Debt”, “Senior Indebtedness”, “Guarantor Senior Debt” or “Senior Secured Financing” (or any comparable term) and “Designated Senior Debt”, “Designated Senior Indebtedness”, “Designated Guaranteed Senior Debt”, or “Designated Senior Secured Financing” (or any comparable term) under, and as defined in, any Junior Financing Documentation.

 

ARTICLE IV

 

Conditions

 

SECTION 4.01                    Closing Date.  The obligation of the Lenders to make Term Loans on the Closing Date is subject to the satisfaction by the Loan Parties or the waiver of each of the following conditions precedent:

 

(a)                                  Subject to SECTION 2.18(b), SECTION 5.16  and SECTION 5.17, the Agents and the Arrangers (or their counsel) shall have received either (i) a counterpart of this Agreement and all other Loan Documents from each party thereto signed on behalf of such party or (ii) written evidence reasonably satisfactory to the Agents and the Arrangers (which may include telecopy transmission or electronic pdf copy of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and all other Loan Documents to which it is a party.

 

(b)                                 The Agents and the Arrangers shall have received a written opinion (addressed to each Agent, the Arrangers and the Lenders and dated the Closing Date) of Kirkland & Ellis LLP, counsel for the Loan Parties, covering such matters relating to the Loan Parties, the Loan Documents or the transactions contemplated thereby as the Agents and the Arrangers shall reasonably request.  The Loan Parties hereby request such counsel to deliver such opinions.

 

(c)                                  The Agents and the Arrangers shall have received Charter Documents and such other documents and certificates as the Agents or their counsel may reasonably request relating to the organization and existence of each Loan Party, the authorization of the transactions contemplated by the Loan Documents and any other legal matters relating to the Loan Parties, the Loan Documents or the transactions contemplated thereby, all in form and substance reasonably satisfactory to the Agents, the Arrangers and their counsel.

 

(d)                                 The Administrative Agent shall have received a notice with respect to such Borrowing as required by Article II.

 

(e)                                  The Agents and the Arrangers shall have received a certificate, reasonably satisfactory in form and substance to the Agents and the Arrangers, certifying that, as of the Closing Date, no Default or Event of Default exists and the Loan Parties and their Subsidiaries, taken as a whole, are Solvent and that immediately after the consummation

 

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of the VH Acquisition, no Default or Event of Default will exist and the Loan Parties and their Subsidiaries, taken as a whole, will be Solvent.

 

(f)                                    The Closing Date Representations and Warranties shall be true and correct in all material respects, provided that any such representation and warranty that is already qualified by materiality or “Material Adverse Effect” shall be true and correct in all respects.

 

(g)                                 No Company Material Adverse Effect (as defined in the Acquisition Agreement) shall have occurred since December 31, 2006.

 

(h)                                 There shall not be any other Indebtedness of the Loan Parties outstanding immediately after the Closing Date other than (i) the Senior Initial Loan Facility Indebtedness, (ii) the ABL Facility, (iii) the Holdco Initial Loan Facility Indebtedness, (iv) this Agreement, (v) Indebtedness permitted to remain outstanding under the Acquisition Agreement (except that all Indebtedness outstanding under the Borrower’s Existing Credit Agreement shall have been paid in full (other than contingent obligations) and all commitments thereunder shall have terminated) and (vi) Permitted Indebtedness.

 

(i)                                     The Administrative Agent shall have received (a) Consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries as of and for the Fiscal Years ended December 31, 2004, December 31, 2005 and December 31, 2006, all prepared in accordance with GAAP and audited and reported on by independent public accountants of recognized national standing, (b) to the extent made available to Holdings, unaudited Consolidated balance sheets and related statements of income, stockholders’ equity and cash flow of the Borrower and its Subsidiaries for each subsequent Fiscal Quarter ended at least forty-five (45) days prior to the Closing Date, prepared in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes and (c) a pro forma Consolidated balance sheet of the Borrower and its Subsidiaries as of the date of the most recent Consolidated balance sheet delivered pursuant to clause (b) above, as adjusted to give effect to the transactions contemplated by the Acquisition Documents and the Loan Documents as if such transactions had occurred on such date and to such other adjustments as shall be agreed among the Sponsors, the Borrower and the Arranger.

 

(j)                                     The Collateral Agent shall have received results of searches or other evidence reasonably satisfactory to the Collateral Agent (in each case dated as of a date reasonably satisfactory to the Collateral Agent) indicating the absence of Liens on the assets of the Loan Parties, except for Permitted Encumbrances and Liens for which termination statements and releases or subordination agreements are being tendered on the Closing Date.

 

(k)                                  The Agents and the Arrangers shall have received, and be reasonably satisfied with, evidence of the Loan Parties’ insurance, together with such endorsements as are required by the Loan Documents.

 

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(l)                                     Holdings and/or the Borrower shall have received a cash and/or roll-over common equity contribution in an aggregate amount equal to at least 25% of the pro forma total Consolidated capitalization of Holdings and its Subsidiaries as of the Closing Date (as adjusted to give effect to the transactions contemplated by the Acquisition Documents and the Loan Documents (including the funding of the Senior Initial Loan Facility, the Holdco Initial Loan Facility, the Term Loan Financing Facility and such equity contribution) as if such transactions had occurred on such date and to such other adjustments as shall be agreed among the Sponsors, Holdings, and the Arranger), to pay a portion of the purchase price under the Acquisition Documents and the Acquisition Charges.

 

(m)                               [Reserved].

 

(n)                                 The Merger shall have been consummated, or substantially simultaneously with the initial Borrowing under this Agreement shall be consummated, in accordance with the Acquisition Agreement, which shall be reasonably satisfactory to the Arranger, and no material provision of the Acquisition Agreement shall have been waived, amended, supplemented or otherwise modified in a manner material and adverse to the Lenders without the consent of the Arranger (not to be unreasonably withheld or delayed).

 

(o)                                 The Collateral Agent shall have received all Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create or perfect in the United States the first priority Liens intended to be created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded to the satisfaction of the Collateral Agent.

 

(p)                                 There shall have been delivered to the Agents and the Arrangers all documentation and other information requested by them that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Act (as defined in SECTION 9.16 below).

 

ARTICLE V

 

Affirmative Covenants

 

Until (i) the Commitments have expired or been terminated and (ii) the principal of and interest on each Term Loan and all fees and other Obligations (other than contingent indemnity obligations with respect to then unasserted claims and the Other Liabilities) shall have been paid in full, each Loan Party covenants and agrees with the Credit Parties that:

 

SECTION 5.01                    Financial Statements and Other Information.  Holdings (and, with respect to clauses (g) through (l) below, the Borrower) will furnish to the Administrative Agent:

 

(a)                                  Within (i) one hundred and five (105) days after the end of the first Fiscal Year of Holdings after the Closing Date and (ii) ninety (90) days after the end of each 

 

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Fiscal Year of Holdings, thereafter, the Consolidated balance sheet and related statements of operations, and Consolidated statements of cash flows as of the end of and for such year for Holdings and its Subsidiaries (including Unrestricted Subsidiaries), setting forth in comparative form, the Consolidated figures for the previous Fiscal Year (such comparisons to the prior Fiscal Year only to commence with the Fiscal Year ended on December 31, 2008) and the figures as set forth in the projections delivered pursuant to SECTION 5.01(e), all audited and reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without a qualification or exception as to the scope of such audit), except for the aforementioned projections, to the effect that such Consolidated financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its Subsidiaries (including Unrestricted Subsidiaries) on a Consolidated basis in accordance with GAAP;

 

(b)                                 Within (i) sixty (60) days after the end of each of the first three (3) Fiscal Quarters of Holdings beginning with the Fiscal Quarter ended March 31, 2008 and (ii) forty-five (45) days after the end of each Fiscal Quarter of Holdings, thereafter, in each case, excluding the last Fiscal Quarter of each Fiscal Year of Holdings, the Consolidated balance sheet and related statements of operations, and Consolidated statements of cash flows for Holdings and its Subsidiaries (including Unrestricted Subsidiaries) as of the end of and for such Fiscal Quarter and the elapsed portion of the Fiscal Year, setting forth in each case, in comparative form the Consolidated figures for the previous Fiscal Year (such comparisons to the prior Fiscal Year only to commence with the Fiscal Quarter ended on March 31, 2009) all such Consolidated figures certified by one of the Borrower’s Financial Officers as fairly presenting in all material respects the financial condition and results of operations of Holdings and its Subsidiaries (including Unrestricted Subsidiaries) on a Consolidated basis in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes;

 

(c)                                  within forty (40) days after the end of each Fiscal Month of Holdings and its Subsidiaries beginning with the Fiscal Month ended October 31, 2007 internally prepared monthly operating financial reports for Holdings and its Subsidiaries (including Unrestricted Subsidiaries), as of the end of and for such Fiscal Month and the elapsed portion of the Fiscal Year, setting forth in each case, in comparative form the Consolidated figures for the previous Fiscal Year (such comparisons to the prior Fiscal Year only to commence with the Fiscal Month ended on October 31, 2008), all certified by one of the Borrower’s Financial Officers as fairly presenting in all material respects the financial condition and results of operations of Holdings and its Subsidiaries (including Unrestricted Subsidiaries) on a Consolidated basis in accordance with GAAP, subject to normal year end audit adjustments and the absence of footnotes;

 

(d)                                 Concurrently with any delivery of financial statements under clause (a) or clause (b) above, a certificate of a Financial Officer of the Borrower substantially in the form of Exhibit E hereto (a “Compliance Certificate”) (i) certifying as to whether a Default or Event of Default has occurred and, if a Default or Event of Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations with respect to Excess 

 

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Cash Flow (in case of any delivery of financial statements under clause (a) above only), for such period, (iii) detailing all Store openings and Store closings during the immediately preceding fiscal period, and stating the aggregate number of the Loan Parties’ and their Subsidiaries’ Stores as of the first day of the current fiscal period, (iv) setting forth the Cure Amount with respect to each exercise of Cure Rights, if any, in such period, (v) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s most recent audited financial statements and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such Compliance Certificate, (vi) listing the names of all Immaterial Subsidiaries (if any) of Holdings and certifying that each Subsidiary set forth on such list qualifies as an Immaterial Subsidiary, provided that such list shall only be required to be produced annually, concurrently with any delivery of financial statements under clause (a) above, with monthly updates to the extent necessary, concurrently with any delivery of financial reports under clause (c) above, and (vii) setting forth all information and calculations necessary for determining compliance by Holdings with SECTION 6.11 as of the last day of the Fiscal Quarter or Fiscal Year for which such financial statements are delivered;

 

(e)                                  Within ninety (90) days after the commencement of each Fiscal Year of the Loan Parties, a detailed, Consolidated budget by month for the applicable Fiscal Year for Holdings and its Subsidiaries, and promptly when available, any revisions to such budget resulting from any Permitted Acquisition, Permitted Disposition or other transaction, the effect of which would reasonably be expected to change the projected Consolidated EBITDA of Holdings and the Restricted Subsidiaries in the subsequent Fiscal Year by 20% or more;

 

(f)                                    [Reserved];

 

(g)                                 Promptly after the same become publicly available, copies of (i) all material periodic and other reports, proxy statements and other materials filed by any Loan Party with the SEC, and (ii) SEC Forms 10K and 10Q for the Borrower and/or Holdings (for so long as the Borrower and/or Holdings is subject to the reporting requirements under the Securities Exchange Act of 1934, as amended);

 

(h)                                 Promptly upon receipt thereof, copies of all material reports submitted to any Loan Party by independent certified public accountants in connection with each annual or special audit of the books of the Loan Parties or any of their Subsidiaries made by such accountants;

 

(i)                                     [Reserved];

 

(j)                                     Concurrently with any delivery of financial statements under clause (a) or (b) above, the related unaudited Consolidated financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such Consolidated financial statements;

 

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(k)                                  Promptly following any reasonable request therefor, on and after the effectiveness of the Pension Act, copies of (i) any documents described in Section 101(k) of ERISA that any Loan Party or any of their ERISA Affiliates have received with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l) of ERISA that the any Loan Party any of their ERISA Affiliates have received with respect to any Plan or Multiemployer Plan; provided, that if the Loan Parties or any of their ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable Plan or Multiemployer Plan, upon reasonable request of the Administrative Agent, the Loan Parties and/or their ERISA Affiliates shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide copies of such documents and notices promptly after receipt thereof; and

 

(l)                                     Promptly following any reasonable request therefor, such other information regarding the operations, business affairs and financial condition of any Loan Party as the Agents or any Lender may reasonably request (other than information which is subject to an attorney-client privilege or would result in a breach of a confidentiality obligation of the Loan Parties to any other Person).

 

Documents required to be delivered pursuant to this SECTION 5.01 (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 on which such documents are posted on the Borrower’s and/or Holdings’ behalf on IntraLinks/ IntraAgency or another relevant website (the “Informational Website”), if any, to which each Lender and the Administrative Agent have unrestricted access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (A) the accommodation provided by the foregoing sentence shall not impair the right of the Administrative Agent, or any Lender through the Administrative Agent, to request and receive from the Borrower physical delivery of specific financial information provided for in this SECTION 5.01 and (B) the Borrower and/or Holdings, as applicable, shall give the Administrative Agent and each Lender (or if applicable, the Administrative Agent shall give each Lender) written or electronic notice each time any information is delivered by posting to the Informational Website.  The Credit Parties shall have no liability to any Loan Party, any Credit Party or any of their respective Affiliates associated with establishing and maintaining the security and confidentiality of the Informational Website and the information posted thereto.

 

SECTION 5.02                    Notices of Material Events.  The Borrower will furnish to the Administrative Agent prompt written notice of the occurrence of any of the following after any Responsible Officer of the Borrower obtains knowledge thereof:

 

(a)                                  A Default or Event of Default, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto;

 

(b)                                 The filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Loan Party or any 

 

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Subsidiary of the Borrower that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  The occurrence of an ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a liability to any Loan Party or any of their respective ERISA Affiliates in excess of $15,000,000; and

 

(d)                                 Any development that results in a Material Adverse Effect;

 

Each notice delivered under SECTION 5.02 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and, if applicable, any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03                    Information Regarding Collateral.  The Borrower will furnish to the Agents prompt written notice of any change in: (a) any Loan Party’s name; (b) the location of any Loan Party’s chief executive office or its principal place of business; (c) any Loan Party’s organizational structure or jurisdiction of incorporation or formation; or (d) any Loan Party’s Federal Taxpayer Identification Number or organizational identification number assigned to it by its state of organization.  The Loan Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings, publications and registrations, have been made (or will be made in a timely fashion) under the Uniform Commercial Code or other Applicable Law that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest to the extent required under the Security Documents (subject only to Permitted Encumbrances) in all the Collateral for its own benefit and the benefit of the other Secured Parties.

 

SECTION 5.04                    Existence; Conduct of Business.  Each Loan Party will, and will cause each Subsidiary of it to, do all things necessary (a) to comply with its Charter Documents in all material respects, and (b) to obtain, preserve, renew and keep in full force and effect (i) its legal existence and (ii) the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks, trade names, domain names, trade secrets and other proprietary and confidential information material to the conduct of its business, except, in the case of clause (a) and (b)(ii) above, to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect; provided, however, that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under SECTION 6.03 or SECTION 6.05.

 

SECTION 5.05                    Payment of Obligations.  Each Loan Party will, and will cause each Subsidiary of it to, pay its Taxes before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings and such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (b) such contest effectively suspends collection of the contested obligation and enforcement of any Lien securing such obligation, or (c) the failure to make payment, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 5.06                    Maintenance of Properties.  Each Loan Party will, and will cause each Subsidiary of it to, keep and maintain all tangible property material to the conduct of its business in substantially the same condition as of the Closing Date (ordinary wear and tear, casualty loss and condemnation excepted), except (a) where the failure to do so would not reasonably be expected to result in a Material Adverse Effect and (b) for Store closings and Permitted Dispositions permitted hereunder.  Each Loan Party will, and will cause each Subsidiary of it to, use commercially reasonable efforts to prosecute, maintain, and enforce the Intellectual Property, except to the extent such Intellectual Property is no longer used or deemed by such Loan Party or such Subsidiary in its reasonable business judgment to be materially useful or desirable in the conduct of the business of the Loan Parties and their Subsidiaries.

 

SECTION 5.07                    Insurance.

 

(a)                                  Each Loan Party shall, and shall cause each Subsidiary of it to, (i) maintain insurance with financially sound and reputable insurers (or, to the extent consistent with business practices in effect on the Closing Date, a program of self-insurance) on such of its property and in at least such amounts and against at least such risks as is consistent with business practices in effect on the Closing Date or as otherwise determined by the Responsible Officers of the Loan Parties acting reasonably in their business judgment, including public liability insurance against claims for personal injury or death occurring upon, in or about or in connection with the use of any properties owned, occupied or controlled by it (including the insurance required pursuant to the Security Documents); (ii) maintain such other insurance as may be required by law; and (iii) furnish to the Agents, upon written request, full information as to the insurance carried.

 

(b)                                 Fire and extended coverage policies maintained with respect to any Collateral shall be endorsed or otherwise amended to include (i) a non-contributing mortgage clause (regarding improvements to real property) and a lenders’ loss payable clause (regarding personal property), in form and substance reasonably satisfactory to the Agents, which endorsements or amendments shall provide that the insurer shall pay all proceeds otherwise payable to any of the Loan Parties or their Subsidiaries under the policies directly to the Administrative Agent, (ii) a provision to the effect that none of the Loan Parties, their Subsidiaries, Credit Parties (in their capacity as such) or any other Affiliate of a Loan Party shall be a co-insurer (the foregoing not being deemed to limit the amount of self-insured retention or deductibles under such policies, which self-insured retention or deductibles shall be consistent with business practices in effect on the Closing Date or as otherwise determined by the Responsible Officers of the Loan Parties acting reasonably in their business judgment), and (iii) such other provisions as the Administrative Agent may reasonably require from time to time to protect the interests of the Credit Parties. Commercial general liability policies shall be endorsed to name the Administrative Agent as an additional insured.  Business interruption policies shall name the Administrative Agent as a loss payee and shall be endorsed or amended to include (i) a provision that, after the occurrence and during the continuance of an Event of Default, the insurer shall pay all proceeds of such business interruption policies otherwise payable to any of the Loan Parties or their Subsidiaries under the policies directly to the Administrative Agent, (ii) a provision to the effect that none of the Loan Parties, their Subsidiaries, Credit Parties (in their capacity as such) or any other Affiliate of a Loan Party shall be a co-insurer and (iii) such other provisions to the endorsement as the Administrative Agent may reasonably require from time to time to protect the interests of the Credit Parties. Each such casualty or liability policy referred to in this 

 

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SECTION 5.07(b) shall also provide that it shall not be canceled, modified in any manner that would cause this SECTION 5.07 to be violated, or not renewed (i) by reason of nonpayment of premium except upon not less than ten (10) days’ prior written notice thereof by the insurer to the Administrative Agent (giving the Administrative Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason except upon not less than ten (10) days’ prior written notice thereof by the insurer to the Administrative Agent. The Borrower shall deliver to the Administrative Agent, prior to the cancellation, modification or non-renewal of any such policy of insurance, a copy of a renewal or replacement insurance binder or certificate (or other evidence of renewal of a policy previously delivered to the Administrative Agent, including an insurance binder) together with evidence reasonably satisfactory to the Administrative Agent of payment of the premium therefor.

 

(c)                                  With respect to each Real Estate for which a Mortgage is required to be delivered under the Loan Documents, obtain flood insurance in such total amounts as the Administrative Agent may from time to time reasonably require, if at any time the area in which any improvements located on such Real Estate is designated as a “flood hazard area” in any Flood Insurance Rate Map established by the Federal Emergency Management Agency (or any successor agency), and otherwise comply with the National Flood Insurance Program set forth in the Flood Disaster Protection Act of 1973, as amended from time to time.

 

SECTION 5.08                    Books and Records; Inspection and Audit Rights; Accountants.

 

(a)                                  Each Loan Party will, and will cause each Subsidiary of it to, keep proper books of record and account in accordance with GAAP and in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  Each Loan Party will, and will cause each Subsidiary of it to, permit any representatives designated by any Agent, upon reasonable prior written notice and during regular business hours, to visit and inspect its properties, to discuss its affairs, finances and condition with its officers and to examine and make extracts from its books and records, all at the reasonable expense of the Loan Parties at such reasonable times and as often as reasonably requested; provided that so long as no Event of Default shall have occurred and be continuing, the Loan Parties shall pay the reasonable out-of-pocket expenses for only one such visit inspection in any calendar year.

 

(b)                                 The Loan Parties shall, and shall cause each Subsidiary of it to, at all times retain independent certified public accountants of national standing and shall instruct such accountants to cooperate with, and be available to, the Agents or their representatives to discuss the annual audited statements, the Loan Parties’ and their Subsidiaries’ financial performance, financial condition, operating results, controls, and such other matters, within the scope of the retention of such accountants for such audited statements, as may be raised by the Agents; subject, however, if requested by such accountants, to the execution of an access agreement by the Agents and such accountants in form reasonably satisfactory to each of them; provided that a representative of the Borrower shall be given the opportunity to be present all such discussions.

 

(c)                      At its election, upon either (i) its reasonable belief that any Loan Party or any Subsidiary thereof has breached any representation, warranty or covenant herein relating to environmental matters, which breach could reasonably be expected to have a Material Adverse Effect, or (ii) in connection with the enforcement of remedies against any Real Estate after the 

 

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occurrence and during the continuance of an Event of Default, the Collateral Agent or any Lender may request in writing that the Loan Party, at its own cost and expense, retain an independent engineer or environmental consultant to conduct an environmental assessment or other appropriate review of reasonable scope (but, prior to the occurrence of any such Event of Default, only with respect to the subject matter of such breach), including, as relevant of the condition of any Real Estate or facility of any Loan Party or any Subsidiary thereof and/or such Loan Party’s or such Subsidiary’s compliance with Environmental Law.  If the Loan Party fails to conduct such assessment or review within 30 days of receipt of the request, the Collateral Agent or Lender may retain an independent engineer or environmental consultant to conduct an environmental assessment or other appropriate review.  Each Loan Party shall, and shall cause each Subsidiary of it to, cooperate in the performance of any such environmental assessment or review and permit any such engineer or consultant designated by the Collateral Agent or such Lender to have full access to each property or facility at reasonable times and after reasonable notice to the Borrower of the plans to conduct such an environmental assessment or review.  Environmental assessments or reviews conducted under this paragraph shall be limited to visual inspections of the Real Estate or facility, interviews with representatives of the Loan Parties or their Subsidiaries or facility personnel, and review of applicable records and documents pertaining to the condition of the property or facility, its compliance with Environmental Law and any potential Environmental Liabilities, in each case prior to the occurrence and during the continuance of an Event of Default, to the extent relevant to the subject matter of such breach.  All environmental assessments or reviews conducted pursuant to this paragraph shall be at the Loan Parties’ sole cost and expense.

 

SECTION 5.09                    Reserved.

 

SECTION 5.10                    Compliance with Laws.  Each Loan Party will, and will cause each Subsidiary of it to, comply with all Applicable Laws and the orders of any Governmental Authority except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  Except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, each Loan Party shall, and shall cause each Subsidiary of it to: (a) conduct its operations and keep and maintain its Real Estate in compliance with all Environmental Laws; and (b) implement any and all investigation, remediation, removal and response actions that are appropriate or necessary to materially comply with Environmental Laws pertaining to the presence, generation, treatment, storage, use, disposal, transportation or Release of any Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate.  The Loan Parties shall, and shall cause each Subsidiary of it to, notify the Administrative Agent promptly after such Person becomes aware of any violation of or non-compliance with any Environmental Laws or any Release on, at, in, under, above, to, from or about any Real Estate or any property subject to a Lease that is reasonably likely to result in Environmental Liabilities in excess of $1,000,000 individually or in the aggregate; and promptly forward to Administrative Agent a copy of any order, notice, request for information or any communication or report received by such Person in connection with any such violation or Release or any other matter that could reasonably be expected to result in Environmental Liabilities in excess of $1,000,000 individually or in the aggregate in each case whether or not any Governmental Authority has taken or threatened any action in connection with any such violation, Release or other matter.

 

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SECTION 5.11                    Use of Proceeds.  The proceeds of Term Loans made hereunder will be used only (a) to directly or indirectly finance the VH Acquisition, (b) to repay in full all amounts, if any, due or owing under the Existing Credit Agreement and to repay other Indebtedness of the Borrower and its Subsidiaries, in each case, on the Closing Date, and (c) to pay the Acquisition Charges.  No part of the proceeds of any Term Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the Board, including Regulations U and X.

 

SECTION 5.12                    Additional Subsidiaries.  If any Loan Party shall form or directly acquire all or substantially all of the outstanding Capital Stock of a Subsidiary that is not an Excluded Subsidiary after the Closing Date, the Borrower will notify the Agents thereof and if such Subsidiary is not an Excluded Subsidiary, such Loan Party will cause such Subsidiary to enter into a Joinder Agreement and to become a Loan Party hereunder and under each applicable Security Document in the manner provided therein within ten (10) Business Days after such Subsidiary is formed or acquired and promptly take such actions to create and perfect Liens on such Subsidiary’s assets to secure the Obligations as the Agents or the Required Lenders shall reasonably request; provided that Mortgages shall only be required in respect of Real Estate having a fair market value at the time of the acquisition of such Subsidiary exceeding $1,000,000.  If any shares of Capital Stock or Indebtedness of any Subsidiary are owned by or on behalf of any Loan Party, such Loan Party will cause such shares and promissory notes evidencing such Indebtedness to be pledged to secure the Obligations within ten (10) Business Days after such Subsidiary is formed or such shares of Capital Stock or Indebtedness are acquired (except that, (i) if such Subsidiary is a Foreign Subsidiary, shares of Capital Stock of such Subsidiary to be pledged shall be limited to 65% of the outstanding shares of Capital Stock of such Subsidiary and (ii) if such Subsidiary is an Immaterial Subsidiary or an Unrestricted Subsidiary, no shares of Capital Stock of such Subsidiary are required to be pledged).

 

SECTION 5.13                    Further Assurances.

 

(a)                                  Each Loan Party will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, Mortgages, deeds of trust and other documents), that may be required under any Applicable Law, or which any Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties.

 

(b)                                 If any Real Estate having a fair market value in excess of $1,000,000 is acquired by any Loan Party after the Closing Date (other than Real Estate constituting Collateral under the Security Agreement that becomes subject to a Lien in favor of the Collateral Agent upon acquisition thereof), the Borrower will notify the Collateral Agent, and, if reasonably requested by the Collateral Agent, the Borrower will cause such Real Estate to be subjected to a Lien securing the Obligations and will take, and cause the other Loan Parties to take, such actions as shall be necessary to grant and perfect such Liens, including actions described in SECTION 4.01(b) and (o), paragraph (a) of this SECTION 5.13 and SECTION 5.16, all at the expense of the Loan Parties.

 

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(c)                                  Each Loan Party shall deliver to the Collateral Agent any and all certificates representing Capital Stock (to the extent certificated) that are required to be pledged pursuant to the Pledge Agreement, accompanied by undated stock powers or other appropriate instruments of transfer executed in blank (or any other documents customary under local law) and  instruments evidencing the intercompany Indebtedness held by such Loan Party and required to be pledged pursuant to the Pledge Agreement, indorsed in blank to the Collateral Agent.

 

SECTION 5.14                    Corporate Separateness.

 

(a)                                  Each Loan Party shall satisfy, and cause each of its Subsidiaries (including Unrestricted Subsidiaries) to satisfy, customary corporate and other formalities, including, as applicable, the holding of regular board of directors’ and shareholders’ meetings or action by directors or shareholders without a meeting, in each case, to the extent required by law and the maintenance of corporate offices and records.

 

(b)                                 Each Loan Party shall ensure that (i) no payment is made by it or any of its Restricted Subsidiaries to a creditor of any Unrestricted Subsidiary in respect of any liability of any Unrestricted Subsidiary, except as permitted under SECTION 6.04, (ii) no bank account of any Unrestricted Subsidiary shall be commingled with any bank account of any Loan Party or any direct or indirect parent of any Loan Party, and (iii) any financial statements distributed to any creditors of any Unrestricted Subsidiary shall clearly establish or indicate the corporate separateness of such Unrestricted Subsidiary from any Loan Party, any of its Restricted Subsidiaries or any direct or indirect parent of any Loan Party.

 

SECTION 5.15                    Designation of Subsidiaries.  The board of directors of the Borrower may at any time designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary, in each case pursuant and subject to the provisions in the definition of “Unrestricted Subsidiary”.  Any such designation by the Borrower shall be notified by the Borrower to the Administrative Agent by promptly delivering to the Administrative Agent a copy of any applicable board resolution giving effect to such designation and a certificate by a Responsible Officer of the Borrower certifying that such designation complied with such provisions.  Notwithstanding the foregoing, as of the Closing Date, all of the Subsidiaries of the Borrower shall be Restricted Subsidiaries.

 

SECTION 5.16                    Mortgages.  Prior to, on or within sixty (60) days after the Closing Date (which period may be extended by the Administrative Agent acting in its reasonable discretion), each Loan Party shall have delivered to the Collateral Agent: (a) fully executed Mortgages in respect of each of the Real Estate properties set forth on Schedule 5.16(a), which Mortgages shall be recorded promptly to create valid and enforceable liens on each such Real Estate property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for its benefit and for the benefit of the Secured Parties, (b) title insurance in form, scope and amount reasonably satisfactory in all respects to the Collateral Agent and a flood insurance policy if required by the Flood Disaster Protection Act of 1973; (c) written opinions (addressed to each Agent, the Arranger and the Lenders) of applicable local counsel with respect to the enforceability and perfection of the Mortgages referred to in clause (a) above and any related fixture filings in form and substance reasonably satisfactory to the Collateral Agent; and (d) for each Real Estate property listed on Schedule 5.16(a), (i) new 

 

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ALTA/ACSM surveys reasonably satisfactory to and certified to the Collateral Agent (including such additional Table A items as the Collateral Agent may reasonably request), dated not more than thirty (30) days prior to the Closing Date or (ii) ALTA/ACSM surveys dated within four (4) years of the Closing Date reasonably satisfactory to the Collateral Agent together with an affidavit of “No Change”, provided that the title company provides full title coverage for such ALTA/ACSM surveys, including the issuance of all survey-dependent title endorsements (to the extent available in the state in which the applicable Real Estate is located).

 

SECTION 5.17                    Post-Closing Matters

 

(a)                                  To the extent the Loan Parties shall have used commercially reasonable efforts to deliver to the Agents the deliverables set forth on Schedule 5.17 and yet are unable to provide such deliverables on or prior to the Closing Date (as determined by the Administrative Agent in its reasonable discretion), the Loan Parties shall deliver such deliverables in each case within the time limits set forth on Schedule 5.17 or such longer period as determined by the Administrative Agent in its sole discretion.

 

(b)                                 Within thirty (30) days after the Closing Date, or such longer period as determined by the Administrative Agent in its sole discretion, the Borrower shall liquidate, dissolve or wind up American Student Rental, Inc., Musician’s Choice, Inc. and GC Stores Canada, Inc.  Prior to and up to the date of the liquidation, dissolution or winding up of the aforementioned entities, such entities shall not engage in any business or activity except as ancillary or incidental to such liquidation or dissolution.

 

(c)                                  Within two (2) Business Days after the Closing Date, Holdings and/or the Borrower shall have received a cash common equity contribution in an amount that, in the aggregate with the cash and roll-over common equity contributions made to Holdings and/or the Borrower on the Closing Date, shall be equal to at least $625,000,000.

 

ARTICLE VI

 

Negative Covenants

 

Until (i) the Commitments have expired or been terminated and (ii) the principal of and interest on each Term Loan and all fees and other Obligations (other than contingent indemnity obligations with respect to then unasserted claims and the Other Liabilities) shall have been paid in full, each Loan Party covenants and agrees with the Credit Parties that:

 

SECTION 6.01                    Indebtedness and Other Obligations.  No Loan Party will, nor will it permit any Subsidiary of it to, create, incur, assume or permit to exist any Indebtedness, except Permitted Indebtedness.

 

SECTION 6.02                    Liens.  No Loan Party will, nor will it permit any Subsidiary of it to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except Permitted Encumbrances.

 

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SECTION 6.03                    Fundamental Changes.

 

(a)                                  No Loan Party will, nor will it permit any Subsidiary of it to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing or would arise therefrom, (i) any Subsidiary may liquidate, dissolve, consolidate, or merge into a Loan Party in a transaction in which a Loan Party is the surviving corporation, (ii) any Subsidiary that is not a Loan Party may liquidate, dissolve, consolidate, or merge into any Subsidiary that is not a Loan Party, (iii) any Loan Party may merge with or into any other Loan Party, and (iv) Permitted Acquisitions and transactions permitted pursuant to SECTION 6.05 may be consummated in the form of a merger or consolidation, as long as, in the event of a Permitted Acquisition, a Loan Party is the surviving Person, provided that any such merger or consolidation involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by SECTION 6.04, and further provided that any such merger or consolidation involving the Borrower shall not be permitted unless the Borrower is the surviving Person; and, further provided, that any such merger or consolidation involving Holdings shall not be permitted unless Holdings is the surviving Person.

 

(b)                                 No Loan Party will, nor will it permit any Subsidiary of it to, engage, to any material extent, in any business other than businesses of the type conducted by such Loan Party or such Subsidiary, as applicable, on the date of execution of this Agreement and businesses reasonably related thereto and those supportive, complementary or ancillary thereto.

 

(c)                                  Holdings shall not, nor shall it permit any of its Subsidiaries directly, or indirectly owning Capital Stock of the Borrower to, (i) engage or commit to engage in any business or activity other than (A) the ownership of all the outstanding shares of Capital Stock of the Borrower and activities incidental thereto and (B) the ownership of all the outstanding shares of Capital Stock of other entities created or acquired in a transaction otherwise permitted hereunder and activities incidental thereto, (ii) own or acquire any assets (other than all of the outstanding shares of Capital Stock of the Borrower, the cash proceeds of any Restricted Payments permitted by SECTION 6.06 or all of the outstanding shares of Capital Stock of any other entity created or acquired in a transaction otherwise permitted hereunder), or (iii) incur any Indebtedness or other liabilities or financial obligations (other than obligations constituting Permitted Indebtedness under clauses (a), (c), (i), (k), (m), (o), (t) or (u) of the definition thereof or, with respect to such types of Permitted Indebtedness, constituting Permitted Indebtedness under clause (w) of the definition thereof to the extent permitted thereunder, nonconsensual obligations imposed by operation of law and obligations reasonably incurred in connection with its maintenance of its existence).

 

SECTION 6.04                    Investments, Unrestricted Subsidiaries.

 

(a)                                  No Loan Party will, nor will it permit any Subsidiary of it to, make or permit to exist any Investment, except Permitted Investments.

 

(b)                                 The Borrower will not permit (i) any Restricted Subsidiary to be designated as or remain an Unrestricted Subsidiary or (ii) any Unrestricted Subsidiary to be designated as a 

 

87

 

Restricted Subsidiary, except in each case in accordance with the provisions of the definition of “Unrestricted Subsidiary”.  The Borrower will not permit any Restricted Subsidiary to be designated an Unrestricted Subsidiary if such Subsidiary had been designated as an Unrestricted Subsidiary at any time during the term of this Agreement.

 

SECTION 6.05                    Asset Sales.  No Loan Party will, nor will it permit any Subsidiary of it to, sell, transfer, lease (as lessor), license (as licensor), abandon or otherwise voluntarily dispose of any asset, including any Capital Stock of another Person, except sales of Inventory and the use of cash or cash equivalents in the ordinary course of business, transactions permitted by SECTION 6.03 and Permitted Dispositions and the making of Permitted Investments (to the extent such Investment would involve a sale, transfer or disposition of any assets).

 

SECTION 6.06                    Restricted Payments; Certain Payments of Indebtedness.

 

(a)                                  No Loan Party will, nor will it permit any Subsidiary of it to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that

 

(i)                                     Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other distributions of property to a Loan Party; provided that any such Restricted Payments made to Holdings under this clause (i) shall be used only (A)(x) to pay general corporate overhead and similar expenses incurred by Holdings in the ordinary course of business, or the amount of any indemnification claims made by any director or officer of Holdings, (y) to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings and (z) to pay taxes that are due and payable by Holdings as the parent of a consolidated group that includes Holdings and its Subsidiaries (including Unrestricted Subsidiaries); (B) so long as (1) no Event of Default has occurred and is continuing or would arise therefrom and (2) the Borrower is not prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to Holdings, to make payments in connection with the repurchase of Capital Stock of Holdings or any Subsidiary of it (including payments of principal and interest in respect of notes issued by Holdings to stockholders in connection therewith), provided that such payments are otherwise permitted under this SECTION 6.06; (C) so long as (1) no Event of Default under SECTION 7.01(a), SECTION 7.01(b) (but only with respect to clause (i) thereof as it relates to non-payment of interest), SECTION 7.01(h) or SECTION 7.01(i) has occurred and is continuing or would arise therefrom and (2) the Borrower is not prohibited under the Senior Initial Loan Facility or the ABL Facility from making such payments to Holdings,  to pay interest as and when due in respect of the Holdco Initial Loan Facility Indebtedness; and (D) to partially redeem or prepay Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon;

 

(ii)                                  The Loan Parties and their Subsidiaries may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, to the extent permitted under SECTION 6.07;

 

(iii)                               The Loan Parties and their Subsidiaries may make Restricted Payments on the Closing Date to consummate the VH Acquisition;

 

88

 

(iv)                              The Loan Parties and their Subsidiaries may make Restricted Payments consisting of Permitted Dispositions of the type described, and subject to the limitations contained, in the definition thereof;

 

(v)                                 The Loan Parties and their Subsidiaries may make Restricted Payments constituting repurchases of Capital Stock of Holdings or any Subsidiary of it in connection with the exercise of stock options or warrants if such equity interests represent a portion of the exercise price of such option or warrants, provided that Restricted Payments made pursuant to this clause (v) shall not exceed $2,000,000 in any Fiscal Year of the Borrower;

 

(vi)                              Holdings may make Restricted Payments constituting other repurchases of Capital Stock of Holdings or any Subsidiary of it, provided that such payments, in the aggregate with any payments made pursuant to clause (vii) below, shall not exceed $3,000,000 in any Fiscal Year (and provided further that (A) in the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the next succeeding Fiscal Year of Holdings, (B) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (A) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (C) the amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (A) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year);

 

(vii)                           Holdings may make payments of principal and interest in respect of notes issued to stockholders in connection with the repurchase of shares of Capital Stock of Holdings or any Subsidiary of it, provided that such payments, in the aggregate with any payments made pursuant to clause (vi) above, shall not exceed $3,000,000 in any Fiscal Year, (and provided further that, (A) in the event the entire $3,000,000 is not utilized in any Fiscal Year under clauses (vi) and (vii) of this SECTION 6.06, one hundred percent (100%) of such unutilized portion may be carried forward to the next succeeding Fiscal Year of Holdings, (B) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (A) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (C) the amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (A) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year; and

 

(viii)                        so long as no Event of Default shall have occurred and be continuing, the Loan Parties and their Subsidiaries may in each Fiscal Year make Restricted Payments in an aggregate amount not exceeding the amount set forth below for such Fiscal Year:

 

	
Fiscal Year
    	
 
    	
Restricted Payment Amount
    	
 
    
	
2007
    	
 
    	
$
    	
1,000,000
    	
 
    
					

 

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Fiscal Year
    	
 
    	
Restricted Payment Amount
    	
 
    
	
2008
    	
 
    	
$
    	
5,000,000
    	
 
    
	
2009
    	
 
    	
$
    	
10,000,000
    	
 
    
	
2010
    	
 
    	
$
    	
15,000,000
    	
 
    
	
2011
    	
 
    	
$
    	
20,000,000
    	
 
    
	
2012
    	
 
    	
$
    	
20,000,000
    	
 
    
	
2013
    	
 
    	
$
    	
20,000,000
    	
 
    

 

; provided, that (a) to the extent the capacity to make Restricted Payments pursuant to this clause (vi) for any Fiscal Year exceeds the aggregate amount of Restricted Payments made during such Fiscal Year, such excess capacity may be carried over to the next succeeding Fiscal Year, (b) Restricted Payments made pursuant to this clause during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to clause (a) above and, second, in respect of amounts permitted for such Fiscal Year as provided above and (c) the amount of excess capacity that may be carried over from a prior Fiscal Year pursuant to clause (a) above shall be calculated without taking into account any amounts carried over to such prior Fiscal Year.

 

(b)                                 No Loan Party will, nor will it permit any Subsidiary of it to, make or agree to pay or make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Specified Indebtedness of the type described in clauses (a)(i), clause (a)(ii) or, with respect to the types of Specified Indebtedness described in clauses (a)(i) and (a)(ii), clause (b) of the definition of Specified Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Specified Indebtedness, except

 

(i)                                     payments in Capital Stock (as long as no Change in Control would result therefrom) and payments of interest in-kind of the Loan Parties and their Subsidiaries;

 

(ii)                                  (A) scheduled payments of principal and interest as and when due and (B) as long as no Specified Default then exists or would arise therefrom, prepayments in whole or in part of the Senior Initial Loan Facility Indebtedness and the Holdco Initial Loan Facility Indebtedness in a principal amount not exceeding $10,000,000 in the aggregate in any Fiscal Year and not exceeding $25,000,000 in the aggregate since the Closing Date;

 

(iii)                               prepayment in whole or in part of the Senior Initial Loan Facility, the Holdco Initial Loan Facility or the Term Loan Financing Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment;

 

(iv)                              (A) mandatory prepayments by the Lead Borrower as required under the Senior Initial Loan Agreement as in effect on the Closing Date or any Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture, so long as such Senior Initial Loan Agreement, Senior Note Indenture or supplemental indenture

 

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contains terms regarding mandatory prepayments no less favorable to the obligors thereunder than the Senior Initial Loan Agreement in effect on the Closing Date and (B) mandatory prepayments by Holdings as required under the Holdco Initial Loan Agreement as in effect on the Closing Date or any Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture, so long as such Holdco Initial Loan Agreement, Holdco Note Indenture or supplemental indenture contains terms regarding mandatory prepayments no less favorable to Holdings than the Holdco Initial Loan Agreement in effect on the Closing Date;

 

(v)                                 partial redemption or prepayment by Holdings of the Holdco Initial Loan Facility Indebtedness to the extent necessary to make an AHYDO “catch-up” payment thereon;

 

(vi)                              any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Senior Initial Loan Facility Indebtedness (including, without limitation, Senior Initial Loans and any Senior Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of the Borrower incurred in compliance with Section 6.01; and

 

(vii)                           any repayment, purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Indebtedness constituting Holdco Initial Loan Facility Indebtedness (including, without limitation, Holdco Initial Loans and any Holdco Notes) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Indebtedness of Holdings incurred in compliance with Sections 6.01 and 6.03.

 

SECTION 6.07                    Transactions with Affiliates.  No Loan Party will, nor will it permit any Subsidiary of it to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates involving aggregate payments or consideration in excess of $1,000,000, except (a) transactions in the ordinary course of business that are at prices and on terms and conditions, taken as a whole, not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Loan Parties and/or their Subsidiaries not otherwise prohibited hereunder, (c) payments due pursuant to the Advisory Agreement on account of Advisory Fees consisting of (i) fees payable on the Closing Date or (ii) payments (but not prepayments) of annual Advisory Fees provided that such payments may not be made if an Event of Default under SECTION 7.01(a), (b), (d) (but only with respect to SECTION 6.11), (h) or (i) has occurred and is continuing or would arise therefrom, and provided further that such fees not paid shall accrue and be paid when the applicable Event of Default has been cured or waived and no additional Event of Default under SECTION 7.01(a), (b), (d) (but only with respect to SECTION 6.11), (h) or (i) has occurred and is continuing or would arise as a result of such payment; (d) payments of indemnities and reasonable expense reimbursements under the Advisory Agreement; (e) payment of reasonable compensation to officers and employees for services actually rendered to any such Loan Party or any of its Subsidiaries; (f) payment of director’s fees, expenses and indemnities; (g) stock option, stock incentive, equity, bonus and other compensation plans of the Loan Parties 

 

91

 

and their Subsidiaries; (h) employment contracts with officers and management of the Loan Parties and their Subsidiaries; (i) the repurchase of equity interests from officers, directors and employees to the extent specifically permitted under this Agreement; (j) advances and loans to officers and employees of the Loan Parties and their Subsidiaries to the extent specifically permitted under this Agreement; (k) Investments consisting of notes from officers, directors and employees to purchase equity interests to the extent specifically permitted under this Agreement; (l) payments pursuant to the tax sharing agreements among the Loan Parties and their Subsidiaries to the extent attributable to the ownership or operations of the Holdings and its Subsidiaries; (m) the issuance of equity interests to the management of Holdings in connection with the VH Acquisition; (n) other transactions with Affiliates specifically permitted under SECTION 6.01 in connection with clause (c)(i), (ii) and (iv), (l) and (p) of the definition of “Permitted Indebtedness,” SECTION 6.04(b) or SECTION 6.04(a) in connection with clause (g)(i) and (ii), (j) and (n) of the definition of “Permitted Investments,” SECTION 6.05 in connection with clause (q) of the definition of “Permitted Dispositions” or SECTION 6.06(a)(i), (a)(v) through (a)(viii) or SECTION 6.06(b)(v); and (o) as set forth on Schedule 6.07.

 

SECTION 6.08                    Restrictive Agreements.  No Loan Party will, nor will it permit any Subsidiary of it to, directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or such Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets in favor of the Collateral Agent or (b) the ability of any Subsidiary thereof to pay dividends or other distributions with respect to any shares of its Capital Stock to such Loan Party or such Subsidiary or to make or repay loans or advances to a Loan Party or to guarantee Indebtedness of the Loan Parties, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Applicable Law, by any Loan Document, by any documents in existence on the Closing Date or under any documents relating to joint ventures of any Loan Party or any Subsidiary to the extent that such joint ventures are not prohibited hereunder, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of assets or equity permitted hereunder by a Loan Party or a Subsidiary pending such sale, provided such restrictions and conditions apply only to the assets of the Loan Party or Subsidiary that are to be sold and such sale is permitted hereunder, (iii) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iv) clause (a) of the foregoing shall not apply to customary provisions in contracts or leases restricting the assignment or subleasing or sublicensing thereof, (v) the foregoing shall not apply to any agreement related to the Specified Indebtedness, (vi) clause (a) of the foregoing shall not apply to licenses or contracts which by the terms of such licenses and contracts prohibit the granting of Liens on the rights contained therein, and (vii) the foregoing shall not apply to any restrictions in existence prior to the time any such Person became a Subsidiary and not created in contemplation of any such acquisition.

 

SECTION 6.09                    Amendment of Material Documents.  No Loan Party will, nor will it permit any Subsidiary of it to, amend, modify or waive any of its rights governing any Specified Indebtedness in any way to (i) increase the rate of or change the time for payment of interest on any Specified Indebtedness, (ii) advance the final maturity date of or shorten the Weighted Average Life to Maturity of any Specified Indebtedness or (iii) alter the redemption 

 

92

 

provisions or the price or terms at which any Loan Party is required to offer to purchase any Specified Indebtedness in any manner materially adverse to the Lenders.

 

SECTION 6.10                    Fiscal Year.  No Loan Party will, nor will it permit any Subsidiary of it to, change its Fiscal Year without the prior written consent of the Administrative Agent.

 

SECTION 6.11                    Financial Performance Covenants.

 

(a)                                  Consolidated Secured Net Leverage Ratio.  Holdings shall not permit the Consolidated Secured Net Leverage Ratio on the last day of any Fiscal Quarter during any period set forth below to be greater than the ratio set forth opposite such period below:

 

	
Period
    	
 
    	
Ratio
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
October 1, 2008 through March 31, 2009 
    	
 
    	
4.80x
    	
 
    
	
April 1, 2009 through September 30, 2009 
    	
 
    	
4.50x
    	
 
    
	
October 1, 2009 through March 31, 2010 
    	
 
    	
3.90x
    	
 
    
	
April 1, 2010 through September 30, 2010 
    	
 
    	
3.50x
    	
 
    
	
October 1, 2010 through March 31, 2011 
    	
 
    	
3.00x
    	
 
    
	
Thereafter 
    	
 
    	
2.75x
    	
 
    

 

(b)                                 Capital Expenditures.  Holdings shall not and shall not permit any of its Subsidiaries to, make or commit to make any Capital Expenditure that would cause the aggregate amount of such Capital Expenditures made by the Loan Parties in any Fiscal Year of Holdings to exceed the amount set forth with respect to such Fiscal Year in the table set forth below (such amount, the “Permitted Capital Expenditure Amount”); provided that to the extent that Capital Expenditures during any Fiscal Year are less than the Permitted Capital Expenditure Amount in respect of such Fiscal Year, (x) up to 100% of any such unused amount may be carried over for expenditure in the next succeeding Fiscal Year and (y) Capital Expenditures made pursuant to this Section during any Fiscal Year shall be deemed made, first, in respect of amounts carried over from the prior Fiscal Year pursuant to subclause (x) above, and, second, in respect of the Permitted Capital Expenditure Amount in respect of such Fiscal Year.

 

	
Period
    	
 
    	
Permitted Capital
   Expenditure
   Amount
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
January 1, 2008 through December 31, 2008 
    	
 
    	
$
    	
57,500,000
    	
 
    
	
January 1, 2009 through December 31, 2009 
    	
 
    	
$
    	
57,500,000
    	
 
    
	
January 1, 2010 through December 31, 2010 
    	
 
    	
$
    	
60,000,000
    	
 
    
	
January 1, 2011 through December 31, 2011 
    	
 
    	
$
    	
65,000,000
    	
 
    
	
January 1, 2012 through December 31, 2012 
    	
 
    	
$
    	
70,000,000
    	
 
    
	
January 1, 2013 through December 31, 2013 
    	
 
    	
$
    	
70,000,000
    	
 
    
	
Thereafter 
    	
 
    	
$
    	
70,000,000
    	
 
    

 

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ARTICLE VII

 

Events of Default

 

SECTION 7.01                    Events of Default.  If any of the following events (“Events of Default”) shall occur:

 

(a)                                  Any Loan Party shall fail to pay any principal of any Term Loan, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration or otherwise;

 

(b)                                 Any Loan Party shall fail to pay (i) any interest on or fee with respect to any Term Loan as the same shall become due and payable under this Agreement or any other Loan Document and such failure continues for five (5) Business Days; or (ii) any other amount (other than an amount referred to in SECTION 7.01(a) or Other Liabilities) as the same shall become due and payable under this Agreement or any other Loan Document and such failure continues for thirty (30) days;

 

(c)                                  Any representation or warranty made or deemed made by or on behalf of any Loan Party in, or in connection with, any Loan Document or any amendment or modification thereof or waiver thereunder (including, without limitation, in any certificate of a Financial Officer accompanying any financial statement) shall prove to have been incorrect in any material respect when made or deemed made;

 

(d)                                 Any Loan Party shall fail to observe or perform when due any covenant, condition or agreement contained in (i) Article VI, (ii) SECTION 5.04(b)(i) or SECTION 5.17(c), or (iii) any of SECTION 5.01(d) or SECTION 5.11 (provided that, if (A) any such Default described in this clause (iii) is of a type that can be cured within five (5) Business Days and (B) such Default could not materially adversely impact the Lenders’ Liens on the Collateral, such default shall not constitute an Event of Default for five (5) Business Days after the occurrence of such Default so long as the Loan Parties are diligently pursuing the cure of such Default);

 

(e)                                  Any Loan Party shall fail to observe or perform when due any covenant, condition or agreement contained in any Loan Document (other than those specified in SECTION 7.01(a), SECTION 7.01(b), SECTION 7.01(c), or SECTION 7.01(d)), and such failure shall continue unremedied for a period of thirty (30) days after the earlier of (x) notice thereof from the Administrative Agent to the Borrower and (y) a Responsible Officer of any Loan Party obtaining actual knowledge thereof;

 

(f)                                    (i) Any Loan Party shall fail to make any payment (whether of principal, interest, letter of credit fees or commitment fees and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable and such failure shall continue beyond the expiration of any applicable grace or cure period set forth in the documents governing such Material Indebtedness, (ii) any event, circumstance or condition occurs that, with or without any action on the part of the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf, 

 

94

 

results in any Material Indebtedness becoming due prior to its scheduled maturity or requiring the prepayment, redemption, repurchase or defeasance thereof, prior to its scheduled maturity or (iii) any event, circumstance or condition shall have occurred and be continuing that enables or permits (with or without the giving of notice) the holder or holders of any Material Indebtedness (other than Indebtedness outstanding under the ABL Facility) or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, redemption, repurchase or defeasance thereof, prior to its scheduled maturity and any applicable grace or cure period set forth in respect of such event, circumstance or condition in the documents governing such Material Indebtedness shall have expired;

 

(g)                                 a Change in Control shall occur;

 

(h)                                 An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan Party or its debts, or of a substantial part of its assets, under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(i)                                     Any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under the Bankruptcy Code or any other federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in SECTION 7.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)                                     Except with respect to matters set forth on Schedule 3.06(a), one or more final judgments for the payment of money in an aggregate amount in excess of $25,000,000 (or such lesser amount as would reasonably be expected to result in a Material Adverse Effect) in excess of insurance coverage (or indemnities from indemnitors reasonably satisfactory to the Agents) shall be rendered against any Loan Party or any combination of Loan Parties and the same shall remain undischarged for a period of forty-five (45) days during which execution shall not be effectively stayed, satisfied or bonded or any action shall be legally taken by a judgment creditor to attach or levy upon any material assets of any Loan Party to enforce any such judgment;

 

(k)                                  An ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a liability of any Loan Party in excess of $25,000,000 or such other amount that would 

 

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reasonably be expected to result in a Material Adverse Effect, and the same shall remain undischarged for a period of thirty (30) consecutive days;

 

(l)                                     Any challenge by or on behalf of any Loan Party to the validity of any Loan Document or the applicability or enforceability of any Loan Document strictly in accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit, or otherwise adversely affect any security interest created by or in any Loan Document or any payment made pursuant thereto, in each case, as to which an order or judgment has been entered materially adverse to the Agents and the Lenders;

 

(m)                               (i) Any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any such Collateral, with the priority required by (but subject to the limitations set forth in) the applicable Security Document and this Agreement except (A) as a result of the sale, release or other disposition of the applicable Collateral in a Permitted Disposition or other transaction permitted under the Loan Documents or, (B) relating to an immaterial amount of Collateral not constituting Term Priority Collateral, or (C) as a result of the failure of the Collateral Agent, through its acts or omissions and through no fault of the Loan Parties, to maintain the perfection of its Liens in accordance with Applicable Law or (ii) any of the outstanding Capital Stock of the Borrower shall cease to be pledged pursuant to the Pledge Agreement free of Liens other than Liens created by the Security Documents or any non-consensual Liens arising solely by operation of law; or

 

(n)                                 The termination of the Facility Guaranty or any other guaranty of the Obligations (except for any release or termination permitted hereunder);

 

then, and in every such event (other than an event with respect to any Loan Party described in SECTION 7.01(h) or SECTION 7.01(i)), and at any time thereafter during the continuance of such event, the Administrative Agent, at the request of the Required Lenders, shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (a) require each of the following to become immediately due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Loan Party to the extent permitted under Applicable Law: (i) the unpaid principal amount of and accrued interest on the Term Loans and (ii) all other Obligations; and (b) subject to the Intercreditor Agreement, cause the Collateral Agent to enforce any and all Liens and security interests created pursuant to the Security Documents.  In the case of any event with respect to any Loan Party described in 7.01(h) or 7.01(i), (a) each of the following shall automatically become immediately due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Loan Party to the extent permitted under Applicable Law: (i) the unpaid principal amount of and accrued interest on the Term Loans and (ii) all other Obligations, and (b) Administrative Agent may, subject to the Intercreditor Agreement, cause Collateral Agent to enforce any and all Liens and security interests created pursuant to Collateral Documents.

 

Notwithstanding anything to the contrary contained in this ARTICLE VII, in the event that the Borrower fails to comply with the requirements of the Financial Performance Covenant set forth 

 

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in SECTION 6.11(a) until the date that is ten (10) days after the day on which financial statements are required to be delivered hereunder for a Fiscal Quarter or a Fiscal Year pursuant to SECTION 5.01(a) or (b), Holdings shall have the right to issue Permitted Cure Securities for cash or otherwise receive cash contributions to the common capital of Holdings (collectively, the “Cure Right”); provided that at the Borrower’s option, Holdings may elect to exercise such Cure Right prior to the date of the delivery of such financial statements if Holdings reasonably determines that it will fail to comply with the requirements of such Financial Performance Covenant upon the delivery of such financial statements, and upon the receipt by the Borrower of such cash (the “Cure Amount”) pursuant to the exercise by the Borrower of such Cure Right such Financial Performance Covenants shall be recalculated giving effect to the following pro  forma adjustments:

 

(i)                                     Consolidated EBITDA shall be increased, solely for the purpose of measuring such Financial Performance Covenant and not for any other purpose under this Agreement, by an amount equal to the Cure Amount; and

 

(ii)                                  if, after giving effect to the foregoing recalculations, Holdings shall then be in compliance with the requirements of such Financial Performance Covenant, Holdings shall be deemed to have satisfied the requirements of such Financial Performance Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of such Financial Performance Covenant that had occurred shall be deemed cured for this purposes of this Agreement.

 

Notwithstanding anything herein to the contrary, (a) in each four-fiscal-quarter period there shall be at least one Fiscal Quarter in which the Cure Right is not exercised, (b) the Cure Amount shall be no greater than the amount required for purposes of complying with such Financial Performance Covenant, and (c) the Cure Amount shall be set forth in each applicable Compliance Certificate delivered pursuant to SECTION 5.01(d).

 

SECTION 7.02                    Remedies on Default.  In case any one or more of the Events of Default shall have occurred and be continuing, and whether or not the maturity of the Obligations shall have been accelerated pursuant hereto, the Agents (at the direction of the Required Lenders) shall proceed to protect and enforce their rights and remedies under this Agreement or any of the other Loan Documents by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement and the other Loan Documents or any instrument pursuant to which the Obligations are evidenced, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Secured Parties. No remedy herein is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law.

 

SECTION 7.03                    Application of Proceeds.  After the occurrence and during the continuance of any Event of Default and acceleration of the Obligations, all proceeds realized from any Loan Party or on account of any Collateral owned by a Loan Party or, without limiting the foregoing, on account of any Prepayment Event or Excess Cash Flow, any payments in 

 

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respect of any Obligations and all proceeds of the Collateral, shall be applied in the following order:

 

(a)                                  FIRST, ratably to pay the Obligations in respect of any Credit Party Expenses, indemnities and other amounts then due to the Agents until paid in full (other than contingent obligations);

 

(b)                                 SECOND, ratably to pay any Credit Party Expenses and indemnities, and to pay any fees then due to the Lenders, until paid in full;

 

(c)                                  THIRD, ratably to pay interest accrued in respect of the Obligations until paid in full;

 

(d)                                 FOURTH, to pay principal due in respect of the Term Loans until paid in full;

 

(e)                                  FIFTH, ratably to pay outstanding Obligations (to the extent such Obligations are secured hereunder and under the other Loan Documents at the option of the Borrower) with respect to any Designated Hedge Agreement;

 

(f)                                    SIXTH, ratably to pay any other outstanding Obligations (including any outstanding Other Liabilities); and

 

(g)                                 SEVENTH, to the Borrower or such other Person entitled thereto under Applicable Law.

 

ARTICLE VIII

 

The Agents

 

SECTION 8.01                    Appointment and Administration by Administrative Agent.  Each Credit Party hereby irrevocably designates JPMorgan Chase Bank as Administrative Agent under this Agreement and the other Loan Documents.  The general administration of the Loan Documents shall be by the Administrative Agent.  The Credit Parties each hereby (a) irrevocably authorizes the Administrative Agent (i) to enter into the Loan Documents to which it is a party, and (ii) at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or refrain from exercising such powers under the Loan Documents as are delegated by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental thereto, and (b) agrees and consents to all of the provisions of the Security Documents. The Administrative Agent shall have no duties or responsibilities except as set forth in this Agreement and the other Loan Documents, nor shall it have any fiduciary relationship with any other Credit Party, and no implied covenants, responsibilities, duties, obligations, or liabilities shall be read into the Loan Documents or otherwise exist against the Administrative Agent.

 

SECTION 8.02                    Appointment of Collateral Agent.  Each Secured Party hereby irrevocably designates JPMorgan Chase Bank as Collateral Agent under this Agreement and the other Loan Documents.  The Secured Parties each hereby (i) irrevocably authorizes the Collateral Agent (x) to enter into the Loan Documents to which it is a party, and (y) at its discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or refrain from 

 

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exercising such powers under the Loan Documents as are delegated by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental thereto, and (ii) agrees and consents to all of the provisions of the Security Documents.  All Collateral shall be held or administered by the Collateral Agent (or its duly-appointed agent) for its own benefit and for the ratable benefit of the other Credit Parties.  Any proceeds received by the Collateral Agent from the foreclosure, sale, lease or other disposition of any of the Collateral and any other proceeds received pursuant to the terms of the Security Documents or the other Loan Documents shall be paid over to the Administrative Agent for application as provided in this Agreement and the other Loan Documents.  The Collateral Agent shall have no duties or responsibilities except as set forth in this Agreement and the other Loan Documents, nor shall it have any fiduciary relationship with any other Secured Party, and no implied covenants, responsibilities, duties, obligations, or liabilities shall be read into the Loan Documents or otherwise exist against the Collateral Agent.

 

SECTION 8.03                    Sharing of Excess Payments.  If at any time or times any Secured Party shall receive (i) by payment, foreclosure, setoff, banker’s lien, counterclaim, or otherwise, or any payments with respect to the Obligations owing to such Secured Party arising under, or relating to, this Agreement or the other Loan Documents, or (ii) payments from the Administrative Agent in excess of such Secured Party’s ratable portion of all such distributions by the Administrative Agent, such Secured Party shall promptly (1) turn the same over to the Administrative Agent, in kind, and with such endorsements as may be required to negotiate the same to the Administrative Agent, or in same day funds, as applicable, for the account of all of the Secured Parties and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (2) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Secured Parties so that such excess payment received shall be applied ratably as among the Secured Parties in accordance with the provisions of SECTION 2.17 or SECTION 7.03, as applicable; provided, however, that if all or part of such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.  In no event shall the provisions of this paragraph be construed to apply to any payment made by the Loan Parties pursuant to and in accordance with the express terms of this Agreement or any other Loan Document or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loans to any assignee or participant, other than to the Loan Parties or any Affiliate(s) thereof (as to which the provisions of this paragraph shall apply).

 

SECTION 8.04                    Agreement of Applicable Lenders.  Upon any occasion requiring or permitting an approval, consent, waiver, election or other action on the part of the Applicable Lenders, action shall be taken by each Agent for and on behalf or for the benefit of all Credit Parties upon the direction of the Applicable Lenders, and any such action shall be binding on all Credit Parties.  No amendment, modification, consent, or waiver shall be effective except in accordance with the provisions of SECTION 9.02.

 

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SECTION 8.05                    Liability of Agents.

 

(a)                                  The Agents, when acting on behalf of the Credit Parties, may execute any of their respective duties under this Agreement or any of the other Loan Documents by or through any of their respective officers, agents and employees, and no Agent nor any of their respective directors, officers, agents or employees shall be liable to any other Secured Party for any action taken or omitted to be taken in good faith, or be responsible to any other Secured Party for the consequences of any oversight or error of judgment, or for any loss, except to the extent of any liability imposed by law by reason of such Agent’s own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). No Agent nor any of their respective directors, officers, agents and employees shall in any event be liable to any other Secured Party for any action taken or omitted to be taken by it pursuant to instructions received by it from the Applicable Lenders, or in reliance upon the advice of counsel selected by it.  Without limiting the foregoing no Agent, nor any of their respective directors, officers, employees, or agents shall be: (i) responsible to any other Secured Party for the due execution, validity, genuineness, effectiveness, sufficiency, or enforceability of, or for any recital, statement, warranty or representation in, this Agreement, any other Loan Document or any related agreement, document or order; (ii) required to ascertain or to make any inquiry concerning the performance or observance by any Loan Party of any of the terms, conditions, covenants, or agreements of this Agreement or any of the Loan Documents; (iii) responsible to any other Secured Party for the state or condition of any properties of the Loan Parties or any other obligor hereunder constituting Collateral for the Obligations or any information contained in the books or records of the Loan Parties; (iv) responsible to any other Secured Party for the validity, enforceability, collectibility, effectiveness or genuineness of this Agreement or any other Loan Document or any other certificate, document or instrument furnished in connection therewith; or (v) responsible to any other Secured Party for the validity, priority or perfection of any Lien securing or purporting to secure the Obligations or for the value or sufficiency of any of the Collateral.

 

(b)                                 The Agents may execute any of their duties under this Agreement or any other Loan Document by or through their agents or attorneys-in-fact, and shall be entitled to the advice of counsel concerning all matters pertaining to its rights and duties hereunder or under the other Loan Documents.  The Agents shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by them with reasonable care.

 

(c)                                  None of the Agents nor any of their respective directors, officers, employees, or agents shall have any responsibility to any Loan Party on account of the failure or delay in performance or breach by any other Secured Party (other than by each such Agent in its capacity as a Lender) of any of its respective obligations under this Agreement or any of the other Loan Documents or in connection herewith or therewith.

 

(d)                                 The Agents shall be entitled to rely, and shall be fully protected in relying, upon any notice, consent, certificate, affidavit, or other document or writing believed by them to be genuine and correct and to have been signed, sent or made by the proper person or persons, and upon the advice and statements of legal counsel (including, without, limitation, counsel to the Loan Parties), independent accountants and other experts selected by any Loan Party or any Secured Party.  The Agents shall be fully justified in failing or refusing to take any action under

 

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this Agreement or any other Loan Document unless they shall first receive such advice or concurrence of the Applicable Lenders as they deem appropriate or they shall first be indemnified to their satisfaction by the other Secured Parties against any and all liability and expense which may be incurred by them by reason of the taking or failing to take any such action.

 

SECTION 8.06                    Notice of Default.  No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless such Agent has actual knowledge of the same or has received notice from a Secured Party or Loan Party referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that an Agent obtains such actual knowledge or receives such a notice, such Agent shall give prompt notice thereof to each of the other Secured Parties.  Upon the occurrence of an Event of Default, the Agents shall (subject to the provisions of SECTION 9.02) take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders.  Unless and until the Agents shall have received such direction, the Agents may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to any such Default or Event of Default as they shall deem advisable in the best interest of the Secured Parties.  In no event shall the Agents be required to comply with any such directions to the extent that the Agents believe that their compliance with such directions would be unlawful.

 

SECTION 8.07                    Credit Decisions.  Each Secured Party (other than the Agents) acknowledges that it has, independently and without reliance upon the Agents or any other Secured Party, and based on the financial statements prepared by the Loan Parties and such other documents and information as it has deemed appropriate, made its own credit analysis and investigation into the business, assets, operations, property, and financial and other condition of the Loan Parties and has made its own decision to enter into this Agreement and the other Loan Documents.  Each Credit Party (other than the Agents) also acknowledges that it will, independently and without reliance upon the Agents or any other Secured Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in determining whether or not conditions precedent to closing any Revolving Credit Loan hereunder have been satisfied and in taking or not taking any action under this Agreement and the other Loan Documents.

 

SECTION 8.08                    Reimbursement and Indemnification.  Each Secured Party (other than the Agents) agrees to (i) reimburse the Agents for such Secured Party’s pro rata share of all Obligations held by such Secured Party of (x) any expenses and fees incurred by any Agent for the benefit of Secured Parties under this Agreement or any of the other Loan Documents or any other agreement or instrument contemplated hereby or thereby, including, without limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Secured Parties, and any other expense incurred in connection with the operations or enforcement thereof not reimbursed by the Loan Parties, and (y) any expenses of any Agent incurred for the benefit of the Secured Parties that the Loan Parties have agreed to reimburse pursuant to this Agreement or any other Loan Document or any other agreement or instrument contemplated hereby or thereby and have failed to so reimburse, and (ii) indemnify and hold harmless each Agent and any of their respective directors, officers, employees, or agents, on demand, in the amount of such Secured Party’s pro rata share of all Obligations held by such 

 

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Secured Party, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any Secured Party in any way relating to or arising out of this Agreement or any of the other Loan Documents or any other agreement or instrument contemplated hereby or thereby or any action taken or omitted by it or any of them under this Agreement or any of the other Loan Documents or any other agreement or instrument contemplated hereby or thereby to the extent not reimbursed by the Loan Parties, including, without limitation, costs of any suit initiated by each Agent against any Secured Party (except such as shall have been determined by a court of competent jurisdiction or another independent tribunal having jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Agent); provided, however, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Secured Party in its capacity as such.  The provisions of this SECTION 8.08 shall survive the repayment of the Obligations and the termination of the Commitments.

 

SECTION 8.09                    Rights of Agents.  It is understood and agreed that the Agents shall have the same rights and powers hereunder (including the right to give such instructions) as the other Lenders and may exercise such rights and powers, as well as their rights and powers under other agreements and instruments to which they are or may be party, and engage in other transactions with the Loan Parties, as though they were not the Agents.  Each Agent and their respective Affiliates may accept deposits from, lend money to, and generally engage in any kind of commercial or investment banking, trust, advisory or other business with the Loan Parties and their Affiliates as if it were not an Agent thereunder.

 

SECTION 8.10                    Notice of Transfer.  The Administrative Agent may deem and treat a Lender party to this Agreement as the owner of such Lender’s portion of the Obligations for all purposes, unless and until, and except to the extent, an Assignment and Acceptance shall have become effective as set forth in SECTION 9.04.

 

SECTION 8.11                    Successor Agents.  Any Agent may resign at any time by giving thirty (30) Business Days’ written notice thereof to the other Secured Parties and the Borrower.  Upon any such resignation of an Agent, the Required Lenders shall have the right to appoint a successor Agent, which, so long as there is no Specified Default, shall be reasonably satisfactory to the Borrower (whose consent in any event shall not be unreasonably withheld or delayed).  If no successor Agent shall have been so appointed by the Required Lenders and/or none shall have accepted such appointment within thirty (30) days after the retiring Agent’s giving of notice of resignation, the retiring Agent may, on behalf of the other Secured Parties, appoint a successor Agent which shall be a commercial bank (or affiliate thereof) organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of a least $1,000,000,000, or capable of complying with all of the duties of such Agent hereunder (in the opinion of the retiring Agent and as certified to the other Secured Parties in writing by such successor Agent) which, so long as there is no Specified Default, shall be reasonably satisfactory to the Borrower (whose consent shall not in any event be unreasonably withheld or delayed).  Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent and the retiring Agent shall be discharged from its duties and obligations 

 

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under this Agreement.  After any retiring Agent’s resignation hereunder as such Agent, the provisions of this Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such Agent under this Agreement.

 

SECTION 8.12                    Relation Among the Lenders.  The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of any Agent) authorized to act for, any other Lender.

 

SECTION 8.13                    Financial Statements.  By signing this Agreement, each Lender:

 

(a)                                  agrees to furnish the Administrative Agent on the first day of each month with a summary of all Other Liabilities due or to become due to such Lender;

 

(b)                                 is deemed to have requested that the Agents furnish such Lender, promptly after they become available, copies of all financial statements required to be delivered by Holdings hereunder (collectively, the “Reports”) (and the Agents agree to furnish such Reports promptly to the Lenders, which Reports may be furnished in accordance with the final paragraph of SECTION 5.01);

 

(c)                                  expressly agrees and acknowledges that no Agent makes any representation or warranty as to the accuracy of the Reports, and shall not be liable for any information contained in any Report;

 

(d)                                 agrees to keep all Reports confidential and strictly for its internal use, and not to distribute except to its participants, or use any Report in any other manner; and

 

(e)                                  without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold each Agent harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Term Loans that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Term Loan or Term Loans of the Borrower; and (ii) to pay and protect, and indemnify, defend, and hold each Agent harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including attorney costs) incurred by the Agents as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender in violation of the terms hereof.

 

SECTION 8.14                    Agency for Perfection.  Each Lender hereby appoints each other Lender as agent for the purpose of perfecting Liens for the benefit of the Agents and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other Applicable Law of the United States of America can be perfected only by possession.  Should any Secured Party (other than an Agent) obtain possession of any such Collateral, such Secured Party shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral to the Collateral Agent, or otherwise deal with such Collateral in accordance with the Collateral Agent’s instructions.

 

SECTION 8.15                    Reserved.

 

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SECTION 8.16                    Collateral Matters.

 

(a)                                  The Lenders hereby irrevocably authorize the Collateral Agent to release any Lien upon any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full of all Obligations (other than contingent indemnity obligations with respect to then unasserted claims), or (ii) constituting property being sold, transferred or disposed of in a Permitted Disposition upon receipt by the Administrative Agent of the Net Proceeds thereof to the extent required by this Agreement.  Except as provided above, the Collateral Agent will not release any of the Collateral Agent’s Liens without the prior written authorization of the Applicable Lenders.  Upon request by any Agent or any Loan Party at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release any Liens upon particular types or items of Collateral pursuant to this SECTION 8.16.

 

(b)                                 Upon at least two (2) Business Days’ prior written request by the Borrower, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens upon any Collateral described in SECTION 8.16(a); provided, however, that (i) the Collateral Agent shall not be required to execute any such document on terms which, in its reasonable opinion, would, under Applicable Law, expose the Collateral Agent to liability or create any obligation or entail any adverse consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of any Loan Party in respect of) all interests retained by any Loan Party, including (without limitation) the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

 

SECTION 8.17                    Syndication Agent and Arranger.  Notwithstanding the provisions of this Agreement or any of the other Loan Documents, the Syndication Agent and the Arranger shall have no powers, rights, duties, responsibilities or liabilities with respect to this Agreement and the other Loan Documents.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01                    Notices.  Except in the case of notices and other communications expressly permitted to be given by telephone or electronically, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or e-mail, as follows:

 

(a)                                  if to any Loan Party, to it at Guitar Center, Inc., 5795 Lindero Canyon Road, Westlake Village, California 91362, Attention: Erick Mason (Telecopy No.  (818) 735-8833, E-Mail: emason@guitarcenter.com), David Robson (Telecopy No. (818) 735-8833, E-Mail: drobson@guitarcenter.com) and Michelle Sanft (Telecopy No. (818) 735-8833, E-Mail: msanft@guitarcenter.com), with copies to Bain Capital Partners, LLC, 111 

 

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Huntington Avenue, Boston, Massachusetts 02199, Attention: John Tudor (Telecopy No. (617) 516-2010, E-Mail: jtudor@baincapital.com), and Kirkland & Ellis, LLP, 200 East Randolph Drive, Chicago, Illinois 60601, Attention: Linda K. Myers, P.C. (Telecopy No. (312) 861-2200, E-Mail: lmyers@kirkland.com);

 

(b)                                 if to the Administrative Agent or the Collateral Agent to JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, New York 10017, Attention: Barry Bergman, with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, Attention: William B. Sheehan;

 

(c)                                  if to any other Credit Party, to it at its address (or telecopy number or electronic mail address) set forth on the signature pages hereto or on any Assignment and Acceptance.

 

Notwithstanding the foregoing, any notice hereunder sent by e-mail shall be solely for the distribution of (i) routine communications such as financial statements and (ii) documents and signature pages for execution by the parties hereto, and for no other purpose.  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

SECTION 9.02                    Waivers; Amendments.

 

(a)                                  No failure or delay by any Credit Party in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Credit Parties hereunder and under the other Loan Documents are cumulative and are not exclusive of any other rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by SECTION 9.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Term Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether any Credit Party may have had notice or knowledge of such Default or Event of Default at the time.

 

(b)                                 Except as otherwise specifically provided herein, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Loan Parties and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Agent(s) and the Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided, however, that no such waiver, amendment, modification or other agreement shall:

 

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(i)                                     Increase the Commitment of any Lender without the prior written consent of such Lender;

 

(ii)                                  Without:

 

(A)                              the prior written Unanimous Consent of all Lenders directly adversely affected thereby, reduce the principal amount of any Obligation or reduce the rate of interest thereon (other than the waiver of the Default Rate), or reduce any fees payable under the Loan Documents (it being understood that a waiver of a Default shall not constitute a reduction of interest for purposes of this Section);

 

(B)                                the prior written Unanimous Consent of all Lenders directly adversely affected thereby, postpone the scheduled date of payment of any interest on any Obligation or reduce the amount of, waive or excuse any such payment (provided that a waiver of a Default shall not constitute a reduction, excuse or waiver of interest for purposes of this Section), or postpone the Maturity Date;

 

(C)                                the prior written Unanimous Consent of all Lenders, except for Permitted Dispositions or for Collateral releases as permitted in SECTION 8.16 and for mergers, consolidations, liquidations and dissolutions permitted under SECTION 6.03, release all or substantially all of the Collateral from the Liens of the Security Documents or release all or substantially all of the Facility Guarantors from their respective obligations under their Facility Guarantee or substantially limit their liability in respect of such Facility Guarantee;

 

(D)                               the prior written consent of all Lenders, change any of the provisions of this SECTION 9.02(b) or the definitions of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder;

 

(E)                                 the prior written Unanimous Consent of all Lenders, change any of the provisions of SECTION 8.03;

 

(iii)                               Without prior written consent of the Agents, affect the rights or duties of the Agents.

 

(c)                                  Notwithstanding anything to the contrary contained in this SECTION 9.02, in the event that the Borrower shall request that this Agreement or any other Loan Document be modified, amended or waived in a manner which would require the consent of all Lenders or all directly adversely affected Lenders pursuant to SECTION 9.02(b) and such modification, amendment or waiver is approved by the Lenders holding at least 50% of the aggregate Commitments held by all Lenders or all directly adversely affected Lenders (as applicable) or, if the Commitments have been terminated, at least 50% of the aggregate outstanding Term Loans held by all Lenders or all directly adversely affected Lenders (as applicable) (such Lender or Lenders collectively, the “Threshold Lenders”), but not by the requisite percentage of all Lenders 

 

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or all the directly adversely affected Lenders, the Borrower and the Administrative Agent shall be permitted to amend this Agreement without the consent of the requisite Lender or Lenders which did not agree to the modification or amendment requested by the Borrower (such Lender or Lenders, collectively the “Minority Lenders”) provided that, with respect to each such Minority Lender, the Borrower shall, by giving written notice to Administrative Agent and such Minority Lender of its election to do so, elect to cause such Minority Lender (and such Minority Lender hereby irrevocably agrees) to assign its outstanding Term Loans in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of SECTION 9.04 and such Replacement Lender shall pay any fees payable thereunder in connection with such assignment; provided  further that, (1) on the date of such assignment, the Replacement Lender shall pay to the Minority Lender an amount equal to the principal of, and all accrued interest on, all outstanding Term Loans of the Minority Lender; (2) on the date of such assignment, the Borrower shall pay any amounts payable to such Minority Lender pursuant to SECTIONS 2.14, 2.16(b) or 2.23 or otherwise as if it were a prepayment; and (3) each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Minority Lender did not consent.  In connection with any such replacement, if the Minority Lender does not execute and deliver to the Administrative Agent a duly completed Assigned and Acceptance and/or any other documentation necessary to reflect such replacement within a period of time deemed reasonably by the Administrative Agent as of the date on which the Replacement Lender executes such Assignment and Acceptance and/or such other documentation, then such Minority Lender shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such documentation on behalf of such Minority Lender.  Upon the prepayment of all amounts owing to any Minority Lender, such Minority Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Minority Lender to indemnification hereunder shall survive as to such Minority Lender.

 

(d)                                 Further, notwithstanding anything to the contrary contained in this SECTION 9.02, if following the Closing Date, the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Loan Documents if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof.

 

(e)                                  No notice to or demand on any Loan Party shall entitle any Loan Party to any other or further notice or demand in the same, similar or other circumstances.  Each holder of a Note shall be bound by any amendment, modification, waiver or consent authorized as provided herein, whether or not a Note shall have been marked to indicate such amendment, modification, waiver or consent and any consent by a Lender, or any holder of a Note, shall bind any Person subsequently acquiring a Note, whether or not a Note is so marked.  No amendment to this Agreement or any other Loan Document shall be effective against any Loan Party unless signed by such Loan Party.

 

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SECTION 9.03                    Expenses; Indemnity; Damage Waiver.

 

(a)                                  The Loan Parties shall jointly and severally pay all Credit Party Expenses incurred as of the Closing Date on the Closing Date.  Thereafter, the Loan Parties shall jointly and severally pay all Credit Party Expenses within thirty (30) days after receipt of an invoice therefor setting forth such expenses in reasonable detail; provided  that in the event the Loan Parties have a bona fide dispute with any such expenses, payment of such disputed amounts shall not be required until the earlier of the date such dispute is resolved to the reasonable satisfaction of the Loan Parties or thirty (30) days after receipt of any such invoice (and any such disputed amount which is so paid shall be subject to a reservation of the Loan Parties’ rights with respect thereto).

 

(b)                                 The Loan Parties shall, jointly and severally, indemnify the Secured Parties and each of their Subsidiaries and Affiliates, and each of the respective directors, officers, employees, agents and controlling persons of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all damages, actual out-of-pocket losses, claims, actions, causes of action, settlement payments, obligations, liabilities and related expenses, including the reasonable fees, charges and disbursements of one counsel for all the Indemnitees (plus, in each case, one local counsel in any other jurisdiction to the extent reasonably necessary) (provided that in the case of a conflict of interest the affected Indemnitee may engage and shall be reimbursed for one additional counsel, plus one local counsel in any other jurisdiction to the extent reasonably necessary), incurred, suffered, sustained or required to be paid by, or asserted against, any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the transactions contemplated by the Loan Documents or any other transactions contemplated hereby, (ii) any Term Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by any Loan Party or any Subsidiary, or any Environmental Liability related in any way to any Loan Party or any Subsidiary, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to or arising from any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto or whether such claim, litigation, investigation or proceeding is brought by a third party or any Loan Party or any Affiliate thereof or (v) any documentary taxes, assessments or similar charges made by any Governmental Authority by reason of the execution and delivery of this Agreement or any other Loan Document; provided, however, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from (i) the gross negligence, bad faith, fraud or willful misconduct of such Indemnitee (or any of its Affiliates or Related Parties), (ii) such Indemnitee’s (or any of its Affiliates’ or Related Parties’) material breach of its obligations under this Agreement or any other Loan Document or (iii) any dispute solely among the Indemnitees other than claims against the Administrative Agent in its capacity or in fulfilling its role as an agent or arranger or any other similar role under this Agreement or any other Loan Document or any other agreement or instrument contemplated hereby or thereby and any claims arising out of any act or omission by the Borrower or any of its Affiliates.  Notwithstanding anything to the contrary contained herein, the Loan Parties shall have no obligation to reimburse any Indemnitee for fees and expenses 

 

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unless such Indemnitee provides the Loan Parties with an executed undertaking in which such Indemnitee agrees to refund and return any and all amounts paid by the Loan Parties to such Indemnitee to the extent any of the foregoing items described in clauses (i) through (iii) occurs.

 

(c)                                  No party to this Agreement shall assert and, to the extent permitted by Applicable Law, each such party hereby waives, any claim against any other party to this Agreement or any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated by the Loan Documents, any Term Loan or the use of the proceeds thereof.

 

(d)                                 The provisions of paragraphs (b) and (c) of this SECTION 9.03 shall remain operative and in full force and effect regardless of the termination of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of any Loan Document, or any investigation made by or on behalf of any Credit Party.  All amounts due under this SECTION 9.03 shall be payable within thirty (30) days of written demand therefor, which written demand shall set forth such amounts in reasonable detail.

 

SECTION 9.04                    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 no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Agents and the Lenders (and any such attempted assignment or transfer without such consent 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 and, to the extent expressly contemplated hereby, Indemnitees), any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Any Lender may, with the consent of the Administrative Agent and the Borrower (which consent in each case shall not be unreasonably withheld or delayed), 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 Term Loans at the time owing to it); provided, however, that no such consent of the Borrower shall be required (A) in connection with any assignment to another Lender, an Affiliate of a Lender or an Approved Fund (unless such Lender Affiliate or Approved Fund is a Disqualified Institution) or (B) if an Event of Default under SECTION 7.01(a), (b), (h) or (i) has occurred and is continuing; and provided  further  that, each assignment shall be subject to the following conditions: (i) except in the case of an assignment to a Lender or an Affiliate of a Lender (unless such Lender Affiliate is a Disqualified Institution), the amount of the Term Loans of the assigning Lender subject to a partial assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent and determined on an aggregate basis in the event of concurrent assignments to Related Funds) shall be an integral multiple of $1,000,000, or, if less, the entire remaining amount of the assigning Lender’s Term Loans; (ii) each partial assignment shall be made as an assignment of a 

 

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proportionate part of all the assigning Lender’s rights and obligations; and (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, and, after completion of the syndication of the Term Loans, together with a processing and recordation fee of $3,500.00.  Subject to acceptance and recording thereof pursuant to SECTION 9.04(d), from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance 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 SECTION 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this SECTION 9.04(b) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with SECTION 9.04(e).  The Loan Parties hereby acknowledge and agree that any effective assignment shall give rise to a direct obligation of the Loan Parties to the assignee and that the assignee shall be considered to be a “Credit Party” for all purposes under this Agreement and the other Loan Documents.

 

(c)                                  The Administrative Agent, acting for this purpose as an agent of the Loan Parties, shall maintain at one of its offices in New York, New York, a copy of each Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Term Loans owing to, each Lender pursuant to the terms hereof from time to time.  The entries in the Register shall be conclusive and the Loan Parties and Credit Parties 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 absent any manifest error, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the processing and recordation fee referred to in SECTION 9.04(b) and any written consent to such assignment required by SECTION 9.04(a), the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this SECTION 9.04(d).

 

(e)                                  Any Lender may, without the consent of the Loan Parties or any other Person, sell participations to one or more banks or other entities (other than any Person in direct competition with a Loan Party’s business) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Term Loans owing to it), subject to the following:

 

(i)                                     such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged;

 

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(ii)           such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations;

 

(iii)          the Loan Parties and other Credit Parties shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement;

 

(iv)          any agreement or instrument pursuant to which a Lender sells a participation in the Commitments, the Term Loans shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; provided, however, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the proviso to SECTION 9.02(b)(ii)(A), (B) or (C) that affects such Participant;

 

(v)           subject to clauses (viii) and (ix) of this SECTION 9.04(e), the Loan Parties agree that each Participant shall be entitled to the benefits of SECTION 2.14 and SECTION 2.23 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to SECTION 9.04(b);

 

(vi)          to the extent permitted by law, each Participant also shall be entitled to the benefits of SECTION 9.08 as though it were a Lender so long as such Participant agrees to be subject to SECTION 2.21(c) as though it were a Lender;

 

(vii)         a Participant shall not be entitled to receive any greater payment under SECTION 2.14 or SECTION 2.23 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 Borrower’s prior written consent; and

 

(viii)        a Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of SECTION 2.23 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Loan Parties, to comply with SECTION 2.23(e) as though it were a Lender and such Participant is eligible for exemption from, or reduction in, the withholding Tax referred to therein, following compliance with SECTION 2.23(e).

 

(f)            Any Credit Party may at any time pledge or grant a security interest in all or any portion of its rights under this Agreement to secure obligations of such Credit Party, including any pledge or grant to secure obligations to any of the twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341, and this SECTION 9.04 shall not apply to any such pledge or grant of a security interest; provided, however, that no such pledge or grant of a security interest shall release a Credit Party from any of its obligations hereunder or substitute any such pledgee or grantee for such Credit Party as a party hereto.

 

(g)           The Loan Parties authorize each Credit Party to disclose to any Participant or grantee and any prospective Participant or grantee, subject to the provisions of SECTION 9.15, any and all financial information in such Credit Party’s possession concerning the Loan Parties 

 

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which has been delivered to such Credit Party by or on behalf of the Loan Parties pursuant to this Agreement or which has been delivered to such Credit Party by or on behalf of the Loan Parties in connection with such Credit Party’s credit evaluation of the Loan Parties prior to becoming a party to this Agreement.

 

(h)           Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to a Borrower all or any part of any Term Loan that such Granting Lender would otherwise be obligated to make to a Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Term Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Term Loan, the Granting Lender shall be obligated to make such Term Loan pursuant to the terms hereof.  The making of a Term Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Term Loan were made by such Granting Lender.  Each party hereto hereby agrees that (i) an SPC shall be entitled to the benefits of SECTIONS 2.11, 2.14, 2.21, 2.22 and 2.23 to the same extent as if it were a Lender, (ii) 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 any Borrower under this Agreement (including its obligations under SECTION 2.14 or 2.23) unless the grant to the SPC was made with the Borrower’s prior written consent, (iii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender) and (iv) the Granting Lender shall for all purposes including approval of any amendment, waiver or other modification of any provision of the Loan Documents, remain the Lender of record hereunder.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any state thereof.  In addition, notwithstanding anything to the contrary contained in this SECTION 9.04, any SPC may (i) with notice to, but without the prior written consent of the Borrower, or the Administrative Agent, and without paying any processing fee therefor, assign all or a portion of its interests in any Term Loans to the Granting Lender or, subject to obtaining the requisite consents under SECTION 9.04(b), to any other financial institutions providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Term Loans and (ii) disclose on a confidential basis any non-public information relating to its Term Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.  Any Lender who grants an option to an SPC to make a Term Loan to the any Borrower shall, if such option is exercised, maintain a register similar to the Participant Register described in paragraph (c) of this SECTION.

 

SECTION 9.05       Survival.  All covenants, agreements, indemnities, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Term Loans,

 

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regardless of any investigation made by any such other party or on its behalf and, notwithstanding that any Credit Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until (i) the Commitments have expired or been terminated and (ii) the principal of and interest on each Term Loan and all fees and other Obligations (other than contingent indemnity obligations with respect to then unasserted claims) shall have been paid in full.  The provisions of SECTION 2.14, SECTION 2.23, SECTION 9.03 and Article VIII shall survive and remain in full force and effect regardless of the repayment of the Obligations, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.  In connection with the termination of this Agreement and the release and termination of the security interests in the Collateral, the Agents, on behalf of themselves and the other Credit Parties, may require such indemnities as they shall reasonably deem necessary or appropriate to protect the Credit Parties against (x) loss on account of credits previously applied to the Obligations that may subsequently be reversed or revoked, and (y) any obligations that may thereafter arise with respect to the Other Liabilities.

 

SECTION 9.06       Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all contemporaneous or previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in SECTION 4.01, this Agreement shall become effective when it shall have been executed by the applicable Credit Parties and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.07       Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 9.08       Right of Set-off.  If any Specified Default shall have occurred and be continuing, each Secured Party, each Participant and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final, but excluding any payroll, trust and tax withholding accounts) at any time held and other obligations at any time owing by such Secured Party, Participant or Affiliate to or for the credit or the account of the Loan Parties against any and all of the Obligations of the Loan Parties now or hereafter existing under this Agreement or other Loan Document to the extent such are then due and owing, although such Obligations may be otherwise fully secured; provided that such Secured Party shall provide the Borrower with written notice promptly after its exercise of such right of setoff. The rights of each Secured Party under this SECTION 9.08 are in addition to 

 

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other rights and remedies (including other rights of setoff) that such Credit Party may have.  No Credit Party will, or will permit its Participant to, exercise its rights under this SECTION 9.08 without the consent of the Administrative Agent or the Required Lenders.  ANY AND ALL RIGHTS TO REQUIRE THE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES ANY OF THE OBLIGATIONS PRIOR TO THE EXERCISE BY ANY SECURED PARTY, PARTICIPANT OR AFFILIATE OF ITS RIGHT OF SETOFF UNDER THIS SECTION ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

SECTION 9.09       Governing Law; Jurisdiction; Consent to Service of Process.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(b)           Each Loan Party agrees that any suit for the enforcement of this Agreement or any other Loan Document may be brought in the courts of the State of New York sitting in the Borough of Manhattan or any federal court sitting therein as the Administrative Agent may elect in its sole discretion and consents to the non-exclusive jurisdiction of such courts.  Each party to this Agreement hereby waives any objection which it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient forum and agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that any Credit Party may otherwise have to bring any action or proceeding relating to this Agreement against a Loan Party or its properties in the courts of any jurisdiction.

 

(c)           Each Loan Party agrees that any action commenced by any Loan Party asserting any claim or counterclaim arising under or in connection with this Agreement or any other Loan Document shall be brought solely in a court of the State of New York sitting in the Borough of Manhattan or any federal court sitting therein as the Administrative Agent may elect in its sole discretion and consents to the exclusive jurisdiction of such courts with respect to any such action.

 

(d)           Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in SECTION 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN  ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY); AND WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS 

 

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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 9.11       Press Releases and Related Matters.  The Borrower consents to the publication by the Administrative Agent of customary trade advertising material in tombstone format relating to the financing transactions contemplated by this Agreement using the Borrower’s name, and with the consent of the Borrower, logo or trademark.  The Administrative Agent shall provide a draft reasonably in advance of any advertising material to the Borrower for review and comment prior to the publication thereof.  The Administrative Agent and the Lenders reserve the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

 

SECTION 9.12       Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

SECTION 9.13       Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Term Loan, together with all fees, charges and other amounts that are treated as interest on such Term Loan under Applicable Law (collectively, the “Charges”), shall be found by a court of competent jurisdiction in a final order to exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Term Loan in accordance with Applicable Law, the rate of interest payable in respect of such Term Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Term Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Term Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

SECTION 9.14       Additional Waivers.

 

(a)           The Obligations are the joint and several obligation of each Loan Party.  To the fullest extent permitted by Applicable Law, the obligations of each Loan Party hereunder shall not be affected by (i) the failure of any Credit Party to assert any claim or demand or to enforce or exercise any right or remedy against any other Loan Party under the provisions of this Agreement, any other Loan Document or under Applicable Law, (ii) any rescission, waiver, amendment or modification of, or any release of any Loan Party from, any of the terms or provisions of, this Agreement, any other Loan Document, or (iii) the failure to perfect any security interest in, or the release of, any of the Collateral or other security held by or on behalf of the Collateral Agent or any other Credit Party.

 

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(b)           The obligations of each Loan Party to pay the Obligations in full hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the payment in full in cash of the Obligations after the termination of all Commitments to the Borrower under any Loan Document), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any other Credit Party to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, any default, failure or delay, willful or otherwise, in the performance of any of the Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Loan Party or that would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than the payment in full in cash of all the Obligations after termination of all Commitments to any Loan Party under any Loan Document).

 

(c)           To the fullest extent permitted by Applicable Law, each Loan Party waives any defense based on or arising out of any defense of any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any other Loan Party, other than the payment in full in cash of all the Obligations after the termination of all Commitments to any Loan Party under any Loan Document.  The Collateral Agent and the other Credit Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any other Loan Party, or exercise any other right or remedy available to them against any other Loan Party, without affecting or impairing in any way the liability of any Loan Party hereunder except to the extent that all the Obligations have been indefeasibly paid in full in cash and performed in full after the termination of Commitments to any Loan Party under any Loan Document.  Pursuant to Applicable Law, each Loan Party waives any defense arising out of any such election even though such election operates, pursuant to Applicable Law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Loan Party against any other Loan Party, as the case may be, or any security.

 

(d)           Each Loan Party hereby agrees to keep each other Loan Party fully apprised at all times as to the status of its business, affairs, finances, and financial condition, and its ability to perform its Obligations under the Loan Documents, and in particular as to any adverse developments with respect thereto.  Each Loan Party hereby agrees to undertake to keep itself apprised at all times as to the status of the business, affairs, finances, and financial condition of each other Loan Party, and of the ability of each other Loan Party to perform its Obligations under the Loan Documents, and in particular as to any adverse developments with respect to any thereof.  Each Loan Party hereby agrees, in light of the foregoing mutual covenants to inform each other, and to keep themselves and each other informed as to such matters, that the Credit Parties shall have no duty to inform any Loan Party of any information pertaining to the business, affairs, finances, or financial condition of any other Loan Party, or pertaining to the ability of any other Loan Party to perform its Obligations under the Loan Documents, even if 

 

116

 

such information is adverse, and even if such information might influence the decision of one or more of the Loan Parties to continue to be jointly and severally liable for, or to provide Collateral for, the Obligations of one or more of the other Loan Parties. To the fullest extent permitted by applicable law, each Loan Party hereby expressly waives any duty of the Credit Parties to inform any Loan Party of any such information.

 

SECTION 9.15       Confidentiality.  Each of the Credit Parties agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to their and their Affiliates’ (other than Excluded Institutions’) directors, officers, employees and agents, including accountants, legal counsel and other advisors involved with the financing (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and agree to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process (the Credit Parties’ agreeing to furnish the Borrower with notice of such process and an opportunity to contest such disclosure as long as furnishing such notice and opportunity would not result in the Credit Parties’ violation of Applicable Law), (d) to any other party to this Agreement, in accordance with Applicable Laws, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement and any actual or prospective counterparty or advisors to any swap or derivative transactions relating to the Loan Parties and the Obligations so long as such Person or any of their Affiliates is not a competitor of any Loan Party, (g) with the consent of the Loan Parties, (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section, or to the knowledge of such Credit Party, the breach of any other Person’s obligation to keep the information confidential, or (ii) becomes available to any Credit Party on a nonconfidential basis from a source other than the Loan Parties, or (i) to the extent that such Information is independently developed by such Credit Party.  For the purposes of this Section, the term “Information” means all information received from or on behalf of the Loan Parties or any of their Affiliates relating to their business.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

SECTION 9.16       Patriot Act.  Each Lender hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.  The Borrower is in compliance, in all material respects, with the Act.  No part of the proceeds of the Term Loans will be used by the Loan Parties, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

117

 

SECTION 9.17       Foreign Asset Control Regulations.  Neither of the advance of the Term Loans nor the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any enabling legislation or executive order relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)).  Furthermore, none of the Loan Parties or their Affiliates (a) is or will become a “blocked person” as described in the Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or (b) knowingly engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person” or in any manner violative of any such order.

 

SECTION 9.18       Intercreditor Agreement.  The Loan Parties, the Agents, the Lenders and the other Credit Parties acknowledge that the exercise of certain of the Agents’ rights and remedies hereunder may be subject to, and restricted by, the provisions of the Intercreditor Agreement.  Except as specified herein, nothing contained in the Intercreditor Agreement shall be deemed to modify any of the provisions of this Agreement and the other Loan Documents, which, as among the Loan Parties, the Agents, the Lenders and the other Credit Parties shall remain in full force and effect.

 

[SIGNATURE PAGES FOLLOW]

 

118

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as a sealed instrument as of the day and year first above written.

 

 

	
 
    	
VH   MERGERSUB, INC., as Borrower
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   John Tudor
    
	
 
    	
Name:   John Tudor
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
As   of and upon effectiveness of the Merger, the undersigned hereby acknowledges   and agrees that it will succeed to all of the rights and obligations of the   Borrower set forth herein and that all references herein to the Borrower   shall thereupon be deemed to be references to the undersigned.
    
	
 
    	
 
    
	
 
    	
GUITAR   CENTER, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUITAR   CENTER HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John Tudor
    
	
 
    	
Name:   John Tudor
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUITAR   CENTER STORES, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leland Smith
    
	
 
    	
Name:   Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    

 

S-1

 

	
 
    	
GUITAR   CENTER GIFT CARD COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leland Smith
    
	
 
    	
Name:   Leland Smith
    
	
 
    	
Title: Executive   Vice President, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARMONY   CENTRAL GROUP, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MUSICIAN’S   FRIEND, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leland Smith
    
	
 
    	
Name:   Leland Smith
    
	
 
    	
Title: Executive   Vice President, General Counsel and Secretary
    

 

S-2

 

	
 
    	
JPMORGAN   CHASE BANK, N.A., As Administrative Agent and as Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas H.   Kozlark
    
	
 
    	
Name: Thomas H.   Kozlark
    
	
 
    	
Title: Executive   Director
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
270 Park Avenue
    
	
 
    	
New York, New York 10017
    
	
 
    	
Attn:
    
	
 
    	
Telephone:
    
	
 
    	
Telecopy:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., As a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas H.   Kozlark
    
	
 
    	
Name: Thomas H.   Kozlark
    
	
 
    	
Title: Executive   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
270 Park Avenue
    
	
 
    	
New York, New York 10017
    
	
 
    	
Attn:
    
	
 
    	
Telephone:
    
	
 
    	
Telecopy:
    

 

S-3

 

 

 

EXHIBIT A TO CREDIT AGREEMENT

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Credit Agreement dated as of October 9, 2007 (as modified, amended, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), the guarantors party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

                                                                         (the “Assignor”) and                                                  (the “Assignee”) agree as follows:

 

1.                          The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations as a Lender under the Credit Agreement as of the date hereof which represents the applicable percentage interest(s) specified on Schedule I hereto of all outstanding rights and obligations of the Lenders under the Credit Agreement. After giving effect to such sale and assignment, the Assignor’s and the Assignee’s Term Loans and the amount of the Term Loans owing to the Assignor and the Assignee will be as set forth in Section 2 of Schedule I.

 

2.                          The Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any Liens and that it is legally authorized to enter into this Assignment and Acceptance; (b) makes no representation or warranty and 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 or any other instrument or document furnished pursuant thereto, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant thereto; and (d) confirms, in the case of an Assignee who is not a Lender or an Affiliate of a Lender (unless such Lender Affiliate is a Disqualified Institution), the amount of the Term Loans subject to this Assignment and Acceptance is not less than $1,000,000.00, or, if less, the entire remaining amount of the Assignor’s Term Loans.

 

 

3.                          The Assignee (a) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 5.01 thereof 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 Acceptance; (b) agrees that it will, independently and without reliance upon the Agents, 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 Credit Agreement; (c) appoints and authorizes the Agents or their successors to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to the Agents by the terms thereof, together with such powers as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Credit Agreement, are required to be performed by it as a Lender; (e) specifies as its lending office (and address for notices) the office set forth beneath its name on the signature pages hereof; (f) agrees that if the Assignee is a Foreign Lender entitled to an exemption from or reduction in withholding tax it shall deliver to the Borrower and the Administrative Agent two copies of either United States Internal Revenue Service Form W-8BEN (claiming a treaty benefit) or Form W-8ECI, or any subsequent versions thereof or successors thereto, or, in the case of a Foreign Lender claiming exemption from or reduction in U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “Portfolio interest”, (i) a Form W-8BEN, or any subsequent versions thereof or successors thereto and (ii) a certificate representing that such Foreign Lender is not (A) a bank for purposes of Section 881(c) of the Code, (B) is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Loan Party and (C) is not a controlled foreign corporation related to the Loan Parties (within the meaning of Section 864(d)(4) of the Code)); and (g) represents and warrants that it is an Eligible Assignee.

 

4.                          Following the execution of this Assignment and Acceptance by the Assignor and the Assignee, it will be delivered, together with a processing and recordation fee of $3,500, to the Administrative Agent for acceptance by the Administrative Agent and recording by the Administrative Agent. The effective date of this Assignment and Acceptance shall be the date of acceptance thereof by the Administrative Agent and, subject to Section 9.04(b) of the Credit Agreement, the Borrower, unless otherwise specified on Schedule I hereto (the “Effective Date”).

 

5.                          Upon such acceptance by the Administrative Agent and acceptance by the Borrower (whose acceptance shall not be required if an Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing or the interest assigned by this Assignment and Acceptance is being assigned to another Lender or to an Affiliate of a Lender or Approved Fund (unless such Lender Affiliate or Approved Fund is a Disqualified Institution)) and recording by the Administrative Agent, from and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned by this Assignment and Acceptance, shall have the rights and obligations under the Credit Agreement of a Lender thereunder, and (b) the Assignor shall, to the extent of the interest assigned by this Assignment and Acceptance, relinquish

 

 

its rights and be released from its obligations under the Credit Agreement, except as otherwise provided in Section 9.04 of the Credit Agreement.

 

6.                          Upon such acceptance by the Administrative Agent and acceptance by the Borrower (whose acceptance shall not be required if an Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing or the interest assigned by this Assignment and Acceptance is being assigned to another Lender or to an Affiliate of a Lender or an Approved Fund (unless such Lender Affiliate or Approved Fun is a Disqualified Institution)), and recording by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly between themselves.

 

7.                          This Assignment and Acceptance shall be governed by, and be construed in accordance with, the laws of the State of New York.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	
 
    	
[ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lending   Office (and address for notices):
    
	
 
    	
 
    
	
 
    	
[Address]
    

 

Accepted this            day of                     ,

 

 

JPMORGAN CHASE BANK, N.A., 
 as Administrative Agent

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

Acknowledged and, to the extent required under Section 9.04(b) of the Credit Agreement, consented to, this            day of                       ,

 

 

GUITAR CENTER, INC., as Borrower

 

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

Schedule I 
 to
 Assignment and Acceptance 
 Dated                               ,               

 

	
Name of Assignor: 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name of Assignee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Aggregate   Outstanding Principal Amount of Term Loans Assigned to Assignee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Effective Date:
    	
 
    	
                              ,             
    

 

 

EXHIBIT B-1 TO CREDIT AGREEMENT

 

FORM OF BORROWING REQUEST

 

Date: October [  ], 2007

 

To:                 JPMorgan Chase Bank, N.A., as Administrative Agent

270 Park Avenue

New York, New York 10017

Attention: Barry Bergman

 

Re: Credit Agreement to be dated as of October 9, 2007 (as modified, amended, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), the guarantors party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties. Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.

 

Ladies and Gentlemen:

 

The Borrower refers to the above described Credit Agreement and hereby irrevocably notifies you of the Borrowing requested below:

 

1.                           The Business Day of the proposed Borrowing is October 9, 2007.

 

2.                           The aggregate amount of the proposed Borrowing is $650,000,000.

 

	
Type of Borrowing
   (Prime Rate Loans or LIBO
   Loans)(1)
    	
 
    	
Amount
    	
 
    	
Interest Period for LIBO
   Loans(2)
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
[months]
    	
 
    
							

 

(1)                     If no election is made as to the Type of Term Loan, such notice shall be deemed a request for Borrowing of Prime Rate Loans.

(2)                     If no election of Interest Period is specified, such notice shall be deemed a request for an Interest Period of one (1) month.

 

 

	
 
    	
VH MERGERSUB, INC.
    
	
 
    	
As Borrower
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT B-2 TO CREDIT AGREEMENT

 

CONVERSION/CONTINUATION NOTICE

 

Reference is made to the Credit Agreement dated as of October 9, 2007 (as modified, amended, supplemented or restated and in effect from time to time, the “Credit Agreement”) by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), the guarantors party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

Pursuant to Section 2.09 of the Credit Agreement, the Borrower desires to convert or to continue the following Term Loans, each such conversion and/or continuation to be effective as of [mm/dd/yy]:

 

1.                           Term Loans:

 

	
$[      ,      ,        ]
    	
LIBO   Loans to be continued with Interest Period of              month(s)(3)
    
	
 
    	
 
    
	
$[      ,      ,        ]
    	
Prime   Rate Loans to be converted to LIBO Loans with Interest Period of              month(s)(3)
    
	
 
    	
 
    
	
$[      ,      ,        ]
    	
LIBO   Loans to be converted to Prime Rate Loans
    

 

The Borrower hereby certifies that as of the date hereof, no Event of Default has occurred and is continuing.

 

 

	
Date:   [mm/dd/yy]
    	
GUITAR CENTER, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    

 

(3)                     If no election of Interest Period is Specified, such notice shall be deemed a request for an Interest Period of one (1) month.

 

 

EXHIBIT C TO CREDIT AGREEMENT

 

FORM OF TERM LOAN NOTE

 

 

TERM LOAN  NOTE

 

	
[$                                        ]
    	
[                                        ,   2007]
    

 

FOR VALUE RECEIVED, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”, together with all successors and assigns), promises to pay to the order of [                                                      ] (hereinafter, together with its successors in title and assigns, the “Lender”), c/o JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, New York 10017, the principal sum of $[                                              ] DOLLARS ($[                    ]), or, if less, the aggregate unpaid principal balance of Term Loans made by the Lender to or for the account of the Borrower pursuant to the Credit Agreement (as hereafter defined), with interest, fees, reasonable out-of-pocket expenses, and costs at the rate and payable in the manner stated in the Credit Agreement. As used herein, the “Credit Agreement” means and refers to that certain Credit Agreement dated as of even date (as such may be amended, modified, supplemented or restated hereafter) by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), a Delaware corporation, to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), a Delaware corporation, the guarantors listed therein, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) and as Collateral Agent (in such capacity, the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties.

 

This is a “Term Loan Note” to which reference is made in the Credit Agreement and is subject to all terms and provisions thereof. The principal of, and interest on, this Term Loan Note shall be payable at the times, in the manner, and in the amounts as provided in the Credit Agreement and shall be subject to prepayment and acceleration as provided therein. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

 

The Administrative Agent’s books and records concerning the Term Loans, the accrual of interest thereon, and the repayment of such Term Loans, shall be prima facie evidence of the indebtedness to the Lender hereunder, absent manifest error.

 

 

No delay or omission by any Agent or the Lender in exercising or enforcing any of such Agent’s or Lender’s powers, rights, privileges, remedies, or discretions hereunder shall operate as a waiver thereof on that occasion nor on any other occasion. No waiver of any Event of Default shall operate as a waiver of any other Event of Default, nor as a continuing waiver.

 

The Borrower waives presentment, demand, notice, and protest, and also waives any delay on the part of the holder hereof. The Borrower assents to any extension or other indulgence (including, without limitation, the release or substitution of Collateral) permitted by any Agent and/or the Lender with respect to this Term Loan Note and/or any Security Document or any extension or other indulgence with respect to any other liability or any collateral given to secure any other liability of the Borrower or any other Person obligated on account of this Term Loan Note.

 

This Term Loan Note shall be binding upon the Borrower, and each endorser and guarantor hereof, and upon their respective successors, assigns, and representatives, and shall inure to the benefit of the Lender and its successors, endorsees, and permitted assigns.

 

The liabilities of the Borrower, and of any endorser or guarantor of this Term Loan Note, are joint and several, provided, however, the release by any Agent or the Lender of any one or more such Persons shall not release any other Person obligated on account of this Term Loan Note. Each reference in this Term Loan Note to the Borrower, any endorser, and any guarantor, is to such Person individually and also to all such Persons jointly. No Person obligated on account of this Term Loan Note may seek contribution from any other Person also obligated.

 

The Borrower agrees that any suit for the enforcement of this Term Loan Note or any other Loan Document may be brought in any New York state or federal court sitting in New York County as the Administrative Agent may elect in its sole discretion and the Borrower consents to the non-exclusive jurisdiction of such courts. The Borrower hereby waives any objection which it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient forum. The Borrower agrees that any action commenced by the Borrower asserting any claim or counterclaim arising under or in connection with this Term Loan Note or any other Loan Document shall be brought solely in any New York state or federal court sitting in New York County as the Administrative Agent may elect in its sole discretion and consents to the exclusive jurisdiction of such courts with respect to any such action. Nothing in this Term Loan Note shall affect any right that any Credit Party may otherwise have to bring any action or proceeding relating to the Credit Agreement against a Loan Party or its properties in the courts of any jurisdiction.

 

THIS TERM LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

The Borrower makes the following waiver knowingly, voluntarily, and intentionally, and understands that the Agents and the Lender, in the establishment and maintenance of their respective relationships with the Borrower contemplated by this Term Loan Note, are each relying thereon. THE BORROWER, EACH FACILITY GUARANTOR, ENDORSER AND SURETY, AND THE LENDER BY ITS ACCEPTANCE HEREOF, HEREBY WAIVES, TO

 

11

 

THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS TERM LOAN NOTE, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY); AND WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE CREDIT AGREEMENT AND THIS TERM LOAN NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

 

 

[SIGNATURE PAGES FOLLOW]

 

12

 

IN WITNESS WHEREOF, the Borrower has caused this Term Loan Note to be duly executed as of the date set forth above.

 

 

	
 
    	
GUITAR CENTER, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

13

 

 

EXHIBIT D TO CREDIT AGREEMENT

 

JOINDER TO CREDIT AGREEMENT

 

This Joinder to Credit Agreement (this “Joinder”) is made as of                                         , by and among:

 

, a                                                    (the “New Facility Guarantor”), with its principal executive offices at                                                   ; and

 

JPMORGAN CHASE BANK, N.A., a national banking association, having a place of business at 270 Park Avenue, New York, New York 10017, as administrative agent (in such capacity, the “Administrative Agent”) for its own benefit and the benefit of the other Credit Parties (as defined in the Credit Agreement referred to below) and as collateral agent (in such capacity, the “Collateral Agent”), for its own benefit and for the benefit of the other Secured Parties (as defined in the Credit Agreement referred to below) to the Credit Agreement (as defined below);

 

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

 

WITNESSETH:

 

A. Reference is made to a certain Credit Agreement dated as of October 9, 2007 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”), by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), a Delaware corporation, to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), a Delaware corporation, the Facility Guarantors named therein (the “Existing Facility Guarantors”, and together with the Borrower, the “Loan Parties”), the lenders party thereto from time to time (collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as Administrative Agent, (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties. All capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to such terms in the Credit Agreement.

 

B. The New Facility Guarantor desires to become a party to, and bound by the terms of, the Credit Agreement and the other Loan Documents in the same capacity and to the same extent as the Existing Facility Guarantors thereunder.

 

C. Pursuant to the terms of the Credit Agreement, in order for the New Facility Guarantor to become party to the Credit Agreement and the other Loan Documents as provided herein, the New Facility Guarantor and the Existing Facility Guarantors are required to execute this Joinder.

 

14

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                          Joinder and Assumption of Obligations. Effective as of the date of this Joinder, the New Facility Guarantor hereby acknowledges that the New Facility Guarantor has received and reviewed a copy of the Credit Agreement, and hereby:

 

a.                         joins in the execution of, and becomes a party to, the Credit Agreement as a Facility Guarantor, as indicated by its signature below;

 

b.                        covenants and agrees to be bound by all covenants, agreements, liabilities and acknowledgments of a Facility Guarantor under the Credit Agreement and the other Loan Documents, in each case, with the same force and effect as if such New Facility Guarantor was a signatory to the Credit Agreement and the other Loan Documents and was expressly named as a Facility Guarantor therein (other than covenants which specifically relate solely to an earlier date);

 

c.                         assumes and agrees to perform all applicable duties and Obligations of a Loan Party under the Credit Agreement and the other Loan Documents.

 

2.                          Representations and Warranties. The New Facility Guarantor hereby makes all representations, warranties, and covenants set forth in the Credit Agreement as of the date hereof (other than representations, warranties and covenants that specifically relate solely to an earlier date). To the extent that any changes in any representations, warranties, and covenants require any amendments to the Schedules to the Credit Agreement, such Schedules are hereby updated, as evidenced by any supplemental Schedules (if any) annexed to this Joinder.

 

3.                          Ratification of Loan Documents. Except as specifically amended by this Joinder and the other documents executed and delivered in connection herewith, all of the terms and conditions of the Credit Agreement and of the other Loan Documents shall remain in full force and effect as in effect prior to the date hereof, without releasing any Loan Party thereunder or Collateral therefore.

 

4.                          Conditions Precedent to Effectiveness. This Joinder shall not be effective until each of the following conditions precedent have been fulfilled to the reasonable satisfaction of the Administrative Agent:

 

a.                         This Joinder shall have been duly executed and delivered by the respective parties hereto, and shall be in full force and effect and shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

b.                        All action on the part of the New Facility Guarantor and the other Loan Parties necessary for the valid execution, delivery and performance by the New Facility

 

15

 

Guarantor of this Joinder and all other documentation, instruments, and agreements required to be executed in connection herewith shall have been duly and effectively taken and evidence thereof reasonably satisfactory to the Administrative Agent shall have been provided to the Administrative Agent.

 

c.                         The New Facility Guarantor (and each other Loan Party, to the extent requested by the Administrative Agent) shall each have delivered the following to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent:

 

i.                             Certificate of Legal Existence and Good Standing issued by the Secretary of the State of its incorporation or organization.

 

ii.                          A certificate of an authorized officer of the due adoption, continued effectiveness, and setting forth the text, of each corporate resolution adopted in connection with the assumption of obligations under the Credit Agreement and the other Loan Documents, and attesting to the true signatures of each Person authorized as a signatory to any of the Loan Documents, together with true and accurate copies of all Charter Documents.

 

iii.                       Execution and delivery by the New Facility Guarantor of the following Loan Documents:

 

a)                        [Joinders to the Term Loan Note];

 

b)                       Joinder to the Security Documents, as applicable;

 

c)                        [Joinder to the Facility Guaranty]; and

 

d)                       Such other documents, agreements and certificates as the Administrative Agent and the Collateral Agent may reasonably require

 

iv.                      Execution and delivery by the New Facility Guarantor of the Acknowledgment to the Intercreditor Agreement.

 

d.                        Upon the reasonable request of the Administrative Agent, the Administrative Agent shall have received a favorable written legal opinion of the Loan Parties’ counsel addressed to the Agents and the other Lenders, covering such matters relating to the New Facility Guarantor, the Loan Documents and/or the transactions contemplated thereby as the Agents shall reasonably request.

 

e.                         The Administrative Agent shall have received all documents and instruments, (including an authenticated record authorizing the Agents and their representatives to file such UCC financing statements as the Agents may

 

16

 

determine to be appropriate), required by law or requested by the Administrative Agent or the Collateral Agent to create or perfect the first priority Lien (subject only to Permitted Encumbrances having priority by operation of Applicable Law) intended to be created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded or other arrangements reasonably satisfactory to the Agents.

 

f.                           All Credit Party Expenses incurred by the Agents in connection with the preparation and negotiation of this Joinder and related documents for which invoices have been rendered shall have been paid in full by the New Facility Guarantor.

 

g.                        The Loan Parties shall have executed and delivered to the Agents such additional documents, instruments, and agreements as the Agents may reasonably request.

 

5.                          Miscellaneous.

 

a.                         This Joinder may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.

 

b.                        This Joinder expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.

 

c.                         Any determination that any provision of this Joinder or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not effect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Joinder.

 

d.        The Loan Parties shall pay all Credit Party Expenses of the Agents and the Secured Parties, including, without limitation, all such Credit Party Expenses incurred in connection with the preparation, negotiation, execution and delivery of this Joinder in accordance with the terms of the Credit Agreement.

 

e.                         THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

[SIGNATURE PAGES FOLLOW]

 

17

 

IN WITNESS WHEREOF, each of the undersigned has caused this Joinder to be duly executed and delivered by its proper and duly authorized officer as of the date set forth below.

 

 

	
 
    	
NEW FACILITY GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

	
 
    	
ADMINISTRATIVE   AGENT:
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

	
 
    	
COLLATERAL AGENT:
    
	
 
    	
 
    
	
 
    	
JPMORGAN CHASE BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

18

 

Acknowledged and Agreed:

 

	
GUITAR CENTER, INC., as   Borrower
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GUITAR CENTER   HOLDINGS, INC., as Facility Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GUITAR CENTER STORES, INC., as Facility   Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
MUSICIAN’S FRIEND, INC., as Facility   Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
GUITAR CENTER GIFT CARD COMPANY, LLC, as Facility   Guarantor
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

19

 

 

	
HARMONY CENTRAL GROUP, LLC, as Facility   Guarantor
    	
 
    
	
 
    	
 
    
	
By: Guitar Center Inc., its sole member
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

20

 

EXHIBIT E TO CREDIT AGREEMENT

 

FORM OF COMPLIANCE CERTIFICATE

 

	
 
    	
To:
    	
JPMorgan   Chase Bank, N.A.
    	
Date:
    	
                       
    
	
 
    	
 
    	
270   Park Avenue
    	
 
    
	
 
    	
 
    	
New   York, New York 10017
    	
 
    
	
 
    	
 
    	
Attention:   [    ]
    	
 
    

 

 

Re:   Credit Agreement, dated as of October 9, 2007 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”), by and among, among others, VH MergerSub, Inc. (“Merger Sub” and, prior to the Merger (as defined below), the “Borrower”), to be merged (the “Merger”) with and into Guitar Center, Inc. (“Guitar Center” and, after the Merger, the “Borrower”), the guarantors party thereto, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and as collateral agent (in such capacity the “Collateral Agent”, and collectively with the Administrative Agent, the “Agents”) for its own benefit and the benefit of the other Secured Parties. Capitalized terms used herein but not defined shall have the meanings set forth in the Credit Agreement.

 

The undersigned, a duly authorized and acting Financial Officer of the Borrower, hereby certifies to you as follows:

 

1.                          No Defaults or Events of Default. No Default or Event of Default presently exists, except as set forth in Appendix I.

 

2.                          Financial Calculations. Attached hereto as Appendix II are all reasonably detailed calculations with respect to Excess Cash Flow for the period ending                                 .(4)

 

3.                          Store Openings and Closings. Appendix III hereto sets forth in reasonable detail all Store openings and Store closings for the period ending                       . The aggregate number of the Loan Parties’ and their Subsidiaries’ Stores as of the first day of the current Fiscal Quarter/Year is                       .

 

4.                          Cure Amount. The Cure Amount with respect to each exercise of Cure Rights in the period ending                        is                       .

 

5.                          No Material Accounting Changes, Etc. The financial statements furnished to the Administrative Agent for the Fiscal Quarter/Fiscal Year ending                        were prepared in accordance with GAAP (subject to normal year end audit adjustments and the absence of footnotes in the case of quarterly and monthly financial statements) consistently applied and present fairly in all material respects the financial condition and results of operations of Holdings and its Subsidiaries on a Consolidated basis at the close of the period(s) covered. There has been no change in GAAP or the application thereof

 

(4)                     To be included with the delivery of audited financial statements delivered pursuant to Section 5.01(a) only.

 

21

 

since the date of the audited financial statements furnished to the Administrative Agent for the Fiscal Year ending                       , other than the material accounting changes and the effects of such changes on the financial statements accompanying this Certificate as disclosed on Appendix IV hereto.

 

6.                          Immaterial Subsidiaries. Appendix V hereto lists the names of all Immaterial Subsidiaries of Holdings (if any). Each Subsidiary set forth on Appendix V hereto qualifies as an Immaterial Subsidiary as of and for the period ending                       .(5)

 

7.                          Consolidated Secured Net Leverage Ratio. Attached hereto as Exhibit VI hereto are all reasonably detailed calculations with respect to the Consolidated Secured Net Leverage Ratio, for the period ending                       .

 

(5)                     To be delivered annually with monthly updates as necessary pursuant to Section 5.01(d) of the Credit Agreement.

 

22

 

IN WITNESS WHEREOF, I have executed this Certificate this            day of                       ,           .

 

	
 
    	
GUITAR   CENTER, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Financial   Officer of Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

23

 

APPENDIX I

 

Except as set forth below, no Default or Event of Default presently exists. If a Default or Event of Default exists, the following describes the nature of the Default or Event of Default in reasonable detail and the steps, if any, being taken or contemplated by the Loan Parties to be taken on account thereof.

 

24

 

APPENDIX II

 

	
Excess Cash Flow of Holdings for the   period ending:
    	
 
    
	
 
    	
 
    
	
A.
    	
The   sum of (without duplication):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(1)
    	
Consolidated   Net Income for such Fiscal Year:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(2)
    	
the   amount of all non-cash charges (including Consolidated depreciation and   amortization) deducted in arriving at such Consolidated Net Income to the   extent such non-cash charges do not result in a cash payment in a future   period:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(3)
    	
decreases   in Consolidated Working Capital for such Fiscal Year:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(4)
    	
the   aggregate net amount of non-cash loss on the sale, transfer or other   disposition of any assets by Holdings and its Subsidiaries during such Fiscal   Year (other than sales of inventory in the ordinary course of business), to   the extent deducted in arriving at such Consolidated Net Income:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(5)
    	
the   sum of Lines A(1) through A(4):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
B.
    	
The   sum of (without duplication):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(1)
    	
the   amount of all non-cash credits included in arriving at such Consolidated Net   Income for such period:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(2)
    	
without   duplication of any such amount deducted in determining Excess Cash Flow for   any preceding Fiscal Year of Holdings, the aggregate amount actually paid   during such Fiscal Year (or, with respect to Permitted Investments, committed   to be invested pursuant to a legally binding agreement) by Holdings and its   Subsidiaries in cash on account of Capital
    	
 
    

 

25

 

	
 
    	
 
    	
Expenditures   or Permitted Investments (excluding the principal amount of Indebtedness   incurred (or, with respect to not yet paid for Permitted Investments, to be   incurred) to finance such expenditures or Investments (but including   repayments of any such Indebtedness incurring during such period or any prior   period) and any such expenditures or Permitted Investments financed with the   proceeds of any Reinvestment Deferred Amount):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(3)
    	
the   aggregate amount of all regularly scheduled or optional principal payments of   Funded Debt (excluding optional prepayments of the Term Loans) of Holdings   and its Subsidiaries made during such Fiscal Year (other than (i) in   respect of any revolving credit facility to the extent there is not an   equivalent permanent reduction in commitments thereunder and (ii) any   such principal prepayments financed with the proceeds of other Indebtedness):
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(4)
    	
increases   in Consolidated Working Capital for such Fiscal Year:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(5)
    	
the   aggregate net amount of non-cash gain on the sale, transfer or other   disposition of any assets by Holdings and its Subsidiaries during such Fiscal   Year (other than sales of inventory in the ordinary course of business), to   the extent included in arriving at such Consolidated Net Income:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(6)
    	
cash   payments made in respect of long-term liabilities of Holdings and its   Subsidiaries other than Indebtedness:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Plus
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(7)
    	
all   interest (whether accrued or paid in cash or added to principal) due in   respect of the Holdco Initial Loan Facility Indebtedness during such Fiscal   Year:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(8)
    	
the   sum of Lines B(l) through (7)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
C.
    	
Excess   Cash Flow (Line A(5) over Line B(8)):
    	
 
    

 

26

 

APPENDIX III

 

[Attach reasonable detail of all Store openings and Store closings for the period ending                     ]

 

27

 

APPENDIX IV

 

Except as set forth below, no change in GAAP or the application thereof has occurred since                                          [the date of the most recently delivered financial statements to the Administrative Agent prior to the date of this Certificate]. [If changes in GAAP or in application thereof have occurred, the following describes the nature of the changes in reasonable detail and the effect, if any, of each such change in GAAP or in application thereof on the financial statements delivered in connection with this Certificate.]

 

28

 

APPENDIX V

 

Immaterial Subsidiaries

 

29

 

APPENDIX VI

 

Consolidated Secured Net Leverage Ratio
  for the period ending                                :

 

 

	
A.
    	
Consolidated   Total Debt as of such date that is secured by a Lien on any asset of Holdings   or any of its Subsidiaries:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
B.
    	
any   portion of such Consolidated Total Debt that is attributed to Loans (as such   term is defined in the ABL Agreement) outstanding at such date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
C.
    	
the   ABL Borrowings Amount on such date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
D.
    	
the   aggregate amount of unrestricted cash and Cash Equivalents on hand as of such   date of Holdings and its Subsidiaries subject to a first priority (other than   (i) Permitted Encumbrances of the type described in clause (q) of the   definition thereof and (ii) Permitted Encumbrances arising by operation of   law) perfected Lien in favor of the Collateral Agent for the benefit of the   Secured Parties:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
E.
    	
Line   A minus Line B:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
F.
    	
Line   E plus Line C:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
G.
    	
Line   F minus Line D:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
H.
    	
Consolidated   EBITDA of Holdings and its Subsidiaries for the period of four consecutive   Fiscal Quarters most recently ended on or prior to such date, taken as one   accounting period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
1. 
    	
The   sum of (without duplication):
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a) 
    	
Consolidated   Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) 
    	
depreciation,   amortization (including goodwill impairment charges), and all other non-cash   charges, non-cash expenses or non-cash losses (including, but not limited to,   amortization of deferred financial fees, non-cash rent expense, non-cash   expense from any employee benefit or stock option plan, loss on sale or   disposition of fixed assets and subsequent non-cash impairment charges) to   the extent deducted in determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    

 

30

 

	
 
    	
 
    	
(c) 
    	
provisions   for Consolidated Taxes based on income to the extent deducted in determining   Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d) 
    	
Consolidated   Interest Expense to the extent deducted in determining Consolidated Net   Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e) 
    	
Acquisition   Charges to the extent deducted in determining Consolidated Net Income for   such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f) 
    	
non-recurring   and other one time costs (including, without limitation, legal, consulting   and other advisory fees in connection with the corporate restructuring of   Holdings and its Restricted Subsidiaries which are incurred within twelve   (12) months after the Closing Date to the extent deducted in determining   Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(g) 
    	
expenses   and indemnities paid to directors to the extent deducted in determining   Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(h) 
    	
all   costs, fees, expenses and any one time payments made related to the VH   Acquisition to the extent deducted in determining Consolidated Net Income for   such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i) 
    	
all   costs, fees, expenses and any one time payments made related to any Permitted   Investments and Permitted Acquisitions, issuance of equity, recapitalization,   reorganization, Permitted Disposition or issuance of Permitted Indebtedness,   to the extend deducted in determining Consolidated Net Income, and any   reasonably identifiable and factually supportable cost savings, in an   aggregate amount for such consecutive four Fiscal
    	
 
    	
 
    	
 
    

 

31

 

	
 
    	
 
    	
 
    	
Quarter   period not to exceed in the aggregate with any Pro Forma Adjustments for such   period (or any portion thereof) an amount equal to 5% of Consolidated EBITDA   of Holdings and its Subsidiaries for the period of four consecutive Fiscal   Quarters most recently ended on or prior to the date of determination:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(j) 
    	
all   one time compensation charges, including, without limitation, stay bonuses   paid to existing management and severance costs, to the extent deducted in   determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(k) 
    	
to   the extent not already included in Consolidated Net Income, proceeds from   business interruption insurance for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(l) 
    	
to   the extent not already included in Consolidated Net Income and actually   indemnified or reimbursed, any expenses and charges that are covered by   indemnification or reimbursement provisions in connection with any Permitted   Acquisition or any Permitted Disposition for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(m) 
    	
cash   receipts (or reduced cash expenditures) in respect of income received in   connection with subleases to the extent non-cash gains relating to such   income were deducted in the calculation of Consolidated EBITDA pursuant to   Line H(2)(b) below for any previous period to the extent deducted in   determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(n) 
    	
non-cash   charges, expenses or losses relating to the vesting of warrants to the extent   deducted in determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    

 

32

 

	
 
    	
 
    	
(o) 
    	
any   one time expenses related to enhanced accounting functions to the extent   deducted in determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(p) 
    	
any   non-cash increase in expenses (i) resulting from the revaluation of inventory   (including any impact of changes to inventory valuation policy methods   including, without limitation, changes in capitalization of variances) or   (ii) due to purchase accounting associated with the Transactions to the   extent deducted in determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(q) 
    	
costs   related to implementation of inventory management and point of sale solutions   and other systems and technology initiatives (provided, that the   amount of any cash costs added back in the calculation of Consolidated EBITDA   for such period in the aggregate with the amount of any add-backs of such cash   costs for preceding periods shall not exceed $4,000,000) to the extent   deducted in determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(r) 
    	
annual   Advisory Fees whether accrued or paid in cash (provided, that to the extent   any non-cash expense added back becomes a cash charge in any subsequent   period, such cash charge shall not be deducted in determining Consolidated   Net Income for such subsequent period) to the extent deducted in determining   Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(s) 
    	
cash   expenses incurred as a result of litigation against any Loan Party or any of   its Subsidiaries to the extent not reimbursed in such period from insurance   proceeds or by other third parties (provided, that the amount of any   such reimbursement in respect of such expenses received in a subsequent   period shall be deducted in calculating Consolidated EBITDA for such   subsequent period) in an amount not to exceed $3,000,000 in the
    	
 
    	
 
    	
 
    

 

33

 

	
 
    	
 
    	
 
    	
aggregate   with the amount of add-backs for preceding periods to the extent deducted in   determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(t) 
    	
annual   non-cash bonus expense in the period recorded (provided, that to the   extent any non-cash expense added back becomes a cash expense in any   subsequent period, such cash expense shall be deducted in calculating   Consolidated EBITDA for such subsequent period) to the extent deducted in   determining Consolidated Net Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(u) 
    	
unusual,   non-recurring or extraordinary expenses, losses or charges as reasonably   approved by the Administrative Agent (such approval not to be unreasonably   withheld or delayed) to the extent deducted in determining Consolidated Net   Income for such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(v) 
    	
Sum   of lines H(l)(a) through H(l)(u):
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.
    	
Minus   the sum of the following:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a) 
    	
any   Restricted Payment made in cash during such period to any Person (other than   a Loan Party) having an interest in any Restricted Subsidiary of a Loan Party   during such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) 
    	
non-cash   gains for such period to the extent included in Consolidated Net Income for   such period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Plus
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c)
    	
cash   payments made during such period on account of non-cash charges added back in   the calculation of Consolidated EBITDA pursuant to Line H(l)(b) above for any   previous period:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d)
    	
The   sum of Lines H(2)(a) through H(2)(c):
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
I.
    	
Consolidated   EBITDA for such period (Line H(l)(v) minus Line H(2)(d)):
    	
 
    	
 
    	
 
    

 

34

 

	
J. 
    	
Consolidated Secured Net Leverage Ratio for such period 
   (Line G over Line I):
    	
 
    	
 
    	
 
    

 

35

 

EXHIBIT F

 

 

EXECUTION VERSION

 

 

INTERCREDITOR AGREEMENT

 

by and between

 

JPMORGAN CHASE BANK, N.A.,

 

as ABL Agent,

 

and

 

JPMORGAN CHASE BANK, N.A.

 

as Term Agent

 

 

Dated as of October 9, 2007

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page No.
    
	
 
    	
 
    	
 
    
	
ARTICLE 1 DEFINITIONS
    	
2
    
	
Section 1.1
    	
UCC   Definitions
    	
2
    
	
Section 1.2
    	
Other   Definitions
    	
2
    
	
Section 1.3
    	
Rules of   Construction
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 LIEN PRIORITY
    	
12
    
	
Section 2.1
    	
Priority   of Liens
    	
12
    
	
Section 2.2
    	
Waiver   of Right to Contest Liens
    	
14
    
	
Section 2.3
    	
Remedies   Standstill
    	
15
    
	
Section 2.4
    	
Exercise   of Rights
    	
16
    
	
Section 2.5
    	
No   New Liens
    	
18
    
	
Section 2.6
    	
Waiver   of Marshalling
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 ACTIONS OF THE PARTIES
    	
19
    
	
Section 3.1
    	
Certain   Actions Permitted
    	
19
    
	
Section 3.2
    	
Agent   for Perfection
    	
19
    
	
Section 3.3
    	
Sharing   of Information and Access
    	
19
    
	
Section 3.4
    	
Insurance
    	
20
    
	
Section 3.5
    	
No   Additional Rights For the Credit Parties Hereunder
    	
20
    
	
Section 3.6
    	
Inspection   Rights and Insurance
    	
20
    
	
Section 3.7
    	
Agreement   Regarding Mortgages
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 APPLICATION OF PROCEEDS
    	
21
    
	
Section 4.1
    	
Application   of Proceeds
    	
21
    
	
Section 4.2
    	
Specific   Performance
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 INTERCREDITOR ACKNOWLEDGEMENTS AND   WAIVERS
    	
24
    
	
Section 5.1
    	
Notice   of Acceptance and Other Waivers
    	
24
    
	
Section 5.2
    	
Modifications   to ABL Documents and Term Documents
    	
25
    
	
Section 5.3
    	
Reinstatement   and Continuation of Agreement
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 INSOLVENCY PROCEEDINGS
    	
28
    
	
Section 6.1
    	
DIP   Financing
    	
28
    
	
Section 6.2
    	
Relief   From Stay
    	
29
    
	
Section 6.3
    	
No   Contest
    	
30
    
	
Section 6.4
    	
Asset   Sales
    	
30
    
	
Section 6.5
    	
Separate   Grants of Security and Separate Classification
    	
30
    
	
Section 6.6
    	
Enforceability
    	
31
    
	
Section 6.7
    	
ABL   Obligations Unconditional
    	
31
    
	
Section 6.8
    	
Term   Obligations Unconditional
    	
31
    
	
Section 6.9
    	
Adequate   Protection
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 MISCELLANEOUS
    	
32
    
	
Section 7.1
    	
Rights   of Subrogation
    	
32
    

 

 

	
Section 7.2
    	
Further   Assurances
    	
33
    
	
Section 7.3
    	
Representations
    	
33
    
	
Section 7.4
    	
Amendments
    	
33
    
	
Section 7.5
    	
Addresses   for Notices
    	
33
    
	
Section 7.6
    	
No   Waiver, Remedies
    	
34
    
	
Section 7.7
    	
Continuing   Agreement, Transfer of Secured Obligations
    	
34
    
	
Section 7.8
    	
Governing   Law: Entire Agreement
    	
34
    
	
Section 7.9
    	
Counterparts
    	
35
    
	
Section 7.10
    	
No   Third Party Beneficiaries
    	
35
    
	
Section 7.11
    	
Headings
    	
35
    
	
Section 7.12
    	
Severability
    	
35
    
	
Section 7.13
    	
Attorneys   Fees
    	
35
    
	
Section 7.14
    	
VENUE;   JURY TRIAL WAIVER
    	
35
    
	
Section 7.15
    	
Intercreditor   Agreement
    	
36
    
	
Section 7.16
    	
No   Warranties or Liability
    	
36
    
	
Section 7.17
    	
Conflicts
    	
36
    
	
Section 7.18
    	
Information   Concerning Financial Condition of the Credit Parties
    	
36
    

 

ii

 

INTERCREDITOR AGREEMENT

 

THIS INTERCREDITOR AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time pursuant to the terms hereof, this “Agreement”) is entered into as of October 9, 2007 between JPMORGAN CHASE BANK, N.A. (“JPMorgan Chase Bank”), in its capacities as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ABL Agent”) for the financial institutions party from time to time to the Original ABL Credit Agreement referred to below (such financial institutions, together with their successors, assigns and transferees, the “ABL Credit Agreement Lenders” and, together with affiliates thereof and certain other specified hedging parties, in their capacity as ABL Bank Products Affiliates or ABL Hedging Affiliates (in each case, as hereinafter defined), the “ABL Lenders”) and JPMORGAN CHASE BANK, N.A., in its capacities as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “Term Agent”) for the financial institutions party from time to time to the Original Term Credit Agreement referred to below (such financial institutions, together with their successors, assigns and transferees, the “Term Lenders”).

 

RECITALS

 

A.            Pursuant to that certain Credit Agreement dated as of the date hereof by and among VH MergerSub, Inc. (to be merged with and into Guitar Center, Inc.), as lead borrower (the “Lead Borrower” and, together with certain other Subsidiaries of the Lead Borrower specified in the Original ABL Credit Agreement, the “ABL Borrowers”), the ABL Credit Agreement Lenders and the ABL Agent (as such agreement may be amended, supplemented, restated or otherwise modified from time to time, the “Original ABL Credit Agreement”), the ABL Credit Agreement Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of the ABL Borrowers (as hereinafter defined).

 

B.            Pursuant to certain guaranty agreements and security agreements dated as of the date hereof (the “ABL Guaranties”) by the ABL Guarantors (as hereinafter defined) in favor of the ABL Agent, the ABL Guarantors have agreed to guarantee the payment and performance of the ABL Borrowers’ obligations under the ABL Documents (as hereinafter defined).

 

C.            As a condition to the effectiveness of the Original ABL Credit Agreement and to secure the obligations of the ABL Borrowers and the ABL Guarantors (the ABL Borrowers, the ABL Guarantors and each other direct or indirect subsidiary or parent of the ABL Borrowers or any of their affiliates that is now or hereafter becomes a party to any ABL Document, collectively, the “ABL Credit Parties”) under and in connection with the ABL Documents, the ABL Credit Parties have granted to the ABL Agent (for the benefit of the ABL Lenders, including, at the option of the Lead Borrower, the ABL Bank Products Affiliates and ABL Hedging Affiliates) Liens on the Collateral.

 

D.            Pursuant to that certain Credit Agreement dated as of the date hereof by and among the Lead Borrower (the “Term Borrower”), the Term Lenders and the Term Agent (as such agreement may be amended, supplemented, restated or otherwise modified from time to time, the “Original Term Credit Agreement”), the Term Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of the Term Borrower.

 

 

E.             Pursuant to certain guaranty agreements and security agreements dated as of the date hereof (the “Term Guaranties”) by the Term Guarantors (as hereinafter defined) in favor of the Term Agent, the Term Guarantors have agreed to guarantee the payment and performance of the Term Borrower’s obligations under the Term Documents (as hereinafter defined).

 

F.             As a condition to the effectiveness of the Original Term Credit Agreement and to secure the obligations of the Term Borrower and the Term Guarantors (the Term Borrower, the Term Guarantors and each other direct or indirect subsidiary or parent of the Term Borrower or any of its affiliates that is now or hereafter becomes a party to any Term Document, collectively, the “Term Credit Parties”) under and in connection with the Term Documents, the Term Credit Parties have granted to the Term Agent (for the benefit of the Term Lenders) Liens on the Collateral.

 

G.            Each of the ABL Agent (on behalf of the ABL Lenders) and the Term Agent (on behalf of the Term Lenders) and, by their acknowledgment hereof, the ABL Credit Parties and the Term Credit Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests as provided herein.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.1               UCC Definitions.  The following terms which are defined in the Uniform Commercial Code are used herein as so defined:  Accounts, Chattel Paper, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Financial Assets, Fixtures, Instruments, Inventory, Investment Property, Letter-Of-Credit Rights, Money, Payment Intangibles, Promissory Notes, Records, Security, Securities Accounts, Security Entitlements, Supporting Obligations and Tangible Chattel Paper.

 

Section 1.2               Other Definitions.  Subject to Section 1.1 above, unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Original ABL Credit Agreement and the Original Term Credit Agreement, in each case as in effect on the Closing Date.  In addition, as used in this Agreement, the following terms shall have the meanings set forth below:

 

“ABL Agent” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well as any Person designated as the “Agent” or “Administrative Agent” under any ABL Credit Agreement.

 

“ABL Bank Products Affiliate” shall mean any ABL Credit Agreement Lender or any Affiliate of any ABL Credit Agreement Lender that has entered into a Bank Products Agreement with an ABL Credit Party or any Subsidiary thereof with, at the option of the Lead Borrower, the obligations of such ABL Credit Party or Subsidiary thereunder being secured by one or more ABL Collateral Documents.

 

2

 

“ABL Borrowers” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“ABL Collateral Documents” shall mean all “Security Documents” as defined in the Original ABL Credit Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with any ABL Credit Agreement, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof.

 

“ABL Credit Agreement” shall mean the Original ABL Credit Agreement and any other agreement extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the ABL Obligations, whether by the same or any other agent, lender or group of lenders and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.

 

“ABL Credit Agreement Lenders” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“ABL Credit Parties” shall have the meaning assigned to that term in the recitals to this Agreement.

 

“ABL Documents” shall mean the ABL Credit Agreement, the ABL Guaranties, the ABL Collateral Documents, at the option of the Lead Borrower, any Bank Product Agreements, at the option of the Lead Borrower, any ABL Designated Hedge Agreements, those other ancillary agreements as to which the ABL Agent or any ABL Lender is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ABL Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the ABL Agent, in connection with any of the foregoing or any ABL Credit Agreement, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof.

 

“ABL Designated Hedge Agreements” means “Designated Hedge Agreements” as such term is defined in the Original ABL Credit Agreement.

 

“ABL Guaranties” shall have the meaning assigned to that term in the recitals to this Agreement.

 

“ABL Guarantors” shall mean the collective reference to Holdings and its Subsidiaries,  other than the ABL Borrowers and any Excluded Subsidiary (as defined in the Original ABL Credit Agreement), and any other Person who becomes a guarantor under any of the ABL Guaranties.

 

“ABL Hedging Affiliate” shall mean any Person that has entered into a Designated Hedge Agreement with an ABL Credit Party or any Subsidiary thereof with, at the option of the Lead Borrower, the obligations of such ABL Credit Party or Subsidiary thereunder being secured by one or more ABL Collateral Documents by an ABL Credit Party.

 

3

 

 

“ABL Lenders” shall have the meaning assigned to that term in the introduction to this Agreement and shall, at the option of the Lead Borrower, include all ABL Bank Product Affiliates and ABL Hedging Affiliates and all successors, assigns, transferees and replacements thereof, as well as any Person designated as a “Lender” under any ABL Credit Agreement.

 

“ABL Obligations” shall mean all obligations of every nature of each ABL Credit Party and each Subsidiary thereof from time to time owed to the ABL Agent, the ABL Lenders or any of them, under any ABL Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party or such Subsidiary, would have accrued on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party or such Subsidiary for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the ABL Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time in accordance with the terms thereof.

 

“ABL Priority Collateral” shall mean all Collateral consisting of the following:

 

(1)           all Accounts;

 

(2)           all Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper);

 

(3)           (x) all Deposit Accounts and Money and all cash, checks, other negotiable instruments, funds and other evidences of payments held therein and (y) Securities, Security Entitlements and Securities Accounts, in each case, solely to the extent constituting cash or Cash Equivalents or representing a claim to Cash Equivalents and all cash, checks and other property held therein or credited thereto, but in any event and regardless of the foregoing clauses, excluding, in each case, the Asset Sales Proceeds Account;

 

(4)           all Inventory;

 

(5)           to the extent relating to, evidencing or governing any of the items referred to in the preceding clauses (1) through (4), all Documents, General Intangibles (other than any Intellectual Property), Instruments (including Promissory Notes) and commercial tort claims, provided that to the extent any of the foregoing also relates to Term Priority Collateral, only that portion related to the items referred to in the preceding clauses (1) through (4) shall be included in the ABL Priority Collateral.

 

(6) to the extent evidencing or governing any of the items referred to in the preceding clauses (1) through (5), all Supporting Obligations; provided that to the extent any of the foregoing also relates to Term Priority Collateral only that portion related to the items referred to in the preceding clauses (1) through (5) shall be included in the ABL Priority Collateral;

 

(7)           all books and Records relating to the items referred to in the preceding clauses (1) through (6) (including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic, which contain any information relating to any of the items referred to in the preceding clauses (1) through (6)); and

 

4

 

(8)           all collateral security and guarantees with respect to any of the foregoing and all cash, Money, insurance proceeds, instruments, securities, financial assets and deposit accounts received as proceeds of any of the foregoing (such proceeds, “ABL Priority Proceeds”); provided, however, that no proceeds of ABL Priority Proceeds will constitute ABL Priority Collateral unless such proceeds of ABL Priority Proceeds would otherwise constitute ABL Priority Collateral.

 

“ABL Recovery” shall have the meaning set forth in Section 5.3(a).

 

“ABL Secured Parties” shall mean the ABL Agent and the ABL Lenders.

 

“Account(s)” means “accounts” as defined in the UCC, and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, or (c) arising out of the use of a credit or charge card or information contained on or for use with the card.  The term “Account” does not include (a) rights to payment evidenced by chattel paper or an instrument, (b) commercial tort claims, (c) deposit accounts, (d) investment property, or (e) letter-of-credit rights or letters of credit.

 

“Affiliate” shall mean, with respect to a specified Person, any other Person that directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with the Person specified.

 

“Agreement” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“Asset Sales Proceeds Account” shall mean one or more Deposit Accounts or Securities Accounts, in each case with the Term Agent, holding only the proceeds of any sale or disposition of any Term Priority Collateral and the proceeds or investment thereof.

 

“Bank Products Agreement” shall mean any agreement pursuant to which any ABL Bank Products Affiliate agrees to provide Cash Management Services.

 

“Borrower” shall mean any of the ABL Borrowers and the Term Borrower.

 

“Capital Stock” shall mean, as to any Person that is a corporation, the authorized shares of such Person’s capital stock, including all classes of common, preferred, voting and nonvoting capital stock, and, as to any Person that is not a corporation or an individual, the membership or other ownership interests in such Person, including the right to share in profits and losses, the right to receive distributions of cash and other property, and the right to receive allocations of items of income, gain, loss, deduction and credit and similar items from such Person, whether or not such interests include voting or similar rights entitling the holder thereof to exercise Control over such Person, collectively with, in any such case, all warrants, options and other rights to purchase or otherwise acquire, and all other instruments convertible into or exchangeable for, any of the foregoing.

 

“Cash Collateral” shall mean any Collateral consisting of Money or Cash Equivalents, Deposit Accounts, Instruments, any Security Entitlement and any Financial Assets.

 

5

 

“Cash Equivalents” shall mean (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America) or any state or state agency thereof, in each case maturing within one (1) year from the date of acquisition thereof, (b) investments in commercial paper maturing within one (1) year from the date of acquisition thereof and having, at the date of acquisition, the highest or next highest credit rating obtainable from S&P or from Moody’s, (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one (1) year from the date of acquisition thereof which are issued or guaranteed by, or placed with, and demand deposit and money market deposit accounts issued or offered by, any Lender or any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000, (d) master demand notes and fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above (without regard to the limitation on maturity contained in such clause) and entered into with a financial institution satisfying the criteria described in clause (c) above or with any primary dealer, (e) shares of any money market or mutual fund that has substantially all of its assets invested in the types of investments referred to in clauses (a) through (d), above, and (f) investments with foreign governmental entities which are members of the OECD, or foreign banks organized under the laws of countries which are member of the OECD, similar to the investments set forth in clauses (a), (b) and (c) above, so long as such foreign bank has combined capital and surplus of a dollar equivalent of no less than $500,000,000.

 

“Cash Management Services” shall have the meaning provided in the ABL Credit Agreement as in effect on the date hereof.

 

“Collateral” shall mean all Property now owned or hereafter acquired by any Borrower or any Guarantor in or upon which a Lien is granted or purported to be granted to the ABL Agent or the Term Agent under any of the ABL Collateral Documents or the Term Collateral Documents, together with all rents, issues, profits, products and Proceeds thereof.

 

“Control” shall mean the possession, directly or indirectly, of the power (a) to vote 50% or more of the securities having ordinary voting power for the election of directors (or any similar governing body) of a Person, or (b) to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power or by contract.  The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

“Control Collateral” shall mean any Collateral consisting of any Certificated Security (as defined in Section 8-102 of the Uniform Commercial Code), Investment Property, Deposit Account, Instruments and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.

 

“Copyright Licenses” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

“Copyrights” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

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“Credit Documents” shall mean the ABL Documents and the Term Documents.

 

“Credit Parties” shall mean the ABL Credit Parties and the Term Credit Parties.

 

“Debtor Relief Laws” shall mean the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for 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 affecting the rights of creditors generally.

 

“DIP Financing” shall have the meaning set forth in Section 6.1(a).

 

“Discharge of ABL Obligations” shall mean (a) the payment in full in cash of the ABL Obligations that are outstanding and unpaid at the time all Indebtedness thereunder is paid in full including, with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit) delivery or provision of Money or backstop letters of credit in respect thereof in compliance with the terms of any ABL Credit Agreement (which shall not exceed an amount equal to 103% of the aggregate undrawn amount of such letters of credit) and (b) the termination of all commitments to extend credit under the ABL Documents.

 

“Discharge of Term Obligations” shall mean (a) the payment in full in cash of the Term Obligations that are outstanding and unpaid at the time all Indebtedness thereunder is paid in full and (b) the termination of all commitments to extend credit under the Term Documents.

 

“Event of Default” shall mean an Event of Default under any ABL Credit Agreement or any Term Credit Agreement.

 

“Exercise Any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” shall mean, except as otherwise provided in the final sentence of this definition:

 

(a)           the taking by any Secured Party of any action to enforce or realize upon any Lien, including the institution of any foreclosure proceedings or the noticing of any public or private sale pursuant to Article 9 of the Uniform Commercial Code;

 

(b)           the exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in satisfaction of a Lien;

 

(c)           the taking by any Secured Party of any action or the exercise of any right or remedy in respect of the collection on, set off against, marshaling of, injunction respecting or foreclosure on the Collateral or the Proceeds thereof;

 

(d)           the appointment on an application of a Secured Party of a receiver, receiver and manager or interim receiver of all or part of the Collateral;

 

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(e)           the sale, lease, license, or other disposition of all or any portion of the Collateral by private or public sale conducted by a Secured Party or any other means permissible under applicable law;

 

(f)            the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code;

 

(g)           the exercise by any Secured Party of any voting rights relating to any Capital Stock included in the Collateral; and

 

(h)           the delivery of any claim or demand relating to the Collateral to any Person (including any securities intermediary, depository bank or landlord) in possession or control of any Collateral in connection with the collection of the ABL Obligations or Term Obligations after the occurrence of an Event of Default (except, with respect to the ABL Lenders, such action shall not be deemed an Exercise of Secured Creditor Remedies if the ABL Lenders have not terminated their commitments to the ABL Borrowers under the ABL Credit Agreement and/or are continuing to make loans and advances to or for the benefit of the ABL Borrowers).

 

For the avoidance of doubt, exercising any right or remedy provided to an ABL Lender upon the occurrence of a Cash Dominion Event, reducing advance rates and sub-limits, imposing reserves, filing a proof of claim in bankruptcy court or seeking adequate protection shall not be deemed to be an Exercise of Secured Creditor Remedies.

 

“Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee.

 

“Foreign Subsidiary” shall have the meaning provided in the Original ABL Credit Agreement and the Original Term Credit Agreement as in effect on the date hereof.

 

“General Intangibles” shall mean all “general intangibles” as such term is defined in the Uniform Commercial Code including, with respect to any Credit Party, all contracts, agreements and indentures in any form, and portions thereof, to which such Credit Party is a party or under which such Credit Party has any right, title or interest or to which such Credit Party or any property of such Credit Party is subject, as the same may be amended, supplemented, restated or otherwise modified from time to time.

 

“Guarantor” shall mean any of the ABL Guarantors or Term Guarantors.

 

“Holdings” shall mean Guitar Center Holdings, Inc., a Delaware corporation.

 

“Indebtedness”  shall have the meaning provided in the ABL Credit Agreement and the Term Credit Agreement as in effect on the date hereof.

 

“Initial Borrower” shall have the meaning assigned to that term in the recitals to this Agreement.

 

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“Insolvency Proceeding” shall mean (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under United States Federal, State or foreign law, including the Bankruptcy Code.

 

“JPMorgan Chase Bank” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“Lead Borrower” shall have the meaning assigned to that term in the recitals to this Agreement.

 

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any Financing Lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Lien Priority” shall mean with respect to any Lien of the ABL Agent, the ABL Lenders, the Term Agent or the Term Lenders in the Collateral, the order of priority of such Lien as specified in Section 2.1.

 

“Original ABL Credit Agreement” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“Original Term Credit Agreement” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“Party” shall mean the ABL Agent or the Term Agent, and “Parties” shall mean both the ABL Agent and the Term Agent.

 

“Patent License” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

“Patents” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

“Payment Collateral” shall mean all Accounts, Instruments, Chattel Paper, Deposit Accounts (other than the Asset Sales Proceeds Account), Securities Accounts and Payment Intangibles, together with all Supporting Obligations, in each case composing a portion of the Collateral.

 

“Priority Collateral” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.

 

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“Proceeds” shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

 

“Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

“Secured Parties” shall mean the ABL Secured Parties and the Term Secured Parties.

 

“Subsidiary” shall mean with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity (a) of which Capital Stock representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Term Agent” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well as any Person designated as the “Agent” or “Administrative Agent” under any Term Credit Agreement.

 

“Term Borrower” shall have the meaning assigned to that term in the introduction to this Agreement.

 

“Term Collateral Documents” shall mean all “Security Documents” as defined in the Original Term Credit Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with any Term Credit Agreement, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof.

 

“Term Credit Agreement” shall mean the Original Term Credit Agreement and any other agreement extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the Term Obligations, whether by the same or any other agent, lender or group of lenders and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.

 

“Term Credit Parties” shall have the meaning assigned to that term in the recitals to this Agreement.

 

“Term Designated Hedge Agreements” means “Designated Hedge Agreements” as such term is defined in the Original Term Credit Agreement.

 

“Term Documents” shall mean the Term Credit Agreement, the Term Guaranties, the Term Collateral Documents, at the option of the Term Borrower, any Term Designated Hedge Agreements, those other ancillary agreements as to which the Term Agent or any Term Lender is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the Term Agent, in connection with any of the foregoing or any 

 

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Term Credit Agreement, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof.

 

“Term Guaranties” shall have the meaning assigned to that term in the recitals to this Agreement.

 

“Term Guarantors” shall mean the collective reference to Holdings and its Subsidiaries, other than any Excluded Subsidiary (as defined in the Original Term Credit Agreement), and any other Person who becomes a guarantor under any of the Term Guaranties.

 

“Term Hedging Affiliate” shall mean any Person that has entered into a Designated Hedge Agreement with a Term Credit Party or any Subsidiary thereof with, at the option of the Term Borrower, the obligations of such Term Credit Party or Subsidiary thereunder being secured by one or more Term Collateral Documents by a Term Credit Party.

 

“Term Lenders” shall have the meaning assigned to that term in the introduction to this Agreement and shall, at the option of the Term Borrower, include all Term Hedging Affiliates and all successors, assigns, transferees and replacements thereof, as well as any Person designated as a “Lender” under any Term Credit Agreement.

 

“Term Obligations” shall mean all obligations of every nature of each Term Credit Party and each Subsidiary thereof from time to time owed to the Term Agent, the Term Lenders or any of them, under any Term Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Term Credit Party or such Subsidiary, would have accrued on any Term Obligation, whether or not a claim is allowed against such Term Credit Party or such Subsidiary for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Term Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time in accordance with the terms thereof.

 

“Term Priority Collateral” shall mean:

 

(1)           all Equipment, Fixtures, Real Estate, Intellectual Property and Investment Property (other than Cash Equivalents not credited to or deposited in the Asset Sales Proceeds Account),

 

(2)           except to the extent relating to, evidencing or governing ABL Priority Collateral, all Instruments, Documents, General Intangibles and commercial tort claims,

 

(3)           all other Collateral, other than the ABL Priority Collateral, and

 

(4)           all collateral security and guarantees with respect to the foregoing and all cash, Money, insurance proceeds, instruments, securities, financial assets and deposit accounts received as proceeds of any Collateral, other than the ABL Priority Collateral (such proceeds, “Term Priority Proceeds”); provided, however, no proceeds of Term Priority Proceeds will constitute Term Priority Collateral unless such proceeds of Term Priority Proceeds would otherwise constitute Term Priority Collateral or are credited to the Asset Sales Proceeds Account.

 

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“Term Recovery” shall have the meaning set forth in Section 5.3(b).

 

“Term Secured Parties” shall mean the Term Agent and the Term Lenders.

 

“Trademark License” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

“Trademarks” shall have the meaning assigned to such term in the Intellectual Property Security Agreement as in effect on the Closing Date.

 

“Uniform Commercial Code” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that to the extent that the Uniform Commercial Code is used to define any term in any security document and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 shall govern; provided, further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, Liens of any Party is governed by the Uniform Commercial Code or foreign personal property security laws as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” will mean the Uniform Commercial Code or such foreign personal property security laws as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

Section 1.3               Rules of Construction.  Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting and shall be deemed to be followed by the phrase “without limitation,” and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.  Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein).  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  Any reference herein to the repayment in full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite holders or representatives in respect of such obligation, or in such other manner as may be approved by the requisite holders or representatives in respect of such obligation.

 

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ARTICLE 2
  LIEN PRIORITY

 

Section 2.1               Priority of Liens.

 

(a)       Subject to the provisos in subclauses (b) and (c) of Section 4.1, notwithstanding (i) the date, time, method, manner, or order of grant, attachment, or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to the ABL Agent or the ABL Lenders in respect of all or any portion of the Collateral or of any Liens granted to the Term Agent or the Term Lenders in respect of all or any portion of the Collateral and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent or the Term Agent (or ABL Lenders or Term Lenders) in any Collateral, (iii) any provision of the Uniform Commercial Code, the Bankruptcy Code or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether the ABL Agent or the Term Agent, in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v) the fact that any such Liens in favor of the ABL Agent or the ABL Lenders or the Term Agent or the Term Lenders securing any of the ABL Obligations or Term Obligations, respectively, are (x) subordinated to any Lien securing any obligation of any Credit Party other than the Term Obligations or the ABL Obligations, respectively, or (y) otherwise subordinated, voided, avoided, invalidated or lapsed, or (vi) any other circumstance of any kind or nature whatsoever, the ABL Agent, on behalf of itself and the ABL Lenders, and the Term Agent, on behalf of itself and the Term Lenders, hereby agree that:

 

(1)           any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the Term Agent or any Term Lender that secures all or any portion of the Term Obligations shall in all respects be junior and subordinate to all Liens granted to the ABL Agent and the ABL Lenders in the ABL Priority Collateral to secure all or any portion of the ABL Obligations;

 

(2)           any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Lender that secures all or any portion of the ABL Obligations shall in all respects be senior and prior to all Liens granted to the Term Agent or any Term Lender in the ABL Priority Collateral to secure all or any portion of the Term Obligations;

 

(3)           any Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Lender that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to all Liens granted to the Term Agent and the Term Lenders in the Term Priority Collateral to secure all or any portion of the Term Obligations; and

 

(4)           any Lien in respect of all or any portion of the Term Priority Collateral now or hereafter held by or on behalf of the Term Agent or any Term Lender that secures all or any portion of the Term Obligations shall in all respects be senior and prior to all Liens granted to the ABL Agent or any ABL Lender in the Term Priority Collateral to secure all or any portion of the ABL Obligations.

 

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(b)       Notwithstanding any failure by any ABL Secured Party or Term Secured Party to perfect its security interests in the Collateral or any avoidance, invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral granted to the ABL Secured Parties or the Term Secured Parties but, for the avoidance of doubt, subject to the provisos in subclauses (b) and (c) of Section 4.1, the priority and rights as between the ABL Secured Parties and the Term Secured Parties with respect to the Collateral shall be as set forth herein.

 

(c)       The Term Agent, for and on behalf of itself and the Term Lenders, acknowledges and agrees that, concurrently herewith, the ABL Agent, for the benefit of itself and the ABL Lenders, has been granted Liens upon all of the Collateral in which the Term Agent has been granted Liens and the Term Agent hereby consents thereto.  The ABL Agent, for and on behalf of itself and the ABL Lenders, acknowledges and agrees that, concurrently herewith, the Term Agent, for the benefit of itself and the Term Lenders, has been granted Liens upon all of the Collateral in which the ABL Agent has been granted Liens and the ABL Agent hereby consents thereto.  The subordination of Liens by the Term Agent and the ABL Agent in favor of one another as set forth herein shall not be deemed to subordinate the Term Agent’s Liens or the ABL Agent’s Liens to the Liens of any other Person.

 

Section 2.2               Waiver of Right to Contest Liens.

 

(a)       The Term Agent, for and on behalf of itself and the Term Lenders, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent and the ABL Lenders in respect of the Collateral or the provisions of this Agreement.  Except to the extent expressly set forth in this Agreement, the Term Agent, for itself and on behalf of the Term Lenders, agrees that none of the Term Agent or the Term Lenders will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Lender under the ABL Documents with respect to the ABL Priority Collateral.  Except to the extent expressly set forth in this Agreement, the Term Agent, for itself and on behalf of the Term Lenders, hereby waives any and all rights it or the Term Lenders may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any ABL Priority Collateral.  The foregoing shall not be construed to prohibit the Term Agent from enforcing the provisions of this Agreement as to the relative priority of the parties hereto.

 

(b)       The ABL Agent, for and on behalf of itself and the ABL Lenders, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the Term Agent or the Term Lenders in respect of the Collateral or the provisions of this Agreement.  Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, agrees that none of the ABL Agent or the ABL Lenders will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the Term Agent or any 

 

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Term Lender under the Term Documents with respect to the Term Priority Collateral.  Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, hereby waives any and all rights it or the ABL Lenders may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the Term Agent or any Term Lender seeks to enforce its Liens in any Term Priority Collateral.  The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement as to the relative priority of the parties hereto.

 

Section 2.3               Remedies Standstill.

 

(a)       The Term Agent, on behalf of itself and the Term Lenders, agrees that, until the date upon which the Discharge of ABL Obligations shall have occurred, neither the Term Agent nor any Term Lender will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent, and will not take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by the Term Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Agent.  From and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent), the Term Agent or any Term Lender may Exercise Any Secured Creditor Remedies under the Term Documents or applicable law as to any ABL Priority Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the Term Agent is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.

 

(b)       The ABL Agent, on behalf of itself and the ABL Lenders, agrees that, until the date upon which the Discharge of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Lender will Exercise Any Secured Creditor Remedies with respect to the Term Priority Collateral without the written consent of the Term Agent, and will not take, receive or accept any Proceeds of the Term Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of Term Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the Term Agent.  From and after the date upon which the Discharge of Term Obligations shall have occurred (or prior thereto upon obtaining the written consent of the Term Agent), the ABL Agent or any ABL Lender may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.

 

(c)       Notwithstanding any other provision of this agreement, nothing contained herein shall be construed to prevent (i) the ABL Agent or any ABL Lender from objecting to any proposed retention of collateral by the Term Agent or any Term Lender in full or partial satisfaction of any Term Obligations of (ii) the Term Agent or any Term Lender from objecting to any proposed retention of collateral by the ABL Agent or any ABL Lender in full or partial satisfaction of any ABL Obligations.

 

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Section 2.4               Exercise of Rights.

 

(a)       No Other Restrictions.  Except as expressly set forth in this Agreement, each of the Term Agent, each Term Lender, the ABL Agent and each ABL Lender shall have any and all rights and remedies it may have as a creditor under applicable law, including the right to the Exercise of Secured Creditor Remedies; provided, however, that the Exercise of Secured Creditor Remedies with respect to the Collateral shall be subject to the Lien Priority and to the provisions of this Agreement, including Sections 2.3 and 4.1 hereof.  None of the Term Agent, any Term Lender, the ABL Agent or any ABL Lender waives any claim it may have on grounds of commercial reasonableness.  The ABL Agent may enforce the provisions of the ABL Documents, the Term Agent may enforce the provisions of the Term Documents and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law; provided, however, that each of the ABL Agent and the Term Agent agrees to provide to the other copies of any notices that it is required under applicable law to deliver to any Borrower or any Guarantor; provided  further, however, that the ABL Agent’s failure to provide any such copies to the Term Agent shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents and the Term Agent’s failure to provide any such copies to the ABL Agent shall not impair any of the Term Agent’s rights hereunder or under any of the Term Documents.  Each of the Term Agent, each Term Lender, the ABL Agent and each ABL Lender agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim, in the case of the Term Agent and each Term Lender, against either the ABL Agent or any other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party, against either the Term Agent or any other Term Secured Party, seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral which is consistent with the terms of this Agreement, and none of such Parties shall be liable for any such action taken or omitted to be taken.

 

(b)           Release of Liens.  (i)  In the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the ABL Agent (other than in connection with a refinancing as described in Section 5.2(c)), (B) any sale, transfer or other disposition of all or any portion of the ABL Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c)), so long as such sale, transfer or other disposition is then permitted by the ABL Documents or shall have been approved by the requisite ABL Lenders or (C) the release of the ABL Secured Parties’ Lien on all or any portion of the ABL Priority Collateral (other than in connection with a sale, transfer or other disposition as described in clauses (A) and (B) above), so long as such release is then permitted by the ABL Documents or shall have been approved by the requisite ABL Lenders, in the case of clause (C) only to the extent prior to the date upon which the Discharge of ABL Obligations shall have occurred and not in connection with a Discharge of ABL Obligations (and irrespective of whether an Event of Default has occurred), the Term Agent agrees, on behalf of itself and the Term Lenders, such sale, transfer, other disposition or release will be free and clear of the Liens on such ABL Priority Collateral securing the Term Obligations, and the Term Agent’s and the Term Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be 

 

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automatically released without further action.  In furtherance of, and subject to, the foregoing, the Term Agent agrees that it will promptly execute any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith.  The Term Agent hereby appoints the ABL Agent and any officer or duly authorized person of the ABL Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Term Agent and in the name of the Term Agent or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).  All proceeds realized from any such sale or disposition shall be applied to the ABL Obligations or the Term Obligations in accordance with the terms of this Agreement.

 

(ii)           In the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the Term Agent (other than in connection with a refinancing as described in Section 5.2(c)), (B) any sale, transfer or other disposition of all or any portion of the Term Priority Collateral (other than in connection with a refinancing as described in Section 5.2(c)), so long as such sale, transfer or other disposition is then permitted by the Term Documents or shall have been approved by the requisite Term Lenders or (C) the release of the Term Secured Parties’ Lien on all or any portion of the Term Priority Collateral (other than in connection with a sale, transfer or other disposition as described in clauses (A) and (B) above), so long as such release is then permitted by the Term Documents or shall have been approved by the requisite Term Lenders, in the case of clause (C) only to the extent prior to the date upon which the Discharge of Term Obligations shall have occurred and not in connection with a Discharge of ABL Obligations (and irrespective of whether an Event of Default has occurred), the ABL Agent agrees, on behalf of itself and the ABL Lenders, that such sale, transfer, other disposition or release will be free and clear of the Liens on such Term Priority Collateral securing the ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action.  In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute any and all Lien releases or other documents reasonably requested by the Term Agent in connection therewith.  The ABL Agent hereby appoints the Term Agent and any officer or duly authorized person of the Term Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the ABL Agent and in the name of the ABL Agent or in the Term Agent’s own name, from time to time, in the Term Agent’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).  All proceeds realized from any such sale or disposition shall be applied to the ABL Obligations or the Term Obligations in accordance with the terms of this Agreement.

 

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Section 2.5               No New Liens.  (a)  Until the date upon which the Discharge of ABL Obligations shall have occurred, the parties hereto agree that no Term Secured Party shall acquire or hold any Lien on any assets of any Credit Party securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein.  If any Term Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the Term Agent (or the relevant Term Secured Party) shall, without the need for any further consent of any other Term Secured Party, the Term Borrower or any Term Guarantor, and notwithstanding anything to the contrary in any other Term Document, be deemed to also hold and have held such Lien as bailee for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien.

 

(b)       Until the date upon which the Discharge of Term Obligations shall have occurred, the parties hereto agree that no ABL Secured Party shall acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of the Term Agent under the Term Documents, subject to the Lien Priority set forth herein.  If any ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of the Term Agent under the Term Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party, any ABL Borrower or any ABL Guarantor and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such Lien as bailee for the benefit of the Term Agent as security for the Term Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the Term Agent in writing of the existence of such Lien.

 

Section 2.6               Waiver of Marshalling.  (a)  Until the Discharge of the ABL Obligations, the Term Agent, on behalf of itself and the Term Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

(b)           Until the Discharge of the Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

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ARTICLE 3
  ACTIONS OF THE PARTIES

 

Section 3.1               Certain Actions Permitted.  The Term Agent and the ABL Agent may make such demands or file such claims in respect of the Term Obligations or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders, or rules of procedure at any time.

 

Section 3.2               Agent for Perfection.  The ABL Agent, for and on behalf of itself and each ABL Lender, and the Term Agent, for and on behalf of itself and each Term Lender, as applicable, each agree to hold all Control Collateral and Cash Collateral that is part of the Collateral in their respective possession, custody, or control (or in the possession, custody, or control of agents or bailees for either) as agent for the other solely for the purpose of perfecting the security interest granted to each in such Control Collateral or Cash Collateral, subject to the terms and conditions of this Section 3.2.  None of the ABL Agent, the ABL Lenders, the Term Agent, or the Term Lenders, as applicable, shall have any obligation whatsoever to the others to assure that the Control Collateral is genuine or owned by any Borrower, any Guarantor, or any other Person or to preserve rights or benefits of any Person.  The duties or responsibilities of the ABL Agent and the Term Agent under this Section 3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral and the Cash Collateral as agent for the other Party for purposes of perfecting the Lien held by the Term Agent or the ABL Agent, as applicable.  The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term Agent, the Term Lenders, or any other Person.  The Term Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Agent, the ABL Lenders, or any other Person.  In the event that (a) the Term Agent or any Term Lender receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, or (b) the ABL Agent or any ABL Lender receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, then the Term Agent, such Term Lender, the ABL Agent, or such ABL Lender, as applicable, shall promptly pay over such Proceeds or Collateral to (i) in the case of clause (a), the ABL Agent, or (ii) in the case of clause (b), the Term Agent, in each case, in the same form as received with any necessary endorsements, for application in accordance with the provisions of Section 4.1 of this Agreement.

 

Section 3.3               Sharing of Information and Access.  In the event that the ABL Agent shall, in the exercise of its rights under the ABL Collateral Documents or otherwise, receive possession or control of any books and Records of any Term Credit Party which contain information identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from the Term Agent and as promptly as practicable thereafter, either make available to the Term Agent such books and Records for inspection and duplication or provide to the Term Agent copies thereof.  In the event that the Term Agent shall, in the exercise of its rights under the Term Collateral Documents or otherwise, receive possession or control of any books and records of any ABL Credit Party which contain information identifying or pertaining to any of the ABL Priority Collateral, the Term Agent shall, upon request from the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and records for inspection and duplication or provide the ABL Agent copies thereof.

 

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Section 3.4               Insurance.  Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds.  The ABL Agent and the Term Agent each shall be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to Collateral.  The ABL Agent shall have the sole and exclusive right, as against the Term Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral.  The Term Agent shall have the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of Term Priority Collateral.  All proceeds of such insurance shall be remitted to the ABL Agent or the Term Agent, as the case may be, and each of the Term Agent and ABL Agent shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1 hereof.

 

Section 3.5               No Additional Rights For the Credit Parties Hereunder.  Except as provided in Section 3.6, if any ABL Secured Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Credit Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured Party.

 

Section 3.6               Inspection Rights and Insurance.  (a)  Without limiting any rights the ABL Agent or any other ABL Secured Party may otherwise have under applicable law or by agreement, the ABL Agent, the ABL Secured Parties and any representatives designated by the ABL Agent may, at any time and whether or not the Term Agent or any other Term Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies (the “ABL Permitted Access Right”), (i) during normal business hours on any business day, access ABL Priority Collateral that (A) is stored or located in or on, (B) has become an accession with respect to (within the meaning of Section 9-335 of the Uniform Commercial Code), or (C) has been commingled with (within the meaning of Section 9-336 of the Uniform Commercial Code), Term Priority Collateral and (ii) in the event of any liquidation of the ABL Priority Collateral (or any other Exercise of Any Secured Creditor Remedies by the ABL Agent or any representatives designated by the ABL Agent (including any ABL Borrower or ABL Guarantor) acting with the consent or on behalf of the ABL Agent), use the Term Priority Collateral (including without limitation, Equipment, Fixtures, Intellectual Property, General Intangibles and Real Estate) (A) in the case of Term Priority Collateral other than Intellectual Property, until the date that is 120 days after the commencement of such liquidation of the ABL Priority Collateral or Exercise of Any Secured Creditor Remedies, as the case may be, and (B) in the case of Intellectual Property until the liquidation of such ABL Collateral is completed, non-exclusively, royalty free and without other costs, expenses or charges, in the case of each of (i) and (ii), (x) for the limited purposes of assembling, inspecting, copying or downloading information stored on, taking actions to perfect its Lien on, completing a production run of inventory involving, taking possession of, moving, preparing and advertising for sale, selling, liquidating (by public auction, private sale or a “store closing”, “going out of business” or similar sale, whether in bulk, in lots or to customers in the ordinary course of business, which sale may include augmented inventory of the same type sole in the ABL Borrowers’ and ABL Guarantors’ business), storing or otherwise dealing with, or to Exercise Any Secured Creditor Remedies with respect to, the ABL Priority Collateral (collectively, “ABL Permitted Access Purposes”) and (y) without notice to, 

 

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the involvement of or interference by any Term Secured Party or liability to any Term Secured Party.  In the event that any ABL Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies with respect to any ABL Priority Collateral, the Term Agent may not sell, assign or otherwise transfer the related Term Priority Collateral prior to the expiration of the 120-day period commencing on the date such Secured Party begins to Exercise Any Secured Creditor Remedies, unless the purchaser, assignee or transferee thereof agrees to be bound by the provisions of this Section 3.6.  If any stay or other order that prohibits the ABL Agent and other ABL Secured Parties from commencing and continuing to Exercise Any Secured Creditor Remedies with respect to ABL Priority Collateral has been entered by a court of competent jurisdiction, such 120-day period shall be tolled during the pendency of any such stay or other order.  The ABL Agent and the ABL Secured parties shall not be obligated to pay any amounts to the Term Agent or the Term Secured Parties (or any Person claiming by, through or under the Term Secured Parties, including any purchaser of the Term Priority Collateral) or to the ABL Borrowers and ABL Guarantors, for or in respect of the use by the ABL Agent and the ABL Secured Parties of the Term Priority Collateral in accordance with this Section and none of the ABL Agent or the ABL Secured Parties shall be obligated to secure, protect, insure or repair any such Term Priority Collateral (other than for damages caused by the ABL Agent, the ABL Secured Parties or other respective employees, agents and representatives).

 

(b)       The Term Agent and the other Term Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent and the other ABL Secured Parties from exercising the ABL Permitted Access Right.

 

(c)       Subject to the terms hereof, the Term Agent may advertise and conduct public auctions or private sales of the Term Priority Collateral without notice (except as required herein or by applicable law) to, the involvement of or interference by any ABL Secured Party or liability to any ABL Secured Party.

 

Section 3.7               Agreement Regarding Mortgages.  The ABL Agent agrees, for and on behalf of itself and the ABL Lenders, that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against real property in favor of or for the benefit of the ABL Agent shall be in form satisfactory to the Term Agent and shall contain the following notation:  “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as Term Agent, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of October 9, 2007 among JPMorgan Chase Bank, N.A., as ABL Agent and JPMorgan Chase Bank, N.A., as Term Agent, as amended from time to time.”

 

ARTICLE 4
  APPLICATION OF PROCEEDS

 

Section 4.1               Application of Proceeds.

 

(a)       Revolving Nature of ABL Obligations.  The Term Agent, for and on behalf of itself and the Term Lenders, expressly acknowledges and agrees that (i) any ABL Credit Agreement includes a revolving commitment, that in the ordinary course of business the 

 

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ABL Agent and the ABL Lenders will apply payments and make advances thereunder, and that no application of any Payment Collateral or Cash Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection with a permitted disposition under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the Term Secured Parties and without affecting the provisions hereof; and (iii) all Payment Collateral or Cash Collateral received by the ABL Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL Obligations at any time; provided, however, that from and after the date on which the ABL Agent (or any ABL Lender) commences the Exercise of Any Secured Creditor Remedies (other than, prior to the acceleration of any of the Term Obligations, the exercise of its rights in accordance with Section 7.02 of the Original ABL Credit Agreement or any similar provision of any other ABL Credit Agreement), all amounts received by the ABL Agent or any ABL Lender shall be applied as specified in this Section 4.1.  The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the ABL Obligations or the Term Obligations, or any portion thereof.

 

(b)       Application of Proceeds of ABL Priority Collateral.  The ABL Agent and the Term Agent hereby agree that all ABL Priority Collateral, and all ABL Priority Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies with respect to ABL Priority Collateral shall be applied,

 

first, to the payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies,

 

second, to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations (other than contingent indemnity obligations with respect to then unasserted claims) shall have occurred,

 

third, to the payment, on a pro rata basis, of the Term Obligations (other than contingent indemnity obligations with respect to then unasserted claims), and

 

fourth, the balance, if any, to the Credit Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct;

 

provided that in the event the Term Agent receives, in connection with an Insolvency Proceeding, any Proceeds of any ABL Priority Collateral and the Lien granted in favor of the ABL Agent or the ABL Lenders in respect of such ABL Priority Collateral has been voided, avoided or otherwise invalidated by a court of competent jurisdiction and the provisions of Section 5.3 would not be effective, then such Proceeds received by the Term Agent with respect to the ABL Priority Collateral shall be applied to the extent permitted by applicable law, to the payment, on a pro rata basis, of the Term Obligations in accordance with the Term Documents until the Discharge of the Term Obligations shall have occurred.

 

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(c)       Application of Proceeds of Term Priority Collateral.  The ABL Agent and the Term Agent hereby agree that all Term Priority Collateral, and all Term Priority Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies with respect to Term Priority Collateral shall be applied,

 

first, to the payment of costs and expenses of the Term Agent in connection with such Exercise of Secured Creditor Remedies,

 

second, to the payment, on a pro rata basis, of the Term Obligations in accordance with the Term Documents until the Discharge of Term Obligations shall have occurred (other than contingent indemnity obligations with respect to then unasserted claims),

 

third, to the payment of the ABL Obligations (other than contingent indemnity obligations with respect to then unasserted claims); and

 

fourth, the balance, if any, to the Credit Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct;

 

provided that in the event the ABL Agent receives, in connection with an Insolvency Proceeding, any Proceeds of any Term Priority Collateral and the Lien granted in favor of the Term Agent or the Term Lenders in respect of such Term Priority Collateral has been voided, avoided or otherwise invalidated by a court of competent jurisdiction and the provisions of Section 5.3 would not be effective, then such Proceeds received by the ABL Agent with respect to the Term Priority Collateral as a result of such defect shall be applied to the extent permitted by applicable law, to the payment, on a pro rata basis, of the ABL Obligations in accordance with the ABL Documents until the Discharge of the ABL Obligations shall have occurred.

 

(d)       Limited Obligation or Liability.  In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation or liability to the Term Agent or to any Term Lender, and the Term Agent shall have no obligation or liability to the ABL Agent or any ABL Lender, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement so long as such exercise of remedies is conducted in a commercially reasonable manner, in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.

 

(e)       Turnover of Cash Collateral After Discharge.  Upon the Discharge of ABL Obligations, the ABL Agent shall (at the ABL Borrowers’ expense) deliver to the Term Agent or shall execute such documents as the Term Agent may reasonably request to enable the Term Agent to have control over any Cash Collateral or Control Collateral still in the ABL Agent’s possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.  Upon the Discharge of Term Obligations, the Term Agent shall (at the Term Borrower’s expense) deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request to enable the ABL Agent to have control over any Cash Collateral or Control Collateral still in the Term Agent’s possession, custody or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.

 

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Section 4.2               Specific Performance.  Each of the ABL Agent and the Term Agent is hereby authorized to demand specific performance of this Agreement, whether or not any Borrower or any Guarantor shall have complied with any of the provisions of any of the Credit Documents, at any time when the other Party shall have failed to comply with any of the provisions of this Agreement applicable to it.  Each of the ABL Agent, for and on behalf of itself and the ABL Lenders, and the Term Agent, for and on behalf of itself and the Term Lenders, hereby irrevocably waives any defense based on the adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.

 

ARTICLE 5
  INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

 

Section 5.1               Notice of Acceptance and Other Waivers.

 

(a)       All ABL Obligations at any time made or incurred by any Borrower or any Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the Term Agent, on behalf of itself and the Term Lenders, hereby waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Lender of this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations.  All Term Obligations at any time made or incurred by any Borrower or any Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Lenders, hereby waives notice of acceptance, or proof of reliance, by the Term Agent or any Term Lender of this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the Term Obligations.

 

(b)       None of the ABL Agent, any ABL Lender, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the Term Agent, any Term Lender, or any of their respective Affiliates for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement.  If the ABL Agent or any ABL Lender honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Lender has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Term Credit Agreement or any other Term Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Lender otherwise should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Lender shall have any liability whatsoever to the Term Agent or any Term Lender as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement).  The ABL Agent and the ABL Lenders shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the Term Agent or any of 

 

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the Term Lenders have in the Collateral, except as otherwise expressly set forth in this Agreement.  The Term Agent, on behalf of itself and the Term Lenders, agrees that neither the ABL Agent nor any ABL Lender shall incur any liability as a result of a sale, lease, license, application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.

 

(c)       None of the Term Agent, any Term Lender or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the ABL Agent, any ABL Lender, or any of their respective Affiliates for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement.  If the Term Agent or any Term Lender honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Term Credit Agreement or any of the other Term Documents, whether the Term Agent or any Term Lender has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement or any other ABL Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the Term Agent or any Term Lender otherwise should exercise any of its contractual rights or remedies under the Term Documents (subject to the express terms and conditions hereof), neither the Term Agent nor any Term Lender shall have any liability whatsoever to the ABL Agent or any ABL Lender as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement).  The Term Agent and the Term Lenders shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL Lender has in the Collateral, except as otherwise expressly set forth in this Agreement.  The ABL Agent, on behalf of itself and the ABL Lenders, agrees that none of the Term Agent or the Term Lenders shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the Term Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.

 

Section 5.2               Modifications to ABL Documents and Term Documents.

 

(a)       The Term Agent, on behalf of itself and the Term Lenders, hereby agrees that, without affecting the obligations of the Term Agent and the Term Lenders hereunder, the ABL Agent and the ABL Lenders may, at any time and from time to time, in their sole discretion without the consent of or notice to the Term Agent or any Term Lender (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the Term Agent or any Term Lender or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever, including, without limitation, to:

 

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(i)        change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the ABL Obligations or any of the ABL Documents;

 

(ii)       retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in connection therewith to enter into any additional ABL Documents;

 

(iii)      amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the ABL Obligations;

 

(iv)      release its Lien on any Collateral or other Property;

 

(v)       exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;

 

(vi)      retain or obtain the primary or secondary obligation of any other Person with respect to any of the ABL Obligations; and

 

(vii)     otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.

 

(b)       The ABL Agent, on behalf of itself and the ABL Lenders, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Lenders hereunder, the Term Agent and the Term Lenders may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL Agent or any ABL Lender (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent or any ABL Lender or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Term Documents in any manner whatsoever, including, without limitation, to:

 

(i)        change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Term Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Term Obligations or any of the Term Documents;

 

(ii)       retain or obtain a Lien on any Property of any Person to secure any of the Term Obligations, and in connection therewith to enter into any additional Term Documents;

 

(iii)      amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Term Obligations;

 

(iv)      release its Lien on any Collateral or other Property;

 

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(v)       exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;

 

(vi)      retain or obtain the primary or secondary obligation of any other Person with respect to any of the Term Obligations; and

 

(vii)     otherwise manage and supervise the Term Obligations as the Term Agent shall deem appropriate.

 

(c)       The ABL Obligations and the Term Obligations may be refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is required to permit the refinancing transaction under any ABL Document or any Term Document) of the ABL Agent, the ABL Lenders, the Term Agent or the Term Lenders, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions hereof, provided, however, that the holders of such refinancing Indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the ABL Agent or the Term Agent, as the case may be, shall reasonably request and in form and substance reasonably acceptable to the ABL Agent or the Term Agent, as the case may be, and any such refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term Documents.

 

Section 5.3               Reinstatement and Continuation of Agreement.

 

(a)       If the ABL Agent or any ABL Lender is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Guarantor, or any other Person any payment made in satisfaction of all or any portion of the ABL Obligations (an “ABL Recovery”), then the ABL Obligations shall be reinstated to the extent of such ABL Recovery.  If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement.  All rights, interests, agreements, and obligations of the ABL Agent, the Term Agent, the ABL Lenders, and the Term Lenders under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Borrower or any Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Borrower or any Guarantor in respect of the ABL Obligations or the Term Obligations.  No priority or right of the ABL Agent or any ABL Lender shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Borrower or any Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Lender may have.

 

(b)       If the Term Agent or any Term Lender is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Guarantor, or any other Person any payment made in satisfaction of all or any portion of the Term Obligations (a “Term Recovery”), then the Term Obligations shall be reinstated to the 

 

27

 

extent of such Term Recovery.  If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement.  All rights, interests, agreements, and obligations of the ABL Agent, the Term Agent, the ABL Lenders, and the Term Lenders under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Borrower or any Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Borrower or any Guarantor in respect of the ABL Obligations or the Term Obligations.  No priority or right of the Term Agent or any Term Lender shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Borrower or any Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which the Term Agent or any Term Lender may have.

 

ARTICLE 6
 INSOLVENCY PROCEEDINGS

 

Section 6.1               DIP Financing.

 

(a)       If any Borrower or any Guarantor shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of ABL Obligations, and the ABL Agent or the ABL Lenders shall seek to provide any Borrower or any Guarantor with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral under Section 363 of the Bankruptcy Code (each, a “DIP Financing”), with such DIP Financing to be secured by all or any portion of the ABL Priority Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be ABL Priority Collateral) (it being understood that the ABL Agent and the ABL Secured Parties shall not propose any DIP Financing with respect to the Term Priority Collateral in competition with the Term Agent and the Term Secured Parties without the consent of the Term Agent), then the Term Agent, on behalf of itself and the Term Lenders, agrees that it will raise no objection and will not support any objection to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of the Term Agent securing the Term Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as (i) the Term Agent retains its Lien on the Collateral to secure the Term Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the Term Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien on Term Priority Collateral securing such DIP Financing is junior and subordinate to the Lien of the Term Agent on the Term Priority Collateral, (ii) all Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Lenders securing the ABL Obligations on ABL Priority Collateral and (iii) if the ABL Agent receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations, the Term Agent also may seek to obtain an adequate protection Lien on such post-petition assets of the debtor to secure the Term Obligations, provided that (x) such Liens in favor of the ABL Agent and the Term Agent shall be subject to the provisions of Section 6.1(c) hereof 

 

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and (y) the foregoing provisions of this Section 6.1(a) shall not prevent the Term Agent and the Term Lenders from objecting to any provision in any DIP Financing relating to any provision or content of a plan of reorganization.

 

(b)       If any Borrower or any Guarantor shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of Term Obligations, and the Term Agent or the Term Lenders shall seek to provide any Borrower or any Guarantor with, or consent to a third party providing, any DIP Financing, with such DIP Financing to be secured by all or any portion of the Term Priority Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be Term Priority Collateral) (it being understood that the Term Agent and the Term Secured Parties shall not propose any DIP Financing with respect to the ABL Priority Collateral in competition with the ABL Agent and the ABL Secured Parties without the consent of the ABL Agent), then the ABL Agent, on behalf of itself and the ABL Lenders, agrees that it will raise no objection and will not support any objection to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of the ABL Agent securing the ABL Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as (i) the ABL Agent retains its Lien on the Collateral to secure the ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the ABL Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien on ABL Priority Collateral securing such DIP Financing is junior and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (ii) all Liens on Term Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the Term Agent and the Term Lenders securing the Term Obligations on Term Priority Collateral and (iii) if the Term Agent receives an adequate protection Lien on post-petition assets of the debtor to secure the Term Obligations, the ABL Agent also may seek to obtain an adequate protection Lien on such post-petition assets of the debtor to secure the ABL Obligations, provided that (x) such Liens in favor of the Term Agent and the ABL Agent shall be subject to the provisions of Section 6.1(c) hereof and (y) the foregoing provisions of this Section 6.1(b) shall not prevent the ABL Agent and the ABL Lenders from objecting to any provision in any DIP Financing relating to any provision or content of a plan of reorganization.

 

(c)       All Liens granted to the ABL Agent or the Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement.

 

Section 6.2            Relief From Stay.  Until the Discharge of ABL Obligations has occurred, the Term Agent, on behalf of itself and the Term Lenders, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL Agent’s express written consent.  Until the Discharge of Term Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Lenders, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term Priority Collateral without the Term Agent’s express written consent.  In addition, neither the Term Agent nor the ABL Agent shall seek any relief from the automatic stay with respect to any Collateral without providing seven (7) business days’ 

 

29

 

prior written notice to the other, unless such period is agreed by both the ABL Agent and the Term Agent to be modified or unless the ABL Agent or the Term Agent, as applicable, makes a good faith determination that either (A) the ABL Priority Collateral or the Term Priority Collateral, as applicable, will decline speedily in value, or (B) the failure to take any action will have a reasonable likelihood of endangering the ABL Agent’s or the Term Agent’s ability to realize upon its Collateral.

 

Section 6.3            No Contest.  The Term Agent, on behalf of itself and the Term Lenders, agrees that, prior to the Discharge of ABL Obligations, none of them shall contest (or support any other Person contesting) (a) any request by the ABL Agent or any ABL Lender for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) above), or (b) any objection by the ABL Agent or any ABL Lender to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Lender that its interests in the Collateral (unless in contravention of Section 6.1(b) above) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement.  The ABL Agent, on behalf of itself and the ABL Lenders, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or support any other Person contesting) (i) any request by the Term Agent or any Term Lender for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(a) above), or (ii) any objection by the Term Agent or any Term Lender to any motion, relief, action or proceeding based on a claim by the Term Agent or any Term Lender that its interests in the Collateral (unless in contravention of Section 6.1(a) above) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the Term Agent as adequate protection of its interests are subject to this Agreement.

 

Section 6.4            Asset Sales.  The Term Agent agrees, on behalf of itself and the Term Lenders, that it will not oppose any sale consented to by the ABL Agent of any ABL Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement.  The ABL Agent agrees, on behalf of itself and the ABL Lenders, that it will not oppose any sale consented to by the Term Agent of any Term Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement.  If such sale of Collateral includes both ABL Priority Collateral and Term Priority Collateral and the Parties are unable after negotiating in good faith to agree on the allocation of the purchase price between the ABL Priority Collateral and Term Priority Collateral, either Party may apply to the court in such Insolvency Proceeding to make a determination of such allocation, and the court’s determination shall be binding upon the Parties.

 

Section 6.5            Separate Grants of Security and Separate Classification.  Each Term Lender, the Term Agent, each ABL Lender and the ABL Agent acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Security Documents and the Term Security Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Term Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  To further effectuate the intent of the parties as provided in the 

 

30

 

immediately preceding sentence, if it is held that the claims of the ABL Secured Parties and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the ABL Secured Parties and the Term Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of ABL Obligation claims and Term Obligation claims against the Credit Parties (with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or Term Priority Collateral is sufficient (for this purpose ignoring all other claims held by the Secured Parties), the ABL Secured Parties or the Term Secured Parties, respectively, shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest that is available from each pool of Priority Collateral for the satisfaction of each of the applicable ABL Obligation claims and the applicable Term Obligation claims, respectively, before any distribution is made in respect of the other claims held by the Secured Parties, with the Secured Parties hereby acknowledging and agreeing to turn over to the respective other Secured Parties amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries).

 

Section 6.6            Enforceability.  The provisions of this Agreement are intended to be and shall be enforceable under Section 510(a) of the Bankruptcy Code.

 

Section 6.7            ABL Obligations Unconditional.  All rights of the ABL Agent hereunder, and all agreements and obligations of the Term Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:

 

(i)        any lack of validity or enforceability of any ABL Document;

 

(ii)       any change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any ABL Document;

 

(iii)      any exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or

 

(iv)      any other circumstances that otherwise might constitute a defense (other than payment in full of the ABL Obligations) available to, or a discharge of, any Credit Party in respect of the ABL Obligations, or of any of the Term Agent or any Credit Party, to the extent applicable, in respect of this Agreement.

 

Section 6.8            Term Obligations Unconditional.  All rights of the Term Agent hereunder, all agreements and obligations of the ABL Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:

 

(i)        any lack of validity or enforceability of any Term Document;

 

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(ii)       any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Term Document;

 

(iii)      any exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee or guaranty thereof; or

 

(iv)      any other circumstances that otherwise might constitute a defense (other than payment in full of the Term Obligations) available to, or a discharge of, any Credit Party in respect of the Term Obligations, or of any of the ABL Agent or any Credit Party, to the extent applicable, in respect of this Agreement.

 

Section 6.9            Adequate Protection.  Except to the extent expressly provided in Sections 6.1 and 6.3, nothing in this Agreement shall limit the rights of the ABL Agent and the ABL Lenders, on the one hand, and the Term Agent and the Term Lenders, on the other hand, from seeking or requesting adequate protection with respect to their respective interests in the applicable Collateral in any Insolvency Proceeding, including adequate protection in the form of a cash payment, periodic cash payments, cash payments of interest, additional collateral or otherwise; provided that (a) in the event that the ABL Agent, on behalf of itself or any of the ABL Lenders, seeks or requests adequate protection in respect of the ABL Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute Term Priority Collateral, then the ABL Agent, on behalf of itself and each of the ABL Lenders, agrees that the Term Agent shall have the right to seek or request a senior Lien on such collateral as security for the Term Obligations and that any Lien on such collateral securing the ABL Obligations shall be subordinate to the Lien on such collateral securing the Term Obligations and (b) in the event that the Term Agent, on behalf of itself or any of the Term Lenders, seeks or requests adequate protection in respect of the Term Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then the Term Agent, on behalf of itself and each of the Term Lenders, agrees that the ABL Agent shall have the right to seek or request a senior Lien on such collateral as security for the ABL Obligations and that any Lien on such collateral securing the Term Obligations shall be subordinate to the Lien on such collateral securing the ABL Obligations.

 

ARTICLE 7
  MISCELLANEOUS

 

Section 7.1               Rights of Subrogation.  The Term Agent, for and on behalf of itself and the Term Lenders, agrees that no payment to the ABL Agent or any ABL Lender pursuant to the provisions of this Agreement shall entitle the Term Agent or any Term Lender to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall have occurred.  Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as the Term Agent or any Term Lender may 

 

32

 

reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request for payment thereof.  The ABL Agent, for and on behalf of itself and the ABL Lenders, agrees that no payment to the Term Agent or any Term Lender pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Lender to exercise any rights of subrogation in respect thereof until the Discharge of Term Obligations shall have occurred.  Following the Discharge of Term Obligations, the Term Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Lender may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Obligations resulting from payments to the Term Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Term Agent are paid by such Person upon request for payment thereof.

 

Section 7.2               Further Assurances.  The Parties will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that either Party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable the ABL Agent or the Term Agent to exercise and enforce its rights and remedies hereunder; provided, however, that no Party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 7.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such Party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2.

 

Section 7.3               Representations.  The Term Agent represents and warrants to the ABL Agent that it has the requisite power and authority under the Term Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the Term Lenders and that this Agreement shall be a binding obligation of the Term Agent and the Term Lenders, enforceable against the Term Agent and the Term Lenders in accordance with its terms.  The ABL Agent represents and warrants to the Term Agent that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Lenders and that this Agreement shall be a binding obligation of the ABL Agent and the ABL Lenders, enforceable against the ABL Agent and the ABL Lenders in accordance with its terms.

 

Section 7.4               Amendments.  No amendment or waiver of any provision of this Agreement nor consent to any departure by any Party hereto shall be effective unless it is in a written agreement executed by the Term Agent and the ABL Agent and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

Section 7.5               Addresses for Notices.  Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in

 

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writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five (5) days after deposit in the United States mail (certified, with postage prepaid and properly addressed).  For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

 

	
ABL Agent:
    	
JPMorgan Chase   Bank, N.A.
    
	
 
    	
270 Park Avenue
    
	
 
    	
New York, New York   10017
    
	
 
    	
Attention: Barry   Bergman
    
	
 
    	
 
    
	
Term Agent:
    	
JPMorgan Chase   Bank, N.A.
    
	
 
    	
270 Park Avenue
    
	
 
    	
New York, New York   10017
    
	
 
    	
Attention: Barry   Bergman
    

 

Section 7.6               No Waiver, Remedies.  No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

Section 7.7               Continuing Agreement, Transfer of Secured Obligations.  This Agreement is a continuing agreement and shall (a) remain in full force and effect until the Discharge of ABL Obligations and the Discharge of Term Obligations shall have occurred, (b) be binding upon the Parties and their successors and assigns, and (c) inure to the benefit of and be enforceable by the Parties and their respective successors, transferees and assigns.  Nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral.  All references to any Credit Party shall include any Credit Party as debtor-in-possession and any receiver or trustee for such Credit Party in any Insolvency Proceeding.  Without limiting the generality of the foregoing clause (c), the ABL Agent, any ABL Lender, the Term Agent, or any Term Lender may assign or otherwise transfer all or any portion of the ABL Obligations or the Term Obligations, as applicable, to any other Person (other than any Borrower, any Guarantor or any Affiliate of any Borrower or any Guarantor (except as provided in the ABL Credit Agreement or the Term Credit Agreement) and any Subsidiary of any Borrower or any Guarantor), and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, the Term Agent, any ABL Lender, or any Term Lender, as the case may be, herein or otherwise.  The ABL Secured Parties and the Term Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide Indebtedness to, or for the benefit of, any Credit Party on the faith hereof.

 

Section 7.8               Governing Law: Entire Agreement.  The validity, performance, and enforcement of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.  This Agreement constitutes the entire agreement and 

 

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understanding among the Parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

 

Section 7.9               Counterparts.  This Agreement may be executed in any number of counterparts, and it is not necessary that the signatures of all Parties be contained on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the same document.

 

Section 7.10             No Third Party Beneficiaries.  This Agreement is solely for the benefit of the ABL Agent, ABL Lenders, Term Agent and Term Lenders.  No other Person (including any Borrower, any Guarantor or any Affiliate of any Borrower or any Guarantor, or any Subsidiary of any Borrower or any Guarantor) shall be deemed to be a third party beneficiary of this Agreement.

 

Section 7.11             Headings.  The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

 

Section 7.12             Severability.  If any of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement and shall not invalidate the Lien Priority or the application of Proceeds and other priorities set forth in this Agreement.

 

Section 7.13             Attorneys Fees.  The Parties agree that if any dispute, arbitration, litigation, or other proceeding is brought with respect to the enforcement of this Agreement or any provision hereof, the prevailing party in such dispute, arbitration, litigation, or other proceeding shall be entitled to recover its reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement of this Agreement, irrespective of whether suit is brought and whether incurred before or after judgment.

 

Section 7.14             VENUE; JURY TRIAL WAIVER.

 

(a)       EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT 

 

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THAT ANY ABL SECURED PARTY OR ANY TERM SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY ABL DOCUMENTS AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(b)       EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(c)       EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 7.5.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

Section 7.15             Intercreditor Agreement.  This Agreement is the Intercreditor Agreement referred to in the Original ABL Credit Agreement and the Original Term Credit Agreement.  Nothing in this Agreement shall be deemed to subordinate the obligations due (i) to any ABL Secured Party to the obligations due to any Term Secured Party or (ii) to any Term Secured Party to the obligations due to any ABL Secured Party, in each case whether before or after the occurrence of an Insolvency Proceeding, it being the intent of the Parties that this Agreement shall effectuate a subordination of Liens but not a subordination of Indebtedness.

 

Section 7.16             No Warranties or Liability.  The Term Agent and the ABL Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL Document or any Term Document.  Except as otherwise provided in this Agreement, the Term Agent and the ABL Agent will be entitled to manage and supervise their respective extensions of credit to any Credit Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

 

Section 7.17             Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Document, the provisions of this Agreement shall govern.

 

Section 7.18             Information Concerning Financial Condition of the Credit Parties.  Each of the Term Agent and the ABL Agent hereby assume responsibility for keeping itself informed of the financial condition of the Credit Parties and all other circumstances bearing upon the risk of nonpayment of the ABL Obligations or the Term Obligations.  The Term Agent and the ABL Agent hereby agree that no party shall have any duty to advise any other party of 

 

36

 

information known to it regarding such condition or any such circumstances.  In the event the Term Agent or the ABL Agent, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, (a) it shall be under no obligation (i) to provide any such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part of its regular business routine, or (iii) to disclose any other information, (b) it makes no representation as to the accuracy or completeness of any such information and (c) the party receiving such information hereby indemnifies and holds harmless the other party from and against any and all losses, claims, damages, liabilities and expenses to which such receiving party may become subject arising out of or in connection with the use of such information.

 

[Signature pages follow]

 

37

 

IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Lenders, and the Term Agent, for and on behalf of itself and the Term Lenders, have caused this Agreement to be duly executed and delivered as of the date first above written.

 

	
 
    	
JPMORGAN   CHASE BANK, N.A., in its capacity as the ABL Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas H.   Kozlark
    
	
 
    	
Name:
    	
Thomas H. Kozlark
    
	
 
    	
Title:
    	
Executive Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A., in its capacity as the Term Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas H.   Kozlark
    
	
 
    	
Name:
    	
Thomas H. Kozlark
    
	
 
    	
Title:
    	
Executive Director
    

 

[Signature Page — Intercreditor Agreement]

 

 

ACKNOWLEDGMENT

 

Each Borrower and each Guarantor hereby acknowledges that it has received a copy of this Agreement and consents thereto, agrees to recognize all rights granted thereby to the ABL Agent, the ABL Lenders, the Term Agent, and the Term Lenders and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement. Each Borrower and each Guarantor further acknowledges and agrees that it is not an intended beneficiary or third party beneficiary under this Agreement and that the ABL Documents and Term Documents remain in full force and effect as written.

 

 

	
 
    	
VH MERGERSUB, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Tudor
    
	
 
    	
Name: John Tudor
    
	
 
    	
Title: Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUITAR CENTER, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MUSICIAN’S   FRIEND, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   Vice President, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUITAR CENTER   STORES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    

 

[Signature Page — Intercreditor Agreement]

 

 

	
 
    	
GUITAR CENTER   HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Tudor
    
	
 
    	
Name: John Tudor
    
	
 
    	
Title: Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUITAR CENTER GIFT CARD   COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   Vice President, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HARMONY CENTRAL GROUP,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leland Smith
    
	
 
    	
Name: Leland Smith
    
	
 
    	
Title: Executive   VP of Corporate Development, General Counsel and Secretary
    

 

[Signature Page — Intercreditor Agreement]

 

 

 

Schedule 1.1(a)
 Lenders and Commitments

 

	
Lender
    	
 
    	
Term Loan
   Commitment
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
$
    	
650,000,000
    	
 
    
	
TOTAL
    	
 
    	
$
    	
650,000,000
    	
 
    

 

 

Schedule 1.1(b)
 Business Segments

 

1.                          Tunecore

 

2.                          GC Studios

 

3.                          Harmony Central

 

 

Schedule 3.01
 Organization Information

 

	
Name
    	
 
    	
State/Province of
   Incorporation
    	
 
    	
Organization
   Type
    	
 
    	
Organizational
   Number
    	
 
    	
Federal
   Employer
   Identification
   Number
    
	
Guitar   Center Holdings, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
4376637
    	
 
    	
26-0843262
    
	
VH   MergerSub, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
4376643
    	
 
    	
N/A
    
	
Guitar   Center, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
2569725
    	
 
    	
95-460082
    
	
Guitar   Center Stores, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
3153691
    	
 
    	
95-4774340
    
	
Musician’s   Friend, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
2839744
    	
 
    	
93-1235414
    
	
Guitar   Center Gift Card Company, LLC
    	
 
    	
Virginia
    	
 
    	
Limited   Liability Company
    	
 
    	
S130087
    	
 
    	
N/A
    
	
GC   Insurance Company, Inc.
    	
 
    	
Hawaii
    	
 
    	
Corporation
    	
 
    	
206327D1
    	
 
    	
20-0437067
    
	
Guitar   Center Stores Canada Inc.
    	
 
    	
Ontario,   Canada
    	
 
    	
Corporation
    	
 
    	
7218359
    	
 
    	
N/A
    
	
Musician’s   Choice, Inc.
    	
 
    	
Delaware
    	
 
    	
Corporation
    	
 
    	
3117147
    	
 
    	
95-4771830
    
	
American   Student Rental, Inc.
    	
 
    	
Maryland
    	
 
    	
Corporation
    	
 
    	
D05266358
    	
 
    	
52-2237109
    
	
Harmony   Central Group, LLC
    	
 
    	
Delaware
    	
 
    	
Limited   Liability Company
    	
 
    	
3962685
    	
 
    	
N/A
    

 

 

Schedule 3.05(b) 
 Intellectual Property

 

UNITED STATES PATENTS:

 

Registrations:

 

	
OWNER
    	
 
    	
REGISTRATION
   NUMBER
    	
 
    	
DESCRIPTION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
None.
    	
 
    	
 
    	
 
    	
 
    

 

Applications:

 

	
OWNER
    	
 
    	
APPLICATION 
   NUMBER
    	
 
    	
DESCRIPTION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
None.
    	
 
    	
 
    	
 
    	
 
    

 

OTHER PATENTS:

 

Registrations:

 

	
OWNER
    	
 
    	
REGISTRATION
   NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
DESCRIPTION
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
None.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Applications:

 

	
OWNER
    	
 
    	
APPLICATION 
   NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
DESCRIPTION
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
None.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

UNITED STATES TRADEMARKS:

 

Registrations:

 

	
OWNER
    	
 
    	
REGISTRATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
2360974
    	
 
    	
Acoustic   Control
    
	
Guitar   Center, Inc.
    	
 
    	
2470898
    	
 
    	
Acoustic
    

 

 

	
OWNER
    	
 
    	
REGISTRATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
2309451
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2294166
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2312002
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2312001
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2580641
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2519142
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2309450
    	
 
    	
Acoustic
    
	
Guitar   Center, Inc.
    	
 
    	
2326378
    	
 
    	
Acoustic
    
	
Musician’s   Friend, Inc.
    	
 
    	
3158086
    	
 
    	
Adesso
    
	
Musician’s   Friend, Inc.
    	
 
    	
3073117
    	
 
    	
AJ’s   Pro Percussion (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2711231
    	
 
    	
Allora
    
	
Guitar   Center, Inc.
    	
 
    	
1,671,712
    	
 
    	
American   Music
    
	
Guitar   Center, Inc.
    	
 
    	
1,684,766
    	
 
    	
American   Music
    
	
Guitar   Center, Inc.
    	
 
    	
1,685,628
    	
 
    	
American   Music
    
	
Guitar   Center, Inc.
    	
 
    	
1,671,713
    	
 
    	
American   Music (Design only - star and background)
    
	
Guitar   Center, Inc.
    	
 
    	
2866155
    	
 
    	
American   Student Rental
    
	
Musician’s   Friend, Inc.
    	
 
    	
2980482
    	
 
    	
Arcolla   CF
    
	
Musician’s   Friend, Inc.
    	
 
    	
2,572,703
    	
 
    	
Axman
    
	
Musician’s   Friend, Inc.
    	
 
    	
2913700
    	
 
    	
Baja   (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2689669
    	
 
    	
Bandl23
    
	
Musician’s   Friend, Inc.
    	
 
    	
2680722
    	
 
    	
Bandl23
    
	
Musician’s   Friend, Inc.
    	
 
    	
2789241
    	
 
    	
Bandnow   (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2577867
    	
 
    	
Bellafina
    
	
Guitar   Center, Inc.
    	
 
    	
3,141,551
    	
 
    	
Black   Label
    
	
Musician’s   Friend, Inc.
    	
 
    	
2746794
    	
 
    	
Chicago   Jazz Series
    
	
Musician’s   Friend, Inc.
    	
 
    	
1318652
    	
 
    	
Design   only
    
	
Guitar   Center, Inc.
    	
 
    	
2,307,875
    	
 
    	
Digital   Reference
    
	
Guitar   Center, Inc.
    	
 
    	
3,296,826
    	
 
    	
Dr   Pro
    
	
Musician’s   Friend, Inc.
    	
 
    	
1867349
    	
 
    	
Drums   in the Wind
    
	
Musician’s   Friend, Inc.
    	
 
    	
2914943
    	
 
    	
Drumwind
    
	
Guitar   Center, Inc.
    	
 
    	
003,068,209
    	
 
    	
Find   your Voice
    
	
Musician’s   Friend, Inc.
    	
 
    	
2819420
    	
 
    	
Florea   (stylized and/or with design)
    
	
Guitar   Center, Inc.
    	
 
    	
2,884,873
    	
 
    	
FretRest
    
	
Musician’s   Friend, Inc.
    	
 
    	
1922887
    	
 
    	
Fullerton
    
	
Musician’s   Friend, Inc.
    	
 
    	
3,261,383
    	
 
    	
Fullerton
    
	
Guitar   Center, Inc.
    	
 
    	
3,213,513
    	
 
    	
GGiardinelli   (new logo) (design mark/use in commerce)
    

 

 

	
OWNER
    	
 
    	
REGISTRATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
3,202,210
    	
 
    	
GGiardinelli   (new logo) (design mark/use in commerce)
    
	
Guitar   Center, Inc.
    	
 
    	
3,227,898
    	
 
    	
Giardinelli   (old logo) (design mark/use in commerce)
    
	
Musician’s   Friend, Inc.
    	
 
    	
1318025
    	
 
    	
Grime   Gutter
    
	
Guitar   Center, Inc.
    	
 
    	
3,212,416
    	
 
    	
Guitarathon
    
	
Guitar   Center, Inc.
    	
 
    	
2,280,874
    	
 
    	
Guitar   Center
    
	
Guitar   Center, Inc.
    	
 
    	
1,290,481
    	
 
    	
Guitar   Center & Design (Disclaimer of “Guitar Center” apart from mark)
    
	
Guitar   Center, Inc.
    	
 
    	
2,085,508
    	
 
    	
Guitar   Center & Design (No Disclaimer of “Guitar Center” apart from mark)
    
	
Guitar   Center, Inc.
    	
 
    	
2,810,188
    	
 
    	
Guitar   Center’s Drum Off
    
	
Guitar   Center, Inc.
    	
 
    	
2,810,186
    	
 
    	
Guitar   Center’s Spinoff
    
	
Guitar   Center, Inc.
    	
 
    	
3,053,666
    	
 
    	
Guitar   drawing only
    
	
Musician’s   Friend, Inc.
    	
 
    	
2802687
    	
 
    	
Guitarsl23.com
    
	
Musician’s   Friend, Inc.
    	
 
    	
3,073,197
    	
 
    	
Harmony   Central (word mark)
    
	
Musician’s   Friend, Inc.
    	
 
    	
1107200
    	
 
    	
Jet-Tone
    
	
Musician’s   Friend, Inc.
    	
 
    	
1654877
    	
 
    	
Jo-Ral   (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2542706
    	
 
    	
Karl   Willhelm
    
	
Musician’s   Friend, Inc.
    	
 
    	
3158209
    	
 
    	
Keytech   (stylized and/or with design)
    
	
Guitar   Center, Inc.
    	
 
    	
3,269,834
    	
 
    	
King   of the Blues
    
	
Musician’s   Friend, Inc.
    	
 
    	
2562681
    	
 
    	
Laser   Trimmed
    
	
Musician’s   Friend, Inc.
    	
 
    	
1692880
    	
 
    	
Lazer
    
	
Guitar   Center, Inc.
    	
 
    	
2,831,584
    	
 
    	
Live   Wire
    
	
Guitar   Center, Inc.
    	
 
    	
3,234,366
    	
 
    	
Live   Wire Solutions
    
	
Musician’s   Friend, Inc.
    	
 
    	
1446299
    	
 
    	
Lyons
    
	
Musician’s   Friend, Inc.
    	
 
    	
1276584
    	
 
    	
Lyons
    
	
Musician’s   Friend, Inc.
    	
 
    	
1318653
    	
 
    	
Lyons   (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2813387
    	
 
    	
Misupply
    
	
Guitar   Center, Inc.
    	
 
    	
3,129,275
    	
 
    	
Mitchell
    
	
Musician’s   Friend, Inc.
    	
 
    	
2731573
    	
 
    	
Molto   Presto
    
	
Musician’s   Friend, Inc.
    	
 
    	
2627153
    	
 
    	
Musicl23.com   (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
2387979
    	
 
    	
Musicl23.com
    
	
Guitar   Center, Inc.
    	
 
    	
2868579
    	
 
    	
Music &   Arts Centers
    

 

 

	
OWNER
    	
 
    	
REGISTRATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
3,257,948
    	
 
    	
Music &   Arts Centers (word mark)
    
	
Guitar   Center, Inc.
    	
 
    	
2866149
    	
 
    	
Music &   Arts Centers (design mark)
    
	
Musician’s   Friend, Inc.
    	
 
    	
1,812,560
    	
 
    	
Musician’s   Friend
    
	
Musician’s   Friend, Inc.
    	
 
    	
2,412,387
    	
 
    	
Musician’s   Friend
    
	
Musician’s   Friend, Inc.
    	
 
    	
2,238,700
    	
 
    	
Musician’s   Friend and Design
    
	
Musician’s   Friend, Inc.
    	
 
    	
2,492,090
    	
 
    	
Musician’s   friend.com and Design
    
	
Guitar   Center, Inc.
    	
 
    	
3,163,994
    	
 
    	
Palomino
    
	
Musician’s   Friend, Inc.
    	
 
    	
2942606
    	
 
    	
Play   Now
    
	
Musician’s   Friend, Inc.
    	
 
    	
2324958
    	
 
    	
Playtest
    
	
Guitar   Center, Inc.
    	
 
    	
2,912,130
    	
 
    	
Proline
    
	
Musician’s   Friend, Inc.
    	
 
    	
1682861
    	
 
    	
Ria   Fine Saxophone & Clarinet Mouthpieces (stylized and/or with design)
    
	
Guitar   Center, Inc.
    	
 
    	
3,159,452
    	
 
    	
Roadrunner
    
	
Guitar   Center, Inc.
    	
 
    	
1576899
    	
 
    	
Rock   Walk
    
	
Musician’s   Friend, Inc.
    	
 
    	
2946523
    	
 
    	
Rockwind
    
	
Musician’s   Friend, Inc.
    	
 
    	
2,247,491
    	
 
    	
Rogue   and Design
    
	
Musician’s   Friend, Inc.
    	
 
    	
2847715
    	
 
    	
Sheetmusic   123.com
    
	
Musician’s   Friend, Inc.
    	
 
    	
2324957
    	
 
    	
Shopcheck
    
	
Musician’s   Friend, Inc.
    	
 
    	
2936992
    	
 
    	
Silver   Creek
    
	
Guitar   Center, Inc.
    	
 
    	
3,246,321
    	
 
    	
Simmons
    
	
Guitar   Center, Inc.
    	
 
    	
3041383
    	
 
    	
Sound   Percussion
    
	
Guitar   Center, Inc.
    	
 
    	
2932518
    	
 
    	
SPSound   Percussion and design
    
	
Guitar   Center, Inc.
    	
 
    	
3,093,672
    	
 
    	
Spectral
    
	
Guitar   Center, Inc.
    	
 
    	
3,248,576
    	
 
    	
Stick   Brick
    
	
Guitar   Center, Inc.
    	
 
    	
3,111,814
    	
 
    	
The   List
    
	
Guitar   Center, Inc.
    	
 
    	
1,946,542
    	
 
    	
The   Musician’s Choice
    
	
Musician’s   Friend, Inc.
    	
 
    	
2980483
    	
 
    	
The   String Centre (stylized and/or with design)
    
	
Musician’s   Friend, Inc.
    	
 
    	
1927030
    	
 
    	
The   Woodwind & The Brasswind
    
	
Musician’s   Friend, Inc.
    	
 
    	
3007043
    	
 
    	
Valdesta
    
	
Musician’s   Friend, Inc.
    	
 
    	
2822780
    	
 
    	
Verve   (stylized and/or with design)
    
	
Guitar   Center, Inc.
    	
 
    	
2,996,547
    	
 
    	
WWilliams
    
	
Musician’s   Friend, Inc.
    	
 
    	
1804375
    	
 
    	
Wolfpak   (stylized and/or with design)
    

 

 

Applications:

 

	
OWNER
    	
 
    	
APPLICATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
77117514
    	
 
    	
Agazarian
    
	
Guitar   Center, Inc.
    	
 
    	
77207548
    	
 
    	
Band   Gear
    
	
Guitar   Center, Inc.
    	
 
    	
78890400
    	
 
    	
Crumar
    
	
Guitar   Center, Inc.
    	
 
    	
78890433
    	
 
    	
Delta   Labs
    
	
Guitar   Center, Inc.
    	
 
    	
77251498
    	
 
    	
DeltaLab   (logo)
    
	
Guitar   Center, Inc.
    	
 
    	
77262983
    	
 
    	
Drum   Pads
    
	
Guitar   Center, Inc.
    	
 
    	
77153729
    	
 
    	
Earth   III
    
	
Musician’s   Friend, Inc.
    	
 
    	
78783810
    	
 
    	
Echo   Man
    
	
Guitar   Center, Inc.
    	
 
    	
78543269
    	
 
    	
EssentialsPak
    
	
Guitar   Center, Inc.
    	
 
    	
77253547
    	
 
    	
Etude
    
	
Musician’s   Friend, Inc.
    	
 
    	
78783809
    	
 
    	
5TH Gear
    
	
Guitar   Center, Inc.
    	
 
    	
77117702
    	
 
    	
Gain
    
	
Guitar   Center, Inc.
    	
 
    	
77119436
    	
 
    	
Gaincentral
    
	
Guitar   Center, Inc.
    	
 
    	
77181835
    	
 
    	
GC   Studios
    
	
Guitar   Center, Inc.
    	
 
    	
78903660
    	
 
    	
Giardinelli   (word mark) (use in commerce)
    
	
Guitar   Center, Inc.
    	
 
    	
78893172
    	
 
    	
Giardinelli   (work mark) (intent to use basis)
    
	
Musician’s   Friend, Inc.
    	
 
    	
78712559
    	
 
    	
Guitar   Sale
    
	
Guitar   Center, Inc.
    	
 
    	
78903541
    	
 
    	
Harbinger
    
	
Guitar   Center, Inc.
    	
 
    	
77080663
    	
 
    	
Independence
    
	
Guitar   Center, Inc.
    	
 
    	
77117443
    	
 
    	
Laguna
    
	
Guitar   Center, Inc.
    	
 
    	
78674347
    	
 
    	
Lucero
    
	
Musician’s   Friend, Inc.
    	
 
    	
78602010
    	
 
    	
Mainline
    
	
Musician’s   Friend, Inc.
    	
 
    	
78602107
    	
 
    	
Mainline   Audio
    
	
Guitar   Center, Inc.
    	
 
    	
77144052
    	
 
    	
Make   Noise
    
	
Musician’s   Friend, Inc.
    	
 
    	
78783814
    	
 
    	
Metal   Man
    
	
Guitar   Center, Inc.
    	
 
    	
78890414
    	
 
    	
Multivox
    
	
Musician’s   Friend, Inc.
    	
 
    	
78730891
    	
 
    	
Musical   Sandbox
    
	
Guitar   Center, Inc.
    	
 
    	
77144164
    	
 
    	
Music &   Arts (horizontal)
    
	
Guitar   Center, Inc.
    	
 
    	
77145665
    	
 
    	
Music &   Arts (vertical)
    
	
Guitar   Center, Inc.
    	
 
    	
77081037
    	
 
    	
Music &   Arts Center (new logo - horizontal)
    
	
Guitar   Center, Inc.
    	
 
    	
77081222
    	
 
    	
Music &   Arts Center (new logo - vertical)
    

 

 

	
OWNER
    	
 
    	
APPLICATION 
   NUMBER
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
78759285
    	
 
    	
Music   As Easy As 123
    
	
Musician’s   Friend, Inc.
    	
 
    	
78850445
    	
 
    	
Music   Emporium
    
	
Guitar   Center, Inc.
    	
 
    	
78928970
    	
 
    	
Ocean
    
	
Guitar   Center, Inc.
    	
 
    	
77080228
    	
 
    	
Otto   Benjamin
    
	
Guitar   Center, Inc.
    	
 
    	
78889870
    	
 
    	
Polaris
    
	
Musician’s   Friend, Inc.
    	
 
    	
78834541
    	
 
    	
Pro   Player
    
	
Musician’s   Friend, Inc.
    	
 
    	
78699383
    	
 
    	
Pulse
    
	
Guitar   Center, Inc.
    	
 
    	
77117494
    	
 
    	
Raven
    
	
Musician’s   Friend, Inc.
    	
 
    	
78783816
    	
 
    	
Razor   Phaser
    
	
Guitar   Center, Inc.
    	
 
    	
78797151
    	
 
    	
Road   Kill
    
	
Guitar   Center, Inc.
    	
 
    	
78741134
    	
 
    	
Rocketeer
    
	
Musician’s   Friend, Inc.
    	
 
    	
78783812
    	
 
    	
Sheen   Machine
    
	
Guitar   Center, Inc.
    	
 
    	
77059144
    	
 
    	
Simmons   (logo)
    
	
Guitar   Center, Inc.
    	
 
    	
77117473
    	
 
    	
Socal   Drums
    
	
Guitar   Center, Inc.
    	
 
    	
78663615
    	
 
    	
SPSound   Percussion and design
    
	
Guitar   Center, Inc.
    	
 
    	
78650328
    	
 
    	
Sterling   Audio (standard characters)
    
	
Guitar   Center, Inc.
    	
 
    	
78785088
    	
 
    	
Sterling   Audio (logo design)
    
	
Guitar   Center, Inc.
    	
 
    	
77099900
    	
 
    	
Sticks &   Stones
    
	
Guitar   Center, Inc.
    	
 
    	
77080276
    	
 
    	
Strobel
    
	
Guitar   Center, Inc.
    	
 
    	
78890454
    	
 
    	
Studio   Master
    
	
Guitar   Center, Inc.
    	
 
    	
78890481
    	
 
    	
Tangent
    
	
Guitar   Center, Inc.
    	
 
    	
78889858
    	
 
    	
Tantrum
    
	
Musician’s   Friend, Inc.
    	
 
    	
78648056
    	
 
    	
The   Music Gear Garage
    
	
Guitar   Center, Inc.
    	
 
    	
78836323
    	
 
    	
Tonecloth
    

 

OTHER TRADEMARKS:

 

Registrations:

 

	
OWNER
    	
 
    	
REGISTRATION 
   NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
TRADEMARK
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
802293
    	
 
    	
Australia
    	
 
    	
Guitar   Center & Design
    
	
Guitar   Center, Inc.
    	
 
    	
869346
    	
 
    	
Australia
    	
 
    	
Guitar   Center & Design
    
	
Guitar   Center, Inc.
    	
 
    	
4114856
    	
 
    	
Japan
    	
 
    	
Guitar   Center & Design
    
	
Guitar   Center, Inc.
    	
 
    	
2068383
    	
 
    	
United   Kingdom
    	
 
    	
Guitar   Center & Design
    

 

 

	
 
    	
 
    	
REGISTRATION
    	
 
    	
 
    	
 
    	
 
    
	
OWNER
    	
 
    	
NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
TRADEMARK
    
	
Musician’s   Choice, Inc.
    	
 
    	
2239958
    	
 
    	
European   Community
    	
 
    	
Musician.com   and Design
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
592327
    	
 
    	
Canada
    	
 
    	
Musician’s   Friend
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
39617712
    	
 
    	
Germany
    	
 
    	
Guitar   Center
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
888   069
    	
 
    	
International   Register
    	
 
    	
Guitar   Center (design mark)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Protection   claimed in:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Netherland   Antilles
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Switzerland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Czech   Republic
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Spain
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Finland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
France
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Greece
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Ireland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Italy
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Democratic   People’s
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Republic   of Korea
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Republic   of Korea
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Monaco
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Norway
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Portugal
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Sweden
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Singapore
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Turkey
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
889   590
    	
 
    	
International   Register
    	
 
    	
Guitar   Center (word mark)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Protection   claimed in:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Netherland   Antilles
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Switzerland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Czech   Republic
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Spain
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Finland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
France
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Greece
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Ireland
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Italy
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Democratic   People’s
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Republic   of Korea
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Republic   of Korea
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Monaco
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Norway
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Portugal
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Sweden
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Singapore
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Turkey
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
885   493
    	
 
    	
International   Register
    	
 
    	
Live   Wire
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Protection   claimed in:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Germany
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Great   Britain
    	
 
    	
 
    

 

 

	
OWNER
    	
 
    	
REGISTRATION
   NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
TRADEMARK
    
	
Guitar   Center, Inc.
    	
 
    	
885   494
    	
 
    	
International   Register

 

Protection   claimed in:

Germany

Great   Britain
    	
 
    	
Proline
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
885   949
    	
 
    	
International   Register

 

Protection   claimed in:

Netherland   Antilles

Austria

Australia

Switzerland

Denmark

Spain

Finland

France

Greece

Ireland

Italy

Japan

Democratic   People’s

Republic   of Korea

Republic   of Korea

Monaco

Norway

Portugal

Sweden

Singapore

Turkey
    	
 
    	
Musician’s   Friend (word mark)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
885   495
    	
 
    	
International   Register

 

Protection   claimed in:

Germany

Great   Britain
    	
 
    	
Fretrest
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
887   177
    	
 
    	
International   Register

 

Protection   claimed in:

Germany

United   Kingdom
    	
 
    	
Guitar   Center (word mark)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
828785
    	
 
    	
Australia
    	
 
    	
Musicl23.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
TMA591577
    	
 
    	
Canada
    	
 
    	
Musicl23.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
780228
    	
 
    	
Benelux
    	
 
    	
Woodwind &   Brasswind
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
TMA671621
    	
 
    	
Canada
    	
 
    	
Woodwind &   Brasswind
    

 

Applications:

 

	
OWNER
    	
 
    	
APPLICATION
   NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
TRADEMARK
    
	
Guitar   Center, Inc.
    	
 
    	
1,209,369
    	
 
    	
Canada
    	
 
    	
Guitar   Center
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
1,209,381
    	
 
    	
Canada
    	
 
    	
Guitar   Center and design
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
1,225,780
    	
 
    	
Canada
    	
 
    	
Musician.com   and design
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Musician’s   Friend, Inc.
    	
 
    	
1,140,231
    	
 
    	
Canada
    	
 
    	
Musician’s   Friend and Design
    

 

 

	
 
    	
 
    	
APPLICATION
    	
 
    	
 
    	
 
    	
 
    
	
OWNER
    	
 
    	
NUMBER
    	
 
    	
COUNTRY/STATE
    	
 
    	
TRADEMARK
    
	
Musician’s   Friend, Inc.
    	
 
    	
1,265,396
    	
 
    	
Canada
    	
 
    	
Musician’s   Friend and Design
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
1190468
    	
 
    	
Taiwan
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
234967693
    	
 
    	
Japan
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4563652
    	
 
    	
China
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4751862
    	
 
    	
China
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
1562669
    	
 
    	
European   Community
    	
 
    	
Musicl23.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4258067
    	
 
    	
European   Community
    	
 
    	
Musicl23.com
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
6310992
    	
 
    	
European   Community
    	
 
    	
Musicl23.co.uk
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
780227
    	
 
    	
Benelux
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
827803508
    	
 
    	
Brazil
    	
 
    	
Music   123
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
2440539
    	
 
    	
United   Kingdom
    	
 
    	
Simmons
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
096015073
    	
 
    	
Taiwan
    	
 
    	
Woodwind &   Brasswind (design mark)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4865674
    	
 
    	
China
    	
 
    	
Woodwind &   Brasswind
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4865675
    	
 
    	
China
    	
 
    	
Woodwind &   Brasswind
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
1068505
    	
 
    	
Australia
    	
 
    	
Woodwind &   Brasswind
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4612297
    	
 
    	
European   Community
    	
 
    	
Woodwind &   Brasswind
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
4526893
    	
 
    	
European   Community
    	
 
    	
Zapf’s   Music 123, Inc.
    

 

UNITED STATES COPYRIGHTS:

 

Registrations:

 

	
OWNER
    	
 
    	
REGISTRATION
   NUMBER
    	
 
    	
COPYRIGHT
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Guitar   Center, Inc.
    	
 
    	
VAu691-983
    	
 
    	
Headstock   design for Mitchell guitars
    

 

Domain Names:

 

See attached Exhibit 3.05(b).

 

 

Exhibit 3.05(b)
 Domain Names

 

	
Domain Name
    	
 
    	
Expires
    	
 
    	
Registrar
    	
 
    	
Notes
    
	
AMERICANMUSICSTORE.COM
    	
 
    	
8/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
BANDFAKTORY.COM
    	
 
    	
7/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
BANDRENTAL.COM
    	
 
    	
12/16/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
BANDRENTALS.COM
    	
 
    	
11/12/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
CD-DUP.COM
    	
 
    	
9/21/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
CELEBRATINGMUSICFORLIFE.COM
    	
 
    	
4/15/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
CELEBRATINGMUSICFORLIFE.ORG
    	
 
    	
4/15/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
CERTIFIEDRESERVE.COM
    	
 
    	
4/18/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
CERTIFIEDRESERVE.US
    	
 
    	
4/30/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DALLASPLATINUMROOM.COM
    	
 
    	
1/27/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITAL-REFERENCE.COM
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCE.NET
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITAL-REFERENCE.NET
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCE.US
    	
 
    	
11/7/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITAL-REFERENCE.US
    	
 
    	
11/7/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEHEADPHONES.COM
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEHEADPHONES.NET
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEHEADPHONES.US
    	
 
    	
11/7/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEMICS.COM
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEMICS.NET
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEMICS.US
    	
 
    	
11/7/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCE-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCE-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCE-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEWIRELESS.COM
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEWIRELESS.NET
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DIGITALREFERENCEWIRELESS.US
    	
 
    	
11/7/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DR-PRO.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DR-PRO.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPROPRODUCTS.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPROPRODUCTS.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPROPRODUCTS.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPROSTANDS.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    

 

 

	
DRPROSTANDS.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPROSTANDS.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPRO-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPRO-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRPRO-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DRUMOFF.NET
    	
 
    	
8/29/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DUPCD.COM
    	
 
    	
9/21/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
DUP-CD.COM
    	
 
    	
9/21/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPACK.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
ESSENTIALSPAK-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FAMILYMUSICSTORE.COM
    	
 
    	
5/14/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FENDERROOM.COM
    	
 
    	
9/2/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETRESTPRODUCTS.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETRESTPRODUCTS.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETRESTPRODUCTS.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETREST-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETREST-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
FRETREST-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GAINCENTRAL.COM
    	
 
    	
2/19/2017
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GAINCENTRAL.NET
    	
 
    	
2/19/2017
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCDRUMOFF.COM
    	
 
    	
8/29/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCDRUMOFF.NET
    	
 
    	
8/29/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCFOUNDATION.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCGEARCARD.COM
    	
 
    	
4/14/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCGEARCARDS.COM
    	
 
    	
4/14/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCIGNET.COM
    	
 
    	
3/2/2015
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKIDS.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKIDS.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKIDS.ORG
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKIDS.US
    	
 
    	
10/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKINGOFTHEBLUES.COM
    	
 
    	
12/4/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCKOTB.COM
    	
 
    	
12/4/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    

 

 

	
GCMEF.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMEF.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMEF.ORG
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMEF.US
    	
 
    	
10/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMUSICEDUCATION.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMUSICEDUCATION.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
GCMUSICEDUCATION.ORG
    	
 
    	
10/21/2007
    	
 
    	
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ROCKWALK.US
    	
 
    	
4/30/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SCOTTIMUSIC.COM
    	
 
    	
11/30/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SHERMANOAKSGUITARCENTER.COM
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONSDRUM.COM
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUM.COM
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONSDRUM.NET
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUM.NET
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONSDRUM.ORG
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUM.ORG
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUMS.COM
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONSDRUMS.NET
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUMS.NET
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONSDRUMS.ORG
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SIMMONS-DRUMS.ORG
    	
 
    	
2/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSION.NET
    	
 
    	
1/13/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSION.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSIONDRUMS.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSIONDRUMS.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSIONDRUMS.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSION-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSION-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SOUNDPERCUSSION-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    

 

 

	
SPECTRALCOMPUTER.COM
    	
 
    	
2/17/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRALCOMPUTER.NET
    	
 
    	
2/17/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRALCOMPUTERS.COM
    	
 
    	
2/17/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRALCOMPUTERS.NET
    	
 
    	
2/17/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRAL-USA.COM
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRAL-USA.NET
    	
 
    	
11/9/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
SPECTRAL-USA.US
    	
 
    	
11/8/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIO.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLING-AUDIO.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIO.US
    	
 
    	
6/7/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLING-AUDIO.US
    	
 
    	
6/7/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOHEADPHONES.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOHEADPHONES.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMICROPHONES.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMICROPHONES.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMICS.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMICS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMONITORS.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOMONITORS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOSPEAKERS.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIOSPEAKERS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIO-USA.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGAUDIO-USA.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGHEADPHONES.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGHEADPHONES.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMICROPHONES.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMICROPHONES.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMICS.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMICS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMONITORS.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGMONITORS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGPROSOUND.COM
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
STERLINGSPEAKERS.NET
    	
 
    	
6/8/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGCFOUNDATION.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGCFOUNDATION.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGCFOUNDATION.ORG
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGCFOUNDATION.US
    	
 
    	
10/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    

 

 

	
THEGEARCARD.COM
    	
 
    	
4/14/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTER.CO.UK
    	
 
    	
2/16/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THE-GUITAR-CENTER.COM
    	
 
    	
8/25/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTER.NET
    	
 
    	
2/17/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTER.US
    	
 
    	
2/16/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERFOUNDATION.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERFOUNDATION.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERFOUNDATION.ORG
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERFOUNDATION.US
    	
 
    	
10/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERMUSICEDUCATIONFOUNDATION.COM
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERMUSICEDUCATIONFOUNDATION.NET
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERMUSICEDUCATIONFOUNDATION.ORG
    	
 
    	
10/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEGUITARCENTERMUSICEDUCATIONFOUNDATION.US
    	
 
    	
10/20/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEMUSICIANFINDER.COM
    	
 
    	
5/16/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
THEMUSICIANSUNION.COM
    	
 
    	
11/21/2007
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
VENEMAN.COM
    	
 
    	
1/30/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
VINTAGECOLLECTORSERIES.COM
    	
 
    	
6/20/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
VINTAGECOLLECTORSERIES.NET
    	
 
    	
6/20/2009
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
VINTAGEGUITARS.NET
    	
 
    	
5/19/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
WILLIAMSPIANO.NET
    	
 
    	
1/13/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
WlLLIAMSPIANOS.COM
    	
 
    	
1/13/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
WILLIAMSPIANOS.NET
    	
 
    	
1/13/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
WILLIAMSUSA.NET
    	
 
    	
1/13/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    
	
YOURFAMILYMUSICSTORE.COM
    	
 
    	
6/9/2008
    	
 
    	
GoDaddy
    	
 
    	
 
    

 

 

	
Client
    	
 
    	
SubClient
    	
 
    	
Brand
    	
 
    	
Extension
    	
 
    	
Country
    	
 
    	
Req. Type
    	
 
    	
Status
    	
 
    	
Clnt Bil
   Date
    	
 
    	
Clnt Pay
   Date
    	
 
    	
Renewal
   Date
    	
 
    	
Domain Name
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
jp
    	
 
    	
Japan
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
2/28/2006
    	
 
    	
3/8/2006
    	
 
    	
6/30/2007
    	
 
    	
guitarcenter.jp
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.mx
    	
 
    	
Mexico
    	
 
    	
nr
    	
 
    	
active
    	
 
    	
4/30/2006
    	
 
    	
5/16/2006
    	
 
    	
6/14/2007
    	
 
    	
guitarcenter.com.mx
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.br
    	
 
    	
Brazil
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
cn
    	
 
    	
China
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
5/31/2006
    	
 
    	
6/15/2006
    	
 
    	
5/8/2007
    	
 
    	
guitarcenter.cn
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/5/2007
    	
 
    	
 
    

 

 

	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.gr
    	
 
    	
Greece
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2008
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
gr
    	
 
    	
Greece
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2008
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.in
    	
 
    	
India
    	
 
    	
RS
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
guitarcenter.co.in
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
in
    	
 
    	
India
    	
 
    	
NR
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
guitarcenter.in
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
ie
    	
 
    	
Ireland
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.it
    	
 
    	
Italy
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/14/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
lu
    	
 
    	
Luxembourg
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/14/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
no
    	
 
    	
Norway
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2007
    	
 
    	
 
    

 

 

	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
co.pt
    	
 
    	
Portugal
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2008
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.pt
    	
 
    	
Portugal
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.sg
    	
 
    	
Singapore
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/5/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
sg
    	
 
    	
Singapore
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/5/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.es
    	
 
    	
Spain
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/5/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
se
    	
 
    	
Sweden
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/4/2007
    	
 
    	
 
    
	
Guitar Center Inc
    	
 
    	
Guitar Center ccTLD
    	
 
    	
guitarcenter
    	
 
    	
com.tr
    	
 
    	
Turkey
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
5/1/2007
    	
 
    	
 
    

 

 

	
Domain Name
    	
 
    	
Registrar
    	
 
    	
Expires
    	
 
    	
Registrant
    	
 
    	
Maintenance Contact
    
	
audiovideofriend.biz
    	
 
    	
directnic.com
    	
 
    	
4/5/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.cc
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.cn
    	
 
    	
directnic.com
    	
 
    	
6/8/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.com
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.com.cn
    	
 
    	
directnic.com
    	
 
    	
6/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.info
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.name
    	
 
    	
directnic.com
    	
 
    	
4/6/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.net
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.net.cn
    	
 
    	
directnic.com
    	
 
    	
6/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.org
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.tv
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.us
    	
 
    	
directnic.com
    	
 
    	
4/5/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
audiovideofriend.ws
    	
 
    	
directnic.com
    	
 
    	
4/6/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
axmanguitars.com
    	
 
    	
directnic.com
    	
 
    	
6/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
contractersfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
contractorsfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.biz
    	
 
    	
directnic.com
    	
 
    	
2/7/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.bz
    	
 
    	
directnic.com
    	
 
    	
2/7/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.cc
    	
 
    	
directnic.com
    	
 
    	
11/28/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.com
    	
 
    	
directnic.com
    	
 
    	
2/8/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.info
    	
 
    	
directnic.com
    	
 
    	
2/8/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.name
    	
 
    	
directnic.com
    	
 
    	
2/8/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.net
    	
 
    	
directnic.com
    	
 
    	
2/8/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.org
    	
 
    	
directnic.com
    	
 
    	
2/8/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.tv
    	
 
    	
directnic.com
    	
 
    	
11/28/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.us
    	
 
    	
directnic.com
    	
 
    	
2/7/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
customdirectguitars.ws
    	
 
    	
directnic.com
    	
 
    	
2/7/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
dinardis.us
    	
 
    	
directnic.com
    	
 
    	
10/10/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
djexplosion.com
    	
 
    	
directnic.com
    	
 
    	
4/25/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.biz
    	
 
    	
directnic.com
    	
 
    	
7/20/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.cc
    	
 
    	
directnic.com
    	
 
    	
7/21/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.com
    	
 
    	
directnic.com
    	
 
    	
7/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.info
    	
 
    	
directnic.com
    	
 
    	
7/21/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.name
    	
 
    	
directnic.com
    	
 
    	
7/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.net
    	
 
    	
directnic.com
    	
 
    	
7/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.org
    	
 
    	
directnic.com
    	
 
    	
7/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.tv
    	
 
    	
directnic.com
    	
 
    	
7/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.us
    	
 
    	
directnic.com
    	
 
    	
7/20/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gcreserve.ws
    	
 
    	
directnic.com
    	
 
    	
7/20/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gear-factory.com
    	
 
    	
directnic.com
    	
 
    	
1/11/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gear-support.com
    	
 
    	
directnic.com
    	
 
    	
1/11/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gearchat.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
gearschool.com
    	
 
    	
directnic.com
    	
 
    	
9/21/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
giardaneli.com
    	
 
    	
directnic.com
    	
 
    	
2/3/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
giardanelli.com
    	
 
    	
directnic.com
    	
 
    	
2/3/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
giardinelli.com
    	
 
    	
directnic.com
    	
 
    	
9/11/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
giardinelli.net
    	
 
    	
directnic.com
    	
 
    	
2/3/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
giardinelli.org
    	
 
    	
directnic.com
    	
 
    	
2/4/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
guitarcntr.com
    	
 
    	
directnic.com
    	
 
    	
3/9/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
guitarexpert.com
    	
 
    	
directnic.com
    	
 
    	
9/21/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
lmi-music.com
    	
 
    	
directnic.com
    	
 
    	
6/13/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
lmimusic.com
    	
 
    	
directnic.com
    	
 
    	
6/12/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
marsmusic.cc
    	
 
    	
directnic.com
    	
 
    	
12/11/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
marsmusic.com
    	
 
    	
directnic.com
    	
 
    	
1/28/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
marsmusic.tv
    	
 
    	
directnic.com
    	
 
    	
12/11/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
marsmusic.us
    	
 
    	
directnic.com
    	
 
    	
12/10/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
marsmusic.ws
    	
 
    	
directnic.com
    	
 
    	
12/11/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfgear.com
    	
 
    	
directnic.com
    	
 
    	
9/21/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfgearlink.com
    	
 
    	
directnic.com
    	
 
    	
5/1/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfi.name
    	
 
    	
directnic.com
    	
 
    	
11/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.biz
    	
 
    	
directnic.com
    	
 
    	
11/11/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.us
    	
 
    	
directnic.com
    	
 
    	
11/11/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfwholesale.com
    	
 
    	
directnic.com
    	
 
    	
6/13/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mfwholesale.net
    	
 
    	
directnic.com
    	
 
    	
6/13/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.cc
    	
 
    	
directnic.com
    	
 
    	
4/19/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.com
    	
 
    	
directnic.com
    	
 
    	
4/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.info
    	
 
    	
directnic.com
    	
 
    	
4/19/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.org
    	
 
    	
directnic.com
    	
 
    	
4/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.tv
    	
 
    	
directnic.com
    	
 
    	
4/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mi-media.ws
    	
 
    	
directnic.com
    	
 
    	
4/19/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
misiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/9/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mmusiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
msiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
muciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/13/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mucisiansfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/13/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
muiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
muscianfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/9/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
4/15/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musianfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/13/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicainsfriend.com
    	
 
    	
directnic.com
    	
 
    	
8/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicanfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/6/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicansfriend.com
    	
 
    	
directnic.com
    	
 
    	
4/16/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiceansfriend.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicemporium.com
    	
 
    	
directnic.com
    	
 
    	
12/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicfriend.com
    	
 
    	
directnic.com
    	
 
    	
9/6/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicfriend.net
    	
 
    	
directnic.com
    	
 
    	
9/21/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicgear.name
    	
 
    	
directnic.com
    	
 
    	
11/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicgear.org
    	
 
    	
directnic.com
    	
 
    	
9/21/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciaansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musician.com
    	
 
    	
directnic.com
    	
 
    	
3/6/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musician.net
    	
 
    	
directnic.com
    	
 
    	
4/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianfreind.com
    	
 
    	
directnic.com
    	
 
    	
10/1/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianfriend.com
    	
 
    	
directnic.com
    	
 
    	
3/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianfriends.com
    	
 
    	
directnic.com
    	
 
    	
4/17/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciannsfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicians-friend.net
    	
 
    	
directnic.com
    	
 
    	
9/21/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicians-friend.org
    	
 
    	
directnic.com
    	
 
    	
9/21/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianschat.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianscredit.com
    	
 
    	
directnic.com
    	
 
    	
4/11/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansemail.com
    	
 
    	
directnic.com
    	
 
    	
4/11/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansffriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfiend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
musiciansfried.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfrieend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfrien.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.biz
    	
 
    	
directnic.com
    	
 
    	
8/1/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.cc
    	
 
    	
directnic.com
    	
 
    	
6/19/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.cn
    	
 
    	
directnic.com
    	
 
    	
6/17/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
2/27/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.info
    	
 
    	
directnic.com
    	
 
    	
9/21/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.name
    	
 
    	
directnic.com
    	
 
    	
8/2/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.net
    	
 
    	
directnic.com
    	
 
    	
9/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.tv
    	
 
    	
directnic.com
    	
 
    	
5/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.us
    	
 
    	
directnic.com
    	
 
    	
4/23/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriend.ws
    	
 
    	
directnic.com
    	
 
    	
8/2/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriendd.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriends.com
    	
 
    	
directnic.com
    	
 
    	
4/29/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriendwholesale.com
    	
 
    	
directnic.com
    	
 
    	
6/13/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriendwholesale.net
    	
 
    	
directnic.com
    	
 
    	
6/13/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriennd.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfriiend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansfrriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianslease.com
    	
 
    	
directnic.com
    	
 
    	
4/11/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciansriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianssfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicianswarranty.com
    	
 
    	
directnic.com
    	
 
    	
4/11/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciasfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiciiansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicinsfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicionsfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/11/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musicsfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/20/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiiansfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musiiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musisiansfriend.com
    	
 
    	
directnic.com
    	
 
    	
8/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musisionsfriend.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musitiansfriend.com
    	
 
    	
directnic.com
    	
 
    	
2/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
musitionsfriend.com
    	
 
    	
directnic.com
    	
 
    	
12/15/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
mussiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
muusiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/27/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
needstrings.com
    	
 
    	
directnic.com
    	
 
    	
6/14/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
northwest-wholesale.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
nw-music.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
poplarstreetguitars.com
    	
 
    	
directnic.com
    	
 
    	
1/31/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
poplarstreetguitars.net
    	
 
    	
directnic.com
    	
 
    	
1/31/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
poplarstreetguitars.org
    	
 
    	
directnic.com
    	
 
    	
1/31/2012
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
prguitars.com
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
prguitars.net
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
private-reserve-guitars.com
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
private-reserve-guitars.net
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
privatereserveguitars.com
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
privatereserveguitars.net
    	
 
    	
directnic.com
    	
 
    	
3/21/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
pulsepropercussion.info
    	
 
    	
directnic.com
    	
 
    	
6/17/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
pulsepropercussion.net
    	
 
    	
directnic.com
    	
 
    	
6/16/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
pulsepropercussion.org
    	
 
    	
directnic.com
    	
 
    	
6/17/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
pulsepropercussion.us
    	
 
    	
directnic.com
    	
 
    	
6/16/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
robeastman.com
    	
 
    	
directnic.com
    	
 
    	
9/21/2007
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
rogueamps.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
rogueguitars.com
    	
 
    	
directnic.com
    	
 
    	
9/16/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
silvercreekusa.com
    	
 
    	
directnic.com
    	
 
    	
6/26/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
silvercreekusa.net
    	
 
    	
directnic.com
    	
 
    	
6/26/2010
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
thefriend.com
    	
 
    	
directnic.com
    	
 
    	
7/20/2009
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
thefriend.name
    	
 
    	
directnic.com
    	
 
    	
11/12/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
thefriend.us
    	
 
    	
directnic.com
    	
 
    	
11/11/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
usiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
6/25/2008
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    
	
wwwmusiciansfriend.com
    	
 
    	
directnic.com
    	
 
    	
5/2/2011
    	
 
    	
Musician’s   Friend, Inc
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
Client
    	
 
    	
SubClient
    	
 
    	
SubClient(2)
    	
 
    	
Brand
    	
 
    	
Extension
    	
 
    	
Country
    	
 
    	
Req. Type
    	
 
    	
Status
    	
 
    	
Case
   Name or #
    	
 
    	
Clnt Bill
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Clnt Pay
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Renewal
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Domain
   Name
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
co .at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
co.at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
co.at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
co.at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
co.at
    	
 
    	
Austria
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/12/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/12/2007
    	
 
    	
 
    

 

 

	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/12/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/12/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
co.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
com.be
    	
 
    	
Belgium
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
com.br
    	
 
    	
Brazil
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    

 

 

	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
com.br
    	
 
    	
Brazil
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
com.br
    	
 
    	
Brazil
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
com.br
    	
 
    	
Brazil
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
ca
    	
 
    	
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rs
    	
 
    	
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Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
ca
    	
 
    	
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rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
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4/10/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
ca
    	
 
    	
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rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
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Musicians Friend
    	
 
    	
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giardinelli
    	
 
    	
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Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
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4/8/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
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Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
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4/8/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
com.cn
    	
 
    	
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nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
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4/8/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
com.cn
    	
 
    	
China
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/8/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
com.cn
    	
 
    	
China
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/8/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
co.dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
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co.dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    

 

 

	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
co.dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
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Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
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Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/7/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/30/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
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dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/30/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/30/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
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dk
    	
 
    	
Denmark
    	
 
    	
nr
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/30/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musician
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
musiciansfriend
    	
 
    	
fi
    	
 
    	
Finland
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/11/2009
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
giardinelli
    	
 
    	
com.fr
    	
 
    	
France
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/14/2007
    	
 
    	
 
    

 

 

	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmonycentral
    	
 
    	
com.fr
    	
 
    	
France
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/14/2007
    	
 
    	
 
    
	
Musicians Friend
    	
 
    	
Musicians Friend ccTLD
    	
 
    	
 
    	
 
    	
harmony- central
    	
 
    	
com.fr
    	
 
    	
France
    	
 
    	
rs
    	
 
    	
Active
    	
 
    	
 
    	
 
    	
3/31/2006
    	
 
    	
5/16/2006
    	
 
    	
4/14/2007
    	
 
    	
 
    
	
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6-May-08
    	
 
    	
Woodwind   and Brasswind
    
	
guitarsale-email.com
    	
 
    	
Domain
    	
 
    	
18-Jul-08
    	
 
    	
Woodwind   and Brasswind
    
	
jet-tone.com
    	
 
    	
Domain
    	
 
    	
16-Sep-07
    	
 
    	
Woodwind   and Brasswind
    
	
jo-ral.com
    	
 
    	
Domain
    	
 
    	
16-Sep-07
    	
 
    	
Woodwind   and Brasswind
    
	
kids4music.com
    	
 
    	
Domain
    	
 
    	
4-May-08
    	
 
    	
Woodwind   and Brasswind
    
	
kidsfunmusic.com
    	
 
    	
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15-Jul-11
    	
 
    	
Woodwind   and Brasswind
    
	
kidsmusicpark.com
    	
 
    	
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15-Jul-11
    	
 
    	
Woodwind   and Brasswind
    
	
kidsmusicplace.com
    	
 
    	
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15-Jul-11
    	
 
    	
Woodwind   and Brasswind
    
	
kidsmusicplayground.com
    	
 
    	
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15-Jul-11
    	
 
    	
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kidsnmusic.com
    	
 
    	
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4-May-08
    	
 
    	
Woodwind   and Brasswind
    
	
kidsnmusicrsmart.com
    	
 
    	
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4-May-08
    	
 
    	
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lespaulusa.com
    	
 
    	
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4-Feb-09
    	
 
    	
Woodwind   and Brasswind
    
	
misupply.com
    	
 
    	
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15-Aug-11
    	
 
    	
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misupply-email.com
    	
 
    	
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18-Jul-08
    	
 
    	
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musco123.com
    	
 
    	
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10-Nov-07
    	
 
    	
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music123.at
    	
 
    	
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29-Jun-07
    	
 
    	
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music123.biz
    	
 
    	
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2-Feb-12
    	
 
    	
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music123.bz
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
music123.cc
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
music123.com
    	
 
    	
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28-Oct-10
    	
 
    	
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musicl23affiliates.com
    	
 
    	
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12-Jun-09
    	
 
    	
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music123-email.com
    	
 
    	
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4-May-08
    	
 
    	
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music123pro.com
    	
 
    	
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25-Sep-07
    	
 
    	
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music 123secure.com
    	
 
    	
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31-Jul-08
    	
 
    	
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music456.com
    	
 
    	
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15-May-08
    	
 
    	
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musicalplayhouse.com
    	
 
    	
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15-Jul-11
    	
 
    	
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musicalpro.com
    	
 
    	
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31-Aug-08
    	
 
    	
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musicalpro.net
    	
 
    	
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31-Aug-08
    	
 
    	
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musicalsandbox.com
    	
 
    	
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15-Jul-11
    	
 
    	
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musicalsandbox-email.com
    	
 
    	
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2-Dec-08
    	
 
    	
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musicgeargarage.com
    	
 
    	
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31-Mar-08
    	
 
    	
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musician123.com
    	
 
    	
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19-May-09
    	
 
    	
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musicians123.com
    	
 
    	
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19-May-09
    	
 
    	
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music-machine.net
    	
 
    	
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23-Oct-08
    	
 
    	
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musicmachinegibson.biz
    	
 
    	
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20-Dec-09
    	
 
    	
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musicmachinegibson.com
    	
 
    	
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21-Dec-08
    	
 
    	
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musico123.com
    	
 
    	
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10-Nov-08
    	
 
    	
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musicplayroom.com
    	
 
    	
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28-Jul-11
    	
 
    	
Woodwind   and Brasswind
    
	
musicstore123.com
    	
 
    	
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13-Apr-08
    	
 
    	
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musik123.com
    	
 
    	
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15-May-08
    	
 
    	
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musique123.com
    	
 
    	
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13-Apr-08
    	
 
    	
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musique123.net
    	
 
    	
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13-Apr-08
    	
 
    	
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netdrummer.com
    	
 
    	
Domain
    	
 
    	
23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
oboes123.com
    	
 
    	
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19-Oct-11
    	
 
    	
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percussionmall.com
    	
 
    	
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23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
percussionstore.com
    	
 
    	
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23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
percussionunlimited.com
    	
 
    	
Domain
    	
 
    	
23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
raredrums.com
    	
 
    	
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23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
rocknrhythm.com
    	
 
    	
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8-Jul-07
    	
 
    	
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rockwind.biz
    	
 
    	
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23-Aug-07
    	
 
    	
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saxophones123.com
    	
 
    	
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19-Oct-11
    	
 
    	
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schoolmusic.com
    	
 
    	
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11-Jul-08
    	
 
    	
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schoolmusic.us
    	
 
    	
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11-Jan-08
    	
 
    	
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sheetmusic123.com
    	
 
    	
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18-Mar-08
    	
 
    	
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solodrummer.com
    	
 
    	
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23-Feb-08
    	
 
    	
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sproutsmusic.com
    	
 
    	
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15-Jul-11
    	
 
    	
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stringwind.com
    	
 
    	
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13-Apr-07
    	
 
    	
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therockwind.com
    	
 
    	
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27-Jul-09
    	
 
    	
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therockwind.net
    	
 
    	
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27-Jul-09
    	
 
    	
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thestringcenter.com
    	
 
    	
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8-Sep-10
    	
 
    	
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thestringcentre.com
    	
 
    	
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8-Sep-10
    	
 
    	
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thewoodwindandbrasswind.com
    	
 
    	
Domain
    	
 
    	
26-Apr-08
    	
 
    	
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topdrum.com
    	
 
    	
Domain
    	
 
    	
4-Nov-11
    	
 
    	
Woodwind   and Brasswind
    
	
usadrums.com
    	
 
    	
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23-Feb-08
    	
 
    	
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usagibsonguitars.biz
    	
 
    	
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20-Dec-09
    	
 
    	
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usalespaul.com
    	
 
    	
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4-Feb-09
    	
 
    	
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vintagedrumsales.com
    	
 
    	
Domain
    	
 
    	
23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
vintagegibson.com
    	
 
    	
Domain
    	
 
    	
30-Nov-08
    	
 
    	
Woodwind   and Brasswind
    
	
vintagepercussion.com
    	
 
    	
Domain
    	
 
    	
23-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
wab-cg.com
    	
 
    	
Domain
    	
 
    	
4-Nov-07
    	
 
    	
Woodwind   and Brasswind
    
	
wolfpackcases.com
    	
 
    	
Domain
    	
 
    	
9-Feb-08
    	
 
    	
Woodwind   and Brasswind
    
	
wolfpakcases.com
    	
 
    	
Domain
    	
 
    	
4-Nov-07
    	
 
    	
Woodwind   and Brasswind
    
	
woodbrassaffiliates.com
    	
 
    	
Domain
    	
 
    	
12-Jun-09
    	
 
    	
Woodwind   and Brasswind
    
	
woodwindandbrasswind.com
    	
 
    	
Domain
    	
 
    	
16-Sep-07
    	
 
    	
Woodwind   and Brasswind
    
	
woodwindbrasswind.com
    	
 
    	
Domain
    	
 
    	
16-Sep-07
    	
 
    	
Woodwind   and Brasswind
    
	
wwandbw.com
    	
 
    	
Domain
    	
 
    	
8-Jul-07
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.at
    	
 
    	
Domain
    	
 
    	
29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.be
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.bz
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.cc
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.co.nz
    	
 
    	
Domain
    	
 
    	
29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.com
    	
 
    	
Domain
    	
 
    	
26-Apr-07
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.de
    	
 
    	
Domain
    	
 
    	
29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.info
    	
 
    	
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29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.net
    	
 
    	
Domain
    	
 
    	
26-Apr-08
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw.org
    	
 
    	
Domain
    	
 
    	
29-Jun-11
    	
 
    	
Woodwind   and Brasswind
    
	
wwbw-email.com
    	
 
    	
Domain
    	
 
    	
18-Jul-08
    	
 
    	
Woodwind   and Brasswind
    

 

 

	
Domain Name
    	
 
    	
Registrar
    	
 
    	
Expires
    	
 
    	
Registrant
    	
 
    	
Maintenance Contact
    
	
wwbw.jp
    	
 
    	
jp-domains.com
    	
 
    	
1/31/2008
    	
 
    	
Music123
    	
 
    	
Chris   James / Steve Peer
    
	
music123.jp
    	
 
    	
jp-domains.com
    	
 
    	
2/29/2008
    	
 
    	
Music123
    	
 
    	
Chris   James / Steve Peer
    

 

 

	
Domain Name
    	
 
    	
Registrar
    	
 
    	
Expires
    	
 
    	
Registrant
    	
 
    	
Maintenance Contact
    
	
allmusicianfind.com
    	
 
    	
directnic.com
    	
 
    	
5/10/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
audio-software.info
    	
 
    	
directnic.com
    	
 
    	
5/22/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
audioprocessor.com
    	
 
    	
directnic.com
    	
 
    	
7/9/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
band-web-sites.com
    	
 
    	
directnic.com
    	
 
    	
12/13/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
bandshwag.com
    	
 
    	
directnic.com
    	
 
    	
8/15/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
basstipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
djtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
drum-rudiments.com
    	
 
    	
directnic.com
    	
 
    	
3/8/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
drumtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
gigscentral.com
    	
 
    	
directnic.com
    	
 
    	
4/26/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitar-string.info
    	
 
    	
directnic.com
    	
 
    	
7/29/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitar-string.net
    	
 
    	
directnic.com
    	
 
    	
7/29/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitar-tip-of-the-day.com
    	
 
    	
directnic.com
    	
 
    	
1/21/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitarbuyingtips.com
    	
 
    	
directnic.com
    	
 
    	
5/6/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitartipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
1/21/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
guitartips.net
    	
 
    	
directnic.com
    	
 
    	
6/5/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
h-ctv.com
    	
 
    	
directnic.com
    	
 
    	
5/10/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
h-ctv.net
    	
 
    	
directnic.com
    	
 
    	
5/10/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
h-ctv.org
    	
 
    	
directnic.com
    	
 
    	
5/10/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.biz
    	
 
    	
directnic.com
    	
 
    	
2/12/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.cc
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.cn
    	
 
    	
directnic.com
    	
 
    	
6/17/2010
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.com
    	
 
    	
directnic.com
    	
 
    	
12/27/2007
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.name
    	
 
    	
directnic.com
    	
 
    	
6/2/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.org
    	
 
    	
directnic.com
    	
 
    	
2/13/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.tv
    	
 
    	
directnic.com
    	
 
    	
5/7/2009
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.us
    	
 
    	
directnic.com
    	
 
    	
2/12/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-central.ws
    	
 
    	
directnic.com
    	
 
    	
6/16/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-centralcom.com
    	
 
    	
directnic.com
    	
 
    	
6/16/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-centraltv.com
    	
 
    	
directnic.com
    	
 
    	
5/9/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-click.com
    	
 
    	
directnic.com
    	
 
    	
7/15/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmony-clicks.com
    	
 
    	
directnic.com
    	
 
    	
7/15/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.biz
    	
 
    	
directnic.com
    	
 
    	
2/12/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.cc
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.com
    	
 
    	
directnic.com
    	
 
    	
6/23/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.info
    	
 
    	
directnic.com
    	
 
    	
2/13/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
harmonycentral.name
    	
 
    	
directnic.com
    	
 
    	
2/1/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.tv
    	
 
    	
directnic.com
    	
 
    	
5/7/2009
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.us
    	
 
    	
directnic.com
    	
 
    	
2/12/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentral.ws
    	
 
    	
directnic.com
    	
 
    	
6/2/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentralcom.com
    	
 
    	
directnic.com
    	
 
    	
6/16/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonycentraltv.com
    	
 
    	
directnic.com
    	
 
    	
5/9/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonyclick.com
    	
 
    	
directnic.com
    	
 
    	
2/16/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
harmonyclicks.com
    	
 
    	
directnic.com
    	
 
    	
7/14/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
hc-ads.com
    	
 
    	
directnic.com
    	
 
    	
1/9/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
home-recording.biz
    	
 
    	
directnic.com
    	
 
    	
10/30/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
instrumentcompare.com
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
keyboardtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
6/5/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.cc
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.info
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.name
    	
 
    	
directnic.com
    	
 
    	
6/2/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.tv
    	
 
    	
directnic.com
    	
 
    	
6/2/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mfinc.ws
    	
 
    	
directnic.com
    	
 
    	
6/2/2011
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
mgearshop.com
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
miclick.com
    	
 
    	
directnic.com
    	
 
    	
2/15/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
monsterrack.com
    	
 
    	
directnic.com
    	
 
    	
7/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
music-instrument-sale.name
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
music-instrument-sale.net
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
music-instrument-sale.org
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
music-poster.net
    	
 
    	
directnic.com
    	
 
    	
5/21/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.biz
    	
 
    	
directnic.com
    	
 
    	
6/1/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.cc
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.info
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.name
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.org
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.tv
    	
 
    	
directnic.com
    	
 
    	
5/7/2009
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.us
    	
 
    	
directnic.com
    	
 
    	
6/1/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musical-instrument-sale.ws
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicalclicks.com
    	
 
    	
directnic.com
    	
 
    	
3/18/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicbusinesstipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musiceducationtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicequipmentforsale.org
    	
 
    	
directnic.com
    	
 
    	
6/2/2012
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicgear.cc
    	
 
    	
directnic.com
    	
 
    	
6/2/2008
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
musicianfindit.com
    	
 
    	
directnic.com
    	
 
    	
5/10/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicianmagazines.com
    	
 
    	
directnic.com
    	
 
    	
12/14/2011 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musicinstrument.us
    	
 
    	
directnic.com
    	
 
    	
6/1/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
musictipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
processaudio.com
    	
 
    	
directnic.com
    	
 
    	
7/9/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
recordingtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
songwritingtipoftheday.com
    	
 
    	
directnic.com
    	
 
    	
5/20/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
tabmonkey.com
    	
 
    	
directnic.com
    	
 
    	
4/26/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    
	
wwwharmony-central.com
    	
 
    	
directnic.com
    	
 
    	
2/16/2012 
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
Chris   James / Alan Laird
    

 

 

	
Domain Name
    	
 
    	
Registrar
    	
 
    	
Expires
    	
 
    	
Registrant
    	
 
    	
Maintenance Contact
    
	
Domain   Name
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
Expiry Date
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.be
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
12-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.ca
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.ch
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.cn
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
9-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
GIARDINELLI.CO.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.kr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
12-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
1-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.co.uk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.br
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.cn
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.mx
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-07 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.com.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.de
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.fi
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-09 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
glardinelli.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.ie
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
GIARDINELLI.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.jp
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.lu
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.nl
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.no
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.ru
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.se
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
giardinelli.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    

 

 

	
harmony-central.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
9-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.be
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
12-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.ca
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.ch
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.co.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
9-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.co.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
HARMONY-CENTRAL.CO.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.co.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.co.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
1-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.br
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.cn
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.mx
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-07
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.com.tr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
16-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
28-Dec-07
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.fi
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-09
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-centrai.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.ie
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
19-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
HARMONY-CENTRAL.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
19-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.jp
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.lu
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.nl
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.no
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08
    	
 
    	
CSC   Corporate Domains inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.se
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmony-central.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.be
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
12-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.ca
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.ch
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.cn
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    

 

 

	
harmonycentral.co.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
9-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.co.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
HARMONYCENTRAL.CO.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.co.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.co.kr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
23-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.co.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
1-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.br
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.cn
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.mx
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral   .com.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-07
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harononycentral.com.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.com.tr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
16-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.fi
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-09
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.ie
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
HARMONYCENTRAL.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
19-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.jp
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.lu
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.nl
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.no
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.ru
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.se
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
harmonycentral.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.ch
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.co.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
9-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.co.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.co.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.co.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
1-May-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.com.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    

 

 

	
musician.com.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.com.mx
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.com.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-07 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.com.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.fi
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-09 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
19-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.lu
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.no
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.se
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musician.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.be
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
12-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.ch
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.co.at
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
6-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.co.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
MUSICIANSFRIEND.CO.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.co.it
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.co.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
1-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.br
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
13-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
10-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.mx
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.pt
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-07 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.com.tr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
16-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.dk
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.es
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.fi
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
11-Apr-09 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.fr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.gr
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
5-May-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.ie
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
MUSICIANSFRIEND.IN
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.jp
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
30-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.lu
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
14-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.no
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
18-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    

 

 

	
musiciansfriend.se
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
7-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    
	
musiciansfriend.sg
    	
 
    	
CSC   Corporate Domains / EBrandSecure
    	
 
    	
21-Apr-08 
    	
 
    	
CSC   Corporate Domains Inc.
    	
 
    	
Chris   James / Dan Smith
    

 

 

Schedule 3.05(c)(i)
 Owned Real Property

 

	
Owner
    	
 
    	
Address of Property
    	
 
    	
County
    
	
Guitar   Center, Inc.
    	
 
    	
5785   Lindero Canyon Road 

Westlake   Village, California
    	
 
    	
Los   Angeles County
    
	
Guitar   Center, Inc.
    	
 
    	
5775   Lindero Canyon Road 

Westlake   Village, California
    	
 
    	
Los   Angeles County
    
	
Musician’s   Friend, Inc.
    	
 
    	
931   Chevy Way 

Medford,   Oregon
    	
 
    	
Jackson   County
    
	
Guitar   Center, Inc.
    	
 
    	
1485   Northeast Expressway 

Atlanta,   Georgia
    	
 
    	
Fulton   County
    
	
Guitar   Center, Inc.
    	
 
    	
1513,1517   and 1521 Northeast 

Expressway   Access Road Atlanta, Georgia
    	
 
    	
Fulton   County
    
	
Guitar   Center, Inc.
    	
 
    	
7425   Sunset Blvd. 

Hollywood,   California
    	
 
    	
Los   Angeles County
    
	
Guitar   Center, Inc.
    	
 
    	
7330-7845   Maltlage Drive(1) 

Liverpool,   New York
    	
 
    	
Onondaga   County
    

 

(1)     To be sold pursuant to the Agreement of Purchase and Sale and Joint Escrow Instructions dated as of September 24, 2007 by and between Guitar Center, Inc. and American Dicing, Inc.

 

 

Schedule 3.06(a)
 Disclosed Matters

 

1.                          Michael Kuhl v. Guitar Center Stores, Inc. et al. 07 CV 214, U.S. District Court, Northern District of Illinois, Eastern Division. On January 11, 2007, plaintiff, Michael Kuhl, a Company employee, initiated a suit against Guitar Center, Inc. This is a class action suit alleging violations under the Fair Labor Standards Act and its Illinois equivalent (the Illinois Wage Payment and Collection Act), as well as breach of contract and unjust enrichment. Due to a lack of specificity of claims in both the complaint and the amended complaint, an estimate on the size of any potential class or the likelihood of class certification is unavailable.

 

2.                          J. Kevin Snyder vs. Guitar Center, Inc. et al. BC 363022, Los Angeles Superior Court. Plaintiff J. Kevin Snyder filed this putative class action on December 6, 2006, against GTRC, Inc., Guitar Center, Inc. and Guitar Center Stores, Inc., alleging violations of California Civil Code § 1747.08, the Song-Beverly Credit Card Act.

 

3.                          The following putative class action complaints have been filed in connection with the proposed merger:

 

(a)                     Mary Benton, v. Guitar Center, Inc., et al., In the Court of Chancery of the State of Delaware, New Castle County, Delaware

 

(b)                    Nina Weitman vs. Guitar Center, Inc., et al., Los Angeles Superior Court, California

 

(c)                     Lou Ann Murphy vs. Guitar Center, Inc., et al., Los Angeles Superior Court, California

 

(d)                    Terri Connors and Dennis Connors vs. Guitar Center, Inc. et al., Los Angeles Superior Court, California

 

(e)                     K Family LLC vs. Guitar Center, Inc. et al., Los Angeles Superior Court, California

 

 

Schedule 3.12
 Subsidiaries; Joint Ventures

 

	
Owner
    	
 
    	
Subsidiary
    	
 
    	
Number of
   Equity
   Interests Held
    	
 
    	
Number of
   Authorized
   Equity
   Interests
    	
 
    	
Percentage of
   Outstanding
   Equity Interests
   Held
    
	
Guitar   Center Holdings, Inc.
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
100   shares
    	
 
    	
1,000   shares of common stock
    	
 
    	
100%
    
	
Guitar   Center, Inc.
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
100   shares
    	
 
    	
1,000   shares of common stock
    	
 
    	
100%
    
	
Guitar   Center, Inc.
    	
 
    	
Guitar   Center Stores, Inc.
    	
 
    	
100   shares
    	
 
    	
1,000   shares of common stock
    	
 
    	
100%
    
	
Guitar   Center, Inc.
    	
 
    	
Guitar   Center Gift Card Company, LLC
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
100%
    
	
Guitar   Center, Inc.
    	
 
    	
GC   Insurance Company, Inc.
    	
 
    	
1,000   shares
    	
 
    	
1,000   shares of common stock
    	
 
    	
100%
    
	
Guitar   Center, Inc.
    	
 
    	
Guitar Center Stores Canada, Inc.
    	
 
    	
100   shares
    	
 
    	
Unlimited
    	
 
    	
100%
    
	
Guitar   Center Stores, Inc.
    	
 
    	
Musician’s   Choice, Inc.
    	
 
    	
100   shares
    	
 
    	
1,000   shares of common stock
    	
 
    	
100%
    
	
Guitar   Center Stores, Inc.
    	
 
    	
American   Student Rental, Inc.
    	
 
    	
100   shares
    	
 
    	
100   shares of common stock
    	
 
    	
100%
    
	
Musician’s   Friend, Inc.
    	
 
    	
Harmony   Central Group, LLC
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
100%
    

 

Joint Ventures and Limited Liability Company Agreements:

 

1.                          Guitar Center, Inc. owns approximately 57% of the capital stock of Your Tunes, Inc., d/b/a Tunecore, a company which assists musicians in uploading their music to online music distribution sites such as iTunes and Napster. The initial investment was $2,000,000.

 

2.                          Limited Liability Company Operating Agreement of Guitar Center Gift Card Company, LLC

 

3.                          Limited Liability Company Agreement of Harmony Central Group, LLC

 

 

Schedule 3.14
 Collective Bargaining Agreements

 

1.                          Guitar Center Holdings, Inc. 2007 Management Equity Plan

 

2.                          Guitar Center Management Incentive Plan

 

 

Schedule 5.16(a)
 Mortgaged Properties

 

1.                          5775 Lindero Canyon Road, Westlake Village, California.

 

2.                          5785 Lindero Canyon Road, Westlake Village, California.

 

3.                          7425 Sunset Boulevard, Hollywood, California.

 

4.                          931 Chevy Way, Medford, Oregon.

 

 

Schedule 5.17
 Post Closing Matters

 

1.                          No later than fifteen (15) days after the Closing Date (which period may be extended by the Administrative Agent acting in its reasonable discretion), the Administrative Agent shall have received a certificate of good standing from the Secretary of State of Virginia for Guitar Center Gift Card Company, LLC.

 

 

Schedule 6.01
 Existing Indebtedness

 

1.                          Capital lease with IBM Corp. relating to an IBM AS400 computer system for the data center in Phoenix, Arizona, in the approximate amount outstanding of $1.8 million.

 

2.                          Synthetic lease with GE Capital Solutions relating to conveyor belt equipment located at the fulfillment center near Indianapolis, Indiana, in the approximate amount outstanding of $5.0 million.

 

3.                          Synthetic lease with Commerce Bank, NA relating to conveyor belt equipment located at the fulfillment center near Kansas City, Missouri, in the approximate amount outstanding of $14.6 million.

 

4.                          Letters of Credit issued by Wells Fargo Bank, N.A.:

 

	
Beneficiary
    	
 
    	
Type/Purpose of Guaranty
    	
 
    	
Letter of
   Credit No.
    	
 
    	
US$
    	
 
    	
Date
   Issued
    	
 
    	
Expiration
   Date
    	
 
    
	
Modell’s   PA II, INC.
    	
 
    	
Standby-Lease   Default, Guitar Center Location 851, automatic annual renewal.
    	
 
    	
408435
    	
 
    	
$
    	
500,000.00
    	
 
    	
7/20/2000
    	
 
    	
7/21/2008
    	
 
    
	
Royal   Indemnity Company
    	
 
    	
Irrevocable-Workers   Compensation Insurance, Policy Period 2002-3.
    	
 
    	
NZS454647
    	
 
    	
$
    	
180,000.00
    	
 
    	
2002
    	
 
    	
None
    	
 
    
	
Zurich   American Insurance Company
    	
 
    	
Irrevocable-Workers   Compensation Insurance, Policy Periods 2003-4, 2004- 5, 2005-6,   2006-7 & 2007-8.
    	
 
    	
NZS499584
    	
 
    	
$
    	
3,635,000.00
    	
 
    	
2003 plus amendments
    	
 
    	
None
    	
 
    
	
Thaddeus   H. Piaseczny and/or Mark Piasecsny and /or Marlene Piaseczny
    	
 
    	
Irrevocable-Music &   Arts Acquisition of Ted Herberts- for Goodwill, Non-compete and consulting.   Amount is reduced by monthly payments with last payment 7/1/2009.
    	
 
    	
NZS548693
    	
 
    	
$
    	
575,000.08
    	
 
    	
7/15/2005
    	
 
    	
7/31/2008
    	
 
    

 

 

Schedule 6.02
 Existing Encumbrances

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
Submitted   to Delaware Secretary of State 10/1/2007
    	
 
    	
Unavailable
    	
 
    	
U.S.   Bancorp Equipment Finance, Inc.
    	
 
    	
All   equipment described on Exhibit A attached thereto, together with all   other parts, attachments, accessories, additions, modifications, replacements   and substitutions now or hereafter made a part of the equipment or attached   thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
Submitted   to Delaware Secretary of State 10/1/2007
    	
 
    	
Unavailable
    	
 
    	
U.S.   Bancorp Equipment Finance, Inc.
    	
 
    	
All   equipment described on Exhibit A attached thereto, together with all   other parts, attachments, accessories, additions, modifications, replacements   and substitutions now or hereafter made a part of the equipment or attached   thereto.
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
Submitted   to Delaware Secretary of State 10/1/2007
    	
 
    	
Unavailable
    	
 
    	
U.S.   Bancorp Equipment Finance, Inc.
    	
 
    	
All   equipment described on Exhibit A attached thereto, together with all   other parts, attachments, accessories, additions, modifications, replacements   and substitutions now or hereafter made a part of the equipment or attached   thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
Submitted   to Delaware Secretary of State 10/1/2007
    	
 
    	
Unavailable
    	
 
    	
U.S.   Bancorp Equipment Finance, Inc.
    	
 
    	
All   equipment described on Exhibit A attached thereto, together with all   other parts, attachments, accessories, additions, modifications, replacements   and substitutions now or hereafter made a part of the equipment or attached   thereto.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
3/22/2004
    	
 
    	
4079187   3
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   OPC30TT 33742, 33743, 33744, 33745, 33746, 33747, 33748 Deka 12D12515 1155BN,   1156BN, 1157BN, 1158BN, 1159BN, 1160BN, 1161BN
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Guitar   Center, Inc.
    	
 
    	
7/18/2005
    	
 
    	
5219426   5
    	
 
    	
Dell   Financial Services, L.P.
    	
 
    	
All   computer equipment and peripherals wherever located leased pursuant to the Master   Lease Agreement #6430546, dated February 15, 2005, and all Schedules   thereto, including, without limitation, all substitutions, additions,   accessions and replacements thereto and thereof, nor or hereafter installed   in, affixed to or used in, conjunction with the equipment and the proceeds   thereof together with all rental or installment payments, insurance proceeds,   other proceeds and payments due and to become due and arising from or   relating to said equipment.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/2/2007
    	
 
    	
2007   0798602
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   8400-FRE60L 70703, 70705, 70709, 70712 Deka 12D8513 2755LP, 2756KP, 2757LP,   2758LP, Deka 510H312G 406CS47898,406CS47899, 406CS47900,406CS47901
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/15/2007
    	
 
    	
2007   0980622
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   SACSR30T 05505, 05506, 05507 Deka 750H324G 406CS48223, 406CS48224,   406CS48225, 406CS48226, Deka 24D12513 2994LP, 29945LP, 2996LP, 2997LP,   2998LP, 2999LP, 3000LP, 3001LP, 3002LP, 3003LP
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/4/2007
    	
 
    	
20071257400
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
(1) JLG   Toucan Series Mast Boom Lift s/n A300033728
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/18/2007
    	
 
    	
2007   1452282
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   750H3-18G 406CS48236, 406CS48240 Raymond 7400-R45TT 07059, 07061 Deka   18-D125-13 2988LP, 2989LP, 2990LP, 2991 LP, 2992LP, 2993LP
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/27/2007
    	
 
    	
2007   1591428
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   SACSR30T 05564
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
5/8/2007
    	
 
    	
2007   1723401
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   8400FRE60L 72485,72484,72483 Deka 12D8513 1122CQ, 1123CQ, 2312AQ Deka   510H312G 406CS47895, 406CS47896, 406CS47897
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
6/19/2007
    	
 
    	
2007   2320249
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
00021950200169395   Scissor Lift, Manuf: JLG Model: JLG3246ES, Year 2007
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
8/13/2003
    	
 
    	
3229245   9
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
U   Charger 303CS08893, 303CS08894
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/10/2004
    	
 
    	
4067354   3
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   18D8513 1162BN Raymond DSD50 S50R20047 Ametek 1050C318 104CS13641
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/22/2004
    	
 
    	
4079678   1
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
(7) Raymond   Orderprickers s/n’s EASI-OPC30TT- AE33742-AE33748(7) Deka Batteries m/n   12D-125-15 s/n 1155BN- 1161BN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
8/11/2004
    	
 
    	
4226260   0
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
DEKA   18D8525 3908FN RAYMOND DSD50 20067
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
8/20/2004
    	
 
    	
4235670   9
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
RAYMOND   RTW30 01623 DEKA 18D8513 4043FN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
8/20/2004
    	
 
    	
4235671   7
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
RAYMOND   OPC30TT 34559, 34560, 34561, 34562 AMETEK 880C312 204CS18313, 204CS18314 DEKA   12D12515 3903FN, 3904FN, 3905FN, 3906FN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
9/2/2004
    	
 
    	
4247911   3
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Ametek   880C318 204CS18160 Deka 18D12515 3907FN Raymond R30C30TT 06879
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
9/20/2004
    	
 
    	
4263364   4
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   24D12513 1235GN Ametek 750C324 304CS18798 Raymond SACSR30T 03723
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
9/20/2004
    	
 
    	
4263366   9
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   112TMFRE60L 52389, 52391, 52395 Deka 12D8513 3909FN, 3910FN, 3911FN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
10/12/2004
    	
 
    	
4286265   6
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   24-D125-13 1959GN Deka 12-D125-15 2458HN, 4098HN
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/30/2005
    	
 
    	
5107042   5
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   128513 1269BO, 1273BO Raymond 112TMFRE60L 56703 Deka XPT 12475 AJ527200011
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/30/2005
    	
 
    	
5107047   4
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   OPC30TT 35991, 35992, 35994 Deka XPT12865 AJ531000014, AJ531000013,   AJ53100012, AJ53100011 Deka 12D12515 1268BO, 1267BO, 1266BO, 1265BO, 1264BO,   1263BO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
3/30/2005
    	
 
    	
5107056   5
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   18D8513 1262BO, 1260, 1260BO, 1261BO Raymond RTW 01736, 01746 Deka XPT18475   AJ528500012, AJ528500011
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/22/2005
    	
 
    	
5138472   7
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   12D8513 1076CO, 1077CO Deka 510C312 102CS94058,102CS94059 Raymond 112TMFRE60L   58706, 56707
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/22/2005
    	
 
    	
5138479   2
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   510C318 102CS93983, 102CS93984,102CS93985 Raymond RTWC30TT 01527, 01564,01676   Deka 18D8513 1274BO, 1275BO, 1081CO
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
4/27/2005
    	
 
    	
5143936   4
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   12D8513 1270BO Deka 18D8513   1271BO, 1272BO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
5/4/2005
    	
 
    	
5150424   1
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   112TM-FRE60L 18984 GTC GTC12600T1 85L2482 Exide 12E8513 AXB133778 Sackett   Battery Changer Battery Changer
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
7/13/2005
    	
 
    	
5224149   6
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   SACSR30T 04032, 04033 Deka 24D12513 1015FO, 1O16FO, 1017FO Hobart 750C324   202CS96352, 202CS96351
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
9/27/2005
    	
 
    	
5303502   0
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Raymond   OPC30TT 36974, 36975, 36976 Deka 12D12515 2549HO, 2550HO, 2551HO, 2552HO,   2553HO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
10/5/2005
    	
 
    	
5316018   2
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   XPT12865 AL081500011, AL081500012 Raymond OPC30TT 37137, 37138, 37139, 37140 Deka   12D12515 2554HO, 2555HO, 2556HO, 2557HO
    

 

 

	
Jurisdiction
    	
 
    	
Loan Party
    	
 
    	
Filing
   Date
    	
 
    	
Filing
   Number
    	
 
    	
Secured
   Party
    	
 
    	
Collateral
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
10/31/2005
    	
 
    	
5344965   0
    	
 
    	
Raymond   Leasing Corporation
    	
 
    	
Deka   XPT181050 AL712200 Deka 18D12525 112510 Raymond DSD50 020100
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
6/14/2006
    	
 
    	
6208113   1
    	
 
    	
Commerce   Bank, N.A.
    	
 
    	
“In   lieu” financing statement / All equipment and items described on Exhibit A   attached thereto and attached hereto as Exhibit 6.02(a), with all   accessions and attachments thereto and all replacements and substitutions   thereof for said equipment in whole or in part
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delaware   Secretary of State
    	
 
    	
Musician’s   Friend, Inc.
    	
 
    	
11/03/2006
    	
 
    	
6385786   9
    	
 
    	
Commerce   Bank, N.A.
    	
 
    	
All   equipment now or hereafter leased under Lease Schedule No. 2 to Master   Lease Agreement No. 1000418, which equipment may be generally described   as warehouse equipment, together with all accessions, additions and   attachments thereto and substitutions and replacements therefore and   insurance thereon and proceeds thereof.
    

 

 

Page 1of 14

 

Exhibit 6.02(a)

 

EXHIBIT A

 

Equipment location: 1491 North Universal Ave. Kansas City, Missouri 64120

 

Automotion, Inc. brand conveyor and storage systems.

 

·    Series 1000/2000/5000 Storage Equipment

·    Conveyor System Equipment (mechanical and electrical equipment)

·    PC terminals in each of the six, non-order start primary picking modules

 

The above equipment Includes “turn-key” installation of the following major components:

 

1) Tote and carton routing conveyor

2) Hand Stack / Full pallet rack

3) Full pallet selective rack

4) Carton Row racking

5) Bin shelving

6) Dunnage System

7) Pack out work stations

8) Supplies racking

 

 

Page 2of 14

 

[Illegible]: Mechanical Equipment List

 

	
Proposal
    	
:   01Q0039TND
    
	
Layout
    	
:   BASE
    
	
Estimate
    	
:   3000S
    
	
 
    	
 
    
	
Customer
    	
: MUSICIAN’S FRIEND
    

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3000A
    	
 
    	
1
    	
 
    	
30
    	
 
    	
70’
    	
 
    	
Roller   Bed
    	
 
    	
6
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
l.5in   GRFA
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3000B
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**148 FT LONG POPUP SORTER** **SCANNER STAND (SIDE)** **30W SINGLE WIDE   CROSSOVER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
5hp
    	
 
    	
10CD
    	
 
    	
 
    	
 
    	
High   Speed Rollers**4 DIVERT STATIONS, 30 CPM, 180 FPM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3005
    	
 
    	
2
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**BUYOUT   ITEM** **180 DEGREE BELT CURVE**
    	
 
    	
2
    	
 
    	
180
    	
 
    	
30
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3010A
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**117 FT LONG POPUP SORTER** **SCANNER STAND (SIDE)** **30W SINGLE WIDE   CROSSOVER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
5hp
    	
 
    	
10CD
    	
 
    	
 
    	
 
    	
High   Speed Rollers**3 DIVERT STATIONS, 30 CPM, 188 FPM**.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3010B
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**SCANNER STAND (SIDE)** **101 FT LONG POPUP SORTER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
3hp
    	
 
    	
10CD
    	
 
    	
 
    	
 
    	
High   Speed Rollers**2 DIVERT STATIONS, 30 CPM, 180 FPM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3020
    	
 
    	
8
    	
 
    	
24
    	
 
    	
#13TR
    	
 
    	
V-Belt**drop   kit**
    	
 
    	
5
    	
 
    	
260
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
l.5in   GRFA
    	
 
    	
High   speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3030
    	
 
    	
6
    	
 
    	
18
    	
 
    	
70’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
l.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3035
    	
 
    	
2
    	
 
    	
18
    	
 
    	
70’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
l.5in   GRFA
    	
 
    	
Angle   End Stop
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3040
    	
 
    	
6
    	
 
    	
18
    	
 
    	
#07
    	
 
    	
Roller   Gravity
    	
 
    	
5
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
l.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3050
    	
 
    	
6
    	
 
    	
18
    	
 
    	
70’
    	
 
    	
Rollar   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
l.5in   GRFA
    	
 
    	
Angle   End Stop
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3060
    	
 
    	
6
    	
 
    	
18
    	
 
    	
60’
    	
 
    	
Singulation   Air**PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT MODULE**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
6CD
    	
 
    	
l.5in   GRFA
    	
 
    	
Sol,   4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3065A
    	
 
    	
2
    	
 
    	
18
    	
 
    	
60’
    	
 
    	
Singulation   Air**PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT MODULE**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
6CD
    	
 
    	
l.5in   GRFA
    	
 
    	
Sol,   4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3065B
    	
 
    	
8
    	
 
    	
18
    	
 
    	
’
    	
 
    	
Miscellaneous**BI-30   BRAKE INDUCT 18W**
    	
 
    	
2
    	
 
    	
120
    	
 
    	
30
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

 

Page 3of 14

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
3070
    	
 
    	
8
    	
 
    	
30
    	
 
    	
#12DR
    	
 
    	
V-Belt*DROP   KIT** **COATED ROLLERS**
    	
 
    	
5
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
lhp
    	
 
    	
D5
    	
 
    	
1.5in   GRFA
    	
 
    	
High   Speed Rollers
    

 

 

 

Page 4 of 14

 

[Illegible]: Mechanical Equipment List

 

	
Proposal
    	
:   01Q0039TND
    
	
Layout
    	
:   BASE
    
	
Estimate
    	
:   4000S
    
	
 
    	
 
    
	
Customer
    	
: MUSICIAN’S FRIEND
    

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4000
    	
 
    	
1
    	
 
    	
30
    	
 
    	
#01DL
    	
 
    	
V-Belt**DROP   KIT**
    	
 
    	
5
    	
 
    	
260
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
d5
    	
 
    	
1.5in   GRFA
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4030
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**80 FT LONG POPUP SORTER** **30W SINGLE WIDE CROSSOVER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
2hp
    	
 
    	
8CD
    	
 
    	
 
    	
 
    	
High   Speed Rollers**1 DIVERT STATION, 30 CPM, 180 FPM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4050
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#0ZTR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
180
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4060
    	
 
    	
1
    	
 
    	
24
    	
 
    	
12’
    	
 
    	
Transportation   Alr**PTO ADDER**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
.75hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4070
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#0ZDR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4080
    	
 
    	
1
    	
 
    	
24
    	
 
    	
49’
    	
 
    	
Singulation   Air**PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
Sol,   AORS, Crossover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4090
    	
 
    	
2
    	
 
    	
24
    	
 
    	
#15
    	
 
    	
Roller   Gravity
    	
 
    	
2
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in   GRFA
    	
 
    	
Gate
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4100
    	
 
    	
2
    	
 
    	
24
    	
 
    	
7’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4130
    	
 
    	
1
    	
 
    	
24
    	
 
    	
95’
    	
 
    	
Adjustable   pressure
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
3hp
    	
 
    	
8CD
    	
 
    	
1.5in   GRFA
    	
 
    	
Merge   Table
    

 

 

 

Page 5 of 14

 

[Illegible]: Mechanical Equipment List

 

	
Proposal
    	
:   01Q0039TND 
    	
 
    
	
Layout 
    	
:   BASE 
    	
 
    
	
Estimate
    	
:   5000S
    	
 
    
	
 
    	
 
    	
 
    
	
Customer
    	
: MUSICIAN’S FRIEND
    	
 
    

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5000
    	
 
    	
1
    	
 
    	
30
    	
 
    	
#10TR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
260
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
1.5in   GRFA
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5010
    	
 
    	
1
    	
 
    	
30
    	
 
    	
24’
    	
 
    	
Slider   Bed
    	
 
    	
N/A
    	
 
    	
180
    	
 
    	
30
    	
 
    	
66
    	
 
    	
5hp
    	
 
    	
10CD
    	
 
    	
12in   GRFA
    	
 
    	
Power   Feeder, High Speed Rollers, Bottom Covers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5030 
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**72 FT LONG POPUP SORTER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
1.5hp
    	
 
    	
8CD
    	
 
    	
12in   GRFA
    	
 
    	
High   speed Rollers**30 CPM, 180 FPM, 1 DIVERT STATION**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5060
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#09DR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
12in   GRFZ
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5080
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#32DL
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
1hp
    	
 
    	
D4
    	
 
    	
12in   GRFZ
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5090A
    	
 
    	
1
    	
 
    	
24
    	
 
    	
53’
    	
 
    	
Singulation   Air**PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT**
    	
 
    	
3
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66   
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
12in   GRFZ
    	
 
    	
Sol,   High speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5090B
    	
 
    	
1
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**BI-30   BRAKE INDUCT 24W**
    	
 
    	
2
    	
 
    	
120
    	
 
    	
66
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5100
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#01DL
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
12in   GRFZ
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5120
    	
 
    	
1
    	
 
    	
30
    	
 
    	
30’
    	
 
    	
Roller   Bed**34 FT LONG POPUP SORTER**
    	
 
    	
6
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
1.5hp
    	
 
    	
8CD
    	
 
    	
12in   GRFA
    	
 
    	
High   Speed Rollers**1 DIVERT STATION,30 CPM, 180 FPM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5140
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#04TR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
180
    	
 
    	
66
    	
 
    	
66
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
12in   GRFZ
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5150
    	
 
    	
1
    	
 
    	
24
    	
 
    	
70’
    	
 
    	
Transportation   Air**PTO ADDER** **RAISED ROLLER STOP 24W**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
66
    	
 
    	
66
    	
 
    	
3hp
    	
 
    	
8DE
    	
 
    	
12in   GRFZ
    	
 
    	
Divert   Table, Sol Controlled Lifter Rollers, 4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5160A
    	
 
    	
1
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**45/45   DEGREE SKATEWHEEL SWEEP 30W**
    	
 
    	
2
    	
 
    	
180
    	
 
    	
66
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
**BUYOUT   ITEM**
    

 

 

	
[Illegible]: Mechanical Equipment List
    	
 
    	
 
    

 

Page 6 of 14

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5160B
    	
 
    	
1
    	
 
    	
24
    	
 
    	
70’
    	
 
    	
Transportation   Air**RAISED ROLLER STOP 24W**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
66
    	
 
    	
65
    	
 
    	
3hp
    	
 
    	
8DE
    	
 
    	
12in   GRFZ
    	
 
    	
Divert   Table, Sol Controlled Lifter Rollers, 4TE cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5170
    	
 
    	
16
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**45/45   DEGREE SKATEWHEEL SWEEP 24W** **DROP KIT**
    	
 
    	
2
    	
 
    	
180
    	
 
    	
66
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
**BUYOUT   ITEM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5190
    	
 
    	
16
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**90   DEGREE SKATEWHEEL CURVE 24W**
    	
 
    	
2
    	
 
    	
180
    	
 
    	
 
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
**BUYOUT   ITEM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5200
    	
 
    	
16
    	
 
    	
24
    	
 
    	
#15
    	
 
    	
Roller   Gravity
    	
 
    	
2
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in   GRFA
    	
 
    	
Gate
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5210
    	
 
    	
1
    	
 
    	
30
    	
 
    	
#11TR
    	
 
    	
V-Belt**DROP   KIT** **DEEP FRAME ADDER**
    	
 
    	
5
    	
 
    	
260
    	
 
    	
66
    	
 
    	
 66
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
12in   GRFZ
    	
 
    	
High   Speed Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5220
    	
 
    	
1
    	
 
    	
24
    	
 
    	
16’
    	
 
    	
Slider   Bed
    	
 
    	
N/A
    	
 
    	
120   
    	
 
    	
66
    	
 
    	
51
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
12in   GRFA
    	
 
    	
Bottom   Covers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5230
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#04DR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
51
    	
 
    	
51
    	
 
    	
N/A
    	
 
    	
D3
    	
 
    	
12in   GRFZ
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5240
    	
 
    	
1
    	
 
    	
24
    	
 
    	
22’
    	
 
    	
Slider   Bed
    	
 
    	
N/A
    	
 
    	
120
    	
 
    	
51
    	
 
    	
30
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
12in   GRFC
    	
 
    	
Bottom   Covers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5260
    	
 
    	
1
    	
 
    	
24
    	
 
    	
30’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in   GRFA
    	
 
    	
Angle   End Stop
    

 

 

[Illegible]: Mechanical Equipment List

 

Page 7 of 14

 

	
Proposal
    	
:   01Q0039TND 
    	
 
    
	
Layout 
    	
:   BASE 
    	
 
    
	
Estimate
    	
:   6000S
    	
 
    
	
 
    	
 
    	
 
    
	
Customer
    	
: MUSICIAN’S FRIEND
    	
 
    

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6000
    	
 
    	
2
    	
 
    	
24
    	
 
    	
70’
    	
 
    	
Singulation   Air **PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
24
    	
 
    	
24
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
l.5in   GRFA
    	
 
    	
AORB   w/sol, Coated Rollers, 4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6010
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#04DL
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
24
    	
 
    	
24
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6030
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#12DL
    	
 
    	
V-Belt**DROP   KIT**
    	
 
    	
5
    	
 
    	
120
    	
 
    	
24
    	
 
    	
24
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6040
    	
 
    	
1
    	
 
    	
24
    	
 
    	
32’
    	
 
    	
Singulation   Air**PTO ADDER** **PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
24
    	
 
    	
24
    	
 
    	
.75hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
Sol,   AORB w/sol, Coated Rollers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6050
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#02TR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
24
    	
 
    	
24
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6060
    	
 
    	
1
    	
 
    	
24
    	
 
    	
17’
    	
 
    	
Slider   Bed
    	
 
    	
N/A
    	
 
    	
120
    	
 
    	
24
    	
 
    	
30
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
Bottom   Covers
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6070
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#02TR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
D3
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6090
    	
 
    	
1
    	
 
    	
24
    	
 
    	
49’
    	
 
    	
Singulation   Air**PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER OUTPUT**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
Sol,   AORS, Crossover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6120
    	
 
    	
4
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**DUNNAGE   MACHINE**
    	
 
    	
2
    	
 
    	
120
    	
 
    	
30
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
**BUYOUT   ITEM**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6130
    	
 
    	
2
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous**BUYOUT   ITEM** **TAPE MACHINE**
    	
 
    	
2
    	
 
    	
120
    	
 
    	
 
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6150
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#04TR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
D2
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6160
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#04TL
    	
 
    	
V-Belt**PTO   ADDER**
    	
 
    	
5
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6200
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#32DL
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
42
    	
 
    	
42
    	
 
    	
1hp
    	
 
    	
D4
    	
 
    	
l.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6210
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#08DR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
42
    	
 
    	
42
    	
 
    	
1hp
    	
 
    	
D5
    	
 
    	
1.5in   GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6240
    	
 
    	
1
    	
 
    	
24
    	
 
    	
50’
    	
 
    	
Adjustable   Pressure
    	
 
    	
3   
    	
 
    	
120
    	
 
    	
42
    	
 
    	
42
    	
 
    	
1.5hp
    	
 
    	
6CD
    	
 
    	
1.5in   GRFA
    	
 
    	
2Wide   Crossover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6250
    	
 
    	
1
    	
 
    	
24
    	
 
    	
#32DR
    	
 
    	
V-Belt
    	
 
    	
5
    	
 
    	
120
    	
 
    	
42
    	
 
    	
42
    	
 
    	
1hp
    	
 
    	
D4
    	
 
    	
l.5in   GRFA
    	
 
    	
 
    

 

 

 

Page 8 of 14

 

[Illegible]: Mechanical Equipment List

 

	
ConvID
    	
 
    	
Qty
    	
 
    	
Width
    	
 
    	
Length
   /Fig#
    	
 
    	
Conveyor Class
    	
 
    	
Roller
   Center
    	
 
    	
Speed
   FPM
    	
 
    	
In
   Elev.
    	
 
    	
Out
   Elev.
    	
 
    	
HP
    	
 
    	
Drive
    	
 
    	
Guard
   Rail
    	
 
    	
Comments
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6260
    	
 
    	
1
    	
 
    	
24
    	
 
    	
60’
    	
 
    	
Adjustable   Pressure **RAISED ROLLER STOP**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
42
    	
 
    	
42
    	
 
    	
2hp
    	
 
    	
8CD
    	
 
    	
l.5in GRFA
    	
 
    	
4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6270
    	
 
    	
8
    	
 
    	
24
    	
 
    	
15’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
42
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6280
    	
 
    	
4
    	
 
    	
36
    	
 
    	
9’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
30
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in GRFA
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6290
    	
 
    	
8
    	
 
    	
24
    	
 
    	
’
    	
 
    	
Miscellaneous   **BUYOUT ITEM**
    	
 
    	
2
    	
 
    	
120
    	
 
    	
30
    	
 
    	
 
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
**WORK STATION**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6310
    	
 
    	
1
    	
 
    	
36
    	
 
    	
160’
    	
 
    	
Singulation   Air** RAISED ROLLER STOP ** **PHOTO EYE** **POWER SUPPLY** **ISOLATED POWER   OUTPUT**
    	
 
    	
3
    	
 
    	
120
    	
 
    	
30
    	
 
    	
30
    	
 
    	
5hp
    	
 
    	
10CO
    	
 
    	
1.5in GRFA
    	
 
    	
Sol, 4TE Cover
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6320
    	
 
    	
8
    	
 
    	
36
    	
 
    	
20’
    	
 
    	
Roller   Gravity
    	
 
    	
3
    	
 
    	
N/A
    	
 
    	
30
    	
 
    	
24
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
1.5in GRFA
    	
 
    	
 
    

 

 

Page 9 of 14

 

	
 Automotion Proposal   No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8.   Page 2
    

 

Section 8. Equipment Listing — Electrical (BASE SYSTEM)

 

The following equipment list is a preliminary listing based on the proposal drawing and is provided for informational purposes only. The actual equipment provided may change slightly based on the final, approved, construction drawings.

 

Electrical Equipment List

 

	
Component
    	
 
    	
Quantity
    
	
Motor Starter 0-10 HP
    	
 
    	
61
    
	
Motor Starter 10-30 HP
    	
 
    	
0
    
	
Relay
    	
 
    	
76
    
	
Warning Horn
    	
 
    	
7
    
	
Light — Emerg. Stop
    	
 
    	
25
    
	
Light — Jam
    	
 
    	
13
    
	
Light — Beacon
    	
 
    	
0
    
	
Light — Panel Indicator
    	
 
    	
0
    
	
Light — PBS Indicator
    	
 
    	
4
    
	
Start/Stop/Lt (Panel)
    	
 
    	
1
    
	
Start/Stop/Lt PBS (NEMA12)
    	
 
    	
10
    
	
Forward/Reverse/Stop/Light PBS (NEMA12)
    	
 
    	
0
    
	
Footswitch (pneumatic, not electric)
    	
 
    	
0
    
	
Photoeye — Quick Disconnect Type
    	
 
    	
83
    
	
Emergency Stop PBS & Lt.
    	
 
    	
3
    
	
Emerg. Cable Switch & Lt.
    	
 
    	
22
    
	
Cable (Per Foot)
    	
 
    	
3300
    
	
Solenoid
    	
 
    	
23
    
	
Limit Switch
    	
 
    	
2
    
	
Selector Switch
    	
 
    	
1
    
	
7.5 HP Air Compressor & Dryer
    	
 
    	
1
    
	
Air Press. Switch
    	
 
    	
1
    
	
PLC & 1/O Rack
    	
 
    	
2
    
	
Device Labels
    	
 
    	
413
    
	
Case Sealers
    	
 
    	
2
    

 

 

 

Page 10 of 14

 

	
 Automotion Proposal No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8. Page 3
    

 

	
Component
    	
 
    	
Quantity
    
	
Sort Induction Podium
    	
 
    	
1
    
	
Pulse Generator (Shaft)
    	
 
    	
7
    
	
Motor Control Soft start
    	
 
    	
0
    
	
Motor Control Variable Freq. 1-10 HP
    	
 
    	
11
    
	
Motor Control Variable Freq. 10-30 HP
    	
 
    	
0
    
	
Sorter Induction AC Servo Controls
    	
 
    	
9
    
	
Sorter Induction Controls & Software
    	
 
    	
1
    
	
Computer Cabinet & VO
    	
 
    	
2
    
	
Accusort 241 Side Scanner & Adjustments
    	
 
    	
11
    
	
Hand scanners
    	
 
    	
2
    
	
Panel Electric Service Feeders
    	
 
    	
1
    

 

 

Page 11 of 14

 

	
 Automotion Proposal   No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8. Page 4
    

 

Section 8. Equipment Listing — Storage Equipment (BASE SYSTEM)

 

Series 1000 Receiving/Back Stock

 

1000 Hand Stack/Full Pallet

This item consists of (2) back-back and (2) single, or (6) total, rows of pallet rack providing (75) total 96’ wide bays. Each bay will provide (3) full pallet and (4) hand stack beam levels providing (450) total full pallet and (600) total hand stack locations respectively, assuming (2) locations per storage level.

 

Component Description

1.                          Upright Frames: Each frame will measure 360” tall x 42” deep and provide a rated capacity of 28,660bs at 35” and 70” vertical beam spacing. Each (3”x 3”) frame post is punched with Teardrop slots on 2” centers tor vertical load beam adjustment. An oversized 6” x 6” x 3/8” base plate is used m accordance with code for this 2A rated seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before it is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

3.                          Row Spacers: A 12” Steel Row Spacer will be used at (3) elevations to connect each back-back upright to one another for Increased stability.

4.                          Cross Aisle Ties: A 72” steel tie will be used to connect the top of every other upright frame of the (1) single row to the upright frame of the parallel back-back row for increased stability.

5.                          Load Beams: Each beam will be a one piece, continuously welded, step beam design with a replaceable safety lock at the connection to prevent unwanted disengagement from the upright frame. Each full pallet beam level is designed to support loads up to 4,000bs, while each hand stack beam level, will support-loads up to 2,000bs, These loads are understated by a minimum of 20% in accordance with code for this 2A rated seismic zone.

6.                          Floor Guide Rail: A 4” x 3” x 3/8” steel guide angle will anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts, On 36” centers; along the face of the loading side of all pallet rack bays to prevent impact to the rack from lift truck equipment.

7.                         End of Row Entry Guides: A spring loaded steel entry guide will be anchored to the floor at each row end to prevent impact to the rack from lift truck equipment.

Wire Decks: Each hand stack beam level will include (2) 42” x 46” wire decks to support equally distributed loads up to 4,000bs

 

1010 Full Pallet Selective Rack

This item consists of (11) back-back and (3) single, or (25) total, rows of selective rack providing (330) total 96” wide bays. Each bay will provide (5) storage levels (4 elevated plus the floor) providing (3,330) total pallet locations, assuming (2) pallet locations per storage level.

 

Component Descriptions

1.                          Upright Frames: Each frame will measure 360” tall x 42” deep and provide a rated capacity of 19,480lbs at 74” vertical beam spacing. Each (3” x 3”) frame post is punched with Teardrop slots on 2” centers for vertical load beam adjustment. An oversized 6”x 6” x 3/8” base plate is used in accordance with code for this 2A seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before It is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

3.                          Row Spacers: A 12” Steel Row Spacer will be used at (3) elevations to connect each back-back upright to one another for increased stability.

 

 

Page 12 of 14

 

	
 Automotion Proposal   No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8. Page 5
    

 

4.                          Cross Aisie Ties: A 72” steel tie will be used to connect the top of every other upright frame of the (1) single row to the upright frame of the parallel back-back row for increased stability.

5.                          Load Beams: Each beam will be a one piece, continuously welded, step beam design with a replaceable safety lock at the connection to prevent unwanted disengagement from the upright frame. Each beam level is designed to support equally distributed loads up to 4,000lbs. These loads are understated by a minimum of 20% in accordance with code for this 2A rated seismic zone.

6.                          Floor Guide Rail: A 4” x 3” x 3/8” steel guide angle will anchored to the floor, on 36” centers, along the face of the loading side of all pallet rack bays to prevent impact to the rack from lift truck equipment.

7.                          End of Row Entry Guides: A spring loaded steel entry guide will be anchored to the floor at each accessible row end to prevent impact to the rack from lift truck equipment.

 

1020 Full Pallet Selective Rack

This Item consists of (7) back-back and (1) single, or (15) total, rows of selective rack providing (15) total 192” wide bays. Each bay will provide (3) elevated storage levels providing (180) total pallet locations, assuming (4) pallet locations per storage level.

 

Component Descriptions

1.                          Upright Frames: Each frame will measure 360” tall x 42” deep and provide a rated capacity of 19,480lbs at 74” vertical beam spacing. Each (3” x 3”) frame post is punched with Teardrop slots on 2” centers for vertical load beam adjustment. An oversized 6” x 6” x 3/8” base plate is used in accordance with code tor this 2A rated seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before it is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

3.                          Row Spacers: A12” Steel Row Spacer will be used at (3) elevations to connect each back-back upright to one another for increased stability.

4.                          Cross Aisle Ties: A 72” steel tie will be used to connect the top of every 3rd upright frame of the (1) single row to the upright frame of the parallel back-back row for increased stability.

5.                          Load Beams: Each beam will be a one piece, continuously welded, step beam design with a replaceable safety lock at the connection to prevent unwanted disengagement from the upright frame. Each beam is 192” long and each pair is designed to support equally distributed loads up to 9,200lbs. These loads are understated by a minimum of 20% in accordance with code for this 2A rated seismic zone.

 

Series 2000 Primary Picking

 

2000 Full Pallet Selective Rack

This Item consists of (12) single rows of selective rack providing (108) total 96” wide bays. Each bay will provide (5) storage levels (4 elevated plus the floor) providing (1,080) total pallet locations, assuming (2) pallet locations per storage level.

 

Component Descriptions

1.                          Upright Frames: Each frame will measure 360” tall x 42” deep and provide a rated capacity of 19,480lbs at 74” vertical beam spacing. Each (3” x 3”) frame post is punched with Teardrop slots on 2” centers for vertical load beam adjustment. An oversized 6” x 6” x 3/8” base plate is used in accordance with code for this 2A rated seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before it is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

 

 

Page 13 of 14

 

	
 Automotion Proposal No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8. Page 6
    

 

3.                          Load Beams: Each beam will be a one piece, continuously welded, step beam design with a replaceable safety lock at me connection to prevent unwanted disengagement from the upright frame. Each beam is 96” long and each pair is designed to support equally distributed loads up to4.000lbs. These loads are understated by a minimum of 20% in accordance with code for this 2A rated seismic zone.

4.                         Floor Guide Rail: A 4” x3”x 3/8” steel guide angle will anchored to the floor, on 36” centers, along the face of the loading side of all pallet rack bays to prevent impact to the rack from lift truck equipment.

5.                          End of Row Entry Guides: A spring loaded steel entry guide will be anchored to the floor at each accessible row end to prevent Impact to the rack from lift duck equipment.

 

2010 Carton Flow Rails

This item consists of (12) single rows of carton flow rack providing (108) total 96” wide bays. Each bay will include (5) shelf levels providing (4,320) total carton flow lanes, assuming (8) carton flow lanes per shelf.

 

Component Descriptions

1.                          Upright Frames: Each frame will be reinforced up to 148” at both posts and measure 240” tall x 66” deep with a rated capacity of 25,000lbs. This height and capacity will allow the customer to add a future mezzanine level without replacing these upright frames. Each (3” x 3”) frame post is punched with Teardrop slots on 2” centers for vertical load beam adjustment. An oversized 6” x 6” x 3/8” base plate is used in accordance with code for this 2A rated seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before it is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

3.                          Cross Aisle Tie: A 62” steel cross aisle tie will be used to connect each carton flow upright frame to each perimeter reserve upright frame for increased stability.

4.                          Sway Beams: Each beam will be a one piece, continuously welded, step beam design with a replaceable safety lock at the connection to prevent unwanted disengagement from the upright frame. Each of these non load-bearing beam is 96” long and is included for lateral stability only.

5.                          Carton Flow Shelves: Each carton flow shelf is 96” wide x 72” deep and is designed to support equally distributed carton loads of 25psf. Each shelf includes (16) roll track and (7) lane guides providing (8) total lanes.

 

2020 Bin Shelving

This item consists of (28) back-back rows of static bin shelving providing (560) total 36” wide bays. Each bay will include (6) shelf levels providing (3,360) total shelves.

 

Component Descriptions

1.                          Upright Frames; Each frame will include (1) beaded and (1) angle post measuring 84” tall x 18” deep and is punched on 1.5” centers tor vertical shelf adjustment.

2.                          Cross Diagonal Bracing: Each bay will include bracing at every end and every other back for lateral stability.

3.                          Shelves: Each shelf is 36” wide x 18” deep and is designed to support equally distributed carton loads up to 450lbs.

 

 

Page 14 of 14

 

	
 Automotion Proposal No. 01Q0039TND
    	
 
    	
Musician’s Friend
    
	
 03/05/01
    	
 
    	
Kansas City, Missouri
    
	
Section 8.   Equipment Listing — Electrical
    	
 
    	
Section 8. Page 7
    

 

Series 5000 Inbound Processing Conveyor System

 

Item 5270 Marry-Up Shelf Carts

This item consists of (12) all welded multipurpose steel carts with (4) shelves measuring 72” wide x 36” deep. Each cart has an overall height of 72” and a load’ capacity up to 3,000lbs. (2) swivel and (2) rigid casters with “Heavy Duty” urethane wheels and an ergonomic driving handlebar are also included.

 

Item 5280 Pack-Out Workstations

This Item consists of (32) individual stations providing a 72” wide x 36” deep “steel top” work surface. Each station will include (1) 64” wide x 17” deep x 15” high overhead carton storage (with (6) dividers) and (1) 64” wide x 9” deep x 9.5” high document shelf.

 

Item 5290 Supplies Rack

This item consists of (1) back-back row of selective rack providing (16) total 96” wide bays. Each bay will provide (5) storage levels (4 elevated-plus the floor) providing (160) total pallet locations, assuming (2) pallet locations per storage level.

 

Component Descriptions

1.                          Upright Frames: Each frame will measure 360” tall x 42” deep and provide a rated capacity of 19,480lbs at 70” vertical beam spacing. Each (3” x 3”) frame post is punched with Teardrop slots on 2” centers for vertical load beam adjustment. An oversized 6” x 6” x 3/8” base plate is used in accordance with code for this 2A seismic zone.

2.                          Anchors: Each Upright Frame Post will be leveled and plumbed before it is anchored to the floor using 1⁄2” x 4” long expansion type anchor bolts. Floor shims are included.

3.                          Row Spacers: A 12” Steel Row Spacer will be used at (3) elevations to connect each back-back upright to one another for increased stability.

4.                          Load Beams: Each beam will be a one place, continuously welded, step beam design with a replaceable safety lock at the connection to prevent unwanted disengagement from the upright frame. Each beam level is designed to support equally distributed loads up to 4,000lbs. These loads are understated by a minimum of 20% in accordance with code for this 2A rated seismic zone.

 

 

Schedule 6.04
 Permitted Investments

 

1.                          Schedule 3.12 is hereby incorporated by reference.

 

2.                          Certificates of Deposit as of 8-31-07 (GC Insurance Company, Inc.):

 

	
Bank
    	
 
    	
Account Number
    	
 
    	
Amount
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000984775
    	
 
    	
$
    	
1,650,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000984808
    	
 
    	
$
    	
1,150,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000984791
    	
 
    	
$
    	
1,000,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000984783
    	
 
    	
$
    	
1,000,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000984890
    	
 
    	
$
    	
1,000,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000223272
    	
 
    	
$
    	
300,000
    	
 
    
	
Bank of Hawaii
    	
 
    	
8000223355
    	
 
    	
$
    	
300,000
    	
 
    

 

 

Schedule 6.05
 Permitted Dispositions

 

Guitar Center has entered into the Agreement of Purchase and Sale and Joint Escrow Instructions dated as of September 24, 2007 by and between Guitar Center, Inc. and American Dicing, Inc. (“American Dicing”) pursuant to which Guitar Center agrees to sell and American Dicing agrees to purchase the real property located at 7845 Maltlage Drive, Liverpool, New York.

 

 

Schedule 6.07
 Affiliate Transactions

 

Guitar Center leases its Music & Arts headquarters building located in Frederick, Maryland pursuant to a lease dated April 24,1997 from MACBEN, a Maryland limited partnership (“MACBEN”). Kenny O’Brien, the Chief Executive Officer of Music & Arts Center, owns a 30% interest in MACBEN. Guitar Center entered into this lease in connection with its acquisition of Music & Art Center, Inc., in April 2005.

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