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EXHIBIT 10.3
CREDIT AGREEMENT
Dated as of April 18, 2002
among
COINSTAR, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
L/C Issuer,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS.........................................1
1.01 Defined Terms............................................................1
1.02 Other Interpretive Provisions...........................................19
1.03 Accounting Terms........................................................20
1.04 Rounding................................................................21
1.05 References to Agreements and Laws.......................................21
1.06 Times of Day............................................................21
ARTICLE 2 THE COMMITMENTS AND CREDIT EXTENSIONS...................................21
2.01 Loans...................................................................21
2.02 Borrowings, Conversions and Continuations of Loans......................22
2.03 Letters of Credit.......................................................23
2.04 Prepayments.............................................................30
2.05 Reduction or Termination of Commitments.................................31
2.06 Repayment of Loans......................................................31
2.07 Interest................................................................32
2.08 Fees....................................................................32
2.09 Computation of Interest and Fees........................................33
2.10 Evidence of Debt........................................................33
2.11 Payments Generally......................................................33
2.12 Sharing of Payments.....................................................35
ARTICLE 3 TAXES, YIELD PROTECTION AND ILLEGALITY..................................36
3.01 Taxes...................................................................36
3.02 Illegality..............................................................37
3.03 Inability to Determine Rates............................................37
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves
on Eurodollar Rate Loans................................................37
3.05 Funding Losses..........................................................38
3.06 Matters Applicable to all Requests for Compensation.....................39
3.07 Survival................................................................39
ARTICLE 4 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS...............................39
4.01 Conditions of Initial Credit Extension..................................39
4.02 Conditions to all Credit Extensions.....................................42
ARTICLE 5 REPRESENTATIONS AND WARRANTIES..........................................43
5.01 Existence, Qualification and Power; Compliance with Laws................43
5.02 Authorization; No Contravention.........................................43
5.03 Governmental Authorization; Other Consents..............................43
5.04 Binding Effect..........................................................43
5.05 Financial Statements; No Material Adverse Effect........................43
5.06 Litigation..............................................................44
5.07 No Default..............................................................44
5.08 Ownership of Property; Liens............................................44
5.09 Environmental Compliance................................................44
5.10 Insurance...............................................................45
5.11 Taxes...................................................................45
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TABLE OF CONTENTS
(continued)
5.12 ERISA Compliance........................................................45
5.13 Subsidiaries and Inactive Subsidiaries..................................46
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.....................................................46
5.15 Disclosure..............................................................46
5.16 Compliance with Laws....................................................47
5.17 Security Interests......................................................47
5.18 Intellectual Property; Licenses, Etc....................................47
5.19 Automatic Coin Counting Machines........................................47
ARTICLE 6 AFFIRMATIVE COVENANTS...................................................48
6.01 Financial Statements....................................................48
6.02 Certificates; Other Information.........................................48
6.03 Notices.................................................................50
6.04 Payment of Obligations..................................................51
6.05 Preservation of Existence, Etc..........................................51
6.06 Maintenance of Properties...............................................51
6.07 Maintenance of Insurance................................................51
6.08 Compliance with Laws....................................................51
6.09 Books and Records.......................................................52
6.10 Inspection Rights.......................................................52
6.11 Use of Proceeds.........................................................52
6.12 Additional Domestic Subsidiaries........................................52
6.13 Additional Foreign Subsidiaries.........................................53
6.14 Rate Hedging Agreement..................................................53
6.15 Compliance with ERISA...................................................53
ARTICLE 7 NEGATIVE COVENANTS......................................................53
7.01 Liens...................................................................53
7.02 Investments.............................................................55
7.03 Indebtedness............................................................55
7.04 Fundamental Changes.....................................................56
7.05 Dispositions............................................................57
7.06 Restricted Payments.....................................................57
7.07 Change in Nature of Business............................................58
7.08 Transactions with Affiliates............................................58
7.09 Capital Expenditures....................................................58
7.10 Burdensome Agreements...................................................58
7.11 Use of Proceeds.........................................................59
7.12 Financial Covenants.....................................................59
7.13 ERISA...................................................................60
7.14 Inactive Subsidiary Transactions........................................60
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES..........................................60
8.01 Events of Default.......................................................60
8.02 Remedies Upon Event of Default..........................................62
ARTICLE 9 ADMINISTRATIVE AGENT....................................................63
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TABLE OF CONTENTS
(continued)
9.01 Appointment and Authorization of Administrative Agent...................63
9.02 Delegation of Duties....................................................64
9.03 Liability of Administrative Agent.......................................64
9.04 Reliance by Administrative Agent........................................64
9.05 Notice of Default.......................................................65
9.06 Credit Decision; Disclosure of Information by Administrative Agent......65
9.07 Indemnification of Administrative Agent.................................66
9.08 Administrative Agent in its Individual Capacity.........................66
9.09 Successor Administrative Agent..........................................66
9.10 Administrative Agent May File Proofs of Claim...........................67
9.11 Collateral and Guaranty Matters.........................................68
9.12 Other Agents; Arrangers and Managers....................................68
ARTICLE 10 MISCELLANEOUS...........................................................68
10.01 Amendments, Etc.........................................................68
10.02 Notices and Other Communications; Facsimile Copies......................70
10.03 No Waiver; Cumulative Remedies..........................................71
10.04 Attorney Costs, Expenses and Taxes......................................71
10.05 Indemnification by the Borrower.........................................71
10.06 Payments Set Aside......................................................72
10.07 Successors and Assigns..................................................72
10.08 Confidentiality.........................................................76
10.09 Control of Deposit Accounts; Set-off....................................77
10.10 Interest Rate Limitation................................................77
10.11 Counterparts............................................................78
10.12 Integration.............................................................78
10.13 Survival of Representations and Warranties..............................78
10.14 Severability............................................................78
10.15 Tax Forms...............................................................79
10.16 Governing Law...........................................................80
10.17 Waiver of Right to Trial by Jury........................................81
10.18 Time of the Essence.....................................................81
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TABLE OF CONTENTS
(continued)
EXHIBITS
Form of
A Loan Notice
B-1 Note (Revolving)
B-2 Note (Term)
C Compliance Certificate
D Assignment and Assumption
E Guaranty
F Security Agreement
G Pledge Agreement
H Opinion Letter
SCHEDULES
1.01 Equity Ownership of Loan Parties as of the Document Preclosing Date
2.01(a)Revolving Commitments and Revolving Pro Rata Shares
2.01(b)Term Commitments and Term Pro Rata Shares
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.13 Subsidiaries; Inactive Subsidiaries; and Other Equity Investments
5.18 Intellectual Property Matters
7.01 Existing Liens
7.03 Existing Indebtedness
10.02 Eurodollar and Domestic Lending Offices, Addresses for Notices
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of April 18, 2002,
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among COINSTAR, INC., a Delaware corporation (the "Borrower"), each lender from
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time to time party hereto (collectively, the "Lenders" and individually, a
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"Lender"), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.
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The Borrower has requested that the Lenders provide a revolving credit
facility and a term facility, and the Lenders are willing to do so on the terms
and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acceptable Security Interest" in any Property means a Lien (a) which
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exists in favor of the Administrative Agent for the benefit of the Lenders; (b)
which is superior to all other Liens except Permitted Liens; (c) which secures
the Obligations of the Loan Parties; and (d) which is perfected and enforceable
against all Persons in preference to any rights of any Person therein (other
than rights in respect of Permitted Liens).
"Acquired Entity" means any Person or group of Persons or any related group
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of assets, liabilities, or securities of any Person or group of Persons,
including any division, branch, or business unit of any Person or group of
Persons, that Borrower proposes to or has completely or substantially acquired
in an Acquisition.
"Acquisition" means the direct or indirect purchase or acquisition, whether
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in one or more related transactions, of any Person or group of Persons or of all
or substantially all of any related group of assets, liabilities, or securities
of any Person or group of Persons (excluding purchases of inventory and
equipment in the ordinary course of business).
"Administrative Agent" means Bank of America in its capacity as
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administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
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and, as appropriate, account as set forth on Schedule 10.02, or such other
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address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"Affiliate" means, with respect to any Person, another Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
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means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
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"Controlled" have
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meanings correlative thereto. Without limiting the generality of the foregoing,
a Person shall be deemed to be Controlled by another Person if such other Person
possesses, directly or indirectly, power to vote 30% or more of the securities
having ordinary voting power for the election of directors, managing general
partners or the equivalent.
"Agent-Related Persons" means the Administrative Agent, together with its
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Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitments" means collectively the Aggregate Revolving
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Commitments and the Aggregate Term Commitments.
"Aggregate Revolving Commitments" means the Revolving Commitments of all
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the Lenders.
"Aggregate Term Commitments" means the Term Commitments of all the Lenders.
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"Agreement" means this Credit Agreement.
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"Applicable Rate" means the following percentages per annum, based upon the
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Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):
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Applicable Rate
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Eurodollar
Rate +
Pricing Consolidated Commitment Letters of
Level Leverage Ratio Fee Credit Base Rate +
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1 Less than or equal 0.20% 1.75% 0.25%
to 1.00x
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2 Less than or equal 0.30% 2.00% 0.50%
to 1.50x, but
greater than 1.00x
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3 Greater than 1.50x 0.40% 2.25% 0.75%
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Any increase or decrease in the Applicable Rate resulting from a change in
the Consolidated Leverage Ratio shall become effective as of the first Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(b); provided, however, that if no Compliance
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Certificate is delivered during a fiscal quarter when due in accordance with
such Section, then Pricing Level 3 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered and Pricing Level 3 shall remain in effect until a Compliance
Certificate indicating a different Pricing Level has been delivered to the
Administrative Agent. The Applicable Rate in effect from the Closing Date
through receipt of the Compliance Certificate for the period ending June 30,
2002, shall be determined based upon Pricing Level 3.
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"Arranger" means Banc of America Securities LLC, in its capacity as sole
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lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
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substantially in the form of Exhibit D.
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"Attorney Costs" means and includes all reasonable fees, expenses and
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disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
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capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance sheet
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of the Borrower and its Subsidiaries for the fiscal years ended December 31,
1999, 2000 and 2001, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto.
"Availability Period" means the period from and including the Closing Date
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to but excluding the earlier of the Maturity Date and the date of termination of
the Aggregate Revolving Commitments.
"Bank of America" means Bank of America, N.A. and its successors.
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"Base Rate" means for any day a fluctuating rate per annum equal to the
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higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
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"Borrower" has the meaning specified in the introductory paragraph hereto.
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"Borrowing" means a borrowing consisting of simultaneous Loans of the same
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Type and, in the case of Eurodollar Rate Loans, having the same Interest Period
made by each of the Lenders pursuant to Section 2.01.
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"Business Day" means any day other than a Saturday, Sunday or other day on
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which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar
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Rate Loan, means any such day on which dealings in Dollar deposits are conducted
by and between banks in the London interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
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"Change of Control" means, with respect to any Person, an event or series
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of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934),
directly or indirectly, of 30% or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis; provided, that for
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purposes of determining whether any Person is the beneficial owner of 30%
or more of an entity's equity interests, the amount of equity interest
owned by such Person on the Document Preclosing Date as set forth on the
attached Schedule 1.01 shall be excluded from the calculations of such
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person's beneficial ownership; or
(b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption of
office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for
the election or removal of one or more directors by any person or group
other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).
"Closing Date" means the date the Final Closing is completed.
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"Code" means the Internal Revenue Code of 1986.
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"Coinstar Installation Agreements" mean any and all contracts, agreements
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or other arrangements of the Borrower or any Subsidiaries concerning the
placement or operation of automated coin counting machines in a supermarket or
other retail location of a third party and the payments to such third party in
connection therewith.
"Coinstar International" means Coinstar International, Inc., a Delaware
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corporation, which is a wholly owned Domestic Subsidiary of Borrower.
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"Coinstar Ltd." means Coinstar Ltd., a private limited company registered
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under the laws of England, whose registered office is in London, England.
Coinstar Ltd. is a wholly owned Subsidiary of Coinstar International.
"Collateral" means (a) the Collateral (as defined in the Security
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Agreements), the Pledged Collateral and the Securities (as such terms are
defined in the Pledge Agreements), and the Collateral (as defined in the other
Security Documents), in each case to the extent securing the Obligations of each
Loan Party and (b) all amounts contained in the cash collateral account(s)
described in Section 2.03(g).
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"Commitment" means, as to each Lender, its Revolving Commitment and/or Term
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Commitment.
"Compliance Certificate" means a certificate substantially in the form of
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Exhibit C.
"Consolidated EBITDA" means, for any period, for the Borrower and its
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Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of
taxes, based on or measured by income, used or included in the determination of
such Consolidated Net Income, (d) the amount of depreciation and amortization
expense deducted in determining such Consolidated Net Income, (e) non-cash stock
based compensation consisting of stock, stock warrants, and stock options that
were an expense deducted in determining such Consolidated Net Income, and (f)
other non-cash charges that were deducted in determining such Consolidated Net
Income and have been approved by the Required Lenders in their sole discretion.
"Consolidated Funded Indebtedness" means, as of any date of determination,
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for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a)
the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) without
duplication, all direct or contingent obligations arising under letters of
credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in respect
of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) all Indebtedness of
any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability in which the Borrower or a Subsidiary is a
general partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to the Borrower or such Subsidiary, (f) Attributable Indebtedness
in respect of capital leases and Synthetic Lease Obligations, and (g) without
duplication, all Guarantees with respect to Indebtedness of the types specified
in subsections (a) through (f) above of Persons other than the Borrower or any
Subsidiary.
"Consolidated Interest Charges" means, for any period, for the Borrower and
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its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments (except for the premium with respect to early payment of the Existing
Bonds), debt discount, fees, charges and related expenses of the Borrower and
its Subsidiaries in connection with borrowed money (including capitalized
interest) or in connection with the deferred purchase price of assets, in each
case to the extent treated as interest in accordance with GAAP, and (b) the
portion of rent
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expense of the Borrower and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.
"Consolidated Leverage Ratio" means, as of any date of determination, the
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ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended for which the Borrower has delivered financial statements pursuant to
Section 6.01(a) or (b).
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"Consolidated Net Income" means, for any period, for the Borrower and its
-----------------------
Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding all charges which have been recognized prior to December
31, 2001, in connection with the discontinued operations of the Inactive
Subsidiary and excluding all extraordinary gains, but including all
extraordinary losses other than the extraordinary losses associated with the
prepayment of the Existing Bonds) for that period.
"Consolidated Net Worth" means, as of any date of determination, for the
----------------------
Borrower and its Subsidiaries on a consolidated basis, Shareholders' Equity of
the Borrower and its Subsidiaries.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
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"Credit Extension" means a Borrowing or an L/C Credit Extension.
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"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
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all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
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or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus (b)
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the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
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annum; provided, however, that with respect to a Eurodollar Rate Loan, the
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Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
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portion of the Loans, participations in L/C Obligations required to be funded by
it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith
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dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
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other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Document Preclosing" has the meaning specified in the preamble to Section
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4.01.
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"Document Preclosing Date" means the date the Document Preclosing is
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completed.
"Dollar" and "$" mean lawful money of the United States.
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"Domestic Subsidiary" means any Subsidiary that is organized under the laws
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of any political subdivision of the United States; provided, however, that all
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references in this Agreement to Domestic Subsidiary shall be deemed to exclude
the Inactive Subsidiary and such entity shall not be considered a Subsidiary of
Borrower for any purpose except for purposes of the consolidated financial
reporting and the financial covenants that are applicable to the "Borrower and
its Subsidiaries" on a consolidated basis.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
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"Environmental Laws" means any and all Federal, state, local, and foreign
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statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"ERISA Affiliate" means any trade or business (whether or not incorporated)
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under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and solely for purposes of provisions relating to Section 412
of the Code, Sections 414(m) and (o) of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
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(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063
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of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon the Borrower or any
ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
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Eurodollar Rate Loan (rounded up to the nearest 1/100th of a percent):
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page 3750of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association LIBOR 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 subsection (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 subsections (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 Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest
Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based on
--------------------
the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
---------------- ------------
-8-
"Existing Bonds" means the Senior Subordinated Discount Bonds Issued on
--------------
October 1, 1996.
"Existing Credit Agreement" means the Credit Agreement between Borrower and
-------------------------
Comerica Bank-California (formerly known as Imperial Bank) dated February 19,
1999, as amended.
"Existing Letters of Credit" means the letters of credit issued under the
--------------------------
Existing Credit Agreement.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
------------------
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
--------
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated March 1, 2002, among the
----------
Borrower, the Administrative Agent and the Arranger.
"Final Closing" has the meaning specified in the preamble to Section 4.01.
------------- ------------
"Fixed Charge Coverage Ratio" means, as of any date of determination, the
---------------------------
ratio of (a) Consolidated EBITDA less an amount equal to the sum of (the
Borrower's and its Subsidiaries' on a Consolidated basis non-financed capital
expenditures, cash income taxes and Restricted Payments) to (b) the sum of (i)
the Consolidated Interest Charges and (ii) the Borrower's and its Subsidiaries'
on a Consolidated basis scheduled principal repayments. The Fixed Charge
Coverage Ratio shall generally be calculated for the period of the four fiscal
quarters most recently ended for which the Borrower has delivered financial
statements pursuant to Section 6.01(a) or (b); however, the Fixed Charge
--------------- ---
Coverage Ratio for the fiscal quarters ending from June 30, 2002, through March
31, 2003, shall be calculated using the following assumptions: (i) the
"Consolidated Interest Charges" shall be deemed to be equal to the annualized
Consolidated Interest Charges for the period from the Closing Date, to the end
of the period described in the most recent Compliance Certificate delivered to
the Administrative Agent, and (ii) the "scheduled principal payments" shall be
deemed to be $8,000,000.
"Foreign Lender" has the meaning specified in Section 10.15(a).
-------------- ----------------
"Foreign Subsidiary" means any Subsidiary that is not organized under the
------------------
laws of any political subdivision of the United States.
"FRB" means the Board of Governors of the Federal Reserve System of the
---
United States.
-9-
"GAAP" means generally accepted accounting principles in the United States
----
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or other
----------------------
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.07(h).
--------------- ----------------
"Guarantors" means collectively, Coinstar International and any future
----------
Domestic Subsidiaries of Borrower and any other persons that are or become a
party to any of the Guaranties.
"Guaranty" means the Guaranty made by the Guarantors in favor of the
--------
Administrative Agent on behalf of the Lenders, substantially in the form of
Exhibit E.
---------
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
---------
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
-------------------
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
-10-
"Inactive Subsidiary" means Xxxxx.xxx, Inc., a Delaware corporation, which
-------------------
is a wholly owned subsidiary of Borrower.
"Indebtedness" means, as to any Person at a particular time, without
------------
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract in an
amount equal to the Swap Termination Value thereof;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) Attributable Indebtedness of such Person in respect of capital
leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any capital lease or Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
----------------------- -------------
"Indemnitees" has the meaning set forth in Section 10.05.
----------- -------------
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
---------------------
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
-------- -------
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
-11-
"Interest Period" means, as to each Eurodollar Rate Loan, the period
---------------
commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of
any Eurodollar Rate Loan) converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by
the Borrower in its Loan Notice or Bid Request, as the case may be; provided
--------
that:
(a) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day
unless, in the case of a Eurodollar Rate Loan, such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;
(b) any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the scheduled Maturity
Date.
"Investment" means, as to any Person, any direct or indirect acquisition or
----------
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP Documents" means each of the documents required to make filings with
------------
the patent and trademark office and/or register with the Copyright Office which
assignment to or grant a security interest to Administrative Agent on behalf of
Lenders in the IP Rights and are executed by the Borrower or other Loan Party to
secure all or a portion of the Obligations.
"IP Rights" has the meaning set forth in Section 5.18.
--------- ------------
"IRS" means the United States Internal Revenue Service.
---
"Laws" means, collectively, all international, foreign, Federal, state and
----
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
-----------
its participation in any L/C Borrowing in accordance with its Revolving Pro Rata
Share.
-12-
"L/C Borrowing" means an extension of credit resulting from a drawing under
-------------
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
--------------------
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
----------
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
---------------
undrawn face amount of all outstanding Letters of Credit plus the aggregate of
----
all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
------
and, as the context requires, includes the L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of such
--------------
Lender described as such on Schedule 10.02, or such other office or offices as a
--------------
Lender may from time to time notify the Borrower and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
----------------
"Letter of Credit Application" means an application and agreement for the
----------------------------
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is 358 days after the
--------------------------------
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to the lesser of the
-------------------------
Aggregate Revolving Commitments and $20,000,000. The Letter of Credit Sublimit
is part of, and not in addition to, the Aggregate Revolving Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement (with respect to any Indebtedness), encumbrance, lien (statutory or
other), charge, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing; provided,
--------
however, an equipment lease that is classified as an operating lease under GAAP
shall be deemed not to be a financing lease for purposes of this definition of
Lien.
"Liquid Investments" means:
------------------
(a) short-term obligations of, or obligations the principal of and
interest on which are unconditionally and fully guaranteed by, the United
States of America;
(b) commercial paper rated "A-1" (or the then equivalent) or better by
the rating service of S&P or "P-1" (or the then equivalent) or better by
the rating service of Moody's or upon the discontinuance of both of such
services, such other nationally
-13-
recognized rating service or services, as the case may be, as shall be
selected by the Administrative Agent with the consent of the Required
Lenders;
(c) demand deposit accounts maintained in the ordinary course of
business;
(d) certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000.00 (or the equivalent amount if denominated in a
currency other than Dollars); provided in each case that the same provides
--------
for payment of both principal and interest (and not principal alone or
interest alone) and is not subject to any contingency regarding the payment
of principal or interest; and
(e) such other instruments (within the meaning of Article 9 of the
Uniform Commercial Code as adopted and in effect in the State of New York
on or after the Closing Date) as the Company may request and the
Administrative Agent may approve in writing, which approval will not be
unreasonably withheld.
"Loan" means a Revolving Loan or a Term Loan.
----
"Loan Documents" means this Agreement, each Note, the Fee Letter, the
--------------
Guaranty(ies) and the Security Documents.
"Loan Notice" means a written notice of (a) a Borrowing, (b) a conversion
-----------
of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which shall be substantially in the form of
---------------
Exhibit A.
---------
"Loan Parties" means, collectively, the Borrower and each Guarantor.
------------
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or material prospects
of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Loan Parties taken as a group to
perform their obligations under the Loan Documents; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against any
Loan Party of any Loan Document to which it is a party.
"Maturity Date" means May 20, 2005.
-------------
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto.
-------
"Multiemployer Plan" means any employee benefit plan of the type described
------------------
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions or, during the preceding 3 calendar
years, has made or been obligated to make contributions.
"Net Cash Balance" has the meaning set forth in Section 7.12(e).
---------------- ---------------
-14-
"Net Cash Proceeds" means, with respect to any sale, transfer, or other
-----------------
disposition of any of the Borrower's or any Subsidiaries' Property (including
the issuance, sale or transfer of stock or other equity interest by the Borrower
or such Subsidiary) all cash and Liquid Investments received by the Borrower or
any Subsidiary from such issuance, sale, transfer or other disposition after (a)
payment of, or provision for, all commissions and other reasonable out-of-pocket
fees and expenses actually incurred; (b) payment of any outstanding obligations
relating to such Property paid in connection with, and necessary for, any such
sale, transfer, or other disposition; (c) the amount of reserves recorded in
accordance with GAAP for indemnity or similar obligations of the Borrower and
its Subsidiaries directly related to such sale, transfer or other disposition;
and (d) provision for all income or other taxes payable in respect of the fiscal
year in which such sale, transfer, or other disposition occurs measured by or
resulting from such sale transfer or other disposition and which are payable in
such fiscal year or the succeeding fiscal year.
"Note" means a promissory note made by the Borrower in favor of a Lender
----
evidencing Loans made by such Lender, substantially in the form of Exhibit B-1
-----------
or B-2.
---
"Obligations" means all advances to, and debts, liabilities, obligations,
-----------
covenants and duties of, any Loan Party arising under any Loan Document, or any
Rate Hedging Agreements or Swap Contracts, or otherwise with respect to any Loan
or Letter of Credit, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
----------------------
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means (a) with respect to Revolving Loans on any date,
------------------
the aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Revolving Loans occurring on such
date; (b) with respect to any L/C Obligations on any date, the amount of such
L/C Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date; and (c) with respect to Term Loans on any date, the aggregate
outstanding principal amount thereof after
-15-
giving effect to any borrowings and prepayments or repayments of Term Loans
occurring on such date.
"Participant" has the meaning specified in Section 10.07(d).
----------- ----------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Pension Plan" means any "employee pension benefit plan" (as such term is
------------
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding 5 plan years.
"Permitted Liens" means Liens permitted under Section 7.01(a)-(l).
--------------- -------------------
"Person" means any natural person, corporation, limited liability company,
------
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
----
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
"Pledge Agreements" means each of the Pledge Agreements in substantially
-----------------
the form of the attached Exhibit G together with any Deed of Charge of Shares
---------
each executed by the Borrower or other Loan Party to secure all or a portion of
the Obligations.
"Property" of any Person means any and all property (whether real,
--------
personal, or mixed, tangible or intangible) of such Person or other assets
owned, leased or operated by such Person.
"Pro Rata Share" means the Revolving Pro Rata Share or Term Pro Rata Share
--------------
as applicable.
"Rate Hedging Agreement" means an agreement, device or arrangement
----------------------
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts or warrants.
"Register" has the meaning set forth in Section 10.07(c).
-------- ----------------
"Reportable Event" means any of the events set forth in Section 4043(c) of
----------------
ERISA, other than events for which the thirty (30) day notice period has been
waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
----------------------------
conversion or continuation of Loans, a Loan Notice, and (b) with respect to an
L/C Credit Extension, a Letter of Credit Application.
-16-
"Required Lenders" means, at any time, (a) before the Revolving Commitments
----------------
terminate, Lenders holding greater than 50% of the Aggregate Revolving
Commitments and Total Term Outstandings and (b) thereafter, Lenders holding
greater that 50% of the Total Outstandings; provided, that the Revolving
--------
Commitments, Total Term Outstandings, and the Total Outstandings of any
Defaulting Lender shall be excluded for purposes of determining the Required
Lenders.
"Responsible Officer" means the chief executive officer, president, chief
-------------------
financial officer or treasurer of a Loan Party. Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether in
------------------
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such capital stock
or other equity interest or of any option, warrant or other right to acquire any
such capital stock or other equity interest. Notwithstanding the foregoing, a
distribution of common stock in the Borrower or a distribution of any warrants
or options with respect thereto shall be deemed to not be a Restricted Payment
for purposes of this definition.
"Revolving Commitment" means, as to each Lender, its obligation (a) to make
--------------------
Revolving Loans to the Borrower pursuant to Section 2.01(a) and (b) to purchase
---------------
participations in L/C Obligations, in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01(a), as such amount may be adjusted from time to time in
----------------
accordance with this Agreement.
"Revolving Loan" has the meaning specified in Section 2.01(a).
-------------- ---------------
"Revolving Pro Rata Share" means, with respect to each Lender at any time,
------------------------
a fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Revolving Commitment of such Lender
at such time and the denominator of which is the amount of the Aggregate
Revolving Commitments at such time. The initial Revolving Pro Rata Share of each
Lender is set forth opposite the name of such Lender on Schedule 2.01(a).
----------------
"S&P" means Standard & Poor's Ratings Services, a division of The
---
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
---
Authority succeeding to any of its principal functions.
"Security Agreements" means each of the Security Agreements in
-------------------
substantially the form of the attached Exhibit F and executed by the Borrower or
---------
other Loan Party to secure all or a portion of the Obligations.
-17-
"Security Documents" means the Pledge Agreements, the Security Agreements,
------------------
the IP Documents, and each other document, instrument or agreement executed in
connection therewith or otherwise executed or delivered in order to secure all
or a portion of the Obligations.
"Shareholders' Equity" means, as of any date of determination, consolidated
--------------------
shareholders' equity of the Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.
"SPC" has the meaning specified in Section 10.07(h).
--- ----------------
"Subsidiary" of a Person means a corporation, partnership, joint venture,
----------
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person; provided, however, that all references in this Agreement to
--------
Subsidiary shall be deemed to exclude the Inactive Subsidiary and such entity
shall not be considered a Subsidiary of Borrower for any purpose except for
purposes of the consolidated financial reporting and the financial covenants
that are applicable to the "Borrower and its Subsidiaries" on a consolidated
basis. Unless otherwise specified, all references herein to a "Subsidiary" or to
"Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower as
described above.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
-------------
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
----------------
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
-18-
"Synthetic Lease Obligation" means the monetary obligation of a Person
--------------------------
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Term Commitment" means, as to each Lender, its obligation to make Term
---------------
Loans to the Borrower pursuant to Section 2.01(b), in an aggregate principal
---------------
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender's name on Schedule 2.01(b); provided, however, that after the date
---------------- --------
of the initial Term Loan the Term Commitment for such Lender shall be zero.
"Term Loan" has the meaning specified in Section 2.01(b).
--------- ---------------
"Term Pro Rata Share" means, with respect to each Lender at any time, a
-------------------
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Term Commitment of such Lender at
such time and the denominator of which is the amount of the Aggregate Term
Commitments at such time. The initial Term Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01(b).
----------------
"Threshold Amount" means $1,000,000.
----------------
"Total Outstandings" means collectively the Total Revolving Outstandings
------------------
and the Total Term Outstandings.
"Total Revolving Outstandings" means the aggregate Outstanding Amount of
----------------------------
all Revolving Loans and all L/C Obligations.
"Total Term Outstandings" means the aggregate Outstanding Amount of all
-----------------------
Term Loans.
"Type" means, with respect to a Loan, its character as a Base Rate Loan or
----
a Eurodollar Rate Loan.
"UCC" has the meaning set forth in Section 4.01(a)(iv).
--- -------------------
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year, over the current value of that Pension Plan's
assets.
"United States" and "U.S." mean the United States of America.
------------- ----
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
------------------- ------------------
1.02 Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
-19-
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) The words "herein," "hereto," "hereof" and "hereunder" and words of
------ ------ ------ ---------
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
(c) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(d) The term "including" is by way of example and not limitation.
---------
(e) The term "documents" includes any and all instruments, documents,
---------
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(f) 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."
---------
(g) 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.
1.03 Accounting Terms.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP 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, except
------
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
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 financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) The Loan Parties shall prepare a complete set of proforma financial
statements and certificates reflecting the effect of any proposed Acquisitions,
including Compliance Certificates reflecting the effects of Acquisitions in
accordance with the requirements established by the Securities and Exchange
Commission for acquisition accounting for reported acquisitions
-20-
by public companies, whether or not the applicable Acquisitions are required to
be publicly reported, and applying such requirements to make such proforma
financial statements and certificates reflect the accounting procedures used in
the preparation of the regular financial statements of the Loan Parties unless
otherwise approved in writing by the Administrative Agent. All applications of
the foregoing requirements regarding proforma financial statements and
certificates must be approved by the Administrative Agent.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrower 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).
1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 Times of Day. Unless otherwise specified, all references to times of
day herein shall be references to Central time (daylight or standard, as
applicable).
ARTICLE 2
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Loans.
(a) Subject to the terms and conditions set forth herein, each Lender
having a Revolving Commitment severally agrees to make loans (each such loan, a
"Revolving Loan") to the Borrower from time to time, on any Business Day during
--------------
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Revolving Commitment; provided, however,
-------- -------
that after giving effect to any Borrowing, (i) the Total Revolving Outstandings
shall not exceed the Aggregate Revolving Commitments, and (ii) the aggregate
Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's
----
Revolving Pro Rata Share of the Outstanding Amount of all L/C Obligations, shall
not exceed such Lender's Revolving Commitment. Within the limits of each
Lender's Revolving Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.01, prepay under Section
------------ -------
2.04, and reborrow under this Section 2.01. Revolving Loans may be Base Rate
---- ------------
Loans or Eurodollar Rate Loans, as further provided herein.
(b) Subject to the terms and conditions set forth herein, each Lender
having a Term Commitment severally agrees to make a single term loan (each such
loan, a "Term Loan") to the Borrower on the Closing Date in an amount equal to
---------
such Lender's Term Commitment. Any Term Loan or portion thereof that has been
repaid may not be reborrowed.
-21-
2.02 Borrowings, Conversions and Continuations of Loans.
(a) Each Borrowing, each conversion of Loans from one Type to the other,
and each continuation of Loans as the same Type shall be made upon the
Borrower's irrevocable written notice to the Administrative Agent. Each such
notice must be received by the Administrative Agent not later than 11:00 a.m.
(i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or of any conversion of
Eurodollar Rate Loans to Base Rate Loans, and (ii) one Business Day prior to the
requested date of any Borrowing of Base Rate Loans. Each such telephonic notice
must be confirmed promptly by delivery to the Administrative Agent of a written
Loan Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof. Each Loan Notice (whether telephonic or written) shall specify
(i) whether the Borrower is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the Borrower
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of its Pro Rata Share of the applicable Loans such
that each Lender has a reasonable time to perform, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans described in the preceding subsection. In the case of each Borrowing, each
Lender shall make the amount of its Loan available to the Administrative Agent
in immediately available funds at the Administrative Agent's Office not later
than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
------------
such Borrowing is the initial Credit Extension, Section 4.01), the
------------
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to the Administrative Agent by the Borrower; provided,
--------
however, that if, on the date of a Borrowing there are L/C Borrowings
-------
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
-----
payment in full of any such L/C Borrowings, and second, to the Borrower as
------
provided above.
-22-
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. The Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than ten Interest Periods in effect with respect to Loans.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
-------------------------------
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.03, (1) from time to time on any Business Day
------------
during the period from the Closing Date until the Maturity Date, to issue
Letters of Credit for the account of the Borrower, and to amend or renew
Letters of Credit previously issued by it, in accordance with subsection
(b) below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower to the extent of each Lender's Revolving Pro Rata
Share of Letters of Credit issued by the L/C Issuer; provided, that (unless
--------
the Borrower has Cash Collateralized such Letter of Credit), the L/C Issuer
shall not be obligated to make any L/C Credit Extension with respect to any
Letter of Credit, and no Lender shall be obligated to participate in, any
Letter of Credit if as of the date of such L/C Credit Extension, (x) the
Total Revolving Outstandings would exceed the Aggregate Revolving
Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender's Revolving Pro Rata Share of the
----
Outstanding Amount of all L/C Obligations, would exceed such Lender's
Revolving Commitment, or (z) the Outstanding Amount of the L/C Obligations
would exceed the Letter of Credit Sublimit. Within the foregoing limits,
and subject to the terms and conditions hereof, the Borrower's ability to
obtain Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon
and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any
-23-
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon the L/C Issuer with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the
Document Preclosing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the
Document Preclosing Date and which the L/C Issuer in good xxxxx xxxxx
material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last renewal, unless the Required Lenders have
approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date; or
(D) such Letter of Credit is in a face amount less than $100,000,
or is denominated in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
----------------------------------------------------------
Auto-Renewal Letters of Credit.
------------------------------
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower. Such L/C Application must be received by the L/C Issuer and
the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the L/C Issuer may agree in a
particular instance in its sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters
as the L/C Issuer may require. In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment
-24-
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter
of Credit in an amount equal to the product of such Lender's Revolving Pro
Rata Share times the amount of such Letter of Credit.
-----
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree
to issue a Letter of Credit that has automatic renewal provisions (each, an
"Auto-Renewal Letter of Credit"); provided, that any such Auto-Renewal
------------ ---------------- --------
Letter of Credit must permit the L/C Issuer to prevent any such renewal at
least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in
----------------------
each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower
shall not be required to make a specific request to the L/C Issuer for any
such renewal. Once an Auto-Renewal Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the L/C
Issuer to permit the renewal of such Letter of Credit at any time to a date
not later than the Letter of Credit Expiration Date; provided, however,
-------- -------
that the L/C Issuer shall not permit any such renewal if (A) the L/C Issuer
would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof, or (B) it has received notice (which
may be by telephone or in writing) on or before the day that is two
Business Days before the Nonrenewal Notice Date (1) from the Administrative
Agent that the Required Lenders have elected not to permit such renewal or
(2) from the Administrative Agent, any Lender or the Borrower that one or
more of the applicable conditions specified in Section 4.02 is not then
------------
satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
-25-
(c) Drawings and Reimbursements; Funding of Participations.
------------------------------------------------------
(i) Upon any drawing under any Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. Not later than
11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Borrower shall reimburse the
----------
L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and such Lender's Revolving Pro Rata Share thereof.
-------------------
In such event, the Borrower shall be deemed to have requested a Revolving
Loan that is a Base Rate Loan be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02(a) for the principal amount of Base
---------------
Rate Loans, but subject to the amount of the unutilized portion of the
Aggregate Revolving Commitments and the conditions set forth in Section
-------
4.02 (other than the delivery of a Loan Notice). Any notice given by the
----
L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i)
------------------
may be given by telephone if immediately confirmed in writing; provided
--------
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to the
------------------
Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Revolving Pro Rata
Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by the Administrative Agent such that each
Lender has a reasonable time to perform, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds
--------------------
available shall be deemed to have made a Base Rate Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so received to
the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Borrowing of Base Rate Loans because the conditions set
forth in Section 4.02 cannot be satisfied or for any other reason, the
------------
Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
-------------------
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.
------------
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
---------------
drawn under any Letter of Credit, interest in respect of such Lender's
Revolving Pro Rata Share of such amount shall be solely for the account of
the L/C Issuer.
-26-
(v) Each Lender's obligation to make Revolving Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional
---------------
and shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
-------- -------
Revolving Loans or L/C Advances pursuant to this Section 2.03(c) is subject
---------------
to the conditions set forth in Section 4.02. Any such reimbursement shall
------------
not relieve or otherwise impair the obligation of the Borrower to reimburse
the L/C Issuer for the amount of any payment made by the L/C Issuer under
any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the
---------------
time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to
-------------------
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the L/C Issuer submitted
to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.
(d) Repayment of Participations.
---------------------------
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
---------------
Administrative Agent receives for the account of the L/C Issuer any payment
related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), or any payment of interest thereon, the
Administrative Agent will distribute to such Lender its Revolving Pro Rata
Share thereof in the same funds as those received by the Administrative
Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
------------------
returned, each Lender shall pay to the Administrative Agent for the account
of the L/C Issuer its Revolving Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the
--------------------
L/C Issuer for each drawing under each Letter of Credit, and to repay each L/C
Borrowing and each drawing under a Letter of Credit that is refinanced by a
Borrowing of Revolving Loans, shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:
-27-
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying
------------------
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Agent-Related Person
nor any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
-------- -------
assumption is not intended to, and shall not, preclude the Borrower's
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pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. No Agent-Related Person, nor any
of the respective correspondents, participants or assignees of the L/C Issuer,
shall be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.03(e); provided, however, that anything in such clauses
--------------- -------- -------
to the contrary notwithstanding, the Borrower may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the
L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, if the
---------------
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing. Additionally, if 7 days prior to the Maturity Date,
any Letter of Credit may for any reason remain outstanding and partially or
wholly undrawn, the Borrower shall immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations in an amount equal to such Outstanding
Amount determined as of the date 7 days prior to the Maturity Date. For purposes
hereof, "Cash Collateralize" means to pledge and deposit with or deliver to the
------------------
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.
(h) Applicability of ISP98. Unless otherwise expressly agreed by the L/C
----------------------
Issuer and the Borrower when a Letter of Credit is issued, the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
---------------------
Agent for the account of each Lender in accordance with its Revolving Pro Rata
Share a Letter of Credit fee for each Letter of Credit equal to the Applicable
Rate times the average daily maximum amount available to be drawn under each
-----
such Letter of Credit (whether or not such maximum amount is then in effect
under such Letter of Credit); provided that, after the occurrence and during the
--------
continuance of an Event of Default, the applicable fee rate on such Letters of
Credit shall be the Applicable Rate for such Letter of Credit plus 2% per annum.
----
Such letter of credit fees shall be
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due and payable on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, and on the Letter of Credit Expiration Date. If there is
any change in the Applicable Rate during any quarter, the daily maximum amount
of each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
------------------------------------------------------------------
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
------
fronting fee with respect to each Letter of Credit equal to the (0.075%) times
-----
the average daily maximum amount available to be drawn under each such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit). Such letter of credit fees shall be due and payable on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, and on the
Letter of Credit Expiration Date. In addition, the Borrower shall pay directly
to the L/C Issuer for its own account the individual customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such fees and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
------------------------------------------
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04 Prepayments.
(a) Voluntary Prepayments. The Borrower may, upon notice to the
---------------------
Administrative Agent, at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; provided that (i) such notice
--------
must be received by the Administrative Agent not later than 11:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B)
on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar
Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each such notice shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of such Lender's Pro
Rata Share of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein. Any prepayment of
a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to Section 3.05. Each
------------
such prepayment shall be applied to the Loans of the Lenders in accordance with
their respective Pro Rata Shares.
(b) Mandatory Prepayments. In addition to the scheduled amortization
---------------------
payments required pursuant to Section 2.06, Borrower shall have the following
------------
mandatory prepayment obligations:
(i) If for any reason the Total Revolving Outstandings at any time
exceeds the Aggregate Revolving Commitments then in effect, the Borrower
shall immediately
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prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess.
(ii) Borrower shall immediately prepay an amount of principal with
respect to the Term Loans equal to 100% of the Net Cash Proceeds of all
asset sales by the Borrower or any Subsidiary (including sales of stock of
subsidiaries), not reinvested in the Borrower's business within 180 days
after the receipt thereof; provided, that no prepayment will be required in
--------
connection with the first $1,000,000 of Net Cash Proceeds from asset sales
during the term of this Agreement.
(iii) Borrower shall immediately make additional Term Loan prepayments
to the extent required by Section 7.06(d) in connection with any election
---------------
by Borrower to purchase, redeem or otherwise acquire shares of its capital
stock or warrants, rights or options to acquire any such shares.
Each of the Term Loan prepayment pursuant to Section 2.04(b)(ii) or (iii)
------------------- -----
shall be (x) applied across the remaining principal installments required
pursuant to Section 2.06(b) on a pro rata basis, and (y) be accompanied by
---------------
accrued interest on the amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 3.05 or any other
------------
provision of this Agreement as a result of such prepayment being made on such
date.
2.05 Reduction or Termination of Commitments. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Revolving Commitments, or
permanently reduce the Aggregate Revolving Commitments to an amount not less
than the then Outstanding Amount of all Revolving Loans and L/C Obligations;
provided that (i) any such notice shall be received by the Administrative Agent
--------
not later than 11:00 a.m. five Business Days prior to the date of termination or
reduction, and (ii) any such partial reduction shall be in an aggregate amount
of $10,000,000 or any whole multiple of $1,000,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of
reduction or termination of the Aggregate Revolving Commitments. Once reduced in
accordance with this Section, the Aggregate Revolving Commitments may not be
increased. Any reduction of the Aggregate Revolving Commitments shall be applied
to the Revolving Commitment of each Lender according to its Revolving Pro Rata
Share. All commitment fees accrued until the effective date of any termination
of the Aggregate Revolving Commitments shall be paid on the effective date of
such termination.
2.06 Repayment of Loans.
(a) On the Maturity Date, the Borrower shall repay to the Administrative
Agent for the benefit of the Lenders based on each Lender's Pro Rata Share the
aggregate principal amount of all Loans outstanding on such date.
(b) The Borrower shall repay the Term Loans to the Administrative Agent for
the benefit of the Lenders based on each Lender's Term Pro Rata Share principal
repayments with respect to the Term Loan in eleven installments with the first
such repayment being made on the last Business Day in September of 2002, and an
additional installment being paid on the last Business Day in each March, June,
September and December thereafter. The principal
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repayments to be paid under this Section 2.06(b) shall be in the following
--------------
amounts: the first payment shall be $2,666,666, the next two shall be $2,666,667
each, the next four shall be $3,750,000 each, and the last four shall be
$4,250,000 each.
2.07 Interest.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall
----
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
----
Rate.
(b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), such amount
shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by applicable
Law. Furthermore, while any Event of Default exists or after acceleration, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Law. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.08 Fees. In addition to certain fees described in subsections (i) and (j)
of Section 2.03:
------------
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
--------------
the account of each Lender in accordance with its Revolving Pro Rata Share, a
commitment fee equal to the Applicable Rate times the actual daily amount by
-----
which the Aggregate Revolving Commitments exceed the sum of (i) the Outstanding
Amount of Revolving Loans and (ii) the Outstanding Amount of L/C Obligations.
The commitment fee shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date. The
commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect. The commitment fee
shall accrue at all times during the Availability Period, including at any time
during which one or more of the conditions in Article IV is not met.
----------
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
----------
Administrative Agent fees in the amounts and at the times specified in the Fee
Letter. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
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(ii) The Borrower shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable.
2.09 Computation of Interest and Fees. Computation of all types of interest
and all fees shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed, which results in a higher yield to the payee
thereof than a method based on a year of 365 or 366 days. Interest shall accrue
on each Loan for the day on which the Loan is made, and shall not accrue on a
Loan, or any portion thereof, for the day on which the Loan or such portion is
paid, provided that any Loan that is repaid on the same day on which it is made
--------
shall bear interest for one day.
2.10 Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Loans or L/C
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, such Lender's Loans may be
evidenced by a Note in addition to such accounts or records. Each Lender may
attach schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of the applicable Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
2.11 Payments Generally.
(a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 12:00 noon on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by
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the Administrative Agent after 12:00 noon shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the definition of "Interest Period," if any payment to be
made by the Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.
(c) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first,
-----
toward costs and expenses (including Attorney Costs and amounts payable under
Article III) incurred by the Administrative Agent and each Lender, (ii) second,
----------- ------
toward repayment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (iii) third, toward repayment of principal and L/C
-----
Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such
parties.
(d) Unless the Borrower or any Lender has notified the Administrative Agent
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment was not
in fact made to the Administrative Agent in immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds, at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "Compensation Period") at a rate per annum equal to the Federal
-------------------
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan, as the case may be, included in the applicable Borrowing. If such
Lender does not pay such amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent may make a demand therefor upon
the Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
-34-
obligation to fulfill its Commitments or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (d) shall be conclusive, absent manifest
error.
(e) If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and the conditions to the applicable Credit Extension set forth in
----------
Article IV are not satisfied or waived in accordance with the terms hereof, the
----------
Administrative Agent shall promptly return such funds (in like funds as received
from such Lender) to such Lender, without interest.
(f) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit are several and not joint. The failure of
any Lender to make any Loan or to fund any such participation on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan or purchase its participation.
(g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.12 Sharing of Payments. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations, any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
ratable share (or other share contemplated hereunder) thereof, such Lender shall
immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Loans made by them and/or such
subparticipations in the participations in L/C Obligations, as the case may be,
as shall be necessary to cause such purchasing Lender to share the excess
payment in respect of such Loans or such participations, as the case may be, pro
rata with each of them; provided, however, that if all or any portion of such
-------- -------
excess payment is thereafter recovered from the purchasing Lender, such purchase
shall to that extent be rescinded and each other Lender shall repay to the
purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 10.09 with
-------------
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The Administrative
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case promptly notify the Lenders following any such purchases or repayments.
Each Lender that purchases a participation pursuant to this Section shall from
and after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to
-35-
the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
ARTICLE 3
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
---------
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income or gross income, and franchise taxes imposed on it (in lieu
of net income taxes), by the jurisdiction (or any political subdivision thereof)
under the Laws of which the Administrative Agent or such Lender, as the case may
be, is organized or maintains a lending office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as "Taxes"). If the
-----
Borrower shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section), each of the Administrative Agent and such Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Laws, and (iv) within 30 days
after the date of such payment, the Borrower shall furnish to the Administrative
Agent (which shall forward the same to such Lender) the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
-----------
(c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) the Administrative
Agent or such Lender would have received if such Taxes or Other Taxes had not
been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability
---------------
-36-
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto, in each case whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this subsection (d) shall be made within 30 days after
the date the Lender or the Administrative Agent makes a demand therefor.
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender. If Eurodollar Rate Loans have been
unavailable pursuant to the terms of this Section 3.02 and such Eurodollar Rate
------------
Loans again become available to Borrower because the circumstance(s) giving rise
to such unavailability has terminated, then the Lender who gave the original
notice that Eurodollar Rate Loans became unavailable shall be required to
promptly notify Borrower and Administrative Agent that Eurodollar Rate Loans are
again available.
3.03 Inability to Determine Rates. If the Required Lenders determine that
for any reason adequate and reasonable means do not exist for determining the
Base Rate or Eurodollar Rate for any requested Interest Period with respect to a
proposed Base Rate Loan or Eurodollar Rate Loan (as applicable), or that the
Base Rate or Eurodollar Rate for any requested Interest Period with respect to a
proposed Base Rate or Eurodollar Rate Loan (as applicable) does not adequately
and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing, conversion or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans.
(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any
-37-
increase in the cost to such Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding for
purposes of this subsection (a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern),
------------
(ii) changes in the basis of taxation of overall net income or overall gross
income by the United States or any foreign jurisdiction or any political
subdivision of either thereof under the Laws of which such Lender is organized
or has its Lending Office, and (iii) reserve requirements contemplated by
Section 3.04(c)) then from time to time upon demand of such Lender (with a copy
----------------
of such demand to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall have
--------
received at least 15 days' prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give
notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 15 days from receipt of such notice.
3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
(including Attorney Costs) incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower.
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate
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the deposits from which such funds were obtained. The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
------------
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
3.06 Matters Applicable to all Requests for Compensation. A certificate of
the Administrative Agent or any Lender claiming compensation under this Article
-------
III and setting forth the additional amount or amounts to be paid to it
---
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.
3.07 Survival. All of the Borrower's obligations under this Article III
-----------
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations.
ARTICLE 4
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension. The obligation of each Lender
to make its initial Credit Extension hereunder is subject to the completion of
Document Preclosing and Final Closing. "Document Preclosing" shall consist of
-------------------
satisfying the conditions precedent set forth in items (a) through (f) below
(with the one exception that the Acceptable Security Interests may be subject to
the Liens of the Existing Bonds and the Existing Credit Agreement). "Final
-----
Closing" shall be achieved by satisfying the conditions precedent set forth in
------
items (g) through (k) below.
(a) Unless waived by all the Lenders, the Administrative Agent's receipt of
the following, each of which shall be originals or facsimiles (followed promptly
by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Document
Preclosing Date (or, in the case of certificates of governmental officials, a
recent date before the Document Preclosing Date) and each in form and substance
satisfactory to the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;
(ii) Notes executed by the Borrower in favor of each Lender requesting
any Notes;
(iii) A Pledge Agreement duly executed by the Borrower, pledging 100%
of the equity interests held by the Borrower in Coinstar International,
together with stock certificates, stock powers executed in blank, UCC-1
financing statements, and any other documents, agreements, or instruments
necessary to create an Acceptable Security Interest in such equity
interests;
-39-
(iv) A Security Agreement duly executed by the Loan Parties granting
to the Administrative Agent for the benefit of the Lenders a Lien in
substantially all of the personal property of the Loan Parties (other than
personal property not subject to the Uniform Commercial Code ("UCC")) to
---
secure the Obligations, together with UCC-1 financing statements and any
other documents, agreements, instruments or actions necessary at any time
hereafter to create an Acceptable Security Interest in such collateral,
including any action required to comply with the Revised Article 9 of the
UCC;
(v) A Pledge Agreement duly executed by the Coinstar International,
pledging 65% of the equity interests held by Coinstar International in
Coinstar Ltd., together with stock certificates, stock powers executed in
blank, UCC-1 financing statements, and any other documents, agreements, on
instruments necessary to create an Acceptable Security Interest in such
equity interests;
(vi) IP Documents duly executed by appropriate Loan Parties granting
to the Administrative Agent for the benefit of the Lenders a Lien in
substantially all of the IP Rights to secure the Obligations, together with
appropriate filings with the patent and trademark office, U.S. Copyright
Office and any other documents, agreements, instruments or actions
necessary at any time hereafter to create an Acceptable Security Interest
in such collateral;
(vii) Other Security Documents executed by the Borrower or other Loan
Parties granting a Lien to the Administrative Agent for the benefit of the
Lenders in the Borrower's or the other Loan Parties' Property to secure the
Obligations together with any other documents, agreements, instruments or
actions necessary at any time to create an Acceptable Security Interest in
such collateral;
(viii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(ix) such documents and certifications as the Administrative Agent may
reasonably require to evidence that the Loan Parties and Coinstar Ltd., are
duly organized or formed, and are validly existing, in good standing and
qualified to engage in business in Washington and Delaware and in every
other jurisdiction where their ownership, lease or operation of properties
or the conduct of their business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;
(x) a favorable opinion of Xxxxxxx Coie LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit H and such other matters concerning the Loan
---------
Parties and the Loan Documents as the Required Lenders may reasonably
request;
-40-
(xi) a certificate of a Responsible Officer of each Loan Party and
Coinstar Ltd., either (A) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and
performance by such Person, and the validity against such Person of the
Loan Documents executed by such Person, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required; provided, that neither the
--------
Loan Parties nor Coinstar Limited shall be obligated to obtain any consents
from the operators of the retail locations where its automated coin
counting machines are located pursuant to the terms of a Coinstar
Installation Agreement;
(xii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b)
---------------- ---
have been satisfied, (B) that there has been no event or circumstance since
December 31, 2001, that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect; and (C)
a calculation of the Consolidated Net Worth and Net Cash Balance, as of the
last day of the fiscal quarter of the Borrower most recently ended prior to
the Document Preclosing Date;
(xiii) evidence that all insurance required to be maintained pursuant
to the Loan Documents has been obtained and is in effect;
(xiv) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, or the Required
Lenders reasonably may require.
(b) All fees that are described in the Fee Letter shall have been paid and
any other fees that are due shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all Attorney Costs of the Administrative Agent to the extent invoiced prior to
or on the Document Preclosing Date, plus such additional amounts of Attorney
Costs as shall constitute its reasonable estimate of Attorney Costs incurred or
to be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude a final settling of accounts between the
Borrower and the Administrative Agent).
(d) The Borrower shall have caused the Administrative Agent to receive, for
the benefit of the Lenders, an Acceptable Security Interest in all of the
Borrower's Collateral.
(e) Coinstar International shall have caused the Administrative Agent to
receive, for the benefit of the Lenders, an Acceptable Security Interest in all
material amounts of their Collateral except that Coinstar International shall
have only granted Administrative Agent an Acceptable Security Interest in 65% of
the ownership interests in Coinstar Ltd.
(f) All representations and warranties of Borrower set forth in this
Agreement and the Security Documents are true and correct including the
Representations and Warranties set forth in Article V.
---------
(g) Administrative Agent shall have received acceptable evidence that the
Existing Credit Agreement and the Existing Bonds have been or concurrently with
the Closing Date are
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being terminated or cancelled and all Liens securing obligations under the
Existing Credit Agreement or the Existing Bonds have been or concurrently with
the Closing Date are being released.
(h) Administrative Agent shall have received acceptable evidence that all
Existing Letters of Credit have been cancelled and the Liens with respect
thereto have been terminated.
(i) Administrative Agent, the L/C Issuer and the Required Lenders shall
have received acceptable evidence such other assurances, certificates,
documents, consents or opinions as the Administrative Agent, the L/C Issuer, or
the Required Lenders reasonably may require.
(j) As of the Closing Date all of the representations made in connection
with the Document Preclosing shall continue to be true (without any exception
for the Liens of the Existing Bonds or Existing Credit Agreement) and all of the
conditions and covenants made in connection with the Document Preclosing
continue to be satisfied.
(k) The Closing Date shall have occurred on or before May 31, 2002.
4.02 Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type, or a continuation of Eurodollar Rate
Loans) is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower contained in Article
V or any other Loan Document, or which are contained in any document furnished
at any time under or in connection herewith or therewith, shall be true and
correct on and as of the date of such Credit Extension, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
------------
contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to
------------
the most recent statements furnished pursuant to subsection (a) and (b),
respectively, of Section 6.01.
------------
(b) No Default shall exist, or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit Extension in accordance with the requirements
hereof.
Each Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
---------------- ---
satisfied on and as of the date of the applicable Credit Extension.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan
Party (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority or arbitral award to which such Person or
its property is subject; or (c) violate any Law.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material
-43-
commitments and Indebtedness. Schedule 5.05 sets forth all material indebtedness
-------------
and other liabilities, direct or contingent, of the Borrower and its
consolidated Subsidiaries as of the date of such financial statements, including
liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower and its
Subsidiaries dated and delivered pursuant to this Agreement, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on that date (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.
(c) Since the December 31, 2001, there has been no event or circumstance,
either individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.
5.06 Litigation. Except as specifically disclosed in Schedule 5.06, there
-------------
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Borrower after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect. As of the Document Preclosing Date,
Schedule 5.06 contains a complete description of all actions, suits,
-------------
proceedings, claims or disputes pending, or to the knowledge of Borrower,
threatened or contemplated that either individually or in the aggregate, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
5.07 No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary
has good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.
------------
5.09 Environmental Compliance. The Borrower and its Subsidiaries do not own
any material real property and are not in violation of any Environmental Laws
except for violations that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. There are no existing
claims alleging potential liability or responsibility for violation of any
Environmental Law with respect to their businesses, operations or properties.
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5.10 Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.
5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state
and other material tax returns and reports required to be filed, and have paid
all Federal, material state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws, except for such
noncompliance that, individually or in the aggregate, could not reasonably be
expected to have a Materially Adverse Effect. Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS, an application for such a letter is currently being
processed by the IRS with respect thereto or has adequate remaining period of
time under the Code or applicable Treasury regulations or IRS pronouncements in
which to apply to the IRS for such letter and, to the best knowledge of the
Borrower, nothing has occurred which would prevent, or cause the loss of, such
qualification. The Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability in excess of the
Threshold Amount; (iii) neither the Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability in excess of the
Threshold Amount under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability in excess of the Threshold Amount (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.
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5.13 Subsidiaries and Inactive Subsidiaries. The Borrower has no
Subsidiaries or Inactive Subsidiaries other than those specifically disclosed in
Part (a) of Schedule 5.13 and has no equity investments in any other corporation
-------------
or entity other than those specifically disclosed in Part(b) of Schedule 5.13.
-------------
The Inactive Subsidiary owns no material assets and does not conduct any active
business. Neither the Borrower nor any of its Subsidiaries is liable for any
material liabilities of the Inactive Subsidiary. If after the Document
Preclosing Date Borrower obtains any additional Subsidiaries or makes any
additional equity investments then Borrower shall promptly, and in any event
within 5 days of obtaining or making same, submit to the Administrative Agent a
revised Schedule 5.13; provided, however, the duty to supplement Schedule 5.13
------------- -------- -------------
shall neither amplify nor restrict the other requirements and limitations set
forth in the Loan Documents that are applicable to Borrower's forming or
obtaining Subsidiaries or making equity investments.
5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulations U and X issued by the FRB), or
extending credit for the purpose of purchasing or carrying margin stock.
Following the application of the proceeds of each Borrowing or drawing under
each Letter of Credit, not more than 25% of the value of the assets (either of
the Borrower only or of the Borrower and its Subsidiaries on a consolidated
basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to
------------ ------------
any restriction contained in any agreement or instrument between the Borrower
and any Lender or any Affiliate of any Lender relating to Indebtedness and
within the scope of Section 8.01(f) will be margin stock.
---------------
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
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5.16 Compliance with Laws. Each of the Borrower and each Subsidiary is in
compliance with all material Laws and all material orders, writs, injunctions
and decrees applicable to it or to its properties.
5.17 Security Interests. On the Document Preclosing Date, all governmental
actions and all other filings, recordings, registrations, third party consents,
and other actions which are necessary to grant an Acceptable Security Interest
in all material amounts of Borrower's property and to create and perfect the
Liens provided for in the Security Documents executed on or before the Document
Preclosing Date will have been made, obtained, and taken in all relevant
jurisdictions, or satisfactory arrangements will have been made for all
governmental actions and all other filings, recordings, registrations, third
party consents, and other actions which are necessary to create and perfect the
Liens provided for in such Security Documents to be made, obtained, or taken in
all relevant jurisdictions. Upon the filing of each Security Document in the
appropriate location, such Security Document shall create an Acceptable Security
Interest in the Property described therein. No filings or recordings are
required in order to perfect the security interests created under any Security
Document except for filings or recordings required in connection with any such
Security Document which shall have been made upon or prior to (or are the
subject of arrangements, satisfactory to the Administrative Agent, for filing on
or promptly after the date of) the execution and delivery thereof. The
representations and warranties set forth in this Section 5.17 are subject to the
------------
following exceptions: (a) no patent or copyright registration has been made with
respect to certain proprietary software of the Borrower which has never been
patented and for which no copyright registration has been made (provided,
however, that Borrower shall immediately register with the U.S. Copyright Office
any software from which Borrower now or in the future derives any direct
licensing revenue from a third party in excess of $20,000 in any calendar year);
and (b) no consents have been obtained from the operators of the retail
locations where Borrower's automated coin counting machines are located pursuant
to the terms of a Coinstar Installation Agreement.
5.18 Intellectual Property; Licenses, Etc. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
---------
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, except for conflicts that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. To the best knowledge of the Borrower, no slogan or
other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the Borrower or
any Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 5.18, no claim or litigation regarding any of
-------------
the foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
5.19 Automatic Coin Counting Machines. The automated coin counting machines
owned by Borrower and its Subsidiaries are located either at Borrower or its
Subsidiaries' places of business or in retail or other locations installed
pursuant to a valid Coinstar Installation Agreement. Such automated coin
counting machines are not subject to any Lien in favor of the owner of the
retail location where such machine is operated, nor are they subject to any Lien
in favor of the counterparty to the applicable Coinstar Installation Agreement,
provided, however,
--------
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the coins in such machines may be subject to a Lien or other ownership rights in
favor of such counterparty to the extent such Person has issued a payment
voucher under the terms of the applicable Coinstar Installation Agreement.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
------------- ---- ---- ----
Subsidiary to:
6.01 Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
GAAP and shall not be subject to any "going concern" or like qualification or
exception or any qualification or exception as to the scope of such audit; and
(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal quarter and for
the portion of the Borrower's fiscal year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
As to any information contained in materials furnished pursuant to Section
-------
6.02(d), the Borrower shall not be separately required to furnish such
-------
information under subsection (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 Certificates; Other Information. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
---------------
accountants certifying such
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financial statements and stating that in making the examination necessary
therefor no knowledge was obtained of any Default under the financial covenants
set forth herein or, if any such Default shall exist, stating the nature and
status of such event;
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
---------------- ---
Responsible Officer of the Borrower;
(c) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports submitted to the board of directors (or the
audit committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or any
Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(e) promptly after same are available, and in any event not less than 30
days prior to the closing of any proposed Acquisition, (i) financial statements
for the Acquired Entity for the three most recently completed fiscal years,
including complete income and cash flow reports, prepared by an independent
certified public accountant (or in a form reasonably satisfactory to the
Administrative Agent) in accordance with GAAP consistently applied; (ii)
projected cash flow reports for the Acquired Entity for the succeeding four
fiscal quarters, adjusted for known changes (detail provided); (iii) (A)
proforma consolidated historical financial statements for the most recently
ended four fiscal quarters of the Borrower reflecting the proforma consolidated
results and status of the Borrower as if such acquisition had occurred prior to
the beginning of such period and (B) a revised Compliance Certificate reflecting
such proforma information, in each case prepared in accordance with the
requirements of Section 1.03(c) regarding proforma historical financial
---------------
information to reflect the consolidated status and results of the Borrower as if
such Acquisition had occurred prior to the beginning of the applicable period
and (iv) such other information as the Administrative Agent may reasonably
request;
(f) concurrently with the delivery of the Compliance Certificate required
in connection with each quarterly financial statement, Borrower shall deliver a
list of all patents, trademarks and copyrights that have been applied for or
received by any Loan Party in the prior fiscal quarter, and such list shall be
Schedule 3 to the applicable Compliance Certificate. Borrower shall promptly
cause the appropriate Loan Parties to execute any financing statement, filing or
registration requested by Administrative Agent or Required Lenders in order to
perfect a lien or security interest in the patents, trademarks and copyrights
described on such Compliance Certificates; and
(g) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary as the Administrative
Agent, at the request of any Lender, may from time to time reasonably request.
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Documents required to be delivered pursuant to Section 6.01(a) or (b) or
--------------- ---
Section 6.02(d) (to the extent any such financial statements, reports or proxy
---------------
statements are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower's website on the Internet at the website
address listed on Schedule 10.02; or (ii) on which such documents are posted on
--------------
the Borrower's behalf on IntraLinks/IntraAgency or another relevant website, if
any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
--------
documents to the Administrative Agent or any Lender who requests the Borrower to
deliver such paper copies until written request to cease delivering paper copies
is given by the Administrative Agent or such Lender and (ii) the Borrower shall
notify (which may be by facsimile or electronic mail) the Administrative Agent
and each Lender of the posting of any such documents and provide to the
Administrative Agent by email electronic versions (i.e., soft copies) of such
----
documents. Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent and each of
---------------
the Lenders. Except for such Compliance Certificates, the Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.
6.03 Notices. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter or group of matters, that separately or in the aggregate,
has resulted or could reasonably be expected to result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or
any Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event; and
(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
---------------
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
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6.04 Payment of Obligations. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property;
and (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 Preservation of Existence, Etc.
(a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05;
------------ ----
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and
(c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.06 Maintenance of Properties.
(a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and
(c) use the standard of care typical in the industry in the operation and
maintenance of its facilities.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws applicable to it or to its business or property, except
in such instances in which (i) such requirement of Law is being contested in
good faith by appropriate proceedings diligently conducted or a bona fide
dispute exists with respect thereto; or (ii) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.
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6.09 Books and Records. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its members of senior management. All of the foregoing visits and
inspections shall be conducted upon reasonable advance notice to the Borrower at
reasonable times during normal business hours and all visits and inspections
that are reasonably requested shall be at the expense of the Borrower; provided,
--------
however, that when an Event of Default exists the Administrative Agent or any
-------
Lender (or any of their respective representatives or independent contractors)
may make any of the above described visits and inspections at any time during
normal business hours, without advance notice, and as often as Administrative
Agent or such Lender in its sole discretion deems necessary all at the expense
of the Borrower. If Administrative Agent or any Lender uses independent
contractors to perform the foregoing visits or inspections it shall instruct
such independent contractor to keep confidential all information that is
identified to such independent contractor as being confidential.
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for working
capital, capital expenditures, acquisitions, to refinance existing indebtedness
including the Borrower's senior subordinated notes, and other general corporate
purposes not in contravention of any Law or of any Loan Document.
6.12 Additional Domestic Subsidiaries. Notify the Administrative Agent not
less than 30 days prior to the date any Person is to become a Domestic
Subsidiary (including any Acquired Entity that will be a Domestic Subsidiary),
and promptly thereafter (and in any event within 45 days of such notice), cause
such Person to (a) become a Guarantor by executing and delivering to the
Administrative Agent a Guaranty in the form attached as Exhibit E or a
counterpart of the Guaranty or such other document as the Administrative Agent
shall deem appropriate for such purpose, (b) deliver Security Documents granting
a Lien to the Administrative Agent for the benefit of the Lenders in such
Person's Property to secure the Obligations together with any other documents,
agreements, instruments, or actions necessary to create an Acceptable Security
Interest in such collateral, (c) deliver a Pledge Agreement duly executed by the
Borrower (or such Subsidiary as may own such Person), pledging 100% of the
equity interests held by the Borrower (or such Subsidiary) in such Person,
together with stock certificates, stock powers executed in blank, UCC-1
financing statements, and any other documents, agreements, on instruments
necessary to create an Acceptable Security Interest in such equity interests;
(d) deliver copies of the organizational documents of such Person certified to
be true and correct by an officer of such Person; and (e) deliver favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to in clauses (a), (b), (c) and (d)) for the benefit of the
Administrative Agent the Lenders and the L/C Issuer, all in form, content and
scope reasonably satisfactory to the Administrative Agent. Administrative Agent
shall promptly deliver copies of all such documents to each Lender.
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6.13 Additional Foreign Subsidiaries. Notify the Administrative Agent not
less than 30 days prior to the date any Person is to become a Foreign Subsidiary
(including any Acquired Entity that will be a Foreign Subsidiary), and promptly
thereafter (and in any event within 45 days of such notice), deliver (a) a
Pledge Agreement duly executed by the Borrower (or such Subsidiary as may own
such Person), pledging 65% of the equity interests held by the Borrower (or such
Subsidiary) in such Person, together with stock certificates, stock powers
executed in blank, UCC-1 financing statements, and any other documents,
agreements, on instruments necessary to create an Acceptable Security Interest
in such equity interests; (b) deliver copies of the organizational documents of
the Acquired Entity certified to be true and correct by an officer of such
Acquired Entity; and (c) deliver a favorable opinion of counsel (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a) and (b)) for the
benefit of the Administrative Agent the Lenders and the L/C Issuer, all in form,
content and scope reasonably satisfactory to the Administrative Agent.
Administrative Agent shall promptly deliver copies of all such documents to each
Lender.
6.14 Rate Hedging Agreement. The Borrower shall, within 90 days of the
Closing Date, enter into Rate Hedging Agreements in an aggregate notional amount
not less than twenty five percent (25%) of the scheduled outstanding principal
amount of the Term Loans, and shall deliver copies of such Rate Hedging
Agreements to Administrative Agent. Such Rate Hedging Agreements shall be for a
term of not less than 2 years and shall be in form and substance satisfactory to
the Administrative Agent. Administrative Agent shall promptly deliver copies of
all such documents to each Lender.
6.15 Compliance with ERISA. Do, and cause each of its ERISA Affiliates to
do, each of the following if the failure to do so, individually or in the
aggregate, could reasonably be expected to have a Materially Adverse Effect: (a)
maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state law; (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan subject to
Section 412 of the Code.
ARTICLE 7
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
-------------
renewals or extensions thereof, provided that the property covered thereby is
--------
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);
---------------
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(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(i) or securing appeal or other surety bonds
---------------
related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.03(e); provided
--------------- --------
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and the property constituting the
proceeds from the sale or other complete disposition of the financed property
and (ii) the Indebtedness secured thereby does not exceed the cost or fair
market value, whichever is lower, of the property being acquired on the date of
acquisition;
(j) Liens arising in the ordinary course of business that are not incurred
in connection with the borrowing of money or the obtaining of advances or
credit; provided, such Liens consist of (i) liens of sellers of good arising
--------
under Article 2 of the UCC or (ii) Liens of banks constituting rights of set
off;
(k) Liens of an Acquired Entity existing on the date of the acquisition and
having been disclosed to Administrative Agent on a supplemental Schedule 7.01
-------------
submitted prior to such acquisition and any renewals or extensions of such
Liens; provided that (i) such Liens do not at any time encumber any property
--------
other than the property covered by such Liens on the date of the acquisition and
the property constituting the proceeds from the sale or other complete
disposition of such property and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of such property on
the date of the Acquisition; and
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(l) Liens securing the Indebtedness owed by one Loan Party to another Loan
Party provided such Liens are expressly subordinated to all Obligations of the
--------
Loan Parties under the Loan Documents.
7.02 Investments. Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the form of
Liquid Investments;
(b) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of the Borrower in the form of cash and in kind investments
in Coinstar Ltd., in an amount not to exceed $9,000,000 in any fiscal year
(beginning with 2002) and not to exceed an aggregate amount of $17,000,000 for
the period beginning on December 31, 2001 through the end of the term of this
Agreement; provided, for purposes of this Section 7.02(c) reasonable interest on
-------- ---------------
loans made by Borrower to Subsidiaries shall be excluded from the calculations
of Investments of the Borrower;
(d) Investments of the Borrower in any wholly-owned Domestic Subsidiary and
Investments of any wholly-owned Domestic Subsidiary in the Borrower or in
another wholly-owned Domestic Subsidiary;
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(f) Guarantees permitted by Section 7.03; and
------------
(g) Borrower may make one or more Acquisitions; provided that (i)
--------
Administrative Agent is given not less than 30 days advance notice of the
proposed Acquisition together with the acquisition information described in
Section 6.02(e), (ii) the aggregate non-equity consideration paid by Borrower in
---------------
connection with all Acquisitions during the term of this Agreement shall not
exceed $15,000,000, (iii) no Default or Event of Default exists and the
Acquisition would not reasonably be expected to cause a Default or Event of
Default (including any Default under Section 7.12 or the other financial
------------
covenant provisions of this Agreement), (iv) the transaction is not hostile, as
reasonably determined by the Administrative Agent, (v) the Acquired Entity has
positive cash flow for the 12 month period immediately preceding the date of the
Acquisition, (vi) the Acquired Entity is engaged in a line of business which may
be leveraged by Borrower's technology, distribution network, or partner
relationships, and (vii) all of the applicable requirements of Sections 6.12 or
----------------
6.13 are complied with. Administrative Agent shall promptly deliver to each
----
Lender copies of all information it receives pursuant to Section 7.02(g)(i).
------------------
7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
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(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
-------------
and any refinancings, refundings, renewals or extensions thereof; provided that
--------
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) Guarantees of the Borrower or any wholly-owned Domestic Subsidiary in
respect of Indebtedness otherwise permitted hereunder of the Borrower or any
wholly-owned Domestic Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
--------
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a "market view;" and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
--------------- -------- -------
amount of all such Indebtedness that may be incurred in any fiscal year of the
Borrower shall not exceed the excess of (i) the amount set forth for such fiscal
year (or part thereof) in the table in Section 7.09 over (ii) cash expenditures
------------
permitted by Section 7.09 made during such fiscal year for the purpose of
------------
acquiring fixed or capital assets; and provided, further, that the aggregate
-------- -------
amount of all such Indebtedness at any one time outstanding shall not exceed
$3,000,000; and
(f) unsecured Indebtedness in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding.
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that the
--------
Borrower shall be the continuing or surviving Person, or (ii) any one or more
Subsidiaries, provided that when any Domestic Subsidiary is merging with another
--------
Subsidiary, a Domestic Subsidiary shall be the continuing or surviving Person;
(b) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the seller in such a transaction is a wholly-owned Subsidiary,
--------
then the purchaser must also be a wholly-owned Subsidiary and if the seller is a
Domestic Subsidiary, the purchaser must also be a Domestic Subsidiary; and
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(c) The Inactive Subsidiary may dissolve its legal existence, provided that
--------
the Inactive Subsidiary has no material existing or anticipated liabilities
(other than to the Loan Parties) and that at or prior to its dissolution all of
its rights and assets are conveyed to Borrower.
7.05 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
--------
Guarantor, the transferee thereof shall also be a Guarantor and if the
transferor is a Domestic Subsidiary, the transferee must also be a Domestic
Subsidiary;
(e) Dispositions permitted by Section 7.04; and
------------
(f) Dispositions of property to the extent that within 7 days of such
Disposition all proceeds from the Disposition is used to make principal
prepayments on the Term Loan that are in addition to the required Term Loan
prepayments and repayments.
provided, however, that any Disposition pursuant to clauses (a) through (f)
-------- -------
shall be for fair market value.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other equity interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);
(b) the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common equity
interests of such Person;
(c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common equity interests or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
equity interests; and
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(d) the Borrower may spend up to $7,500,000 during the term of this
Agreement to purchase, redeem or otherwise acquire shares of its capital stock
or warrants, rights or options to acquire any such shares for cash; provided
--------
that no Default existed before or would exist immediately after giving effect to
such proposed action. In addition to the foregoing $7,500,000, the Borrower may
spend up to an additional $7,500,000 during the term of this Agreement to
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash; provided that (i)
--------
Borrower simultaneously with such action pays a like amount as an additional
prepayment on the Term Loans which payment shall be made to the Administrative
Agent for the benefit of the Lenders and (ii) no Default existed before or would
exist immediately after giving effect to such proposed actions.
7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business which may be leveraged
by Borrower's technology, distribution network, or partner relationships.
7.08 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or any Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm's length transaction with a Person
other than an Affiliate; provided, the foregoing restriction shall not restrict
--------
a Loan Party from entering into a non-arms length transaction with another Loan
Party so long as such transaction is entered into on terms that are commercially
reasonable taking into account the relationship between such Loan Parties.
7.09 Capital Expenditures. Make or become legally obligated to make any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations), except for capital expenditures in the ordinary
course of business not exceeding, in the aggregate for the Borrower and it
Subsidiaries during each fiscal year set forth below, the amount set forth
opposite such fiscal year:
Fiscal Year Amount
-------------------------
2002 $30,000,000
2003 $35,000,000
2004 $35,000,000
2005 $35,000,000
7.10 Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i)
of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor
or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person; provided, however, that this clause (iii) shall not
-------- -------
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
---------------
negative pledge relates to the property financed by or the
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subject of such Indebtedness; or (b) requires the grant of a Lien to secure an
obligation of such Person if a Lien is granted to secure another obligation of
such Person.
7.11 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
7.12 Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth (excluding any
----------------------
adjustments that are made as a result of FASB 142 or any successor FASB
provisions) at any time to be less than the sum of (a) $29,700,000, (b) an
amount equal to 75% of the Consolidated Net Income earned in each full fiscal
quarter ending after December 31, 2001 (with no deduction for a net loss in any
such fiscal quarter) and (c) an amount equal to 100% of the aggregate increases
in Shareholders' Equity of the Borrower and its Subsidiaries after the date
hereof by reason of the issuance and sale of capital stock or other equity
interests of the Borrower or any Subsidiary (other than issuances to the
Borrower or a wholly-owned Subsidiary), including upon any conversion of debt
securities of the Borrower into such capital stock or other equity interests.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio on
---------------------------
or after June 30, 2002, during any period of four fiscal quarters of the
Borrower to be less than the ratio set forth below opposite such period:
Minimum Fixed
Charge Coverage
Four Fiscal Quarters Ending Ratio
-----------------------------------------------------------------------
June 30, 2002 through September 30, 2002 1.15
December 31, 2002, and each fiscal quarter thereafter 1.25
(c) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio on
---------------------------
or after June 30, 2002, during any period of four fiscal quarters of the
Borrower to be greater than 2.0.
(d) Consolidated EBITDA. Permit the Consolidated EBITDA for the fiscal
-------------------
quarters ending on the dates set forth in the table below to be less than the
minimum EBITDA set forth opposite such quarter:
---------------------------------------------------------
Four Fiscal Quarters Ending Minimum Consolidated EBITDA
---------------------------------------------------------
June 30, 2002 $ 7,300,000
---------------------------------------------------------
September 30, 2002 $10,500,000
---------------------------------------------------------
December 31, 2002 $10,500,000
---------------------------------------------------------
March 31, 2003 $ 8,400,000
---------------------------------------------------------
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(e) Net Cash Balance. Permit the Net Cash Balance at any time to be less
----------------
than $25,000,000. "Net Cash Balance" means the Borrower's Liquid Investments
----------------
less the sum of (i) the aggregate amounts owing pursuant to all Coinstar
Installation Agreements and the documents related thereto and (ii) the aggregate
amount of cash subject to any other agreement pursuant to which the Borrower's
cash is restricted, encumbered, or otherwise reserved for payment; provided,
that encumbrances for purposes of this Section 7.12(e) shall not include bank
---------------
set off rights arising in the ordinary course of business that are not incurred
in connection with the borrowing of money or the obtaining of advances or
credit.
7.13 ERISA. At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Plan to (a) engage in any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code);
(b) fail to comply with ERISA or any other applicable Laws; or (c) incur any
material "accumulated funding deficiency" (as defined in Section 302 of ERISA),
which, with respect to each event listed above, could be reasonably expected to
have a Material Adverse Effect.
7.14 Inactive Subsidiary Transactions. Enter into any loan, Investment or
other transaction of any kind with the Inactive Subsidiary. At any time permit
the Inactive Subsidiary to carry on any business, incur any additional
Indebtedness or have any material assets.
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when
-----------
and as required to be paid herein, any amount of principal of any Loan or any
L/C Obligation (except that non-payment of an L/C Obligation on an Honor Date
shall not be an Event of Default under this Section 8.01(a) if the Unreimbursed
---------------
Amount of such L/C Obligation is fully refinanced pursuant to the automatic Base
Rate Loan described in Section 2.03(c)(i) and (ii)), or (ii) within 5 days after
---------------------------
the same becomes due, any interest on any Loan or on any L/C Obligation, or any
commitment or other fee due hereunder, or (iii) within 5 days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term,
------------------
covenant or agreement contained in any of Section 6.03, 6.05, 6.10, 6.12, 6.13,
------------ ---- ---- ---- ----
6.14, or 6.15 or Article VII; or
---- ---- -----------
(c) The Borrower fails to perform or observe any term, covenant or
agreement contained in Section 6.01 or 6.02 and such failure continues for 5
------------ ----
days; or
(d) Other Defaults. Any Loan Party fails to perform or observe any other
--------------
covenant or agreement (not specified in subsection (a), (b) or (c) above)
contained in this Agreement and such failure continues for 30 days or in any
Loan Document on its part to be performed or observed and such failure continues
beyond the applicable grace period, if any, set forth in such Loan Document; or
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(e) Representations and Warranties. Any representation, warranty,
------------------------------
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or
(f) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
-------------
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including amounts owing to all creditors under
any combined or syndicated credit arrangement) of more than the Threshold
Amount, or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required
and expiration of any applicable cure period, such Indebtedness to be demanded
or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than the Threshold Amount; or
(g) Insolvency Proceedings, Etc. Any Loan Party or any Loan Party's
---------------------------
Subsidiary institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(h) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
----------------------------------
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or
(i) Judgments. There is entered against the Borrower or any Subsidiary (i)
---------
a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold
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Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
-----
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(k) Invalidity of Loan Documents and Rate Hedging Agreements. Any Loan
--------------------------------------------------------
Document or Rate Hedging Agreement, at any time after its execution and delivery
and for any reason other than as expressly permitted hereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect; or any
Loan Party or any other Person contests in any manner the validity or
enforceability of any Loan Document or Rate Hedging Agreement; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document or Rate Hedging Agreement, or purports to revoke, terminate or rescind
any Loan Document or Rate Hedging Agreement; provided that any Event of Default
--------
with respect to a Rate Hedging Agreement shall only be considered an Event of
Default under this Section 8.01(k) if the Rate Hedging Agreement in question is
one that is required for Borrower to comply with its obligations under Section
-------
6.14; or
----
(l) Security Documents. (i) The Administrative Agent and the Lenders shall
------------------
fail to have an Acceptable Security Interest in any material amount of the
Collateral or (ii) any material provision of any Security Document shall for any
reason cease to be valid and binding on the Borrower or other Loan Parties
executing such Security Document, or any such Person shall so state in writing;
provided, that it shall not be an Event of Default under this Section 8.01(l)(i)
-------- ------------------
if the Administrative Agent and the Lenders fail to have an Acceptable Security
Interest because of either of the following: (a) no patent or copyright
registration has been made with respect to certain proprietary software of the
Borrower which has never been patented and for which no copyright registration
has been made (provided, however, that Borrower shall immediately register with
the U.S. Copyright Office any software from which Borrower now or in the future
derives any direct licensing revenue from a third party in excess of $20,000 in
any calendar year); and (b) no consents have been obtained from the operators of
the retail locations where Borrower's automated coin counting machines are
located pursuant to the terms of a Coinstar Installation Agreement; or
(m) Change of Control. There occurs any Change of Control.
-----------------
8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
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(a) declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
-------- -------
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
ARTICLE 9
ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties, provided nothing in this Section shall cause
the Administrative Agent not to be an "agent" for purposes of perfecting a
security interests of each Lender and the L/C Issuer.
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(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
----------
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the application and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX included the L/C Issuer with
----------
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to the L/C Issuer.
9.02 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
9.03 Liability of Administrative Agent. No Agent-Related Person shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
9.04 Reliance by Administrative Agent.
(a) Absent gross negligence or willful misconduct of the Administrative
Agent in its reliance, the Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if required hereunder, all
directly-affected Lenders) as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative
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Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders or all the Lenders, if required
hereunder, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and participants.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
------------
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender specifying its objection thereto prior to the proposed
Document Preclosing Date or Closing Date as applicable.
9.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
------------ -------- -------
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
9.06 Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial
-65-
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
9.07 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
-------- -------
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
-------- -------
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct of the Agent Related Person for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Aggregate Commitments, the payment
of all Obligations hereunder and the resignation of the Administrative Agent.
9.08 Administrative Agent in its Individual Capacity. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
9.09 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days' notice to the Lenders; provided that any such
--------
resignation by Bank of America shall also constitute its resignation as L/C
Issuer. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the
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Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and L/C Issuer and the respective terms "Administrative Agent" and "L/C
Issuer" shall mean such successor administrative agent, Letter of Credit issuer,
and the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated and the retiring L/C Issuer's rights,
powers and duties as such shall be terminated, without any other or further act
or deed on the part of such retiring L/C Issuer or any other Lender, other than
the obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
----------
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
-------------- -----
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
9.10 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.08 and 10.04)
---------------- --- ---- -----
allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent
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and its agents and counsel, and any other amounts due the Administrative Agent
under Sections 2.08 and 10.04.
------------- -----
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
9.11 Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 10.01, if approved, authorized or ratified in writing by the
-------------
Required Lenders;
(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and
---------------
(c) to release any Guarantor from its obligations under the Guaranty if
such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.
Upon request by the Administrative Agent at any time, the Lenders will
confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
-------
9.11.
----
9.12 Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger," "lead arranger" or "co-arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, in the case of such Lenders, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE 10
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower and/or the applicable Loan
Party, as the case may be, and acknowledged by the
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Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
--------
however, that no such amendment, waiver or consent shall, unless in writing and
-------
signed by each of the Lenders directly affected thereby and by the Borrower, and
acknowledged by the Administrative Agent, do any of the following:
(a) postpone any date fixed by this Agreement or any other Loan Document
for any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled reduction of the
Aggregate Commitments hereunder or under any other Loan Document;
(b) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to
this Section 10.01) any fees or other amounts payable hereunder or under any
-------------
other Loan Document, or change the manner of computation of any financial ratio
used in determining the Applicable Rate that would result in a reduction of any
interest rate on any Loan or any fee payable hereunder; provided, however, that
-------- -------
only the consent of the Required Lenders shall be necessary to amend the
definition of "Default Rate" or to waive any obligation of the Borrower to pay
interest at the Default Rate;
(c) change the percentage of the Aggregate Commitments or of the aggregate
unpaid principal amount of the Loans and L/C Obligations which is required for
the Lenders or any of them to take any action hereunder;
(d) amend this Section, or Section 2.12, or any provision herein providing
------------
for consent or other action by all the Lenders;
(e) release any Guarantor from the Guaranty; or
(f) release all or a material part of the Collateral;
and, provided further, that (i) no amendment or waiver shall extend or increase
-------- -------
the Commitment of any Lender (or reinstate any Commitment terminated pursuant to
Section 8.02) unless such amendment or waiver has been consented to in writing
------------
by the all Lenders and the Borrower; (ii) no amendment, waiver or consent shall,
unless in writing and signed by the L/C Issuer in addition to the Required
Lenders or each directly-affected Lender, as the case may be, affect the rights
or duties of the L/C Issuer under this Agreement or any Letter of Credit
Application relating to any Letter of Credit issued or to be issued by it; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Required Lenders or each
directly-affected Lender, as the case may be, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.07(h) may not be amended, waived or otherwise modified without the
----------------
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; (v) the
Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender; and (vi) no amendment shall be
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made to the definition of Required Lenders without the written consent of
Borrower and all Lenders.
10.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all notices and
-------
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the address, facsimile number or (subject to subsection (c) below)
electronic mail address specified for notices on Schedule 10.02 and all notices
--------------
and other communications expressly permitted hereunder to be given by telephone
shall be made to the telephone number specified for notices on Schedule 10.02;
--------------
or, in the case of the Borrower, the Administrative Agent or the L/C Issuer, to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other parties,
and in the case of any other party, to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the Borrower, the Administrative Agent and the L/C Issuer. All
such notices and other communications shall be deemed to be given or made upon
the earlier to occur of (i) actual receipt by the relevant party hereto and (ii)
(A) if delivered by hand or by courier, when signed for by or on behalf of the
relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
-------- -------
to the Administrative Agent and the L/C Issuer pursuant to Article II shall not
----------
be effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may
---------------------------------------------------
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof and each Lender requesting Notes shall receive
manually-signed originals thereof; provided, however, that the failure to
-------- -------
request or deliver the same shall not limit the effectiveness of any facsimile
document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
------------------------------
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
------------
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent
--------------------------------------------
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent-Related Person and
each Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person
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on each notice purportedly given by or on behalf of the Borrower (except for
losses, costs, expenses and liabilities resulting from such Agent-Related Person
or Lender's own gross negligence or willful misconduct). All telephonic notices
to and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. The agreements in this Section shall survive
the termination of the Aggregate Commitments and repayment of all other
Obligations.
10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
-----------
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), or (c) any actual
or alleged presence or release of Hazardous Materials on or from any property
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currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
-----------
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
-----------
part, out of the negligence of the Indemnitee; provided that such indemnity
--------
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations. All amounts due under this Section 10.05 shall be payable
-----
within ten Business Days after demand therefor.
10.06 Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
10.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) or (i) of this Section, or (iv) to an SPC in
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accordance with the provisions of subsection (h) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Revolving Commitment and the Loans (including for purposes
of this subsection (b), participations in L/C Obligations) at the time owing to
it); provided that (i) except in the case of an assignment of the entire
--------
remaining amount of the assigning Lender's Revolving Commitment and Loans at the
time owing to it or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund (as defined in subsection (g) of this Section) with
respect to a Lender, the aggregate amount of the Revolving Commitment (which for
this purpose includes Loans outstanding thereunder) or other Loans subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
"Trade Date" is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loans or the Revolving Commitment assigned;
(iii) any assignment of a Commitment must be approved by the Administrative
Agent and the L/C Issuer unless the Person that is the proposed assignee is
itself a Lender (whether or not the proposed assignee would otherwise qualify as
an Eligible Assignee); and (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this Section,
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
--------
3.01, 3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances
---- ---- ---- ----- -----
occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a new Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection 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 subsection (d) of this Section.
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(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office1 a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Term Commitments
and Revolving Commitments of, and principal amounts of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). Absent manifest error the entries in the Register shall be
--------
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower's Affiliates or
Subsidiaries (each, a "Participant") in all or a portion of such Lender's rights
-----------
and/or obligations under this Agreement (including all or a portion of its
Revolving Commitment and/or the Loans (including such Lender's participations in
L/C Obligations) owing to it); provided that (i) such Lender's obligations under
--------
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
--------
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
-------------
that directly affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
------------- ---- ----
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
------------- --------
such Participant agrees to be subject to Section 2.12 as though it were a
------------
Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 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. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
------------
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
-------------
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations
----------
/1/ This office must be in the United States.
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of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release
--------
such Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means. (a) a Lender; (b) an Affiliate of a Lender;
-----------------
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent and the L/C Issuer, and
(ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, "Eligible Assignee" shall not
--------
include the Borrower or any of the Borrower's Affiliates or Subsidiaries
"Fund" means any Person (other than a natural person) that is (or will
----
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Approved Fund" means any Fund 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 administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle identified
---------------
as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
---
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
--------
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.04), (ii) no SPC shall
------------
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Revolving Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt 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 proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender
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and (ii) disclose on a confidential basis any non-public information relating to
its funding of Loans to any rating agency, commercial paper dealer or provider
of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(i) Notwithstanding anything to the contrary contained herein, any Lender
that is a Fund may create a security interest in all or any portion of the Loans
owing to it and the Note, if any, held by it to the trustee for holders of
obligations owed, or securities issued, by such Fund as security for such
obligations or securities, provided that unless and until such trustee actually
--------
becomes a Lender in compliance with the other provisions of this Section 10.07,
-------------
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Loan Documents and (ii) such trustee shall not be entitled to exercise
any of the rights of a Lender under the Loan Documents even though such trustee
may have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.
(j) Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 30 days' notice to the Borrower
and the Lenders, resign as L/C Issuer. In the event of any such resignation as
L/C Issuer the Borrower shall be entitled to appoint from among the Lenders
(with such appointed Lender's consent) a successor L/C Issuer hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
-------- -------
shall affect the resignation of Bank of America as L/C Issuer. Bank of America
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund
participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
---------------
10.08 Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Loan
Parties; (g) with the consent of the Borrower; (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's or its Affiliates' investment portfolio in
connection with ratings issued with respect to such Lender or its
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Affiliates. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
"Information" means all information received from the Loan Parties relating to
-----------
the Loan Parties or their businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by any Loan Party; provided that, in the case of information
--------
received from a Loan Party after the date hereof, such information is clearly
identified in writing at the time of delivery as confidential. 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.
10.09 Control of Deposit Accounts; Set-off.
(a) The Parties to this Agreement hereby agree that upon the occurrence and
during the continuance of any Event of Default, each Lender shall comply with
the instructions of the Administrative Agent with respect to directing the
disposition of Borrower's funds in any deposit account held by such Lender
without requiring any further consent from or notice to any Loan Party or
Lender. Additionally, each Lender hereby waives any present or future recoupment
and setoff rights that are unrelated to activity in a deposit account of
Borrower, except for the rights of the Administrative Agent to recoup or setoff
funds for the satisfaction of the Obligations. For purposes of clarity, the
Parties acknowledge that the Lender's recoupment and setoff rights for unpaid
items, returned items and bank charges are "related activity in a deposit
account" and are therefore not waived by the foregoing provision.
(b) Subject to the foregoing waiver, in addition to any rights and remedies
of the Lenders provided by law, upon the occurrence and during the continuance
of any Event of Default, each Lender is authorized at any time and from time to
time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party) to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the respective Loan Parties against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any other Loan Document and although such Obligations
may be contingent or unmatured or denominated in a currency different from that
of the applicable deposit or indebtedness. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
-------- -------
shall not affect the validity of such set-off and application.
10.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum
-------
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Rate"). If the Administrative Agent or any Lender shall receive interest in an
----
amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrower. In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations.
10.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
--------
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation shall remain unpaid
or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
-78-
10.15 Tax Forms.
(a) Each Lender that is not a "United States person" within the meaning of
Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the
--------------
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax. Thereafter and from time
to time, each such Foreign Lender shall (i) promptly submit to the
Administrative Agent such additional duly completed and signed copies of one of
such forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
satisfactory to the Borrower and the Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of
all payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement, (ii) promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (iii) take such steps as shall not be materially disadvantageous
to it, in the reasonable judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Lending Office) to avoid any
requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
Each Foreign Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (i) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (ii) two duly signed completed copies of IRS Form W-8IMY (or any
successor forms), together with any information such Lender chooses to transmit
with such form, and any other certificate or statement of exemption required
under the Code, to establish that such Lender is not acting for its own account
with respect to a portion of any such sums payable to such Lender.
The Borrower shall not be required to pay any additional amount to any
Foreign Lender under Section 3.01 (i) with respect to any Taxes required to be
------------
deducted or withheld on the basis of the information, certificates or statements
of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section 10.15(a); provided that if such Lender shall have satisfied the
---------------- --------
requirement of this Section 10.15(a) on the date such Lender became a Lender or
----------------
ceased to act for its own account with respect to any payment under any of the
Loan Documents,
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nothing in this Section 10.15(a) shall relieve the Borrower of it obligation to
----------------
pay any amounts pursuant to Section 3.01 in the event that, as a result of any
------------
change in any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender or other
Person for the account of which such Lender receives any sums payable under any
of the Loan Documents is not subject to withholding or is subject to withholding
at a reduced rate as described in Section 3.01. The Administrative Agent may,
------------
without reduction, withhold any Taxes required to be deducted and withheld from
any payment under any of the Loan Documents with respect to which the Borrower
is not required to pay additional amounts under this Section 10.15(a).
----------------
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all Obligations and the resignation of the Administrative Agent.
10.16 Governing Law.
(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
--------
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE Agent AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT
-80-
OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE Agent AND
EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
10.17 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 Time of the Essence. Time is of the essence for all Loan Documents.
-81-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
COINSTAR, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: CFO
S-1
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
S-2
BANK OF AMERICA, N.A.,
as a Lender, and L/C Issuer
By: /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
S-3
SILICON VALLEY BANK
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Senior Vice President
S-4
KEY BANK, NA
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
S-5
COMERICA BANK-CALIFORNIA
By: /s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
S-6
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
S-7
EXHIBIT A
FORM OF LOAN NOTICE
Date: [__________]
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of April 18, 2002
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "Agreement;" the terms defined therein being used herein
---------
as therein defined), among Coinstar, Inc., a Delaware corporation (the
"Borrower"), the Lenders from time to time parties thereto, and Bank of America,
--------
N.A., as Administrative Agent and L/C Issuer.
The undersigned hereby requests (select one):
A Borrowing of Loans A conversion or continuation of Loans
1. On (a Business Day).
------------------------------------------------
2. In the amount of $ .
----------------------------------
3. Comprised of .
---------------------------------------
[Type of Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of months.
-------
[The Borrowing requested herein does not violate the proviso to the first
sentence of Section 2.01(a).][To be included in Notices with respect to
---------------
revolving Loans]
COINSTAR, INC.
By:
--------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT B-1
FORM OF NOTE
(Revolving)
[$_______________] ---------- ---, -----
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
--------
pay to or registered assigns (the "Lender"), in accordance
--------------------- ------
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Revolving Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of [_________, _____] (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement;" the terms defined therein being used herein as
---------
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Loan from the date of such Loan until such principal amount is
paid in full, at such interest rates and at such times as provided in the
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. This Note is secured by the Collateral and is
also entitled to the benefits of any present or future Guaranty. Upon the
occurrence of one or more of the Events of Default specified in the Agreement,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable all as provided in the Agreement. Revolving
Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
COINSTAR, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of
Principal Outstanding
Type of Amount End of or Interest Principal
Loan of Loan Interest Paid This Balance This Notation
Date Made Made Period Date Date Made By
--------------------------------------------------------------------------------
EXHIBIT B-2
FORM OF NOTE
(Term)
[$_______________] ---------- ---, -----
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
--------
pay to or registered assigns (the "Lender"), in accordance
--------------------- ------
with the provisions of the Agreement (as hereinafter defined), the principal
amount of the Term Loan made by the Lender to the Borrower under that certain
Credit Agreement, dated as of [_________, _____] (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
---------
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of the
Term Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. This Note is secured by the Collateral and is
also entitled to the benefits of any present or future Guaranty. Upon the
occurrence of one or more of the Events of Default specified in the Agreement,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable all as provided in the Agreement. The Term
Loan made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Term Loan and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
COINSTAR, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of
Principal Outstanding
Type of Amount End of or Interest Principal
Loan of Loan Interest Paid This Balance This Notation
Date Made Made Period Date Date Made By
--------------------------------------------------------------------------------
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is dated
-------------------------
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
--------
"Assignee"). Capitalized terms used but not defined herein shall have the
--------
meanings given to them in the Credit Agreement identified below (the "Credit
------
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
---------
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit and Guarantees) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of the Assignor (in its capacity as a
Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "Assigned Interest"). Such sale and assignment is without
-----------------
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor:
------------------------------
2. Assignee: [and is an
------------------------------
Affiliate of [identify Lender] / an Approved Fund / a
Person approved by the Administrative Agent, the L/C
Issuer and, if no Event of Default is continuing, the
Borrower/2/]
3. Borrower:
------------------------------
----------
/2/ Select as applicable.
4. Administrative Agent:Bank of America, N.A., as the Administrative Agent
under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of , among
--------
Coinstar, Inc., the Lenders from time to time parties
thereto, and Bank of America, N.A., as Administrative
Agent and L/C Issuer
6. Assigned Interest:
---------------------------------------------------------------------------------
Aggregate Amount of Amount of Percentage
Commitment/Loans Commitment/Loans Assigned of
Facility Assigned for all Lenders* Assigned* Commitment/Loans/3/
----------------- --------------- -------- ----------------
---------------------------------------------------------------------------------
/4/ $ $ %
------------- ---------------- ---------------- --------------
---------------------------------------------------------------------------------
$ $ %
------------- ---------------- ---------------- --------------
---------------------------------------------------------------------------------
$ $ %
------------- ---------------- ---------------- --------------
---------------------------------------------------------------------------------
[7. Trade Date: ____________________]/5/
[signature page follows]
----------
/3/ Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
/4/ Fill in the appropriate terminology for the types of facilities under
the Credit Agreement that are being assigned under this Assignment (e.g.
"Revolving Commitment", "Term Commitment", etc.).
/5/ To be completed if the Assignor and the Assignee intend that the
minimum assignment amount is to be determined as of the Trade Date.
2
Effective Date: , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT
------------------ --
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
--------
[NAME OF ASSIGNOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ASSIGNEE
--------
[NAME OF ASSIGNEE]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Consented to and]/6/ Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Consented to:]/7/
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------
/6/ To be added only if the consent of the Administrative Agent is required
by the terms of the Credit Agreement.
/7/ To be added only if the consent of the Borrower and/or other parties
(e.g. L/C Issuer) is required by the terms of the Credit Agreement.
3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
------------------------------
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the
--------
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
--------
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
1.3 Assignee's Address for Notices, etc. Attached hereto as Schedule 1 is
------------------------------------
all contact information, address, account and other administrative information
relating to the Assignee.
2. Payments. From and after the Effective Date, the Administrative Agent
--------
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption shall be binding
------------------
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
-5-
SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION
ADMINISTRATIVE DETAILS
[Assignee to list names of credit contacts, addresses, phone and facsimile
numbers, electronic mail addresses and account and payment information]
-6-
EXHIBIT E
FORM OF
GUARANTY
This Guaranty dated as of April 18, 2002 (this "Guaranty") is by each
Domestic Subsidiary of the Borrower (as defined below) listed on the signature
page (each a "Guarantor" and collectively the "Guarantors"), in favor of Bank of
America, N.A., in its capacity as administrative agent for the benefit of
itself, the L/C Issuer, and the Lenders referred to below.
INTRODUCTION
A. This Guaranty is given in connection with the Credit Agreement dated as
of April 18, 2002 (as amended, restated, modified, or supplemented from time to
time, the "Credit Agreement"), among Coinstar Inc., a Delaware corporation (the
"Borrower"), each lender from time to time party thereto (each a "Lender" and
collectively, the "Lenders"), and Bank of America, N.A., as administrative agent
for the Lenders (the "Administrative Agent") and L/C Issuer.
B. The Borrower is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Borrower has made
capital contributions and advances to its Subsidiaries, including each of the
Guarantors. Each Guarantor is a wholly owned subsidiary of the Borrower and will
derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.
C. Under the Credit Agreement, it is a condition to the making of the Loans
by the Lenders and the issuance of the Letters of Credit by the L/C Issuer that
each of the Guarantors shall have executed and delivered this Guaranty.
Therefore, in order to induce the Lenders to make the Loans and the L/C
Issuer to issue Letters of Credit, each of the Guarantors hereby agrees with
Administrative Agent for its benefit and the ratable benefit of the Lenders and
the L/C Issuer as follows:
Section 1. Definitions. Capitalized terms used herein, but not defined herein,
-----------
shall have the meanings set forth for such terms in the Credit Agreement.
Section 2. Guaranty. Each Guarantor hereby unconditionally guarantees the
--------
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Borrower or any other Loan Party now or
hereafter existing under the Credit Agreement, the Notes, any Rate Hedging
Agreements, and any other Loan Document, whether for principal, Unreimbursed
Amounts, obligations under any Rate Hedging Agreements, interest (including
interest accruing by the terms of the Loan Documents after the Borrower is
subject to a bankruptcy proceeding, fees, expenses, or otherwise (such
obligations being the "Guaranteed Obligations"), and any and all expenses
(including reasonable counsel fees and expenses)
-7-
incurred by the Administrative Agent, the L/C Issuer, or any Lender in enforcing
any rights under this Guaranty. Each Guarantor agrees that this Guaranty is a
guarantee of payment, not of collection and that each Guarantor is primarily
liable for the payment of the Guaranteed Obligations.
Section 3. Limit of Liability. The obligations of each Guarantor hereunder shall
------------------
be limited to an aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provisions of any applicable
state law.
Section 4. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
-----------------
Obligations shall be paid strictly in accordance with the terms of the Credit
Agreement and the other Loan Documents, regardless of any law, regulation, or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Administrative Agent, the L/C Issuer, or the Lenders with
respect thereto. The liability of each Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement,
any other Loan Document, or any other agreement or instrument relating thereto;
(b) any change in the time, manner, or place of payment of, or in any
other term of, any of the Guaranteed Obligations, any increase, reduction,
extension, or rearrangement of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from the Credit Agreement or
any Loan Document;
(c) any exchange, release, or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
Guaranty, for any of the Guaranteed Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of the Borrower or a Guarantor.
Section 5. Certain Waivers.
---------------
5.1 Notice. Each Guarantor hereby waives promptness, diligence, notice of
------
acceptance, notice of acceleration, notice of intent to accelerate, and any
other notice with respect to any of the Guaranteed Obligations and this
Guaranty.
5.2 Other Remedies. Each Guarantor hereby waives any requirement that the
--------------
Administrative Agent, the L/C Issuer, or any Lender protect, secure, perfect, or
insure any Lien or any Property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any collateral.
-8-
5.3 Subrogation. (a) Until the irrevocable payment in full of the
-----------
Guaranteed Obligations, none of the Guarantors shall take any action pursuant to
any claim or rights which it may acquire against the Borrower or any other
Guarantor that arise from each Guarantor's obligations under this Guaranty or
any other Loan Document, including, without limitation, any right of subrogation
(including, without limitation, any statutory rights of subrogation under
Section 509 of the Bankruptcy Code, 11 U.S.C. Section 509, or otherwise),
reimbursement, exoneration, contribution, indemnification or any right to
participate in any claim or remedy of the Administrative Agent, the L/C Issuer,
or any Lender against the Borrower or any collateral, if any, which the
Administrative Agent, the L/C Issuer, or any Lender now has or acquires. If any
amount shall be paid to any Guarantor in violation of the preceding sentence and
the Guaranteed Obligations shall not have been paid in full, such amount shall
be held in trust for the benefit of the Administrative Agent, the L/C Issuer,
and the Lenders, and shall promptly be paid to the Administrative Agent for the
benefit of the Administrative Agent, the L/C Issuer, and the Lenders to be
applied to the Guaranteed Obligations, whether matured or unmatured, as the
Administrative Agent may elect. Each Guarantor acknowledges that it shall
receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and that the waiver set forth in this
Section 5.3(a) is knowingly made in contemplation of such benefits.
(b) Each Guarantor agrees that, to the extent that any Borrower makes
payments to the Administrative Agent, the L/C Issuer, or any Lender, or the
Administrative Agent, the L/C Issuer, or any Lender receives any proceeds of
collateral, and such payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, or otherwise
required to be repaid, then to the extent of such repayment the Guaranteed
Obligations shall be reinstated and continued in full force and effect as of the
date such initial payment or collection of proceeds occurred. EACH GUARANTOR
SHALL DEFEND AND INDEMNIFY THE ADMINISTRATIVE AGENT, THE L/C ISSUER, AND EACH
LENDER (EACH AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY CLAIM OR LOSS UNDER
THIS SUBSECTION 5.3(b) (INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES IN THE
DEFENSE OF ANY SUCH ACTION OR SUIT), INCLUDING LOSSES, LIABILITIES, CLAIMS,
DAMAGES, OR EXPENSES INCURRED BY REASON OF NEGLIGENCE OF THE PERSON TO BE
INDEMNIFIED, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR
EXPENSES (A) INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
AN INDEMNIFIED PARTY OR (B) ASSERTED BY AN INDEMNIFIED PARTY OR A STOCKHOLDER OR
AFFILIATE THEREOF AGAINST AN INDEMNIFIED PARTY.
Section 6. Representations and Warranties. Each Guarantor hereby represents and
------------------------------
warrants as follows:
(a) Corporate Authority. Each Guarantor is duly organized, validly
-------------------
existing and in good standing under the laws of the jurisdiction of its
organization. The execution,
-9-
delivery and performance by each Guarantor of this Guaranty are within each
Guarantor's powers, have been duly authorized by all necessary action, and do
not (i) contravene (A) each Guarantor's charter or bylaws or (B) any law or
material contractual restriction affecting each Guarantor or its Property, the
contravention of which would reasonably be expected to cause a Material Adverse
Effect, or (ii) result in or require the creation or imposition of any Lien
prohibited by the Credit Agreement.
(b) Government Approval. No authorization or approval or other action
-------------------
by, and no notice to or filing with, any Governmental Authority is required for
the due execution, delivery, and performance by each of the Guarantors of this
Guaranty.
(c) Binding Obligations. This Guaranty is the legal, valid, and
-------------------
binding obligation of each Guarantor enforceable against each Guarantor in
accordance with its terms subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, or similar law affecting creditors'
rights (whether considered in a proceeding at law or in equity).
Section 7. Covenants. Each Guarantor shall comply with all provisions of
---------
Articles 6 and 7 of the Credit Agreement to the extent such provisions are
applicable to such Guarantor.
Section 8. Miscellaneous.
-------------
8.1 Amendments, Etc. No amendment or waiver of any provision of this
----------------
Guaranty nor consent to any departure by each of the Guarantors therefrom shall
be effective unless the same shall be in writing and signed by the
Administrative Agent, Required Lenders and the Borrower, provided that any
--------
amendment or waiver releasing any Guarantor from any liability hereunder shall
be signed by all the Lenders and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
8.2 Addresses for Notices. All notices and other communications provided
---------------------
for hereunder shall be in writing, including telegraphic communication, and
delivered or teletransmitted to the addresses set forth next to the signatures
below, or to such other address as shall be designated by each Guarantor or
Administrative Agent in written notice to the other party. All such notices and
other communications shall be effective when delivered or teletransmitted to the
above addresses.
8.3 No Waiver; Remedies. No failure on the part of the Administrative
-------------------
Agent, the L/C Issuer, or any Lender 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.
8.4 Right of Set-Off. Upon (a) the occurrence and during the continuance of
----------------
any Event of Default and (b) the acceleration of amounts payable under the
Credit Agreement, the Administrative Agent, the L/C Issuer, and each Lender is
hereby authorized at any time, to the
-10-
fullest extent permitted by law, to set off and apply any deposits (general or
special, time or demand, provisional or final, but excluding deposits that it
knows or, with reasonable inquiry should know, are held by Borrower in a
fiduciary capacity for the benefit of others) and other indebtedness owing by it
to the account of each Guarantor against any and all of the obligations of each
Guarantor under this Guaranty, irrespective of whether or not any demand shall
have been made under this Guaranty and although such obligations may be
contingent and unmatured. The Administrative Agent, the L/C Issuer, and each
Lender agrees promptly to notify each Guarantor after any such set-off and
application made by it, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of setoff under
this Section 8.4 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent, the
L/C Issuer, or the Lenders may have.
8.5 Continuing Guaranty; Transfer of Interest. This Guaranty shall create a
-----------------------------------------
continuing guaranty and shall (a) remain in full force and effect until payment
in full and termination of the Guaranteed Obligations, (b) be binding upon each
Guarantor, its successors, and assigns, and (c) inure, together with the rights
and remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the L/C Issuer, the Lenders, and their respective
successors and Eligible Assignees. Without limiting the generality of the
foregoing clause, when any Lender assigns or otherwise transfers any interest
held by it under the Credit Agreement or other Loan Document to any other
Person, that other Person shall thereupon become vested with all the benefits
held by such Lender under this Guaranty. Upon the payment in full and
termination of the Guaranteed Obligations, the guaranty granted hereby shall
terminate and all rights hereunder shall revert to each Guarantor to the extent
such rights have not been applied pursuant to the terms hereof. Upon any such
termination, the Administrative Agent shall, at each Guarantor's expense,
execute and deliver to each Guarantor such documents as such Guarantor shall
reasonably request and take any other actions reasonably requested to evidence
or effect such termination.
8.6 Governing Law.
-------------
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF NEW YORK APPLICABLE TO GUARANTIES MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE SECURED PARTY SHALL
--------
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH GUARANTOR IRREVOCABLY WAIVES
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ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH GUARANTOR WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
8.7 Waiver of Right to Trial by Jury. EACH PARTY TO THIS GUARANTY HEREBY
--------------------------------
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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Each of the Guarantors has caused this Guaranty to be duly executed as of
the date first above written.
GUARANTORS:
-----------
COINSTAR INTERNATIONAL, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address:
--------------------------
--------------------------
Attention:
--------------------------
Telecopy No.:
--------------------------
EXHIBIT F
FORM OF
SECURITY AGREEMENT
This Security Agreement dated as of April 18, 2002 (this "Agreement") is
made by Coinstar, Inc., a Delaware corporation (the "Borrower"), and the
undersigned subsidiaries of the Borrower (the Borrower and such undersigned
subsidiaries collectively being referred to herein as the "Debtors") in favor of
Bank of America, N.A. (the "Secured Party"), in its capacity as Administrative
Agent for the benefit of itself, the Lenders, and the L/C Issuer referred to
below.
INTRODUCTION
Reference is made to the Credit Agreement dated as of April 18, 2002 (as
amended, restated, modified, or supplemented from time to time, the "Credit
Agreement"), among the Borrower, each lender from time to time party thereto
(each a "Lender" and collectively, the "Lenders"), and the Secured Party, as
Administrative Agent and L/C Issuer. Each of the undersigned subsidiaries of the
Borrower has entered into the Guaranty dated as of April 18, 2002 (as modified
from time to time, the "Guaranty"), in favor of the Secured Party guaranteeing
the payment of the obligations of the Borrower under the Credit Agreement. It is
a condition precedent to the making of the Loans by the Lenders and the issuance
of the Letters of Credit by the L/C Issuer that each Debtor shall have executed
and delivered this Agreement to secure the obligations under Credit Agreement,
the Guaranty, and the Other Loan Documents.
Therefore, for the consideration expressed in the Credit Agreement and in
order to induce the Lenders to make the Loans and the L/C Issuer to issue
Letters of Credit, each Debtor jointly and severally agrees with the Secured
Party as follows:
Section 1. Interpretation; Definitions.
---------------------------
1.1 Terms defined above and elsewhere in this Agreement shall have their
specified meanings. Capitalized terms used herein but not defined herein shall
have the meanings specified by the Credit Agreement. Capitalized terms that are
neither defined herein nor in the Credit Agreement shall have the meanings
specified in Article 9 of the UCC.
1.2 The following terms shall have the following meanings:
"Collateral" has the meaning specified in Section 2.1.
"Collateral Account" means any deposit account with the Secured Party which
is designated, maintained, and under the sole control of the Secured Party and
is pledged to the Secured Party and which has been established pursuant to the
provisions of this Agreement for the purposes described in this Agreement
including collecting, holding, disbursing, or applying certain funds, all in
accordance with this Agreement. Each Debtor agrees to execute any
-14-
documents reasonably requested by the Secured Party to create any Collateral
Account and pledge it to the Secured Party.
"Equipment" means all of each Debtor's present and future Equipment as such
term is defined in Article 9 of the UCC, together with owned or leased fixtures,
equipment, mobile equipment, vehicles, and inventory comprised of such items,
wherever located, including containers, parts inventory, and all parts thereof
and all accessions and additions thereto.
"General Intangibles" means all of each Debtor's present and future General
Intangibles as such term is defined in Article 9 of the UCC, including, without
limitation, Payment Intangibles and Software as such terms are defined in
Article 9 of the UCC.
"Intellectual Property" means all of each Debtor's present and future (a)
patents and patent applications and the inventions and improvements described
and claimed therein, trademarks, service marks, trade names, company names,
business names, fictitious names, tradestyles, logos or other source or business
identifiers, works of authorship in any tangible medium, copyright applications
therefor, copyrights, all intellectual property rights arising in development of
Debtor's business including all ideas, concepts, techniques, discoveries,
inventions, processes, and works of authorship, designs, and the registrations
and recordings thereof, including letters patent, registrations, recordings and
applications in the United States Patent and Trademark Office, United States
Register of Copyrights or in any similar office or agency of the United States,
or other foreign country, any State thereof or any county or any political
subdivision thereof, and licenses to use the Intellectual Property of third
parties, including those patents, patent applications, trademarks and licenses
listed on Schedule II attached hereto; (b) the reissues, divisions,
-----------
continuations, renewals, extensions, and continuations-in-part of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including damages and payments for past, present, and future
infringements of any of the foregoing; (d) the right to xxx for past, present,
and future infringements of any of the foregoing; and (e) all rights, title,
interest, and goodwill associated with any of the foregoing throughout the
world.
"Inventory" means all of each Debtor's present and future Inventory as such
term is defined in Article 9 of the UCC, wherever located, including, without
limitation, inventory in the form of items of Equipment that are or become
inventory, inventory in joint production with another person, inventory in which
the Debtor has an interest as consignor, and inventory that is returned to or
stopped in transit by the Debtor, all combinations and products thereof
(including Comingled Goods), and any documents of title or warehouse receipts
representing or purporting to represent the foregoing.
"Investment Property" means all of each Debtor's present and future
Investment Property as such term is defined in Article 9 of the UCC.
"Proceeds" means all of each Debtor's present and future Proceeds as such
term is defined in Article 9 of the UCC, including, without limitation, (a)
proceeds of the Collateral, whether
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arising from the collection, sale, lease, exchange, assignment, licensing, or
other disposition of the Collateral, (b) proceeds of any casualty or
condemnation of the Collateral (including insurance proceeds and condemnation
awards), (c) claims against third parties for impairment, loss, damage, or
impairment of the value of the Collateral, and (d) rights under any insurance,
indemnity, warranty, or guaranty of or for any of the foregoing, in each case
whether represented as money, deposit accounts, accounts, general intangibles,
securities, instruments, documents, chattel paper, inventory, equipment,
fixtures, goods, or by other property.
"Receivables" means collectively, all of each Debtor's present and future
Letter-of-Credit Rights, Chattel Paper, Deposit Accounts, Documents, Payment
Intangibles, Instruments, and Accounts as such terms are defined in Article 9 of
the UCC, together with accounts from governmental agencies, chattel paper
arising from the consignment, storage, and sale of Inventory, rights to payment
under contracts, income tax refunds, and other rights to the payment of money.
"Records" means all of each Debtor's present and future contracts,
accounting records, files, computer files, computer programs, and other records
related to the Collateral or any portion thereof.
"Secured Obligations" means (a) all principal, interest, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by the
Borrower or any Debtor to the Secured Party, the Lenders, or the L/C Issuer
under the Credit Agreement, the Notes, any Rate Hedging Agreements, and any
other Loan Documents; and (b) any increases, extensions, and rearrangements of
the foregoing obligations under any amendments, supplements, and other
modifications of the agreements creating the foregoing obligations.
"State of Organization" means, with respect to any Debtor, the state under
whose laws such Debtor is organized, as listed on the attached Schedule I.
----------
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York.
Section 2. Grant of Security Interest.
--------------------------
2.1 Grant of Security Interest. Each Debtor hereby grants to the Secured
--------------------------
Party, for the benefit of the holders of the Secured Obligations, a security
interest in all of such Debtor's present and future right, title, and interest
in and to all personal property of such Debtor including, without limitation,
the following property (collectively, the "Collateral") to secure the payment
and performance of the Secured Obligations:
All Equipment;
All General Intangibles;
All Intellectual Property;
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All Inventory;
All Investment Property;
All Proceeds;
All Receivables; and
All Records.
To the extent that the Collateral is not subject to the UCC, each Debtor
collaterally assigns all of such Debtor's right, title, and interest in and to
such Collateral to the Secured Party to secure the payment and performance of
the Secured Obligations to the full extent that such a collateral assignment is
possible under the relevant law. Notwithstanding the foregoing, to the extent
that any Debtor owns equity interest in a Foreign Subsidiary, such Debtor's
grant of a security interest in or collateral assignment of any rights with
respect to such equity interests shall not exceed 65% of the total equity
interest in such Foreign Subsidiary.
2.2 Debtors Remain Liable. Anything herein to the contrary notwithstanding:
---------------------
(a) each Debtor shall remain liable under any contracts and agreements included
in the Collateral of such Debtor to the extent set forth therein to perform such
Debtor's obligations thereunder to the same extent as if this Agreement had not
been executed; (b) the exercise by the Secured Party of any rights hereunder
shall not release any Debtor from any obligations under any contracts and
agreements included in the Collateral of such Debtor; and (c) the Secured Party
shall not have any obligation under any contracts and agreements included in the
Collateral of any Debtor by reason of this Agreement, nor shall the Secured
Party be obligated to perform or fulfill any of the obligations of any Debtor
thereunder, including any obligation to make any inquiry as to the nature or
sufficiency of any payment that any Debtor may be entitled to receive
thereunder, to present or file any claim, or to take any action to collect or
enforce any claim for payment thereunder.
Section 3. General Provisions. Each Debtor represents and warrants to and agrees
------------------
with the Secured Party as follows:
3.1 Ownership.
---------
(a) Such Debtor has good and indefeasible title to the assets that
comprise the Collateral of such Debtor as reflected in such Debtor's financial
statements free from any liens, security interests, assignments, adverse claims,
restrictions, or other encumbrances whatsoever except for the Permitted Liens.
No effective recorded interest, financing statement, or similar recording or
filing covering any part of the Collateral of such Debtor is on file in any
recording office, except those filed in connection with the Permitted Liens.
Such Debtor shall not, without the prior written consent of the Secured Party,
grant any lien, security interest, assignment, restriction, claim, or other
encumbrance on or against the Collateral, or lease, sell, or otherwise
-17-
transfer any of such Debtor's rights in the Collateral except as otherwise
permitted under this Agreement or the Credit Agreement.
(b) Such Debtor shall promptly upon the request of the Secured Party,
use best efforts to cause any mortgagee of real estate owned by such Debtor, any
landlord of premises leased by such Debtor, and any warehouseman or other bailee
on whose premises any Collateral of such Debtor may be located, to execute and
deliver to the Secured Party instruments, in form and substance satisfactory to
the Secured Party, by which such mortgagee, landlord, or warehouseman or other
bailee waives its rights in the Collateral of such Debtor; provided that no
Debtor shall be obligated to obtain any waivers from the operators of the retail
locations where its automated coin counting machines are located pursuant to the
terms of a Coinstar Installation Agreement.
3.2 Perfection.
----------
(a) As of the date of this Agreement, the true and correct name of
such Debtor as listed on such Debtor's certificate of incorporation is the name
specified for such Debtor on the signature pages of this Agreement. Such Debtor
has had no prior names other than those listed for such Debtor on the attached
Schedule I. Such Debtor has not used and does not use any trade names other than
----------
those listed for such Debtor on the attached Schedule I. As of the date of this
----------
Agreement, such Debtor is organized under the laws of the State of Organization
for such Debtor listed on the attached Schedule I. Without advance written
----------
notice to the Secured Party and reasonable opportunity for the Secured Party to
take action to protect the Secured Party's interests hereunder, such Debtor
shall not change such Debtor's name, reincorporate or otherwise reorganize, or
change the jurisdiction of organization from the State of Organization of such
Debtor.
(b) A carbon, photographic, or other reproduction of this Agreement
shall be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof.
(c) Debtor authorizes Secured Party to file one or more financing
statements or other documents describing any or all of the Collateral in any
filing or recording office.
3.3 Priority.
--------
(a) The security interests created by this Agreement are first
priority, subject only to the Permitted Liens, and such Debtor shall preserve
and maintain the status of such security interests to the end that such security
interests remain first priority security interests in the Collateral of such
Debtor subject only to the Permitted Liens.
(b) If the proceeds of the Secured Obligations are used to pay any
indebtedness secured by prior liens, the Secured Party is subrogated to all of
the rights and liens of the holders of such indebtedness.
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3.4 Further Assurances.
------------------
(a) There are no actions, suits, proceedings, or investigations
pending or, to the knowledge of such Debtor, threatened against or affecting
such Debtor or the Collateral of such Debtor, or involving the validity or
enforceability of this Agreement or the priority of the liens, security
interests, or assignments created hereunder. If the validity or priority of this
Agreement or of any liens, security interests, or assignments created or
purported to be created hereunder or the title of such Debtor to any Collateral
of such Debtor shall be endangered, questioned, or attacked or if any legal
proceedings are instituted against such Debtor with respect thereto, such Debtor
shall give prompt written notice thereof to the Secured Party, and the action
proposed to be taken by such Debtor in connection therewith. Such Debtor shall
not initiate any action with respect to such matters without granting the
Secured Party advance written notice of such Debtor's intent to initiate such
actions and the opportunity to consult with such Debtor regarding such Debtor's
proposed actions. At the Secured Party's request, such Debtor shall take any
actions reasonably requested by the Secured Party with respect to such matters,
including diligently endeavoring to cure any defect existing or claimed and
taking all necessary and desirable steps for the defense of any legal
proceedings, including the employment of counsel, the prosecution or defense of
litigation, and the release or discharge of all adverse claims. During the
existence of an Event of Default, the Secured Party, whether or not named as a
party to any legal proceedings, is authorized to take any additional steps as
the Secured Party deems necessary or desirable for the defense of any such legal
proceedings or the protection of the validity or priority of this Agreement and
the liens, security interests, and assignments created hereunder, including the
employment of independent counsel, the prosecution or defense of litigation, the
compromise or discharge of any adverse claims made with respect to any
Collateral of such Debtor and the payment or removal of prior liens or security
interests, and the expenses of the Secured Party in taking such action shall be
paid by such Debtor.
(b) Such Debtor agrees that at any time such Debtor shall promptly
execute and deliver all further agreements, including the Intellectual Property
Security Agreement attached hereto as Exhibit A, and take all further action,
---------
that may be necessary or that the Secured Party may reasonably request, in order
to further evidence the liens, security interests, and assignments granted or
purported to be granted hereunder and perfect and protect the same or to enable
the Secured Party to exercise and enforce the Secured Party's rights and
remedies hereunder. Without limiting the foregoing, such Debtor shall, at the
Secured Party's request, execute financing statements, assignments, notices,
certificates of title and applications therefor, and such other documents and
agreements as the Secured Party may reasonably request in order to perfect and
preserve the security interests granted or purported to be granted hereunder.
Such Debtor shall furnish to the Secured Party from time to time any statements
and schedules further identifying and describing any Collateral of such Debtor
and such other reports in connection with the Collateral of such Debtor as the
Secured Party may reasonably request.
(c) During the existence of an Event of Default, such Debtor agrees
that, if such Debtor fails to perform under this Agreement, the Secured Party
may, but shall not be obligated to, perform such Debtor's obligations under this
Agreement, and any expenses incurred by the Secured Party in performing such
Debtor's obligations shall be paid by such Debtor. Any
-19-
such performance by the Secured Party may be made by the Secured Party in
reasonable reliance on any statement, invoice, or claim, without inquiry into
the validity or accuracy thereof. The amount and nature of any expense of the
Secured Party hereunder shall be conclusively established by a certificate of
any officer of the Secured Party absent manifest error.
(d) Such Debtor irrevocably appoints the Secured Party as such
Debtor's attorney in fact, with full authority to act during the existence of an
Event of Default for such Debtor and in the name of such Debtor, to take any
action and execute any agreement which the Secured Party deems necessary or
advisable to accomplish the purposes of this Agreement, including the matters
that the Secured Party is expressly authorized to take pursuant to this
Agreement (including the matters described in paragraph (c) above), and
instituting proceedings the Secured Party deems necessary or desirable to
enforce the rights of the Secured Party with respect to this Agreement.
(e) The powers conferred upon the Secured Party under this Agreement
are solely to protect the Secured Party's rights under this Agreement and shall
not impose any duty upon it to exercise any such powers. Except as elsewhere
provided hereunder, the Secured Party shall have no duty as to any of the
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to the Collateral.
3.5 Insurance. With respect to any casualty or condemnation to the
---------
Collateral, all proceeds of such casualty or condemnation which are due to such
Debtor, including any property insurance proceeds, condemnation awards, proceeds
from actions, and any other proceeds, shall be paid directly to such Debtor,
provided, however, that during the continuance of any Event of Default, such
proceeds are assigned to the Secured Party and shall be paid directly to the
Secured Party for disposition as directed by the Secured Party.
Section 4. General Remedies. During the existence of an Event of Default, the
----------------
Secured Party may, at the Secured Party's option, exercise one or more of the
remedies specified elsewhere in this Agreement and the following remedies:
4.1 Interim Remedies.
----------------
(a) To the extent permitted by law, the Secured Party may exercise all
the rights and remedies of a secured party under the UCC.
(b) The Secured Party may prosecute actions in equity or at law for
the specific performance of any covenant or agreement herein contained or in aid
of the execution of any power herein granted or for the enforcement of any other
appropriate legal or equitable remedy.
(c) The Secured Party may require any Debtor to promptly assemble any
tangible Collateral of such Debtor and make it available to the Secured Party at
a place to be designated by the Secured Party. The Secured Party may occupy any
premises owned or leased by any Debtor where any Collateral is assembled for a
reasonable period in order to effectuate
-20-
the Secured Party's rights and remedies hereunder or under law, without
obligation to any Debtor with respect to such occupation.
4.2 Foreclosure.
-----------
(a) The Secured Party may foreclose on any Collateral in any manner
permitted by the courts of or in the State of New York or the State in which any
Collateral is located. If the Secured Party should institute a suit for the
collection of the Secured Obligations and for foreclosure under this Agreement,
the Secured Party may at any time before the entry of a final judgment dismiss
the same, and take any other action permitted by this Agreement.
(b) To the extent permitted by law, the Secured Party may exercise all
the foreclosure rights and remedies of a secured party under the UCC. In
connection therewith, the Secured Party may sell any Collateral at public or
private sale, at the office of the Secured Party or elsewhere, for cash or
credit and upon such other terms as the Secured Party deems commercially
reasonable. The Secured Party may sell any Collateral at one or more sales, and
the security interest granted hereunder shall remain in effect as to the unsold
portion of the Collateral. Each Debtor agrees that to the extent permitted by
law, such sales may be made without notice. If notice is required by law, each
Debtor hereby deems ten days advance notice of the time and place of any public
or private sale reasonable notification, recognizing that if any portion of the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, shorter notice may be reasonable.
The Secured Party shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Secured Party may adjourn
any sale by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
adjourned. In the event that any sale hereunder is not completed or is defective
in the opinion of the Secured Party, the Secured Party shall have the right to
cause subsequent sales to be made hereunder. Any statements of fact or other
recitals made in any xxxx of sale, assignment, or other document representing
any sale hereunder, including statements relating to the occurrence of an Event
of Default, acceleration of the Secured Obligations, notice of the sale, the
time, place, and terms of the sale, and other actions taken by the Secured Party
in relation to the sale may be conclusively relied upon by the purchaser at any
sale hereunder. The Secured Party may delegate to any agent the performance of
any acts in connection with any sale hereunder, including the sending of notices
and the conduct of the sale.
4.3 Application of Proceeds.
-----------------------
(a) Unless otherwise specified herein, any cash proceeds received by
the Secured Party from the sale of, collection of, or other realization upon any
part of the Collateral or any other amounts received by the Secured Party
hereunder may be, at the reasonable discretion of the Secured Party (i) held by
the Secured Party in one or more Collateral Accounts as cash collateral for the
Secured Obligations or (ii) applied to the Secured Obligations.
(b) Amounts applied to the Secured Obligations shall be applied in the
following order:
-21-
First, to the payment of the costs and expenses of exercising the
Secured Party's rights hereunder, whether expressly provided for herein or
otherwise; and
Second, to the payment of the Secured Obligations in the order set
forth by the Secured Party.
Any surplus cash collateral or cash proceeds held by the Secured Party after
payment in full of the Secured Obligations and the termination of any
commitments of the Secured Party to any Debtor shall be paid over to such Debtor
or to whomever may be lawfully entitled to receive such surplus.
4.4 Waiver of Certain Rights. To the full extent each Debtor may do so,
------------------------
such Debtor shall not insist upon, plead, claim, or take advantage of any law
providing for any appraisement, valuation, stay, extension, or redemption, and
such Debtor hereby waives and releases the same, and all rights to a marshaling
of the assets of such Debtor, including the Collateral of such Debtor, or to a
sale in inverse order of alienation in the event of foreclosure of the liens and
security interests hereby created. Such Debtor shall not assert any right under
any law pertaining to the marshaling of assets, sale in inverse order of
alienation, the administration of estates of decedents or other matters whatever
to defeat, reduce, or affect the right of the Secured Party under the terms of
this Agreement.
4.5 Remedies Cumulative. The Secured Party's remedies under this Agreement
-------------------
and the Loan Documents shall be cumulative, and no delay in enforcing this
Agreement and the Loan Documents shall act as a waiver of the Secured Party's
rights hereunder.
Section 5. Equipment. Each Debtor hereby represents and warrants to and agrees
---------
with the Secured Party as follows:
5.1 Ownership.
---------
(a) Such Debtor has good and indefeasible title to the Equipment of
such Debtor, free from any liens, security interests, assignments, adverse
claims, restrictions, or other encumbrances whatsoever except the Permitted
Liens.
(b) Such Debtor may not sell or otherwise dispose of the Equipment of
such Debtor except in accordance with Section 7.05 of the Credit Agreement.
5.2 Perfection.
----------
(a) Such Debtor shall provide the Secured Party with advance written
notice of any material purchases or acquisitions of any railroad rolling stock,
ships, or aircraft and the opportunity to perfect a first priority security
interest in any such Equipment, subject to any Permitted Liens. No material
amount of the Equipment of such Debtor is in the form of fixtures except where
the owner of the real property to which the fixtures are attached has executed a
lien waiver in favor of the Secured Party.
-22-
(b) Such Debtor shall not move any Equipment into any jurisdiction
that would result in the loss of perfection of the Secured Party's Lien on such
Equipment unless such Debtor has provided the Secured Party with advance notice
of the designation referencing this Agreement and the opportunity to perfect a
first priority security interest in any Equipment located at such location in
accordance with the terms of this Agreement, or unless such Equipment is being
used at such location in the ordinary course of business, but in no event shall
any of the Equipment of such Debtor be kept at such location for more than four
consecutive months.
(c) The filed financing statements in favor of the Secured Party filed
in the applicable jurisdictions against the name of such Debtor are the only
filings or recordings necessary to perfect the security interests purported to
be granted hereunder on the Equipment, and no other filing, recording,
authorization, consent, or other action is necessary to allow such Debtor to
perform such Debtor's obligations hereunder with respect to such Collateral or
to permit the Secured Party to exercise the Secured Party's rights and remedies
hereunder with respect to such Collateral; provided that no Debtor shall be
obligated to obtain any consents from the operators of the retail locations
where its automated coin counting machines are located pursuant to the terms of
a Coinstar Installation Agreement.
5.3 Value. The Equipment of such Debtor is in good working order and such
-----
Debtor shall maintain and preserve the Equipment in good working order and shall
make all repairs, replacements, and restorations that are necessary or desirable
to that end.
5.4 Default and Remedies. During the existence of an Event of Default, the
--------------------
Secured Party may take control of any Equipment of such Debtor, and such Debtor
shall transfer to the Secured Party or execute in favor of the Secured Party any
documents necessary to take control of such Equipment. If such Debtor fails to
do so, the Secured Party may execute any documents reasonably necessary to take
such control of such Equipment. The Secured Party shall have no obligation to
take any action to assemble or otherwise take control of the Collateral, whether
for the purposes of sale or otherwise.
Section 6. Inventory. Each Debtor represents and warrants to and agrees with the
---------
Secured Party as follows:
6.1 Ownership. Such Debtor may sell any Inventory of such Debtor in the
---------
ordinary course of business.
6.2 Perfection.
----------
(a) Such Debtor does not and shall not distribute or sell any
Inventory of such Debtor on consignment. Such Debtor shall not move the
Inventory of such Debtor into any jurisdiction which would result in loss of
perfection of the Secured Party's Lien on such Inventory unless such Debtor has
provided the Secured Party with advance notice of the designation referencing
this Agreement and the opportunity to perfect a first priority security
-23-
interest in any Inventory located at such location in accordance with the terms
of this Agreement, or unless such Inventory is being distributed in the ordinary
course of business. The filed financing statements in favor of the Secured Party
filed against the name of such Debtor are the only filings or recordings
necessary to perfect the security interests purported to be granted hereunder on
the Inventory of such Debtor, and no other filing, recording, authorization,
consent, or other action is necessary to allow such Debtor to perform such
Debtor's obligations hereunder with respect to such Collateral of such Debtor or
to permit the Secured Party to exercise the Secured Party's rights and remedies
hereunder with respect to such Collateral of such Debtor.
(b) No document has been issued representing title to the Inventory of
such Debtor. If disposition of any Inventory of such Debtor gives rise to any
documents, such Debtor shall promptly inform the Secured Party thereof and
deliver the documents to the Secured Party with all necessary endorsements and
assignment agreements requested by the Secured Party, or at the request of the
Secured Party negotiate the same to the Secured Party.
6.3 Value. The Inventory of such Debtor is and will be of good and merchantable
-----
quality, free from material defects. Such Debtor shall maintain and protect the
Inventory of such Debtor in accordance with such Debtor's current practices.
6.3 Default and Remedies. During the existence of an Event of Default, the
--------------------
Secured Party may take control of Inventory of such Debtor held by bailees,
warehousemen, or similar parties, and such Debtor shall transfer to the Secured
Party or execute in favor of the Secured Party any documents necessary to take
control of such Inventory. If such Debtor fails to do so, the Secured Party may
execute any documents reasonably necessary to take such control of such
Inventory. The Secured Party shall have no obligation to take any action to
assemble or otherwise take control of the Collateral, whether for the purposes
of sale or otherwise.
Section 7. Receivables, Investment Property, and General Intangibles. Each
---------------------------------------------------------
Debtor represents and warrants to and agrees with the Secured Party as follows:
7.1 Perfection.
----------
(a) The filed financing statements in favor of the Secured Party filed
against the name of such Debtor are the only filings or recordings necessary to
perfect the security interests purported to be granted hereunder on the
Receivables of such Debtor in the form of Accounts and Payment Intangibles, and
no other filing, recording, authorization, consent, or other action is necessary
to allow such Debtor to perform such Debtor's obligations hereunder with respect
to such Collateral or to permit the Secured Party to exercise the Secured
Party's rights and remedies hereunder with respect to such Collateral.
(b) Upon written request of the Secured Party, each Debtor shall take
such actions as the Secured Party may reasonably request to permit the Secured
Party to perfect a first priority security interest subject only to the
Permitted Liens in any Receivables, Investment Property, and General Intangibles
of such Debtor including delivery of chattel paper to the Secured Party with all
necessary endorsements and delivery of assignment and/or control agreements
requested by the Secured Party.
-24-
7.2 Value. Such Debtor shall use commercially reasonable efforts to collect
-----
payments on the Receivables, Investment Property, and General Intangibles of
such Debtor when due. Unless otherwise specified herein, such Debtor shall use
commercially reasonable efforts to perform such Debtor's obligations under each
contract giving rise to any Receivables, Investment Property, and General
Intangibles of such Debtor.
7.3 Collection Covenants. Borrower shall cause the coins it receives from
--------------------
its automated coin counting machines to continue to be collected in a manner
consistent with its current collection practices, and shall always insure that
all coins are collected within the time period required under the installation
agreement applicable to such machine. Borrower shall cause the deposits it
receives from the collection of coins to be transferred to Borrower's bank
account with the Secured Party within two Business Days of such funds being
deposited into any of Borrower's other bank accounts; provided, however, all
amounts that are paid to the retailer in accordance with the terms of the
installation agreement prior to the expiration of such two Business Day period
are exempt from the foregoing transfer obligation.
7.4 Default and Remedies
--------------------
(a) During the existence of an Event of Default, the Secured Party may
establish Collateral Accounts for the purpose of collecting the Receivables of
such Debtor and holding the proceeds thereof, and may direct such Debtor to
instruct all account debtors and obligors on the Receivables of such Debtor to
make all payments on such Receivables directly to the Secured Party for deposit
into such Collateral Account. After such direction to such Debtor and until such
direction has been rescinded, all collections and proceeds of the Receivables of
such Debtor shall be directed to such Collateral Accounts. All proceeds of the
Receivables of such Debtor that may from time to time come into the possession
of such Debtor shall be held in trust for the Secured Party, segregated from the
other funds of such Debtor, and delivered immediately to the Secured Party in
the form received with any necessary endorsement for deposit into such
Collateral Account, such delivery in no event to be later than one Business Day
after receipt thereof by such Debtor. In addition, such Debtor shall not adjust,
settle, or compromise the amount or payment of any Receivable of such Debtor,
release wholly or partly any account debtor or obligor for any Receivable of
such Debtor, or allow any credit or discount on any Receivable of such Debtor,
without the advance written consent of the Secured Party.
(b) In connection with the foregoing, the Secured Party shall have the
right at any time during the existence of an Event of Default to take any of the
following actions, in the Secured Party's own name or in the name of such
Debtor: change the accounts that shall be the Collateral Accounts for the
Receivables of such Debtor; compromise or extend the time for payment of the
Receivables of such Debtor upon such terms as the Secured Party may determine;
endorse the name of such Debtor on checks, instruments, or other evidences of
payment on the Receivables of such Debtor; make written or verbal requests for
verification of amount owing on the Receivables of such Debtor from any Persons
which the Secured Party believes are account debtors or obligors on the
Receivables of such Debtor; open mail addressed to such Debtor and, to the
extent of checks or other proceeds of the Receivables of such Debtor, dispose of
same in
-25-
accordance with this Agreement; take action in the Secured Party's name or such
Debtor's name to enforce collection; and take all other action necessary to
carry out this Agreement and give effect to the Secured Party's rights
hereunder. Reasonable costs and expenses incurred by the Secured Party in
collection and enforcement of the Receivables of such Debtor, including
attorneys' fees and out-of-pocket expenses, shall be reimbursed by such Debtor
to the Secured Party on demand.
Section 8. Intellectual Property. Each Debtor represents and warrants to and
---------------------
agrees with the Secured Party as follows:
8.1 Ownership. All Intellectual Property is subsisting and has not been
---------
adjudged invalid or unenforceable. To the best of Debtor's knowledge, all of the
Intellectual Property is valid and enforceable. No claim has been made that the
use of any of the Intellectual Property does or may violate the rights of any
third person. The Debtor has used, and will continue to use, proper statutory
notice in connection with its use of the Intellectual Property and consistent
standards of quality in its manufacture of products sold under the Intellectual
Property.
8.2 Perfection.
----------
(a) Debtor shall not take any action, or permit any action to be taken
by others, including licensees, or fail to take any action or permit any other
to fail to take any action if such action or failure to act could reasonably be
expected to cause an event, occurrence or condition which could reasonably be
expected to have a material adverse change on (i) the business, operations, or
financial condition of the Debtor or (ii) the Debtor's ability to perform its
obligations under the Loan Documents.
(b) Whenever any of the Intellectual Property is used by or on behalf
of the Debtor in a country where affixing a trademark notice is mandatory, the
Debtor shall affix or cause to be affixed a notice that the xxxx is a trademark,
a service xxxx or is registered, which notice shall be in a form accepted or
required by the trademark marking laws of each country in which the xxxx is so
used.
(c) If requested by the Secured Party, the Debtor shall take all
reasonable and necessary steps to prosecute any trademark applications with
respect to the Intellectual Property pending as of the date of this Agreement or
thereafter to make federal application on registrable but unregistered
Intellectual Property, to file and prosecute opposition and cancellation
proceedings, to maintain a suit to stop any infringement or any other suit,
action or proceedings brought against the Debtor relating to, concerned with or
affecting the Intellectual Property and to do any and all material acts which
are reasonably necessary or desirable to preserve and maintain all rights in the
Intellectual Property. Upon the Secured Party's request, the Debtor shall
provide the Secured Party with a complete status report of all Intellectual
Property and upon request by the Secured Party, the Debtor shall deliver to the
Secured Party, copies of any such Intellectual Property and other documents
concerned with or related to the prosecution, protection, maintenance,
enforcement and issuance of the Intellectual Property.
-26-
8.3 Default and Remedies. During the existence of an Event of Default, the
--------------------
Debtor hereby grants to the Secured Party an exclusive, nontransferable right
and license in the Intellectual Property, such license including but not limited
to use of the Intellectual Property on and in connection with products sold by
the Debtor, the Secured Party or other authorized parties, wherein all such use
by any party shall inure to the benefit of the Secured Party.
Section 9. Miscellaneous.
-------------
9.1 Choice of Law.
-------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE SECURED PARTY SHALL
--------
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE SECURED
PARTY AND EACH DEBTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE SECURED PARTY AND EACH
DEBTOR IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE SECURED
PARTY AND EACH DEBTOR WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
9.2 Notice. All notices and other communications from the Secured Party to
------
any Debtor provide for in this Agreement shall be delivered or transmitted to
the Borrower, and shall be deemed delivered to any such Debtor upon delivery to
the Borrower. All notices and other communications between the parties provided
for in this Agreement shall be in the manner and to the addresses set forth in
the Credit Agreement.
9.3 General. If any provision in this Agreement is held to be
-------
unenforceable, such provision shall be severed and the remaining provisions
shall remain in full force and effect. All representations, warranties, and
covenants of each Debtor in this Agreement shall survive the execution of this
Agreement, any of the Loan Documents, and any other contract or agreement. If a
due date for an amount payable is not specified in this Agreement, the due date
shall be the date on which the Secured Party demands payment therefor. The
Secured Party's remedies under this Agreement and the other Security Documents
shall be cumulative, and no delay in enforcing
-27-
this Agreement and the other Loan Documents shall act as a waiver of the Secured
Party's rights hereunder or thereunder. The provisions of this Agreement may be
waived or amended only in a writing signed by the party against whom enforcement
is sought. This Agreement shall bind and inure to the benefit of each Debtor and
the Secured Party and their respective successors and assigns. No Debtor may
assign its rights or delegate its duties under this Agreement. The Secured Party
may assign its rights and delegate its duties under this Agreement in accordance
with the terms of the Credit Agreement. This Agreement may be executed in
multiple counterparts each of which shall constitute one and the same agreement.
9.4 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
--------------------------------
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
-28-
THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED as of the date first above written.
COINSTAR, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
COINSTAR INTERNATIONAL, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
BANK OF AMERICA, N.A., as Administrative Agent
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Schedule I
to Security Agreement
Collateral Information
1. Prior Names:
2. Trade Names:
3. State of Organization:
Schedule II
to Security Agreement
Intellectual Property
---------------------
a. Patents.
-------
b. Patent Applications.
-------------------
c. Trademarks.
----------
d. Licenses.
--------
Exhibit A
to Security Agreement
FORM OF
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Agreement dated effective as of April 18, 2002, by and between
Coinstar, Inc., a Delaware corporation with principal offices at 0000 000xx
Xxxxxx XX, Xxxxxxxx, Xxxxxxxxxx 00000 (the "Debtor"), and Bank of America, N.A.
with offices at 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000 (the "Secured Party"), in
its capacity as Administrative Agent for the benefit of itself, the Lenders, and
the L/C Issuer referred to below.
WHEREAS, the Debtor is the owner of certain rights, title and interest in
and to the inventions and their associated patent registrations and applications
described on Schedule A attached to and made a part of this Agreement (the
"Patents");
WHEREAS, the Debtor is the owner of certain rights, title and interest in
and to the associated trademark registrations and applications described on
Schedule B attached to and made a part of this Agreement (the "Trademarks");
WHEREAS, the Secured Party is interested in acquiring a security interest
in the Patents and Trademarks from the Debtor, and the Debtor is interested in
granting such a security interest in the Patents and Trademarks to the Secured
Party.
NOW, THEREFORE, the Debtor, for the sum of one United States dollar and
other good and valuable consideration, the receipt, adequacy and sufficiency of
which are acknowledged by the Debtor:
Hereby grants to the Secured Party, its successors and assigns, a security
interest in the Assignor's entire right, title, interest, and goodwill
associated therewith in and to the Patents and Trademarks;
Will, upon written request of the Secured Party, its successors and
assigns, execute reasonable documents to perfect the Secured Party's security
interest in the Patents and Trademarks; and
Hereby represents and warrants that it is the owner of the rights granted
herein and has full power and authority to grant a security interest in the
Patents and Trademarks.
IN WITNESS WHEREOF, the Debtor has given legal effect to this Agreement by
its duly authorized representative.
COINSTAR, INC.,
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
STATE OF WASHINGTON)
)ss.
COUNTY OF {County} )
I certify that I know or have satisfactory evidence that {Name} is the
person who appeared before me, and said person acknowledged that signed this
instrument, on oath stated that {he is/she is/they are} authorized to execute
the instrument and acknowledged it as the to be {his/her} free and voluntary act
of such parties for the uses and purposes mentioned in this instrument.
DATED:
-------------------------- -----------------------------------------------
Print Name:
------------------------------------
NOTARY PUBLIC for the State of Washington,
residing at
-----------------------------------------------
My appointment expires:
-----------------------------------------------
Schedule A
to Intellectual Property Security Agreement
United States Patents and Patent Applications
U.S. PATENTS
------------
U.S. PATENT APPLICATIONS
------------------------
Schedule B
to Intellectual Property Security Agreement
United States Trademarks
-35-
EXHIBIT G
FORM OF
PLEDGE AGREEMENT
This Pledge Agreement dated as of April 18, 2002 ("Agreement") is between
Coinstar, Inc., a Delaware corporation (the "Debtor"), and Bank of America, N.A.
(the "Secured Party"), in its capacity as Administrative Agent for the benefit
of itself, the Lenders, and the L/C Issuer referred to below.
INTRODUCTION
Reference is made to the Credit Agreement dated as of April 18, 2002 (as
amended, restated, modified, or supplemented from time to time, the "Credit
Agreement"), among the Debtor, each lender from time to time party thereto (each
a "Lender" and collectively, the "Lenders"), and the Secured Party, as
Administrative Agent and L/C Issuer. It is a condition precedent to the
effectiveness of the Credit Agreement that the Debtor secure its obligations
under the Credit Agreement and the other Loan Documents with this Agreement.
Therefore, for the consideration expressed in the Credit Agreement and in
order to induce the Lenders to make the Loans and the L/C Issuer to issue
Letters of Credit, the Debtor agrees with the Secured Party as follows:
Definitions.
------------
Terms defined above and elsewhere in this Agreement shall have their specified
meanings. Capitalized terms used herein but not defined herein shall have the
meanings specified by the Credit Agreement. Capitalized terms that are neither
defined herein nor in the Credit Agreement shall have the meanings specified in
Article 9 of the UCC.
The following terms shall have the following meanings:
"Collateral" means all of the Debtor's present and future right, title, and
interest in the Pledged Securities, Records, and Proceeds.
"Pledged Securities" means all of the shares of stock described on Schedule
I to this Agreement and all additional shares of stock of each issuer of such
shares of stock issued to Debtor, together with all dividends, distributions,
cash, instruments, and other proceeds from time to time received or otherwise
distributed in respect of the foregoing, including stock rights, options,
warrants, rights to subscribe, dividends, liquidating dividends, stock
dividends, new securities or other properties or benefits to which the Debtor
may become entitled to receive on account of such property.
"Proceeds" means all of Debtor's present or future Proceeds of the
Collateral as the term Proceeds is defined in Article 9 of the UCC including
without limitation all present and future Proceeds of the Pledged Securities,
whether arising from the collection, sale, exchange, assignment, or other
disposition of any Pledged Securities, the realization upon any Pledged
Securities, or any other transaction or occurrence, including all claims of
Debtor against third parties for impairment, loss, or damage to any Pledged
Securities, all proceeds payable under any put, call, hedge, or other protection
for the value of any Pledged Securities, and all rights under any indemnity,
warranty, or guaranty of or for any of the foregoing, whether such proceeds are
-36-
represented as money, deposit accounts, accounts, general intangibles,
securities, investment property, instruments, documents, chattel paper,
inventory, equipment, fixtures, goods, or by other property.
"Records" means all of the Debtor's present and future contracts,
accounting records, files, computer files, computer programs, and other records
relating to the Collateral or any portion thereof.
"Secured Obligations" means (a) all principal, interest, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by the
Debtor or the other Loan Parties to the Secured Party, the Lenders, and the L/C
Issuer under the Credit Agreement, the Notes, any Rate Hedging Agreements, and
the other Loan Documents and, (b) any increases, extensions, and rearrangements
of the foregoing obligations under any amendments, supplements, and other
modifications of the agreements creating the foregoing obligations.
"State of Organization" means Delaware.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York.
Pledge.
-------
Pledge. The Debtor hereby pledges to the Secured Party, for the benefit of the
------
holders of the Secured Obligations, all of the Debtor's right, title, and
interest in interest in and to the Collateral to secure the payment and
performance of the Secured Obligations.
Debtor Remains Liable. Anything herein to the contrary notwithstanding: (a) the
---------------------
Debtor shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein to perform its obligations thereunder
to the same extent as if this Agreement had not been executed; (b) the exercise
by Secured Party of any rights hereunder shall not release Debtor from any
obligations under the contracts and agreements included in the Collateral; and
(c) Secured Party shall not have any obligation under the contracts and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform or fulfill any of the obligations of the
Debtor thereunder, including any obligation to make any inquiry as to the nature
or sufficiency of any payment Debtor may be entitled to receive thereunder, to
present or file any claim, or to take any action to collect or enforce any claim
for payment thereunder.
General Provisions. The Debtor represents and warrants to and agrees with the
------------------
Secured Party as follows:
Ownership.
---------
As of the date of this Agreement, each issuer of any Pledged
Securities has no outstanding capital stock or other securities except those
shown on Schedule I. The Pledged Securities constitute the percentages reflected
----------
on Schedule I of the issued and outstanding shares of capital stock of each
----------
issuer thereof.
The Debtor has good and indefeasible title to the Collateral free from
any liens, security interests, assignments, options, adverse claims,
restrictions, and other encumbrances whatsoever, except for Permitted Liens.
-37-
The shares of stock representing the Pledged Securities are duly
authorized and validly issued and are fully paid and nonassessable.
The Debtor has the right to vote, pledge, and grant a security
interest in or otherwise transfer the Collateral free of any Liens, except for
Permitted Liens.
The pledge of the Collateral does not violate (i) the articles or
bylaws of the issuers of the Collateral, or any indenture, mortgage, bank loan,
or credit agreement to which the Debtor is a party or by which any of its
respective properties or assets may be bound, or (ii) any restriction on such
transfer or encumbrance of the Collateral.
No effective pledge or other transfer regarding the Pledged Securities
is in effect. No recorded financing statement or similar recording or filing
covering any part of the Collateral is in effect or on file in any recording
office, except those filed in connection with this Agreement. There are no
restrictions upon the voting rights associated with, or upon the transfer of,
any of the Collateral.
No consent of any other Person and no authorization, approval, or
other action by, and no notice to or filing with, any regulatory body, that has
not occurred, is required either (i) for the pledge by the Debtor of the
Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by the Debtor (except to the extent that financing
statements may be required under the UCC to be filed in order to maintain a
perfected security interest in the Collateral) or (ii) for the exercise by the
Secured Party of the voting or other rights provided for in this Agreement or
the remedies in respect of the Collateral pursuant to this Agreement (except as
may be required in connection with such disposition by laws affecting the
offering and sale of securities generally).
The Debtor shall not, without the prior written consent of the Secured
Party, grant any lien, security interest, assignment, option, restriction,
claim, or other encumbrance on or against the Collateral, or lease, sell,
assign, or otherwise transfer any of its rights in the Collateral, except (a) as
permitted under the Credit Agreement, or (b) to the Secured Party pursuant to
the terms of this Agreement.
Perfection.
----------
All certificates or instruments representing the Pledged Securities
are correctly described in the definition of "Pledged Securities" and have been
delivered to the Secured Party in a form suitable for transfer by delivery, or
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Secured Party, and Debtor shall
deliver to the Secured Party in such manner all certificates and instruments
representing the Pledged Securities acquired by the Debtor after the date of
this Agreement. The Debtor waives any provision of the organizational documents
applicable to the Pledged Securities prohibiting or otherwise restricting the
grant of the security interest hereunder. No other authorization, approval, or
other action is necessary to perfect such security interests granted or
purported to be granted hereunder, to allow the Debtor to perform its
obligations hereunder, or to permit the Secured Party to exercise its rights and
remedies hereunder (except as may be required in connection with such
disposition by laws affecting the offering and sale of
-38-
securities generally), except for those that have been obtained, and no consent
of any Person is required for the pledge by the Debtor of the Collateral pledged
hereunder.
As of the date of this Agreement, the true and correct name of the
Debtor as listed on the Debtor's certificate of incorporation is the name
specified for the Debtor on the signature pages of this Agreement. The Debtor
has had no prior names other than those listed for the Debtor on the attached
Schedule II. The Debtor has not used and does not use any trade names other than
-----------
those listed on the attached Schedule II. As of the date of this Agreement, the
-----------
Debtor is organized under the laws of the State of Organization. Without advance
written notice to the Secured Party and reasonable opportunity for the Secured
Party to take action to protect the Secured Party's interests hereunder, the
Debtor shall not change its name, reincorporate or otherwise reorganize, or
change the jurisdiction of organization of the Debtor from the State of
Organization.
A carbon, photographic, or other reproduction of this Agreement shall
be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof.
Upon the filing of financing statements in the jurisdictions set forth
on the attached Schedule II, the security interests granted to the Secured Party
-----------
hereunder will constitute valid first-priority perfected security interests in
all Collateral with respect to which a security interest can be perfected by the
filing of a financing statement.
Priority.
--------
The security interest created by this Agreement is first priority, and
the Debtor shall preserve and maintain the status of such security interest to
the end that the security interest of the Secured Party shall remain a first
priority security interest in the Collateral.
If the proceeds of the Secured Obligations are used to pay any
indebtedness secured by prior liens, the Secured Party is subrogated to all of
the rights and liens of the holders of such indebtedness.
Use and Condition.
-----------------
The Debtor agrees that it will cause each issuer of any Pledged
Securities not to issue any stock or other securities in addition to or in
substitution for the Pledged Securities existing as of the date hereof that are
listed on Schedule I.
----------
Debtor agrees that it shall not (i) sell, assign, or otherwise dispose
of, or grant any option with respect to, any of the Collateral, except as
permitted by the Credit Agreement, or (ii) create or permit to exist any Lien
upon or with respect to any of the Collateral, except for Permitted Liens.
Any (i) non-cash dividends, instruments, documents, chattel paper, and
other property received or otherwise distributed in respect of or in
substitution for any Pledged Securities; (ii) cash dividends and other
distributions in connection with a partial or total liquidation or dissolution
of an issuer of any Pledged Securities or in connection with a reduction of
capital, capital surplus, or paid-in-surplus of an issuer of any Pledged
Securities; and (iii) cash distributed in respect of a redemption of principal
of, or in exchange for, any Pledged Securities, shall be promptly delivered to
the Secured Party for disposition and shall, if received by the
-39-
Debtor, be received in trust for the benefit of the Secured Party, be segregated
from the other property or funds of the Debtor, and be promptly delivered to the
Secured Party as Collateral in the same form as so received, with any necessary
endorsement.
Notwithstanding the pledge in Section 2.1, so long as no Event of
Default shall have occurred and be continuing, the Debtor shall be entitled to
receive and retain any and all cash dividends distributed in respect of the
Pledged Securities and to exercise any voting and other consensual rights
pertaining to the Pledged Securities for any purpose not inconsistent with the
terms of this Agreement; provided, that the Debtor shall not exercise or shall
refrain from exercising any such right if, in the Secured Party's judgment, such
action would have a materially adverse effect on the value of the Pledged
Securities. The Secured Party shall execute and deliver (or cause to be executed
and delivered) to the Debtor all proxies and other instruments that the Debtor
may reasonably request to enable the Debtor to exercise the voting and other
rights which it is entitled to exercise hereunder and to receive the dividends
or interest payments which it is authorized to receive and retain hereunder.
Further Assurances.
------------------
The Debtor agrees that at any time, and at the expense of the Debtor,
the Debtor shall promptly execute and deliver all further instruments,
agreements, and other related documents, and take all further action that may be
necessary or that the Secured Party may reasonably request in order to further
evidence the security interests granted or purported to be granted hereunder and
perfect and protect the same or to enable the Secured Party to exercise and
enforce its rights and remedies hereunder. Without limiting the foregoing, the
Debtor shall (i) xxxx conspicuously any tangible Collateral with a legend, in
form and substance satisfactory to the Secured Party, indicating that such
Collateral is subject to the security interest granted or purported to the
granted hereunder, and (ii) execute stock powers, pledge registration requests,
financing statements, amendments and continuations of financing statements, and
such other documents and agreements as the Secured Party may reasonably request
in order to perfect and preserve the security interests granted or purported to
be granted hereunder. The Debtor shall furnish to the Secured Party from time to
time any statements and schedules further identifying and describing any of the
Collateral and such other reports in connection with the Collateral as the
Secured Party may reasonably request.
If, during the term of this Agreement, (i) any stock dividend,
reclassification, readjustment, or other change is declared or made in the
capital structure of any of the issuers of the Pledged Securities, or any option
included with the Collateral is exercised, or both, or (ii) any subscription
warrants or any other rights or options shall be issued in connection with the
Collateral, then all new, substituted, and additional certificates, shares,
warrants, rights, options or other securities, issued by reason of any of the
foregoing, shall be immediately delivered to and held by the Secured Party and
shall constitute Collateral hereunder.
During the existence of an Event of Default, the Debtor agrees that,
if the Debtor fails to perform under this Agreement, the Secured Party may, but
shall not be obligated to, perform the Debtor's obligations under this Agreement
and any reasonable expenses incurred by the Secured Party in performing the
Debtor's obligations shall be paid by the Debtor. Any such performance by the
Secured Party may be made by the Secured Party in reasonable reliance on any
statement, invoice, or claim, without inquiry into the validity or accuracy
thereof. The
-40-
amount and nature of any expense of the Secured Party hereunder shall be
established conclusively by a certificate of any officer of the Secured Party.
The Debtor irrevocably appoints the Secured Party as the Debtor's
attorney in fact, with full authority to act during the existence of an Event of
Default for the Debtor and in the name of the Debtor, to take any action and
execute any agreement which the Secured Party deems necessary or advisable to
accomplish the purposes of this Agreement, including taking actions the Secured
Party is expressly authorized to take pursuant to this Agreement (such as the
matters described in paragraph (c) above), instituting proceedings the Secured
Party deems necessary or desirable to enforce the rights of the Secured Party
with respect to this Agreement, and taking actions with respect to receiving,
endorsing, and collecting instruments made payable to the Debtor representing
any dividend, interest payment, or other distribution in respect of the Pledged
Securities and giving full discharge for the same.
The powers conferred on the Secured Party under this Agreement are
solely to protect its rights under this Agreement and shall not impose any duty
upon it to exercise any such powers. Except as elsewhere provided hereunder, the
Secured Party shall have no duty as to any of the Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to the Collateral. The Secured Party shall have no
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders, or other matters relative to any
Pledged Securities, whether or not the Secured Party has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Securities.
Remedies. During the continuation of any Event of Default:
--------
Interim Remedies.
----------------
The Secured Party may exercise all the rights and remedies of a
secured party under the UCC and any other rights and remedies available under
applicable law.
The Secured Party may prosecute actions in equity or at law for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted or for the enforcement of any other
appropriate legal or equitable remedy.
All rights of the Debtor to receive cash dividends or distributions
shall cease, and all such rights shall thereupon become vested in the Secured
Party who shall thereupon have the sole right to receive such cash dividends or
distributions. All cash dividends or distributions received by the Debtor in
violation of the foregoing shall be received in trust for the benefit of the
Secured Party, shall be segregated from other funds of the Debtor, and shall be
promptly paid over to the Secured Party to be held as Collateral in the same
form as so received (with any necessary endorsement).
All rights of the Debtor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise with respect to any
Pledged Securities and pursuant to this Agreement shall cease, and all such
rights shall thereupon become vested in the Secured Party who shall thereupon
have the sole right to exercise such voting and other consensual rights. The
Debtor authorizes all other parties to follow the instructions of the Secured
Party and ignore the instructions of the Debtor with respect to such rights.
-41-
To the extent permitted by applicable law, the Secured Party shall
have the right, without notice to the Debtor, to transfer or to register, in the
name of the Secured Party or any of its nominees, any of the Pledged Securities.
In addition, the Secured Party shall have the right at any time to exchange the
certificates or instruments representing the Pledged Securities for certificates
or instruments of smaller or larger denominations.
The Secured Party may require the Debtor to promptly assemble any
tangible Collateral and make it available to the Secured Party at a place to be
designated by the Secured Party. The Secured Party may occupy any premises owned
or leased by the Debtor where the Collateral is assembled for a reasonable
period in order to effectuate its rights and remedies hereunder or under law,
without obligation to the Debtor with respect to such occupation. The Secured
Party shall have no obligation to take any action to assemble or otherwise take
control of the Collateral, whether for the purposes of sale or otherwise.
The Secured Party may take any action permitted under the Credit
Agreement or the other Loan Documents including declaring the unpaid portion of
the Secured Obligations to be immediately due and payable under the terms of the
Credit Agreement.
Foreclosure.
-----------
The Secured Party may foreclose on the Collateral in any manner
permitted by the courts of or in the State of New York or the State in which any
Collateral is located. If the Secured Party should institute a suit for the
collection of the Secured Obligations and for the foreclosure of this Agreement,
the Secured Party may at any time before the entry of a final judgment dismiss
the same, and take any other action permitted by this Agreement.
The Secured Party may exercise all the rights and remedies of a
secured party under the UCC, including foreclosure.
If, in the opinion of the Secured Party, there is any question that a
public or semipublic sale or distribution of any Collateral will violate
any state or federal securities law, the Secured Party in its discretion
(A) may offer and sell securities privately to purchasers who will agree to
take them for investment purposes and not with a view to distribution and
who will agree to imposition of restrictive legends on the certificates
representing the security or (B) may, if lawful, sell such securities in an
intrastate offering under Section 3(a)(11) of the Securities Act of 1933,
as amended, and no sale so made in good faith by the Secured Party shall be
deemed to be not "commercially reasonable" because so made. Debtor shall
cooperate fully with Secured Party in all respects in selling or realizing
upon all or any part of the Collateral. In addition, Debtor shall fully
comply with the securities laws of the United States, the State of New
York, and other states or jurisdictions and take such actions as may be
necessary to permit the Secured Party to sell or otherwise dispose of any
securities pledged hereunder in compliance with such laws.
The Secured Party may sell any Collateral at public or private sale,
at the office of the Secured Party or elsewhere, for cash or credit and
upon such other terms as the Secured Party deems commercially reasonable.
The Secured Party may sell any Collateral at one or more sales, and the
security interest granted hereunder shall remain in
-42-
effect as to the unsold portion of the Collateral. If notice is required by
law, the Debtor hereby deems ten days' advance notice of the time and place
of any public or private sale reasonable notification, recognizing that if
the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, shorter notice may be
reasonable. The Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Secured
Party may adjourn any sale by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was adjourned. In the event that any sale hereunder
is not completed or is defective in the opinion of the Secured Party, the
Secured Party shall have the right to cause subsequent sales to be made
hereunder. Any statements of fact or other recitals made in any xxxx of
sale, assignment, or other document representing any sale hereunder,
including statements relating to the occurrence of an Event of Default,
acceleration of the Secured Obligations, notice of the sale, the time,
place, and terms of the sale, and other actions taken by the Secured Party
in relation to the sale shall be conclusive evidence of the truth of the
matters so stated. The Secured Party may delegate to any agent the
performance of any acts in connection with any sale hereunder, including
the sending of notices and the conduct of the sale.
Application of Proceeds. Unless otherwise specified herein, any cash proceeds
-----------------------
received by the Secured Party from the sale of, collection of, or other
realization upon any part of the Collateral or any other amounts received by the
Secured Party hereunder shall be applied to the Secured Obligations as directed
by the Secured Party.
Waiver of Certain Rights. To the full extent the Debtor may do so, the Debtor
------------------------
shall not insist upon, plead, claim, or take advantage of any law providing for
any appraisement, valuation, stay, extension, or redemption, and the Debtor
hereby waives and releases the same, and all rights to a marshaling of the
assets of the Debtor, including the Collateral, or to a sale in inverse order of
alienation in the event of foreclosure of the liens and security interests
hereby created. The Debtor shall not assert any right under any law pertaining
to the marshaling of assets, sale in inverse order of alienation, the
administration of estates of decedents or other matters whatever to defeat,
reduce, or affect the right of the Secured Party under the terms of this
Agreement.
Miscellaneous.
--------------
General. The miscellaneous provisions contained in Article XI of the Credit
-------
Agreement are incorporated herein as if fully set forth herein. This Agreement
may be executed in multiple counterparts each of which shall constitute one and
the same agreement.
Addresses for Notices. All notices and other communications provided for
---------------------
hereunder shall be in the manner and to the addresses set forth in the Credit
Agreement.
5.3 Choice of Law.
-------------
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF NEW YORK applicable to agreements made and to be
performed entirely within such State; PROVIDED THAT THE SECURED PARTY SHALL
--------
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
-00-
XXXXXX XX XXX XXXXX XX XXX XXXX SITTING IN NEW YORK COUNTY OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE SECURED PARTY AND THE DEBTOR CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE SECURED PARTY AND EACH DEBTOR IRREVOCABLY WAIVE ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE SECURED PARTY AND EACH DEBTOR WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
5.4 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
--------------------------------
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
-44-
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
Executed as of the date first above written.
COINSTAR, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
SCHEDULE I
to Pledge Agreement
Attached to and forming a part of that certain Pledge Agreement dated April
18, 2002, by Coinstar, Inc. a Delaware corporation, as Debtor, to the Secured
Party.
-------------------------------------------------------------------------------------------
Stock Issuer Class Stock Par Number Percentage of
of Certificate Value of Shares Outstanding
Stock No(s). and Issued
Stock Pledged
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------