Exhibit 10.11
EXECUTION COPY
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CAKEWALK BRE LLC, as
Issuer
ENTERTAINMENT FINANCE INTERNATIONAL, LLC,
as Lender
and
RZO CORPORATE ADMINISTRATION, INC.,
as Servicer
INDENTURE
Dated as of June 29, 1999
$5,500,000
10.09% SENIOR ROYALTY-BACKED NOTES
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ....... 3
Section 1.1. Definitions .............................................. 3
Section 1.2. Acts Of Noteholders ...................................... 3
Section 1.3. Notices, etc. to Lender and Issuer ....................... 4
Section 1.4. Notices to Lender; Waiver ................................ 5
Section 1.5. Effect of Headings and Table of Contents ................. 5
Section 1.6. Successors and Assigns ................................... 5
Section 1.7. Severability ............................................. 5
Section 1.8. Benefits of Indenture .................................... 5
Section 1.9. Governing Law ............................................ 6
Section 1.10. Counterparts ............................................ 6
Section 1.11. Consents ................................................ 6
ARTICLE II. NOTE FORN ..................................................... 6
Section 2.1. Form Generally ........................................... 6
Section 2.2. Form of Note ............................................. 6
ARTICLE III. THE NOTES ....................................................10
Section 3.1. Designation of Notes; Certain Related Provisions .........10
Section 3.2. Denominations ............................................10
Section 3.3. Execution, Delivery and Dating ...........................10
Section 3.4. Registration, Registration of Transfer and Exchange ......11
Section 3.5. Limitation on Transfer and Exchange ......................12
Section 3.6. Mutilated, Destroyed, Lost or Stolen Notes ...............12
Section 3.7. Payment of Principal and Interest ........................13
Section 3.8. Persons Deemed Owners ...................................14
Section 3.9. Cancellation .............................................14
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ARTICLE IV. DELIVERY OF THE NOTES .........................................14
Section 4.1. General Provisions .......................................14
Section 4.2. Security for Notes ......................................15
ARTICLE V. SATISFACTION AND DISCHARGE ....................................15
Section 5.1. Satisfaction and Discharge of Indenture ..................15
Section 5.2. Application of Trust Money ...............................16
Section 5.3. Discharge of Security Interest ...........................16
ARTICLE VI. REMEDIES ......................................................17
Section 6.1. Events of Default ........................................17
Section 6.2. Acceleration of Maturity, Rescission and Annulment .......18
Section 6.3. Remedies .................................................19
Section 6.4. Lender May File Claim ....................................20
Section 6.5. Lender May Enforce Claims without Possession of Notes ....21
Section 6.6. Allocation of Money Collected ............................21
Section 6.7. Unconditional Right of Lender to Receive Principal and
Interest ...........................................22
Section 6.8. Restoration of Rights and Remedies .......................22
Section 6.9. Rights and Remedies Cumulative ...........................22
Section 6.10. Delay or Omission Not Waiver ............................23
Section 6.11. Waiver of Past Defaults .................................23
Section 6.12. Undertaking for Costs ...................................23
Section 6.13. Waiver of Stay or Extension Laws ........................23
Section 6.14. Sale of Collateral ......................................24
Section 6.15. Action on Notes .........................................25
Section 6.16. Issuer Bankruptcy .......................................25
ARTICLE VII. [INTENTIONALLY OMITTED] ......................................25
ARTICLE VIII. CONSOLIDATION AND MERGER ....................................25
Section 8.1. Issuer May Not Consolidate, etc ..........................25
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ARTICLE IX. SUPPLEMENTAL INDENTURES .......................................25
Section 9.1. Supplemental Indentures Only with Consent of Noteholders .25
Section 9.2. Execution of Supplemental Indentures .....................26
Section 9.3. Effect of Supplemental Indentures ........................27
Section 9.4. Reference in Notes to Supplemental Indenture .............27
Section 9.5. Solicitation of Holders of Notes .........................27
ARTICLE X. REDEMPTION OF NOTES ............................................28
Section 10.1. Redemption at the Option of the Issuer; Election
To Redeem ...............................................28
Section 10.2. Notice of Redemption by the Issuer ......................28
Section 10.3. Deposit of the Redemption Price .........................28
Section 10.4. Notes Payable on Redemption Date ........................29
Section 10.5. Matching Right ..........................................29
ARTICLE XI. REPRESENTATIONS, WARRANTIES AND COVENANTS .....................30
Section 11.1. Payment of Principal and Interest .......................30
Section 11.2. Maintenance of Office or Agency .........................30
Section 11.3. Money for Note Payments To Be Held in Trust .............30
Section 11.4. Co-Existence ............................................31
Section 11.5. Protection of Collateral ................................31
Section 11.6. Annual Opinion as to Collateral .........................32
Section 11.7. Negative Covenants ......................................32
Section 11.8. Statement as to Compliance ..............................33
Section 11.9. Investment Company Act ..................................34
Section 11.10. Limited Purpose ........................................34
Section 11.11. Issuer Ownership .......................................34
Section 11.12. Nonconsolidation .......................................34
Section 11.13. Enforcement of Transaction Documents ...................35
Section 11.14. Representations and Warranties .........................35
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Section 11.15. Gross Receipts ..........................................41
Section 11.16. Submission to Jurisdiction ..............................41
ARTICLE XII. ACCOUNTS, ACCOUNTINGS AND RELEASES ...........................41
Section 12.1. Collection of Money ......................................41
Section 12.2. Accounts .................................................41
Section 12.3. Repurchase of Collateral .................................43
Section 12.4. Collateral ...............................................44
Section 12.5. Opinion of Counsel .......................................44
ARTICLE XIII. APPLICATION OF MONIES .......................................45
Section 13.1. Disbursements of Monies out of Collection Account ........45
Section 13.2. Disbursement of Monies out of Reserve Fund ...............46
Section 13.3. Eligible Investments .....................................46
Section 13.4. Improper Payments ........................................47
Section 13.5. Third Party Beneficiaries ................................47
APPENDIX A Standard Definitions
EXHIBIT A Form of Assignment of Note
EXHIBIT B Form of Investment Letter
EXHIBIT C Form of Rule 144A Representation Letter
EXHIBIT D Substitute Form W-9
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This INDENTURE (as amended from time to time as permitted hereby,
the "Indenture") is dated as of June 29, 1999, and is by and among CAKEWALK BRE
LLC, a New York limited liability company (together with its permitted
successors and assigns, the "Issuer"), Entertainment Finance International,
LLC, a Delaware limited liability Company, as lender (together with its
permitted successors and assigns, the "Lender") and RZO Corporate
Administration, Inc., a New Jersey Corporation (together with its permitted
successors and assigns, the "Servicer").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of a single class of Royalty-Backed Notes
(as the same may be amended pursuant to the terms hereof, the "Notes")
The following table sets forth the designation, type, Note Interest
Rate and aggregate Initial Note Principal Balance for the Notes.
Initial
Note Note
Type Interest Principal
---- Rate Balance
---- -------
Senior 10.09% $5,500,000
All covenants and agreements made by the Issuer herein are for the
benefit and security of the Noteholders. The Issuer is entering into this
Indenture, and the Lender is accepting the Grant created hereby on behalf of
itself and any subsequent Holder of Notes, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged.
GRANTING CLAUSES
The Issuer hereby Grants to the Holders of the Notes a lien upon and
a security interest in all of the Issuer's right, title and interest (but none
of the obligations) in and to the following (collectively, the "Collateral"),
subject, however, in each case, to any applicable Impositions on Rights:
(a) the Issuer's entire worldwide right, title and interest in and
to any and all of the Assets, whether such rights were acquired by the Issuer
under Section 4 or under Section 15 of the Capital Contribution Agreement;
(b) all cash, securities, instruments and other property held from
time to time in the Collection Account or the Reserve Fund or otherwise
transferred to the Lender hereunder;
(c) the Contribution Agreement, the Management Agreement and any
other material agreements to which the Issuer is a party, including, without
limitation, bills of sale, in each case as the same may be modified, amended,
supplemented or restated from time to time;
(d) all books and records concerning the foregoing property
(including without limitation all tapes, disks and related items containing any
such information);
(e) all other assets of the Issuer of any kind or nature whether now
owned or hereafter acquired; and
(f) all proceeds of the foregoing of any nature whatsoever,
including without limitation proceeds and the conversion, voluntary or
involuntary, of any thereof.
Such Grants are only made, however, in trust, solely to secure (i)
the Notes equally and ratably without prejudice, priority or distinction among
the Notes by reason of difference in time of delivery or otherwise, (ii) the
payment of all other sums payable under this Indenture, and (iii) compliance
with the provisions of this Indenture, all as provided in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Issuer shall not, other than as required by
applicable law, be released from any of its obligations under any of the
Collateral, and the Lender shall have no obligation or liability under any
Collateral by reason of or arising out of the assignment hereunder, nor shall
the Lender be required or obligated in any manner to perform or fulfill any
obligations of the Issuer under or pursuant to any of the Collateral or such
other documents or to make any payment, subject, however, to any applicable
Imposition on Rights, or to make any inquiry as to the nature or sufficiency of
any payment received by them, or present or file any claim, or take any action
to collect or enforce the payment of any amounts which may have been assigned to
them or to which they may be entitled at any time or times.
The Issuer does hereby warrant and represent that (i) except for
Impositions on Rights, it has not permitted and hereby covenants that it will
not permit the creation of any lien other than the lien of this Indenture with
respect to any part of the Collateral, so long as this Indenture shall remain in
effect, to anyone other than the Lender, and that it will not, except as
provided in this Indenture and the Management Agreement, without the prior
written consent of the Lender, enter into any agreement amending or
supplementing any of the Collateral, execute or grant any waiver or modification
of, or consent under, the terms of any
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of the Collateral, settle or compromise any claim arising under any of the
Collateral or submit or consent to the submission of any dispute, difference or
other matter arising under or in respect of any of the Collateral, to
arbitration thereunder, and (ii) the representations and warranties of the
Issuer contained in this Indenture are true and correct.
The Lender acknowledges such Grant, and accepts the same in
accordance with the provisions of this Indenture.
The Lender agrees to maintain in its possession each item of
Collateral constituting an instrument or chattel paper under the UCC delivered
to it unless and until such item of Collateral is released from the lien hereof
pursuant to Article V hereof.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. Definitions
(a) Except as otherwise expressly provided herein or unless the
context otherwise requires, the capitalized terms used in the Indenture shall
have the respective meanings specified in the Standard Definitions set forth as
Appendix A hereto, which is incorporated herein by this reference. The
definitions of such terms are equally applicable both to the singular and plural
forms of such terms.
(b) All references in this instrument to designated "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated Articles,
Sections, Subsections and other subdivisions of this instrument as originally
executed or if amended or supplemented, as so amended and supplemented. The
words herein, "hereof," "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section, Subsection
or other subdivision.
(c) All calculations of interest are determined on the basis of a
360 day year of twelve 30-day months.
Section 1.2. Acts Of Noteholders
(a) If, at any time, there is more than one Holder of the Notes, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by the Holders of 51% of
the Note Principal Balance of Notes Outstanding may be embodied in and evidenced
by
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one or more instruments of substantially similar tenor signed by such
Noteholders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered where it is herein expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Holders and the Issuer, if made in the manner provided in this Section 1.2.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Lender reasonably
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Note.
Section 1.3. Notices, etc. to Lender and Issuer
Except as otherwise provided, any request, demand, authorization,
direction, notice, consent, waiver or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with
(l) the Lender by the Issuer shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to
or with the Servicer at the Servicer's Office; or
(2) the Issuer by the Servicer or the Lender shall be
sufficient for every purpose hereunder if in writing and mailed,
registered mail return receipt requested or by overnight courier or
hand delivery, to the Issuer addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, with a
copy to ▇▇▇▇ Marks & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq. or at any other address
previously furnished in writing to the Servicer or the Lender by the
Issuer.
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Section 1.4. Notices to Lender; Waiver
Where this Indenture provides for notice to Lender of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and by registered mail return receipt requested or by
overnight courier or hand delivery, to the Lender, at its address as it appears
on the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. Any notice which is
mailed in the manner herein provided shall be deemed effective upon receipt or
refusal.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by the Lender shall be filed with the Servicer, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to the Lender when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be reasonably satisfactory to the Servicer shall be deemed
to be a sufficient giving of such notice.
Section 1.5. Effect of Headings and Table of Contents
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.6. Successors and Assigns
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
Section 1.7. Severability
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.8. Benefits of Indenture
Nothing in this Indenture or in the Notes, expressed or implied,
shall give to any Person, other than the parties hereto, and any of their
successors hereunder and the Noteholders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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Section 1.9. Governing Law
This Indenture and each Note shall be construed in accordance with
and governed by the laws of the State of New York applicable to agreements made
and to be performed therein.
Section 1.10. Counterparts
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 1.11. Consents
Any consent of any of the parties hereto required pursuant to this
Agreement shall not be unreasonably withheld or delayed.
ARTICLE II.
NOTE FORM
Section 2.1. Form Generally
The Notes shall be in substantially the form set forth in Section
2.2 with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may be required to comply with the rules of any
securities exchange on which the Notes may be listed, or as may, consistently
herewith, be determined by the officers executing such Notes, as evidenced by
their execution of the Notes. Any portion of the text of any Note may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Note.
Section 2.2. Form of Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR UNDER ANY STATE SECURITIES LAWS AND THE ISSUER HAS NOT
BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"INVESTMENT COMPANY ACT"), AND THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER
THE SECURITIES ACT (INCLUDING TRANSFER MADE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT) AND APPLICABLE STATE SECURITIES LAWS.
THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS
DESCRIBED HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE PRINCIPAL BALANCE OF THIS
NOTE AT ANY TIME MAY BE LESS THAN THE
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AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE ASCERTAINED ONLY BY OBTAINING A
CONFIRMATION THEREOF FROM THE NOTE REGISTRAR NAMED HEREIN OR ITS SUCCESSOR.
No. [ ] Initial Note Principal
Balance of the
Notes: $5,500,000
Senior
Initial Note Principal
Balance of this Note:
$5,500,000
10.09% ROYALTY-BACKED NOTE
ISSUE DATE: June 29, 1999
MATURITY DATE: June 15, 2009
CAKEWALK BRE LLC, a limited liability company duly organized and
existing under the laws of the State of New York (the "Issuer," which term
includes any successor entity under the Indenture referred to below), for value
received, hereby promises to pay to ENTERTAINMENT FINANCE INTERNATIONAL, LLC, or
registered assigns (the "Lender"), the principal sum of FIVE MILLION FIVE
HUNDRED THOUSAND Dollars ($5,500,000) payable in (i) a payment of interest only
accrued from the Closing Date to, but not including, July 15, 1999 (the "Initial
Payment Date"), payable on the Initial Payment Date, (ii) eleven (11) monthly
payments of interest only commencing on August 15, 1999 and continuing on the
tenth day of each month thereafter to and including June 15, 2000, (iii)
thereafter, one hundred seven (107) equal monthly installments of principal and
interest in the amount of $77,701.07, in each case in the manner set forth in
the Indenture beginning on July 15, 2000, and continuing on the 15th day of each
month thereafter to and including May 15, 2009 and (iv) on June 15, 2009, a
final installment of principal and interest sufficient in amount to repay the
entire unpaid principal balance of this Note; except that if any such 15th day
is not a Business Day, the Business Day immediately following (each a "Payment
Date"). This Note shall bear interest on the outstanding unpaid principal
balance at the rate of 10.09% per annum, determined on the basis of a 360 day
year of twelve 30-day months; provided, however, that interest on any amount of
principal or interest that is not timely paid when due shall accrue interest
until paid at the rate equal to 2.50% in excess of the rate set forth above;
and, provided further, that if a Default shall have occurred under, and as
defined in, the Indenture, interest shall accrue from that time forward at the
Default Rate until such Default is cured. The interest and principal so payable
on any Payment Date
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shall, as provided in the Indenture, be paid to the Person in whose name this
Note is registered in the Note Register on the Record Date for such Payment Date
which shall be the close of business on the last day of the month prior to such
Payment Date (whether or not a Business Day)
The principal of and interest on this Note are payable by check
payable to the Person whose name appears as the Registered Holder of this Note
on the Note Register on the Record Date for the Payment Date, or, under
circumstances specified in the Indenture, by wire transfer in immediately
available funds to the account specified in writing by such Registered Holder at
least ten (1O) Business Days prior thereto or as otherwise provided in the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. Funds
represented by checks returned undelivered shall be held for payment to the
Person entitled thereto, subject to the terms of the Indenture, at the office or
agency in the United States of America designated as such by the Issuer for such
purpose pursuant to the Indenture.
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Royalty-Backed Notes (herein called the "Notes") issued under
an Indenture, dated as of June 29, 1999 (herein called the "Indenture"),
between the Issuer, Entertainment Finance International, LLC, as lender (the
"Lender") and RZO Corporate Administration, Inc., as servicer (the "Servicer"),
to which Indenture reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Lender, the Servicer and the Holders of the
Notes, and the terms upon which the Notes are, and are to be, delivered. All
terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture. Certain provisions of the Indenture
are described in this Note. The Note shall govern in the event that the
provisions of the Indenture are inconsistent herewith.
As provided in the Indenture, the Notes are secured by, among other
things, certain royalty payments and related assets having an Investment Value
(as defined in the Indenture) in excess of 100% of the Initial Note Principal
Balance of the Notes and by certain other collateral (the "Collateral")
described in the Indenture. The Notes are equally and ratably secured by the
Collateral pledged therefor to the extent provided by the Indenture.
Unless earlier declared due and payable by reason of an Event of
Default, the Notes are payable only at the time and in the manner provided in
the Indenture and are not redeemable or prepayable at the option of the Issuer
before such time except that the Notes shall be redeemable at the option of the
Issuer in whole, but not in part, on any Payment Date. The Notes shall be
redeemed at a redemption price equal to the aggregate Outstanding Note Principal
Balance thereof, plus accrued interest thereon
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through the redemption date, plus any applicable premium payable thereon
pursuant to this Indenture. If an Event of Default (as defined in the Indenture)
shall occur and be continuing, the principal of all the Notes may become or be
declared due and payable in the manner and with the effect provided in the
Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Note
Register of the Issuer, upon surrender of this Note for registration of transfer
at the office or agency of the Servicer in the United States of America, duly
endorsed by, or accompanied by a written instrument of transfer in form and
content satisfactory to the Issuer and the Servicer duly executed by, the Holder
hereof or its attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate Initial Note
Principal Balance, shall be issued to the designated transferee or transferees.
Prior to due presentment for registration of transfer of this Note,
the Issuer, the Servicer and any agent of the Issuer or the Servicer may treat
the Person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes
whether or not this Note be overdue, and neither the Issuer, the Servicer, nor
any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Lender. The Indenture also contains
provisions permitting the Lender to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults and their consequences
under the Indenture. Any such consent or waiver by the Lender shall be
conclusive and binding upon the Lender and upon all future holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note.
The Notes are issuable only in registered form without coupons in
such authorized denominations as provided in the Indenture and subject to
certain limitations therein set forth. The Notes are exchangeable for Notes of a
like Initial Note Principal Balance of a different authorized denomination, as
requested by the Holder surrendering same.
This Note and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
conflicts of laws rules.
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No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note in
accordance with the Indenture at the times, place and rate, and in the coin or
currency, herein prescribed.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its President or a Vice President.
By: CAKEWALK BRE LLC
By: ___________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive
Officer and President
ARTICLE III.
THE NOTES
Section 3.1. Designation of Notes; Certain Related Provisions
The Notes shall be designated generally as the "Royalty-Backed
Notes" of the Issuer.
The Maturity Date of the Notes shall be June 15, 2009.
The aggregate Initial Note Principal Balance of the Notes that may
be delivered hereunder is limited to $5,500,000, except for Notes delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes,
pursuant to Sections 3.4, 3.6 or 9.4 hereof.
Section 3.2. Denominations
The Notes are available in a minimum denomination of $1,000,000 and
integral multiples of $100,000 in excess thereof.
Section 3.3. Execution, Delivery and Dating
The Notes shall be executed on behalf of the Issuer by the President
or one of its Vice Presidents which may be in facsimile form or otherwise
reproduced thereon and attested by its Secretary or one of the Assistant
Secretaries. The signature of any of these officers on the Notes may be manual
or facsimile. The Notes may be printed, lithographed, typewritten, mimeographed
or otherwise produced.
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Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the delivery of such Notes or did not hold such offices at the
date of delivery of such Notes.
Each Note shall bear on its face the Issue Date and be dated as of
the date of its delivery.
Section 3.4. Registration, Registration of Transfer and Exchange
The Servicer is hereby appointed as registrar of the Notes (the
"Note Registrar") and the agent of the Issuer for transfer of the Notes (the
"Transfer Agent"). The Lender is hereby appointed as the agent of the Issuer
for the payment of the Notes (the "Paying Agent"). The Servicer and the Lender
each accept such appointments. The Servicer in its capacity as the Note
Registrar shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Servicer shall
provide for the registration of Notes and the registration of transfers of
Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Servicer to be maintained as provided in Section 11.2,
the Issuer shall execute and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like Initial Note Principal Balance.
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denominations and of a like Initial Note Principal Balance,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and deliver
the Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
entitled to the same benefits and subject to all the terms and conditions of
this Indenture, as the Notes surrendered upon such registration of such transfer
or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Servicer) be duly endorsed,
or be accompanied by a written instrument of transfer in form and content
satisfactory to the Issuer and the Servicer duly executed, by the Holder thereof
or his attorney duly authorized in writing. The form of assignment set forth at
Exhibit A hereof shall be deemed to be satisfactory for purposes of the last
preceding sentence.
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No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Servicer may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 9.4 not involving any
registration of transfer.
Prior to any sale or other disposition of any Note the Holder
transferring such Note will, at its election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Servicer in exchange for a new Note or
Notes pursuant to this Section.
Section 3.5. Limitation on Transfer and Exchange
The Notes have not been registered or qualified under the 1933 Act
or the securities laws of any state. No transfer of any Note shall be made
unless such transfer is made pursuant to an effective registration statement
under the 1933 Act and registration or qualification under applicable state
securities laws or is exempt from such registration or qualification. In the
event that a transfer is to be made in reliance upon an exemption from the 1933
Act and applicable state securities laws, the Servicer shall require, in order
to assure compliance with the 1933 Act, that the prospective transferee certify
to the Issuer and the Servicer in writing the facts surrounding the transfer in
the form of either Exhibit B or Exhibit C hereto, provided, however, such
certificates will not be required for the transfers by the initial purchaser.
Neither the Issuer nor the Servicer is obligated to register or qualify the
Notes under the 1933 Act or any other securities law.
In addition, the Servicer or other Note Registrar shall not permit a
transfer of a Note if such transfer would result in the Issuer having more than
ninety-nine (99) registered Noteholders as shown in the Note Register.
The Issuer and the Servicer shall have no liability to the
Noteholders or otherwise arising from a transfer of any such Note in reliance
upon the Investment Letter described in Exhibit B or the Rule 144A
Representation Letter described in Exhibit C.
Section 3.6. Mutilated, Destroyed, Lost or Stolen Notes
If (i) any mutilated Note is surrendered to the Servicer, or the
Servicer receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Servicer such security or
indemnity as may be required by the Servicer to indemnify and hold the Issuer
and the Servicer harmless (which in the case of any holder that is, or is a
subsidiary of, a bank or other institutional buyer with a net
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worth of at least $50,000,000, and whose claims paying ability or long-term debt
is rated at least investment grade or better by a Rating Agency, need only be
such bank's or institutional buyer's unsecured written promise of indemnity),
then, in the absence of notice to the Issuer or the Note Registrar that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note of the same tenor and Initial Note Principal Balance,
bearing a number not contemporaneously outstanding; provided, however, that if
any such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable the Issuer in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Issuer or
the Servicer may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.7. Payment of Principal and Interest
The principal of and interest on the Notes are payable by wire
transfer in immediately available funds to the account specified in directions
delivered at least five (5) Business Days prior to such Payment Date by a
Registered Holder to the Person whose name appears as the Registered Holder of
such Note on the Record Date on the Note Register. Such payment shall be in such
coin or currency of the United States of America as at the time of tender is
legal tender for the payment of public and private debts. Payments pursuant to
Section 13.1 shall be made to each Noteholder, if there is more than one, based
on the aggregate of the Percentage Interests represented by Notes held by such
Noteholder.
To prevent backup withholding on payments made with respect to the
Notes, each Noteholder is required to provide the Servicer with (i) the
Noteholder's correct TIN by completing the form at Exhibit D (Substitute Form
W-9), certifying that the TIN provided on the Substitute Form W-9 is correct (or
that such Noteholder is awaiting a TIN) and that (A) such Noteholder is exempt
from backup withholding, (B) the Noteholder has not been
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notified by the IRS that the Noteholder is subject to backup withholding as a
result of failure to report all interest or dividends or (C) the IRS has
notified the Noteholder that the Noteholder is no longer subject to backup
withholding, or (ii) if applicable, an adequate basis for exemption. A Foreign
Noteholder may qualify as an exempt recipient by submitting to the Servicer a
properly completed IRS Form W-8, signed under penalties of perjury, attesting to
that Noteholder's exempt status, and (iii) any other document and to take any
other action required by applicable law or tax regulation of the United States
or any state thereof.
Section 3.8. Persons Deemed Owners
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Servicer and any agent of the Issuer or the Servicer may treat the
Person in whose name any Note is registered as the owner of such Note for the
purpose of receiving payments of principal of and interest on such Note (subject
to Section 3.7) and for all other purposes whatsoever, whether or not such Note
be overdue, and neither the Issuer, the Servicer nor any agent of the Issuer or
the Servicer shall be affected by notice to the contrary.
Section 3.9. Cancellation
All Notes surrendered to the Servicer following payment or for
registration of transfer or exchange (including Notes surrendered to any Person
other than the Servicer which shall be delivered to the Servicer) shall be
promptly canceled and destroyed by the Servicer in accordance with its customary
procedures.
ARTICLE IV.
DELIVERY OF THE NOTES
Section 4.1. General Provisions
The Notes shall be executed by the Issuer and thereupon the same
shall be delivered to the Lender upon Issuer Order and upon compliance with the
conditions of Section 4.2, and upon delivery to the Servicer of the following:
(a) a certificate, certified by the Issuer, authorizing the
execution and delivery of this Indenture and the Notes;
(b) either (i) a certificate or other official document evidencing
the due authorization, approval or consent of any government body or bodies, at
the time having jurisdiction in the premises, and that the authorization,
approval or consent of no other governmental body is required for valid issuance
of the
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Notes, or (ii) an Opinion of Counsel that no such authorization, approval or
consent of any governmental body is required;
(c) an Officers' Certificate from the Issuer stating that the Issuer
is not, as of the Issue Date, in Default under this Indenture and that the
issuance of the Notes will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the Issuer's
organizational documents or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Issuer is a party or by which it is bound,
or any order of any court or administrative agency entered in any proceeding to
which the Issuer is a party or by which it may be bound or to which it may be
subject; and that all conditions precedent provided in this Indenture relating
to the delivery of the Notes have been complied with; and
(d) such other documents as the Servicer may reasonably require.
Section 4.2. Security for Notes
The Notes shall be executed by the Issuer upon Issuer Order and
upon: (a) establishment of the Collection Account and the Reserve Fund by the
Servicer on behalf of the Noteholders; and
(b) delivery by the Issuer to the Lender, and receipt by the Lender,
of the collateral assignment of all of the Issuer's right, title, and interest
in and to the Collateral securing the Notes.
ARTICLE V.
SATISFACTION AND DISCHARGE
Section 5.1. Satisfaction and Discharge of Indenture
This Indenture shall cease to be of further effect (except as to any
surviving rights of indemnification, payment of fees and registration of
transfer and exchange or payment) with respect to the Notes, on demand of and at
the expense of the Issuer, the Lender shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes and shall pay, assign, transfer and deliver to the Issuer upon Issuer
Order all cash, securities and all other property held by it as part of the
Collateral (except for amounts required to pay and discharge the entire
indebtedness of the Notes), when
(a) either
(A) all Notes theretofore delivered (other than (i) Notes
which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section
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3.6, and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 11.3) have been delivered to the Servicer for
cancellation; or
(B) all Notes not theretofore delivered to the Servicer for
cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be deposited with the Servicer,
in trust for the purpose, an amount sufficient to pay and discharge
the entire indebtedness on such Notes together with all accrued
interest thereon not theretofore delivered to the Servicer for
cancellation;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Servicer an Officers'
Certificate stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture with respect to the Notes
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the Issuer's obligations in Sections 11.2 and 11.3, the Servicer's obligations
in Section 5.2 and the rights and immunities of the Servicer under this
Indenture shall survive until the Notes are no longer Outstanding. Thereafter,
the obligations of the Servicer in Section 5.2 and the rights and immunities of
the Servicer under this Indenture shall survive the discharge of this Indenture
or the earlier resignation or removal of the Servicer.
Section 5.2. Application of Trust Money
All monies deposited with the Servicer pursuant to Section 5.1 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Servicer; but such money need not be segregated from other funds except to
the extent required herein or to the extent required by law.
Section 5.3. Discharge of Security Interest
Upon satisfaction and discharge of the Indenture as specified in
Section 5.1, the Lender shall execute a release of the Collateral provided by,
and at the expense of, the Issuer. Further, on demand of and at the expense of
the Issuer and upon being supplied with instruments appropriate for the purpose,
the Lender shall execute and the Issuer shall file all documents (including
without limitation UCC Form 3) necessary to discharge
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all liens, mortgages, chattel mortgages and other security interests filed with
any governmental board or body with respect to the Collateral, and the Lender
shall otherwise cooperate in any way reasonably necessary to restore full
unencumbered title in the Collateral to the Issuer or its designee.
ARTICLE VI.
REMEDIES
Section 6.1. Events of Default
"Event of Default" wherever used herein means any one of the
following events (whatever the reason for such Event of Default and without
regard to whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
when used with respect to the Notes shall mean the same occurring at any time
while there are Notes Outstanding:
(l) (a) the failure by Cakewalk LLC to comply with its obligations
under Section 3#(I) (d) (i) of the Contribution Agreement, or (b) the
failure of the Issuer to comply with the provisions of Section 11.15 of
this Indenture, or (c) the failure of the Manager to comply with Article 4
of the Management Agreement;
(2) failure of the Lender to receive timely payments of principal
and interest pursuant to the terms and provisions of the Notes (other than
as a result of the failure by the Servicer or the Lender to distribute
funds in the Collection Account as provided in Section 13.1)
(3) default in the performance, or breach of any covenant of the
Issuer in any Transaction Document to which it is a party and continuance
of such default or breach for a period of 30 days (15 days with respect to
any default or breach of any of the covenants set forth in Section 11.12
hereof) after the earlier of (i) the date on which the Issuer shall first
have knowledge of such default or breach and (ii) the date on which
written notice, specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder
shall have been given to the Issuer by the Servicer or to the Issuer and
the Servicer by the Holders of not less than 25% of the aggregate Note
Principal Balance of the Outstanding Notes;
(4) breach of any representation or warranty of the Issuer in this
Indenture as of the date such representation or warranty was made which
has a material adverse effect on the interests of the Lender;
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(5) an Event of Default shall have occurred under, and as defined
in, the Management Agreement;
(6) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Issuer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar law,
or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or of any substantial
part of its property, or ordering the winding up or liquidation of the
affairs of the Issuer and the continuance of any such decree or order
unstayed and in effect for a period of 90 consecutive days; or
(7) the commencement by the Issuer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar law,
or the consent by the Issuer to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or any substantial part of its
property or the making by the Issuer of an assignment for the benefit of
creditors or the failure by the Issuer generally to pay its debts as such
debts become due or the taking of partnership action by the Issuer in
furtherance of any of the foregoing.
(8) the occurrence of a Deficiency Trigger Event which is not cured
within 30 days of the immediately following Payment Date.
Section 6.2. Acceleration of Maturity, Rescission and Annulment
If an Event of Default of the kind specified in clauses (5), (6) and
(7) of Section 6.1 occurs, the unpaid principal amount of all of the Notes shall
automatically become immediately due and payable without notice, presentment or
demand of any kind. If an Event of Default (other than an Event of Default of
the kind specified in clauses (5), (6) and (7) of Section 6.1) occurs and is
continuing, then and in every such case the Lender may declare the principal of
all of the Notes to be immediately due and payable, by a notice in writing to
the Issuer and the Servicer and upon any such declaration (in accordance with
this sentence or the preceding sentence) the Notes shall become immediately due
and payable at the Redemption Price.
At any time after such a declaration of acceleration has been made,
but before any Sale of the Collateral has been made or a judgment or decree for
payment of the money due has been obtained by the Lender as hereinafter in this
Article provided, the Lender by written notice to the Issuer and the
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Servicer, may rescind and annul such declaration and its consequence if
(1) the Issuer has paid or deposited with the Servicer a sum
sufficient to pay
(A) all overdue installments of interest on all Notes,
(B) the principal of any of the Notes which has become due
other than by such declaration of acceleration and interest thereon
at the Note Interest Rate,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest on the Notes at the
rate specified therefor in the Notes,
(D) in connection with the preservation of the Collateral and
enforcement of its rights all sums paid or advanced by the Lender
hereunder and the compensation, expenses, disbursements and advances
of the Servicer, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of the Notes which have become due solely by such acceleration,
have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Subsequent to any such declaration of acceleration and so long as
such declaration and its consequences has not been rescinded and annulled, prior
to the exercise by the Lender of the remedies set forth in Section 6.3, the
Lender shall give the Rating Agencies ten days notice of its intention to take
such actions.
Section 6.3. Remedies
If an Event of Default shall have occurred and be continuing, the
Lender or the Servicer shall, at the written direction of the Lender, and
subject to Article VII herein, do one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Collateral
securing the Notes the monies adjudged due;
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(b) sell the Collateral or any portion thereof or rights or interest
therein, at one or more Sales called and conducted in any manner permitted by
law;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the portion of the
Collateral securing the Notes; and
(d) exercise any remedies of a secured party under the Uniform
Commercial Code or other applicable law and take any other appropriate action to
protect and enforce the rights and remedies of the Holders of the Notes
hereunder;
provided, however, that if there is more than one Holder of Outstanding Notes
and if less than all of the Holders of Outstanding Notes have approved a Sale of
the Collateral and if the proceeds of any such Sale will be less than the amount
required to retire all of the Outstanding Notes in full, then, in any such
event, the Lender may not sell or otherwise liquidate any of the Collateral
unless after consultation with an accounting firm acceptable to the Noteholders
or another Person approved by Act of the Noteholders of national reputation in
the field of appraisal of assets of the type constituting the Collateral, such
Person provides the Servicer with a written report that the proceeds of such
Sale reflect a reasonable approximation of the fair market value of the
Collateral. The Lender shall have no liability for any public Sale or private
Sale conducted in reliance upon the advice, with respect to the commercial
reasonableness of the sale, of a Person of national reputation in the field of
appraisal. In the event that the Servicer does not sell or otherwise liquidate
the Collateral, it shall continue to hold such Collateral and make distributions
therefrom pursuant to Article XIII hereof.
Section 6.4. Lender May File Claim
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial Proceeding, relating to the Issuer or any other obligor upon the
Notes or the property of the Issuer or of such other obligor or their creditors,
the Lender (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Lender shall have made any demand on the Issuer for the payment
of overdue principal or interest) shall be entitled and empowered, to intervene
in such proceeding or otherwise,
(i) to file and prove a claim for all amounts owing and unpaid in
respect of the Notes and to file such other papers or documents and take such
other action including participating as a member, voting or otherwise, in any
committee of creditors appointed in the matter, as may be necessary or advisable
in order to have the claims of the
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Lender (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lender, its agents and counsel) allowed
in such judicial Proceeding;
(ii) to petition for lifting of the automatic stay and thereupon to
foreclose upon the Collateral as elsewhere provided herein; and
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by the
Lender to make such payments to the Servicer, and to pay to the Lender any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Lender, its agents and counsel.
Section 6.5. Lender May Enforce Claims without Possession of Notes
All rights of actions and claims under this Indenture or the Notes
may be prosecuted and enforced by the Lender without the possession of any of
the Notes or the production thereof in any Proceeding relating thereto, and any
such Proceedings instituted by the Lender shall be brought in its own name, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Lender, its
agents and counsel, be for the benefit of the Holders of the Notes in respect of
which such judgment has been recovered applied to payments on the Notes to the
persons and in the order set forth in Section 6.6.
Section 6.6. Allocation of Money Collected
If the Notes have been declared due and payable following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Lender with respect to the Notes pursuant
to this Article (and any funds then held or thereafter received by the Lender)
shall be applied in the following order, at the date or dates fixed by the
Lender:
FIRST: To the payment of all amounts due the Servicer under the
Servicing Agreement;
SECOND: To the payment of accrued interest on and the Note Principal
Balance of the Notes, including interest (to the extent such interest has been
collected by the Lender or a sum sufficient therefor has been so collected and
payment thereof is legally enforceable at the rate prescribed therefor in the
Notes) on overdue installments of interest, ratably, without preference
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or priority of any kind, according to the amounts due and payable on the Notes;
THIRD: To the payment of all reasonable costs and expenses incurred
by the Lender in connection with the enforcement of its rights hereunder or
under the Notes, ratably, without preference or priority of any kind; and
FOURTH: To the payment of any surplus to or at the written direction
of the Issuer or any other person legally entitled thereto.
Section 6.7. Unconditional Right of Lender to Receive Principal and
Interest
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note as such principal and
interest becomes due and payable and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder; provided, however, that no Holder of any Note shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
Section 6.8. Restoration of Rights and Remedies
If the Lender has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Person who
instituted the Proceeding, then and in every such case the Issuer, the Lender
shall, subject to any determination in such Proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Issuer and the Lender shall continue as though no such
Proceeding has been instituted.
Section 6.9. Rights and Remedies Cumulative
No right or remedy herein conferred upon or reserved to the Lender
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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Section 6.10. Delay or Omission Not Waiver
No delay or omission of the Lender to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Lender may be
exercised from time to time, and as often as may be deemed expedient by the
Lender.
Section 6.11. Waiver of Past Defaults
The Lender may waive any past Default with respect to the Notes
hereunder and its consequences, except a Default
(l) described in Sections 6.1(5) and (6), or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected thereby.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture. The Lender shall transmit by mail to the Rating
Agencies and the Issuer notice of such waiver specifying the date on which the
Default was waived promptly after the occurrence of such waiver.
Section 6.12. Undertaking for Costs
All parties to the Indenture and the Lender by its acceptance of the
Notes shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Lender for any action taken, suffered or
omitted by it as Lender, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees against
any party litigant in such suit, having due regard to the merits and good faith
of the claims or defenses made by such party litigant; but the provisions of
this Section 6.12 shall not apply to any suit instituted by the Lender.
Section 6.13. Waiver of Stay or Extension Laws
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance by the Issuer under this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby
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expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Lender, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 6.14. Sale of Collateral
(a) The power to effect any sale (a "Sale") of any portion of the
Collateral pursuant to Section 6.3 shall not be exhausted by any one or more
Sales as to any portion of the Collateral remaining unsold, but shall continue
unimpaired until the entire Collateral securing the Notes shall have been sold
or all amounts payable under this Indenture with respect thereto shall have been
paid. Any sale conducted hereunder shall be completed in accordance with the
applicable terms and provisions of the New York State Uniform Commercial Code.
The Lender may from time to time postpone any Sale by public announcement made
at the time and place of such Sale. It is hereby expressly agreed that the
Lender is not limited to any amount fixed by law as compensation for any Sale,
so long as the same shall be reasonable.
(b) The Lender may bid for and acquire any portion of the Collateral
securing the Notes in connection with any Sale thereof. In lieu of paying cash
for the entire purchase price therefor, the Lender, after deducting the costs,
charges and expenses (including reasonable attorney's fees and expenses)
incurred by the Lender in connection with such Sale may make settlement for any
portion of the purchase price remaining by crediting against amounts owing on
the Notes held by it or other amounts owing to the Lender secured by this
Indenture, the portion of the net proceeds of such Sale to which the Lender
would be entitled hereunder.
(c) The Issuer covenants and agrees that ten Business Days prior
notice of a Sale of the entirety of the Collateral by a public Sale constitutes
commercially reasonable notice.
(d) The Servicer shall prepare and the Lender shall execute and
deliver an appropriate instrument of conveyance transferring its interest in any
portion of the Collateral in connection with a Sale thereof, which Sale shall be
at the expense of the Issuer. In addition, the Lender is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Collateral in connection with a Sale thereof
pursuant to the terms of this Indenture, and to take all action necessary to
effect such Sale. No purchaser or transferee at such a sale shall be bound to
ascertain the Lender's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.
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(e) Any amounts received by the Lender in connection with a public
or private sale pursuant this Section shall be deemed to be conclusive and
binding upon the parties hereto and the Lender shall have no liability in
respect hereto.
Section 6.15. Action on Notes
The Lender's right to seek and recover judgment on the Notes or
under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither
the lien of this Indenture nor any rights or remedies of the Lender shall be
impaired by the recovery of any judgment by the Lender against the Issuer or by
the levy of any execution under such judgment upon any portion of the Collateral
or upon any of the assets of the Issuer.
Section 6.16. Issuer Bankruptcy
The Lender, by its acceptance of the Notes shall be deemed to
agree, that it will not join in any proceeding to commence a case against the
Issuer under the Federal Bankruptcy Code or any other applicable bankruptcy,
insolvency or similar federal or state law.
ARTICLE VII.
[INTENTIONALLY OMITTED]
ARTICLE VIII.
CONSOLIDATION AND MERGER
Section 8.1. Issuer May Not Consolidate, etc.
The Issuer shall not consolidate or merge with or into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures Only with Consent of
Noteholders
With the written consent of the Lender or by Act of said Holders
delivered to the Issuer and the Servicer, the Issuer, when authorized by a Board
Resolution, and the Lender may enter into one or more supplemental indentures
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or modifying in any manner
the rights of the Holders of the Notes under this
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Indenture; provided, however, such amendment shall not, without the consent of
the Lender:
(l) reduce the Note Principal Balance of any Note or the Note
Interest Rate thereon or change the amount or priority or time of any
payment on any Note or any place of payment where, or the coin or currency
in which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment; or
(2) impair or adversely affect the Collateral except as otherwise
permitted herein; or
(3) modify or alter the definition of the term "Outstanding"; or
(4) modify or alter the provisions of the proviso to Section 6.3; or
(5) modify any of the provisions of this Section 9.1, except to
increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note; or
(6) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of a Collateral
or terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security afforded
by the lien of this Indenture.
Promptly after the execution by the Issuer and the Lender of any
supplemental indenture pursuant to this Section, the Issuer shall, if requested
by the Lender, mail to the Rating Agencies and each of the Holders of the Notes,
a notice setting forth in general terms the substance of such supplemental
indenture together with a copy of such supplemental indenture. Any failure of
the Issuer to mail such notice and copy, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.2. Execution of Supplemental Indentures
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Lender shall be entitled to be
supplied with, and prior to executing any supplemental indenture pursuant to
Section 9.1, the Lender shall require an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture.
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Section 9.3. Effect of Supplemental Indentures
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter delivered hereunder shall be bound thereby.
Section 9.4. Reference in Notes to Supplemental Indenture
Notes delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Issuer shall, bear a
notation in form approved by the Lender as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and delivered in exchange for
Outstanding Notes.
Section 9.5. Solicitation of Holders of Notes
(a) Solicitation. The Issuer shall provide each Noteholder
(irrespective of the amount of Notes then owned by it) with sufficient
information, at least five (5) Business Days in advance of the date a decision
is required, to enable such Holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of
the provisions hereof or of the Notes. The Issuer shall deliver to the Servicer
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Indenture and the Servicer shall
deliver copies of the same to each Noteholder promptly following the date on
which it is executed and delivered by the Issuer; provided, however, nothing in
this Section 9.5(a) shall, in the absence of affirmative consent of a
Noteholder, be construed as deemed consent.
(b) Payment. The Issuer will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any Noteholder as
consideration for or as an inducement to the entering into by any Noteholder of
any waiver or amendment of any of the terms and provisions hereof or of the
Notes unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Noteholder then Outstanding even if
such Noteholder did not consent to such waiver or amendment.
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ARTICLE X.
REDEMPTION OF NOTES
Section 10.1. Redemption at the Option of the Issuer; Election To
Redeem
The Notes are redeemable at the option of the Issuer in whole, but
not in part, at the Redemption Price, on any Payment Date (hereinafter referred
to as a "Redemption Date")
Installments of interest and principal due on or prior to a
Redemption Date shall continue to be payable to the Holders of Notes called for
redemption as of the relevant Record Dates according to their terms and the
provisions of Section 3.7. The election of the Issuer to redeem any Notes
pursuant to this Section shall be evidenced by a Board Resolution and an
Officer's Certificate directing the Servicer to make the payment of the
Redemption Price on all of the Notes to be redeemed from monies deposited with
the Servicer pursuant to Section 10.3.
Section 10.2. Notice of Redemption by the Issuer
Notice of redemption pursuant to Section 10.1 shall be given by
first class mail, postage prepaid, mailed not less than 45 days prior to the
applicable Redemption Date, to the Rating Agencies and to each Holder of Notes
whose Notes are to be redeemed, at its address in the Note Register.
All notices of redemption shall state:
(l) the Redemption Date;
(2) the Redemption Price;
(3) that on the Redemption Date, the Redemption Price shall become
due and payable upon each such Note, and that interest thereon shall cease
to accrue on such date; and
(4) the place where such Notes are to be surrendered within 30 days
after the Redemption Date, which shall be the office or agency of the
Issuer to be maintained as provided in Section 11.2.
Notice of redemption of Notes shall be given by the Issuer or, at
the Issuer's request, by the Servicer in the name and at the expense of the
Issuer. Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.3. Deposit of the Redemption Price
On or before the Business Day next preceding any Redemption Date,
the Issuer shall deposit with the Servicer an
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amount of monies sufficient to pay the Redemption Price of all Notes which are
to be redeemed on such Redemption Date (less any portion of such payment set
aside from monies in the Collection Account or the Reserve Fund for the Notes to
be redeemed)
The Issuer shall pay and discharge the entire indebtedness on all Notes
hereby secured (or provided therefor) in any one or more of the following ways:
(1) by paying or causing to be paid the principal of, premium, if
any, and interest on all Notes hereby secured, as and when the same become
due and payable; or
(2) by depositing with the Lender, in trust, at or before maturity,
cash or Government Securities sufficient to pay or redeem the principal
of, premium, if any, and interest to the date of such deposit (in the case
of Notes which have become due and payable) or to the Maturity Date or
Redemption Date, as the case may be, of the Notes of such class hereby
secured.
Section 10.4. Notes Payable on Redemption Date
Notice of redemption having been given as provided in Section 10.2,
the Notes to be redeemed shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and on such Redemption Date (unless the
Issuer shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. On the Redemption Date, the Holders of such Notes shall
be paid the Redemption Price by the Servicer, as paying agent from funds
deposited by the Issuer; provided, however, that installments of principal and
interest which are due on or prior to the Redemption Date shall be payable to
the Holders of such Notes registered as such on the relevant Record Dates
according to their terms and the provisions of Section 3.7.
If the Holders of any Note called for redemption shall not be so
paid, the principal shall, until paid, continue to bear interest from the
Redemption Date at the related Note Interest Rate until payment of principal is
made.
Section 10.5. Matching Right
Upon the occurrence of an Event of Default, if the Servicer intends
to commence a sale of the Collateral pursuant to Section 6.3(b) hereof, it shall
first give 30 days prior written notice of such intent to the Issuer. The Issuer
shall thereupon have the right, prior to the expiration of such 30-day period,
to redeem the Collateral at the Redemption Price.
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ARTICLE XI.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.1. Payment of Principal and Interest
The Issuer shall duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
Section 11.2. Maintenance of Office or Agency
(a) The Issuer shall maintain an office or agency within the United
States of America where Notes may be presented or surrendered for payment, where
Notes may be surrendered for registration of transfer or exchange and where
notices in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Servicer its office or agency for each of said
purposes. The Issuer shall give prompt written notice to the Servicer of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Servicer with the address thereof, such presentations,
surrenders or exchanges may be made or served at the address set forth in
paragraph (b) below. As of the date hereof, on the Issue Date, and at all times
since its formation, the chief executive office and place of business of the
Issuer is and has been located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇.
(b) The Issuer irrevocably appoints the process agent specified
below to receive for it and on its behalf service of process for any proceedings
arriving from or based upon this Indenture. If, for any reason, such process
agent is unable to act as such, the Issuer shall promptly notify the Servicer
and within 30 days appoint a substitute process agent:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Section 11.3. Money for Note Payments To Be Held in Trust
Subject to any applicable escheat law, any money deposited with the
Servicer in trust for payment to the Lender on any Payment Date and remaining
unclaimed for three years after such payment has become due and payable shall be
paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Servicer with respect to such trust
money, shall thereupon cease; provided, however, that the Servicer, before being
required to
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make any such repayment, shall at the expense of the Issuer send by first class
mail to the Lender with a right to or interest in monies due and payable but not
claimed, at the last address as shown on the Note Register for the Lender, and
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
city in which the Servicer's Office is located, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
60 days from the date of such publication, any unclaimed balance of such money
then remaining shall be repaid to the Issuer. The Servicer may also adopt and
employ, at the expense of the Issuer, any other reasonable means of notification
of such repayment (including, but not limited to, mailing notice of such
repayment to the Lender whose right to or interest in monies due and payable but
not claimed is determinable from the records of the Servicer, at the last
address as shown on the Note Register for the Lender)
Section 11.4. Co-Existence
The Issuer shall keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the State of New
York, shall operate in accordance with, and subject to the limitations set forth
in, its Operating Agreement, and shall obtain and preserve its qualification to
do business as a foreign limited liability company in each jurisdiction in which
the failure to be so qualified shall have a material adverse effect on the
validity and enforceability of this Indenture or the Notes. The Issuer shall
promptly deliver to the Lender, and if requested by the Lender, the Rating
Agencies, a copy of any amendment to its Operating Agreement.
Section 11.5. Protection of Collateral
(a) The Issuer covenants to file or cause to be filed all UCC
Financing Statements and any related forms with respect to the Collateral within
five (5) Business Days of the Closing Date.
(b) The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action as is necessary or advisable to:
(i) Grant more effectively a first priority, perfected security
interest in all or any portion of the Collateral;
(ii) maintain or preserve the lien of this Indenture or carry out
more effectively the purposes hereof;
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(iii) perfect, publish notice of, or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral or, where appropriate, any
security interest in the Collateral and the proceeds thereof; or
(v) preserve and defend title to the Collateral and the rights of
the Lender therein against the claims of all persons and parties.
(c) Except as provided in the Management Agreement, the Issuer shall
not attempt to alter, modify, amend or supplement any of the Contract Assets
included in the Collateral without the prior written consent of the Lender.
Section 11.6. Annual Opinion as to Collateral
On or before June 15 in each calendar year commencing in 2000, the
Issuer shall furnish to the Servicer, if requested by the Lender, the Rating
Agencies and to the Lender an Opinion of Counsel (which shall not be in-house
counsel) either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
any requisite documents as is necessary to maintain the lien and security
interest created by this Indenture and the perfection and priority thereof and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe the recording, filing, re-recording
and refiling of such requisite documents that shall, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture and the perfection and priority thereof until June 15 in the following
calendar year.
Section 11.7. Negative Covenants
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any of the
Collateral (except as expressly permitted by the Management Agreement or
Section 12.3 hereof); or
(ii) claim any credit on, or make any deduction from, the principal
or interest payable in respect of the Notes by reason of the payment of
any taxes levied or assessed upon any of the Collateral; or
(iii) amend its charter or any Transaction Document without
providing notice of any such amendment to the Rating Agencies, if
requested by the Lender and the Lender and obtaining written consent of
the Lender; or
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(iv) (a) permit the validity or effectiveness of this Indenture to
be impaired, or permit this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations of this Indenture, except as
may be expressly permitted hereby and thereby, (b) except to the extent
permitted under this Indenture, permit any lien, charge, security
interest, mortgage or other encumbrances to be created on or extended to
or otherwise arise upon or burden the Collateral or any part thereof or
any interest therein or the proceeds thereof or incur any indebtedness
other than the Notes, or (c) except for Impositions on Rights, permit this
Indenture to not constitute a valid first priority security interest in
the Collateral; or
(v) change the location of its chief executive office without thirty
days, prior written notice to the Servicer, accompanied by such evidence
of actions taken as shall be necessary to continue the perfection of the
lien on the Collateral; or
(vi) without the unanimous consent of its Board or its Managers, as
applicable, (i) institute, or consent to the institution of, bankruptcy or
insolvency proceedings in respect to the Issuer, or file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Issuer or any substantial part of its
assets, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or
take any corporate action in furtherance of any such action; or (ii)
consolidate, merge, dissolve or liquidate, in whole or in part; or
(vii) except for Impositions on Rights or as may be expressly
permitted in the Management Agreement incur, assume or guaranty any
indebtedness except for such indebtedness as has been approved by the
Lender; or
(viii) fail to take the actions (if any) necessary to be treated as
a partnership for federal income tax purposes.
Section 11.8. Statement as to Compliance
The Issuer shall deliver to the Servicer, to the Lender and if
requested by the Lender, to the Rating Agencies, on or before each December 31
(commencing December 31, 1999), a written statement signed by the President or a
Vice President and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of the Issuer, stating, as to each signer thereof,
that
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(1) a review of the activities of the Issuer during the preceding
twelve-month period (or such lesser period in the case of the first such
statement) and of performance under this Indenture has been made under his
supervision and
(2) the Issuer has fulfilled all its obligations in all material
respects under this Indenture throughout such period, or, if there has been a
default in the fulfillment of any such obligation, specifying each such Default
known to him and the nature and status thereof.
Section 11.9. Investment Company Act
The Issuer shall conduct its operations in a manner which shall not
subject it to registration as an "investment company" under the Investment
Company Act of 1940.
Section 11.10. Limited Purpose
The Issuer shall not engage in any business other than the
transactions contemplated hereby and by the Management Agreement.
Section 11.11. Issuer Ownership
The Issuer agrees that its books and records will reflect its
ownership of the Collateral, subject to the liens and security interests created
by this Indenture.
Section 11.12. Nonconsolidation
The Issuer agrees that it will be operated such that it will not be
substantively consolidated in the bankruptcy estate of Cakewalk LLC and will not
have its separate existence disregarded in the event of a bankruptcy of Cakewalk
LLC. Without limiting the foregoing:
(a) The Issuer agrees that it will pay its own expenses, it will not
accept a guarantee by Cakewalk LLC of all of the Issuer's obligations and
liabilities, and it will not borrow funds from Cakewalk LLC for the payment of
expenses;
(b) The Issuer agrees that it will conduct its business exclusively
on its own stationary and issue all of its correspondence in its own name;
(c) Except as set forth in the Management Agreement, the Issuer will
not permit Cakewalk LLC to be involved in the daily management of the Issuer;
(d) The Issuer will not engage in any transactions with Cakewalk
LLC, except on an arms length basis; and the Issuer hereby represents that the
Management Agreement provides for a reasonable arm's length management fee;
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(e) The Issuer agrees to establish and maintain records and books of
account separate and distinct from Cakewalk LLC's records and books of account
thereof, and to share business offices and telephone numbers with that of
Cakewalk LLC, but to pay the allocable costs thereof as set forth in the
Management Agreement;
(f) The Issuer agrees to keep its financial statements so as to
disclose that its assets are not available to pay creditors of Cakewalk LLC and
to reflect its separate existence;
(g) The Issuer will not either (i) act as an agent for Cakewalk LLC
or (ii) authorize Cakewalk LLC to act as its agent;
(h) The Issuer will maintain at least two Independent (as such term
is defined in the Issuer's Operating Agreement) Managers so long as any Note
remains Outstanding;
(i) The Issuer agrees to maintain its assets separate and distinct
from Cakewalk LLC's assets and shall not permit its assets to be commingled with
those of Cakewalk LLC;
(j) The Issuer shall not become contractually liable for the payment
of any liability of Cakewalk LLC; and
(k) The Issuer shall observe all limited liability company
formalities.
Section 11.13. Enforcement of Transaction Documents
The Issuer shall take all actions necessary, and diligently pursue
all remedies available to it, to enforce the obligations of each other party to
a Transaction Document to secure its and the Noteholders' rights thereunder,
provided that, prior to taking any action in the name of the Lender, it shall
receive the written consent of the Lender.
Section 11.14. Representations and Warranties
The Issuer, as of the date hereof and as of the Closing Date, hereby
represents and warrants the following:
(a) Except for the interests created by Impositions on Rights, the
Issuer is the owner of all of the Collateral free of liens and encumbrances, the
Issuer has not assigned any interest or participation in any Collateral, and the
Issuer has full right to Grant such Collateral to the Lender;
(b) the Issuer has Granted all of its right, title, and interest in
the Collateral to the Lender;
(c) as of the Issue Date, the Investment Value shall be not less
than 100% of the Initial Note Principal Balance;
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(d) the Lender will, upon proper filing and/or recording of UCC
financing statements, copyright and trademark documents, as applicable, by the
Issuer or the Servicer on the Issuer's behalf, have a perfected first priority
security interest for each item of Collateral, free from any lien, security
interest encumbrance or other right, title or interest of any Person, except for
any Impositions on Rights; and
(e) The Issuer has its chief executive office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(f) The Issuer, (i) is a limited liability company, duly organized,
validly existing in good standing under the laws of its jurisdiction of
organization; (ii) has requisite power and authority and all licenses and
permits to own and operate its properties to carry on its business as now
conducted, and to enter into and perform its obligations under each Transaction
Document to which it is a party and the transactions contemplated by, including,
the issuance and sale of the Notes and the performance of its obligations
thereunder; and (iii) has duly qualified and is authorized to do business and,
if applicable, is in good standing as a foreign limited partnership (or is
exempt from such requirements) and has obtained all necessary licenses and
approvals in each jurisdiction where the failure to be so qualified would have a
material adverse effect on its ability to conduct its business.
(g) Each Transaction Document to which the Issuer is a party has
been duly authorized and, when executed and delivered by the Issuer will
constitute valid, binding and enforceable obligations of the Issuer in
accordance with its terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally applicable in the
event of the bankruptcy, insolvency or reorganization of the Issuer and to
general principles of equity.
(h) No event has occurred and is continuing that constitutes, or
with the passage of time or the giving of notice or both would constitute a
Default or an Event of Default under, and as defined in, this Indenture, the
Servicing Agreement or any other Transaction Document. Neither the execution and
delivery of any Transaction Document by the Issuer, the consummation of the
transactions contemplated thereby nor the satisfaction of the terms and
conditions of the Transaction Documents (i) conflicts with or results in any
breach or violation of any provision of the organizational documents of the
Issuer, or any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award currently in effect having applicability to the Issuer,
or any of its properties, including regulations issued by an administrative
agency or other governmental authority having supervisory powers over the
Issuer; or (ii) constitutes a default by the Issuer under or a breach of any
provision of this Indenture or any contract, agreement, mortgage
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or other instrument to which it is a party or by which it or any of its
properties are or may be bound or affected, (iii) results in the creation or
imposition of any lien upon any of the properties or assets of the Issuer
pursuant to the terms of any mortgage, deed of trust, contract, agreement,
charter instrument, by-law or other instrument, or (iv) in the case of the
Issuer, violate any of the provisions of the operating agreement, of the Issuer.
(i) The Notes have been duly and validly authorized by the Issuer
and, when duly and validly executed in accordance with this Indenture, will be
validly issued and outstanding and entitled to the benefits of this Indenture.
(j) The Issuer had at all relevant times and now has full power and
authority to originate, own and, has full power and authority to Grant the
Collateral, has duly authorized such Grant by all necessary action, and does not
require any member approval, or approval or consent of any trustee or holders of
any indebtedness or obligations of the Issuer other than such as have been
obtained.
(k) No form of general solicitation or general advertising was used
by the Issuer or its representatives in connection with the offer and sale of
the Notes. the Issuer has not offered, in this offering or any offering that
would be integrated with this offering under any applicable securities law, any
of the Notes or any similar security of the Issuer for sale to, or solicited
offers to buy any thereof from, or otherwise approached or negotiated with
respect thereto with, any prospective purchaser, other than one institutional
investor, which was offered a portion of the Notes at private sale for
investment. Neither the Issuer, nor anyone acting on its behalf, have offered or
sold, nor will any of them offer or sell, any Note or any part thereof or any
similar security for issue or sale to, or solicit any offer to acquire any of
the same from, anyone in any manner that would render the issuance and sale of
the Notes a violation of the Securities Act, the rules or regulations
thereunder, or the securities laws of any state of the United States or require
registration pursuant thereto, nor have they authorized, nor will they
authorize, any Person to act in such manner. Based on the foregoing, it is not
necessary in connection with the offer, sale and delivery of the Notes to
register the Notes under the Securities Act of 1933, as amended.
(l) The Issuer agrees that any Person, designated in writing by the
Lender may, upon reasonable prior written notice, consult with proper officials
of the Issuer and the Servicer at such times during normal business hours and as
often as such Person may reasonably request regarding the information required
to be furnished pursuant to the Servicing Agreement or regarding the performance
of the Issuer's covenants and agreements contained in this Indenture or any of
the Transaction Documents to which it is a party.
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(m) The Issuer is not an "investment company" or under the control
of an "investment company" within the meaning of the Investment Company Act of
1940, as amended and this Indenture is not required to be qualified as an
"Indenture" pursuant to the terms of the Trust Indenture Act of 1939, as
amended.
(n) There is no pending action, suit, proceeding or investigation,
including, but not limited to, any such proceeding or investigation resulting
from the ownership or use of any of the Collateral, against or affecting the
Issuer before any administrative agency, arbitrator or governmental body against
the Issuer or, to the best knowledge of the Issuer, any threatened action or
proceeding, including but not limited to any such proceeding or investigation
resulting from the ownership or use of any of the Collateral, against or
affecting the Issuer before any of the foregoing which, if decided adversely to
the Issuer, would materially affect (i) the condition (financial or otherwise),
business, properties, prospects, profits or operations of the Issuer, (ii) the
ability of the Issuer to perform its obligations under, or the validity or
enforceability of, any Transaction Document to which it is a party or (iii) the
Lender's ability foreclose or otherwise enforce its interest in the Collateral
as contemplated under this Indenture and the Servicing Agreement. This Issuer is
not subject to any order of any court, governmental authority or agency or
arbitration board of tribunal.
(o) No consent, approval, authorization, order of, or filing,
registration, application with any court or other governmental authority in
respect of the Issuer is necessary or required in connection with the
authorization, execution, delivery or performance by the Issuer of this
Indenture or any other Transaction Document to which it is a party or any of the
other documents or transactions contemplated thereby, including without
limitation, the pledge, transfer and assignment of the Collateral to the Lender,
the servicing of the Collateral, the filing of any appropriate UCC financing
statements or similar documents in the United States Copyright Office or the
offer, issue, sale, delivery or performance of the Notes, other than that
consent, approval, authorization, order, filing, registration or qualification
which has been, or will be promptly, obtained.
(p) No information supplied in writing by, or on behalf of, the
Issuer to the Noteholder in connection with the transactions contemplated by
this Indenture and the Transaction Documents, in each case as of the Closing
Date, contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein or herein not misleading.
There is no fact peculiar to the Issuer or any Asset or other Person which the
Issuer has not disclosed to the Noteholder in writing which materially affects
adversely nor, so far as the Issuer can now reasonably foresee, will materially
affect adversely the financial condition, affairs or prospects
-38-
of, or the ability of, the Issuer to perform the transactions contemplated by
the Transaction Documents.
(q) None of the transactions contemplated herein (including, without
limitation thereof, the use of the proceeds from the sale of the Notes) will
result in a violation of Section 7 of the Securities Exchange Act, or any
regulations thereto, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
Issuer does not own or intend to carry or purchase, and no proceeds from the
sale of the Notes will be used by the Issuer to purchase, any "margin security"
within the meaning of said Regulation G, including margin securities originally
issued to it or any "margin stock" within the meaning of said Regulation U.
(r) The representations and warranties of the Issuer in each of the
Servicing Agreement, this Indenture and the Transaction Documents to which it is
a party are true and correct and are hereby incorporated by reference as if each
such representation and warranty were specifically made herein.
(s) The Issuer is not a party to any contract or agreement, or
subject to any charter or other corporate restriction, which materially and
adversely affects its business as contemplated in the Transaction Documents. The
Issuer has not agreed consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its properties or any of the
Collateral, other than as otherwise set forth in this Indenture, whether now
owned or hereafter acquired, to be subject to a lien not permitted by this
Indenture.
(t) For so long as any of the Notes are Outstanding and are
"restricted securities" within the meaning of Rule 144(a) (3) under the
Securities Act, the Issuer will cause to be provided to the Lender and any
prospective purchaser of Notes designated by a holder of such Notes, upon the
request of such holder or prospective purchaser, the information required to be
provided to such holder or prospective purchaser by Rule l44A(d) (4) under the
Securities Act.
(u) The Issuer will comply in all material respects with all
requirements of law applicable to the Issuer relating to the performance of its
obligations under this Indenture and the Notes.
(v) The Issuer agrees to furnish the Lender copies of each of the
Transaction Documents and any documents to be furnished pursuant to the terms of
the Transaction Documents and such other information and documents relating to
the Notes and the Collateral as the Lender may reasonably request.
(w) Except as contemplated in the Management Agreement, the Issuer
agrees not to enter into any material
-39-
amendment or supplement to or modification of the Assets or grant any waiver or
consent under the Assets without the consent of the Lender.
(x) The Notes have not been registered under the Securities Act nor
pursuant to the securities or blue sky laws of any State. The Lender, by its
purchase of a Note, will be deemed to have represented that it is not acquiring
the Notes with a view to or in connection with any distribution thereof within
the meaning of the Securities Act, provided that the disposition of its property
shall at all times be and remain within its control.
(y) Whether or not the transactions contemplated hereby and by the
other Transaction Documents shall be consummated, the Issuer will pay or cause
to be paid all present and future recording and filing fees, and all legal,
financial and miscellaneous out-of-pocket expenses and costs incurred in
connection with the negotiation and consummation of this Indenture, the issuance
and sale of the Notes and the transactions hereby contemplated, including, but
not limited to (i) all taxes, including without limitation, sales, transfer,
documentary stamp and similar taxes, applicable to such transactions, together
with interest and penalties, if any, thereon, but excluding any taxes of the
Lender imposed on or measured by the Lender's income, and (ii) the fees and
out-of-pocket expenses of the Servicer incurred in connection with transactions
on or before the Closing Date (including legal fees or expenses). The Issuer
further agrees to pay the fees, expenses and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, special counsel for the Lender. The Issuer further agrees that it
will pay or cause to be paid, promptly upon demand, any reasonable expense
incurred by the Lender in connection with the making of amendment to, or the
giving of any release, consent or waiver in respect of, this Indenture and any
document executed pursuant hereto or thereto, whether or not consummated,
including the reasonable fees and disbursements of counsel for the Lender in
connection therewith. The Issuer further agrees that it will pay, or reimburse
the Lender for, promptly upon demand, all costs and expenses (including legal
fees and disbursements) incident to or in connection with any proceeding or
governmental investigation, against or with respect to the Issuer or any obligor
or any subsidiary or affiliate of any of and which result because of the
ownership by the Lender of the Notes. The obligations of the Issuer under the
immediately preceding sentence shall survive the termination of the trust, the
transfer of any Note or portion thereof or interest therein by the Lender and
the payment of any Note.
(z) The Issuer agrees to indemnify and hold harmless the Lender for
the amount of any and all losses, claims, damages and liabilities to the extent
that such loss, claim, damage or liability arose out of, or was imposed upon the
Lender by reason of, the failure by the Issuer, to perform any of its covenants
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under this Indenture or the breach of a representation or warranty made by the
Issuer herein.
Section 11.15. Gross Receipts
Promptly upon the Issuer's receipt of any Gross Receipts after the
Closing Date (but in no event later than two (2) Business Days after receipt
thereof), the Issuer shall account for and pay to the Lender the aggregate
amount of such Gross Receipts, and the Issuer shall immediately upon the
Issuer's receipt thereof deliver to the Servicer and the Manager copies of all
accounting statements and other documents received by the Issuer relating to
such Gross Receipts.
Section 11.16. Submission to Jurisdiction
THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW
YORK AND ITS VALIDITY, CONSTRUCTION AND EFFECT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS WHOLLY PERFORMED THEREIN.
THE VENUE FOR ANY AMOUNT, SUIT OR PROCEEDING ARISING FROM OR BASED UPON THIS
AGREEMENT SHALL BE THE APPROPRIATE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF NEW YORK IN THE STATE OF NEW YORK. ACCORDINGLY, THE ISSUER AGREES THAT
ANY ACTION, SUIT OR PROCEEDING ARISING FROM OR BASED ON THIS AGREEMENT SHALL BE
COMMENCED IN AND DETERMINED BY THOSE APPROPRIATE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK; THE PARTIES HEREBY
WAIVE ANY OBJECTION TO THE PROPRIETY OR CONVENIENCE OF VENUE IN SUCH COURTS OR
TO THE JURISDICTION OF THE COURTS OVER EITHER PARTY AND AGREE THAT ANY JUDGMENT
ENTERED THEREIN MAY BE ENFORCED WITH NO FURTHER DEFENSE OR OFFSET IN ANY
JURISDICTION IN WHICH THE DEFENDANT IS A CITIZEN, RESIDES OR OWNS PROPERTY.
ARTICLE XII.
ACCOUNTS, ACCOUNTINGS AND RELEASES
Section 12.1. Collection of Money
Except as otherwise expressly provided herein, the Lender shall
receive and collect all money and other property payable to or receivable by the
Issuer pursuant to the Collateral from the Servicer as provided in Section 2.02
(c) of the Servicing Agreement and as otherwise provided in this Indenture. The
Lender shall hold all such money and property so received by it as part of the
Collateral, shall deposit the same into the Collection Account, and shall apply
it as provided in this Indenture.
Section 12.2. Accounts
(a) Reserve Fund. The Issuer shall establish and the Lender shall
maintain a segregated trust account (the "Reserve
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Fund"), which shall be in the name of the Lender "as the Holder of Cakewalk
Royalty-Backed Pay-Through Notes," and which shall be in an Eligible Financial
Institution, for the receipt of funds deposited into the Reserve Fund.
Thereafter, the Lender shall deposit to the Reserve Fund the amounts referred to
Section 13.1(a) and Section 13.1(b). If the bank with which the Reserve Fund is
held ceases to be an Eligible Financial Institution, the Lender shall within ten
days of obtaining actual knowledge of such cessation, transfer the Reserve Fund
to an account maintained with an Eligible Financial Institution selected by the
Issuer (unless an Event of Default shall have occurred and not been waived, in
which case, such Eligible Financial Institution shall be selected by the Lender)
Funds in the Reserve Fund shall not be commingled with any other monies. All
payments to be made from time to time by the Lender to the Noteholders out of
funds in the Reserve Fund pursuant to this Indenture shall be made by the Lender
as paying agent of the Issuer. Funds on deposit in the Reserve Fund shall be
invested in Eligible Investments at the written direction of the Issuer. Any
interest or other earnings realized on funds on deposit in the Reserve Fund
shall be retained in the Reserve Fund, subject to withdrawal as set forth in
Section 13.2. The maximum permissible maturity or, if applicable, the latest
redemption date of any Eligible Investments made with amounts on deposit in the
Reserve Fund for a particular Payment Date shall be not later than the Business
Day preceding such Payment Date. All monies deposited from time to time in the
Reserve Fund pursuant to this Indenture shall be held by the Lender as part of
the Collateral for the exclusive benefit of the Holders as herein provided.
Monies in the Reserve Fund shall be subject to withdrawal pursuant to Section
13.2 of this Indenture.
(b) Collection Account. The Issuer shall establish and the Lender
shall maintain a segregated trust account (the "Collection Account") which shall
be in the name of the Lender "as the Holder of Cakewalk Royalty-Backed
Pay-Through Notes," and which shall be in an Eligible Financial Institution, for
the receipt of, and there shall be deposited into the Collection Account,
payments to be deposited therein as provided herein. If the bank with which the
Collection Account is maintained ceases to be an Eligible Financial Institution,
the Servicer shall within ten days of obtaining actual knowledge of such
cessation, transfer the Collection Account to an account maintained with an
Eligible Financial Institution selected by the Issuer (unless an Event of
Default shall have occurred and not been waived, in which case, such Eligible
Financial Institution shall be selected by the Lender). The Collection Account
shall relate solely to the transactions contemplated in this Indenture, and
funds in such account shall not be commingled with any other monies. All
payments to be made from time to time by the Lender to the Noteholders out of
funds in the Collection Account pursuant to this Indenture shall be made by the
Lender as paying agent of the Issuer. Funds on deposit in the Collection Account
shall be invested in Eligible Investments at the written direction of the
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Issuer. The maximum permissible maturity or, if applicable, the latest
redemption date of any Eligible Investments made with amounts on deposit in the
Collection Account for a particular Payment Date shall be not later than the
Business Day preceding such Payment Date or a Redemption Date, as applicable.
All monies deposited from time to time in the Collection Account pursuant to
this Indenture shall be held by the Servicer as part of the related Collateral
as herein provided. Monies in the Collection Account shall be subject to
withdrawals pursuant to Section 13.1 of this Indenture.
(c) Lockbox Account. The Issuer is hereby authorized to establish
and the Lender shall maintain in the name of the Lender "as the Holder of
Cakewalk Royalty-Backed Pay-Through Notes", from time to time, such
sub-accounts, sub-ledger accounts and lockbox accounts (collectively, the
"Lockbox Account") as part of, for the purposes of administering the payments
to, the Collection Account, remitted by the obligated parties under the
Collateral. All of the Lender's rights, powers, immunities, indemnities and
protections afforded herein shall also be afforded to it with respect to its
administration of the Lockbox Account. The Eligible Financial Institution at
which the Lockbox Account is established shall be under standing instructions
from the Lender to the effect that funds on deposit in the Lockbox Account shall
be deposited into the Collection Account on the Business Day on which deposits
to the Lockbox Account become collected funds.
Section 12.3. Repurchase of Collateral
(a) If at any time the Issuer, the Servicer or the Lender discovers
(i) that any of the representations and warranties of Cakewalk LLC in the
Contribution Agreement was incorrect in any material and adverse respect at the
time as of which such representations and warranties were made, or (ii) that any
of the other circumstances set forth in the Contribution Agreement that require
a repurchase of an item of Collateral contributed pursuant to such Contribution
Agreement have occurred, then the party discovering such defect, omission, or
occurrence shall promptly notify the other parties.
(b) In the event there exists any circumstances or conditions
causing any representation or warranty described in clause (i) of Subsection (a)
of this Section 12.3 to be incorrect and the Servicer receives a written request
by the Lender, then the Servicer shall request in writing that: Cakewalk LLC,
pursuant to the Contribution Agreement eliminate or otherwise cure such
circumstance or condition (provided that the Servicer incurs no liability for
Cakewalk LLC's failure to cure such circumstance or condition). If Cakewalk LLC
fails or is unable to cure such circumstance or condition in accordance with the
Contribution Agreement, then the Servicer shall require Cakewalk LLC to effect a
repurchase pursuant to and in accordance with the terms and conditions of the
Contribution Agreement of any item of
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Collateral as to which such representation or warranty is incorrect. Upon such
repurchase the Lender shall release the item of the Collateral from the lien of
this Indenture pursuant to Section 12.6. The proceeds of a repurchase shall be
deposited in the Collection Account by the Lender upon receipt.
(c) If Cakewalk LLC shall be obligated or entitled to repurchase any
item of Collateral as the result of the occurrence of other circumstances
specified in the Contribution Agreement, Cakewalk LLC shall repurchase such item
of the Collateral at a purchase price calculated in accordance with Section 10
of the Contribution Agreement. The Servicer shall deposit such amount in the
Collection Account upon receipt, and upon such deposit, the Issuer shall be
deemed to have complied with all requirements imposed upon it by this Section
12.3 with respect to the repurchased item of Collateral.
Section 12.4. Collateral
(a) The Lender may, and when required by the provisions of Articles
V and XII of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Lender's interest in the same, in a
manner and under circumstances which are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Lender as
provided in this Article XII shall be bound to ascertain the Lender's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
(b) At the written request and expense of the Issuer and upon being
supplied by the Servicer with appropriate forms therefor, the Lender shall, at
such time as there are no Notes Outstanding and all amounts due under this
Indenture have been paid and the lien of the Indenture has been discharged in
accordance with Section 5.1 hereof, release the Collateral from the lien of this
Indenture and promptly deliver all Collateral held by it to the Issuer.
Section 12.5. Opinion of Counsel
In order to properly advise the Lender of any appropriate action
required to be taken by the Lender, the Servicer shall be entitled to receive at
least ten days' notice of any action to be taken pursuant to Section 12.4 (a),
accompanied by copies of any instruments involved, and the Servicer and the
Lender shall also be entitled to receive, upon request, an Opinion of Counsel,
in form and substance satisfactory to the Servicer and the Lender, outlining the
steps required to complete such action and stating that such action is permitted
hereunder. The Servicer and the Lender shall be entitled to rely conclusively on
any such Opinion of Counsel as to the opinions expressed therein.
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ARTICLE XIII.
APPLICATION OF MONIES
Section 13.1. Disbursements of Monies out of Collection Account
(a) On each Payment Date, the Lender, acting as paying agent and in
conformity with the information provided in the Servicer's Report, shall
withdraw from the Collection Account and first, deposit the RYKO Reserve
Payment, if any, to the Reserve Fund until the earlier to occur of (i) the
Minimum Reserve Fund Requirement is met, and (ii) RYKO Reserve Payments
aggregating $247,500 shall have been so deposited to the Reserve Fund, and
second, pay the amounts as provided in paragraph (b) below.
(b) On each Payment Date, the Lender, acting as paying agent and in
conformity with the information provided in the Servicer's Report, shall
withdraw from the Collection Account, and pay the following amounts in the
following order of priority in each case to the extent of the Available Funds in
the Collection Account on such Payment Date:
(i) to the Servicer, the amounts, if any, set forth in Section 2.06
and Section 2.07 of the Servicing Agreement;
(ii) to the Manager, so long as the Manager is not an Affiliate of
the Issuer, the Management Fee;
(iii) to the Noteholders, interest accrued on the Notes for the
related Interest Period plus any accrued interest thereon remaining unpaid
from any previous Interest Period, and interest on such overdue interest
to the date such payment is made, at the Note Interest Rate, but only to
the extent that payment of such interest on interest shall be legally
enforceable;
(iv) commencing July 15, 2000 and continuing on each Payment Date
thereafter, to the Noteholders, the aggregate Note Principal Payment for
the related Due Period (applied to reduce the Note Principal Balance of
the Notes;
(v) commencing July 15, 1999 and continuing on each Payment Date to
and including June 15, 2000 (but not thereafter), to the Issuer the
Expense Payment;
(vi) commencing July 15, 1999 and continuing on each Payment Date to
and including June 15, 2000 (but not thereafter), to the Manager, so long
as the Manager is an Affiliate of the Issuer, the Management Fee;
(vii) to the Reserve Fund the difference, if any, between the amount
on deposit in the Reserve Fund and the Minimum Reserve Fund Requirement;
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(viii) commencing on July 15, 2000 and continuing on each Payment
Date thereafter, to the Manager, so long as the Manager is an Affiliate of
the Issuer, the Management Fee; and
(ix) the balance, if any, to the Issuer or such party as the Issuer
may direct.
(c) The foregoing provisions of this Section 13.1 notwithstanding,
any monies deposited in the Collection Account for purposes of redeeming Notes
pursuant to Article X shall, subject to Section 11.3, remain in the Collection
Account until paid for the purpose of such redemption.
Section 13.2. Disbursement of Monies out of Reserve Fund
(a) In the event that on any Payment Date Available Funds in the
Collection Account are not sufficient to make the payments specified in clauses
(iii) and (iv) of Section 13.1(b), the Lender, as Paying Agent, shall, on such
Payment Date, withdraw from the Reserve Fund to the extent funds are available
therein and on behalf of the Issuer shall apply the amounts to such payments due
on Notes on such Payment Date.
(b) At such time as no Notes remain Outstanding and the lien of this
Indenture has been discharged in accordance with Section 5.1 hereof, the Lender
shall upon an Issuer Order, withdraw from the Reserve Fund any excess funds
remaining after payment of all other amounts required under this Indenture, and
remit any such excess to or at the direction of the Issuer. Upon the occurrence
of an Event of Default, amounts on deposit in the Reserve Fund shall be
transferred to the Collection Account and disbursed as provided in Section 13.1.
Notwithstanding any provision to the contrary herein, upon the occurrence of an
Event of Default and at the Maturity Date, by Act of the Noteholders, the amount
on deposit in the Reserve Fund shall be applied in reduction of the Note
Principal Balance.
Section 13.3. Eligible Investments
Upon an Issuer Order, the Lender shall invest the funds in the
Collection Account, the Lockbox Account and the Reserve Fund in Eligible
Investments. In the event, at the close of each Business Day, the Lender has not
received an Issuer Order, or is not in possession of a standing Issuer Order,
the Lender shall invest such funds in the type of Eligible Investment specified
in Clause (v) of the definition of Eligible Investments set forth in the
Standard Definitions annexed hereto as Appendix A. No Eligible Investment shall
mature later than the Business Day preceding the next following Payment Date.
Any income or other gain from such Eligible Investments in the
Collection Account or the Reserve Fund shall be credited
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to such account. The Lender shall not be liable for any loss incurred on any
funds invested in Eligible Investments pursuant to the provisions of this
Section 13.3.
The Lender shall have no liability in respect of losses incurred as
a result of the liquidation of any Eligible Investment prior to its stated
maturity or the failure of the Issuer to provide timely written investment
direction.
Section 13.4. Improper Payments
The Lender, by acceptance of its Note, agrees with the Issuer that
in the event that notwithstanding the provisions of this Indenture, it receives
any payment or distribution in respect of its Note contrary to the provisions of
this Indenture, such payment or distribution shall be received and held in trust
for the benefit of, and shall upon demand of the Issuer or the Servicer be
forthwith paid over and delivered to, the Persons then entitled thereto in
accordance with this Indenture.
Section 13.5. Third Party Beneficiaries
(a) The parties hereto acknowledge that (i) the Lender intends to
pledge and assign its rights hereunder and under the other Transaction Documents
to the Warehouse Trustee under the Warehouse Indenture and (ii) the Lender may
assign such rights to an entity which may in turn assign and pledge its rights
to the Term Trustee under the Term Indenture. The Servicer and the Issuer hereby
irrevocably agree to the assignments and pledges described above. In addition to
and without limitation of anything else in this Indenture, if and for so long as
the Indenture and the Note are pledged as collateral under the Warehouse
Indenture or the Term Indenture:
(i) the Issuer and the Servicer shall deliver or cause to be
delivered to the Warehouse Trustee or the Term Trustee, at an address
specified in a notice from the Lender advising the Issuer of the
assignment of the Note, contemporaneously with the delivery of the same to
the Issuer or the Servicer, as applicable, a copy of each notice, report
and certificate required to be delivered by such party to the Servicer
hereunder;
(ii) the Issuer and the Servicer agree that each of its respective
representations, warranties and covenants in each Transaction Document to
which it is a party are made to and for the benefit of the Warehouse
Trustee or the Term Trustee, as applicable, and the related holders of
notes issued under a Warehouse Indenture or Term Indenture which parties
shall be third party beneficiaries of this Indenture; and
(iii) all rights and powers of the Lender hereunder may be exercised
and enforced by the Warehouse Trustee or
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the Term Trustee for the benefit of the related holders of Notes issued
under a Warehouse Indenture or Term Indenture, as case may be.
(b) The parties hereto agree to take any such action as is
reasonably necessary and without significant expense to the Issuer to conform
the provisions of this Indenture to future requirements of any Rating Agency
rating (or issuing letters with respect to) the Warehouse Notes or the Term
Notes, including, if necessary and reasonably acceptable to the parties hereto,
amending and/or restating this Indenture at a future date to include such other
provisions as the parties shall agree to change which may be necessary or
appropriate in connection with a securitization transaction, including, without
limitation providing such notices and reports as the Rating Agency may require
pursuant to such indentures; provided, however, that the Issuer shall have no
liability or obligation to assure that the Warehouse Notes or the Term Notes
receive a credit rating of any kind and, accordingly, whether or not such a
rating is obtained or unavailable, the rights and obligations of the Issuer
under this Indenture shall be unchanged as a result thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Issuer, the Lender and the Servicer have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized and their respective seals, duly attested, to be hereunto
affixed, all as of the day and year first above written.
CAKEWALK BRE LLC, as Issuer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer and President
ENTERTAINMENT FINANCE INTERNATIONAL, LLC,
as Lender
By: BJT HOLDING, INC., its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
RZO CORPORATE ADMINISTRATION, INC., as
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORM OF ASSIGNMENT OF NOTE
A-i
ASSIGNMENT OF NOTE
For value received the undersigned hereby sells, assigns and
transfers unto [___] whose social security or other tax identifying number is
[__________] a note as hereinafter described and hereby irrevocably constitutes
and appoints [__________], attorney, to transfer the same on the Note Register
of the Lender with full power of substitution in the premises.
Description of Note:
10.09% Royalty-Backed Note, No. [__] with an Initial Note Principal
Balance of $5,500,000 issued under that certain Indenture dated as
of June 29, 1999 among CAKEWALK BRE LLC (the "Issuer"),
Entertainment Finance International, LLC, as lender (the "Lender")
and RZO Corporate Administration, Inc., as servicer (the
"Servicer")
[SELLER/ASSIGNOR]
By: _______________________________
Name:
Title:
Dated: ________________
NOTE: The signature to this assignment must correspond with the name as written
on the face of the Note herein described in every particular, without
alterations or enlargement or any change whatsoever.
Signature Guaranteed:
NOTE: Signature(s) must be guaranteed by a participant in a signature medallion
program.
A-2
EXHIBIT B
FORM OF INVESTMENT LETTER
B-1
[date]
CAKEWALK BRE LLC
______________________________
______________________________
and
RZO Corporate Administration, Inc.
Ladies and Gentlemen:
In connection with the purchase by _____________________ (the
"Purchaser") from ______________________ of $ _______ of Royalty-Backed Notes
(the "Notes"), issued by CAKEWALK BRE LLC (the "Issuer"), pursuant to an
indenture (the "Indenture"), dated as of June 29, 1999, by and among the Issuer,
RZO Corporate Administration, Inc., as servicer (the "Servicer") and
Entertainment Finance International, LLC, as lender (the "Lender"), we hereby
represent and warrant to, and covenant with, you that:
1. The Purchaser understands that the Notes have not been registered or
qualified under the Securities Act of 1933, as amended (the "1933 Act"), or the
securities laws of any state, and therefore cannot be resold unless they are
registered or qualified thereunder or unless an exemption from registration or
qualification is available.
2. The Purchaser is acquiring the Notes for its own account or for resale to
"qualified institutional buyers" in transactions in accordance with Rule 144A
promulgated under the 1933 Act and not with a view to distribution of the Notes
in violation of the 1933 Act or for any other purpose.
3. The Purchaser is a substantial, sophisticated institutional investor having
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in the Notes.
4. The Purchaser will not sell or otherwise transfer any Note, except in
compliance with the provisions of Section 3.05 of the Indenture.
5. The Purchaser understands that the Indenture has not been qualified under the
Trust Indenture Act of 1939, as amended, and that the Issuer has not been
registered under the Investment Issuer Act of 1940, as amended.
6. The Purchaser agrees that in the event that at some future time it wishes to
dispose of or exchange its Note or Notes, it will not transfer or exchange its
Note or Notes unless (i) such Note or Notes are sold in a transaction that does
not require registration under the 1933 Act or registration by the Company
B-2
under any applicable State securities laws, and (ii) the Purchaser obtains from
any subsequent purchaser written representations to the same effect as those
contained in the foregoing paragraphs and this paragraph and delivers a copy of
the same to the Servicer.
7. The Purchaser understands that the Notes bear a legend to substantially the
following effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR UNDER ANY STATE SECURITIES LAWS AND THE COMPANY HAS
NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"INVESTMENT COMPANY ACT"), AND THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER
THE SECURITIES ACT (INCLUDING TRANSFER MADE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT) AND APPLICABLE STATE SECURITIES LAWS.
8. Unless the Purchaser has delivered to you an opinion of counsel of the type
described in paragraph 9 below, the Purchaser represents that, with respect to
the source of funds to be used by the Purchaser to purchase the Notes (the
"Source") either:
(a) The Purchaser is an insurance company and either (i) the Source
is the general account of the Purchaser; or (ii) the Source is a separate
account within the meaning of Section 3 (17) of ERISA, which account is both a
"pooled separate account" within the meaning of Prohibited Transaction Class
Exemption 90-1 ("PTE 90-1") and an "investment fund" within the meaning of Part
V of Prohibited Transaction Class Exemption 84-14 ("PTE 84-14"); provided, with
respect to an investment from a source of funds pursuant to (ii) above: (A) all
requirements for exemption under PTE 90-1 are met with respect to the use of the
separate account's funds to purchase the Notes; (B) it meets the definition of a
"Qualified Professional Asset Manager" within the meaning of Part V(a) of PTE
84-14; (C) it has negotiated the terms, and made the decision, on behalf of the
separate account to enter into the purchase of the Notes, which was not a part
of an arrangement designed to benefit a party in interest; and (D) to the best
of its knowledge after reasonable investigation and on the basis of the
disclosure provided by the Issuer to date, all conditions for application of PTE
84-14 are met with respect to those plans holding interests of ten percent or
greater in the separate account; or
(b) The Purchaser is an entity other than an insurance company and
either (i) the Source is not an "employee benefit plan" (within the meaning of
Section 3 (3) of ERISA), a "plan" (within the meaning of Section 4975 (e) (l) of
the Code) or an entity whose underlying assets include plan assets by reason of
the investment in the entity by such an "employee benefit plan" or "plan" and
the application of the DOL's "plan assets"
B-3
regulation, 29 C.F.R. Section 2510.3-101 (Nov. 13, 1986); (ii) the Source is a
"governmental plan" (within the meaning of Section 3 (32) of ERISA); or (iii)
the Source is a "collective investment fund maintained by a bank" (within the
meaning of PTCE 91-38) and the assets of no single employee benefit plan
(treating as a single plan all employee benefit plans maintained by the same
employer or employee organization) invested in such bank collective investment
fund exceeds 10% of the total assets in that fund.
9. If the Purchaser cannot make the representation set forth in Paragraph 8
above, the Purchaser has delivered to you an opinion of its counsel (who may be
a member of its in-house legal staff) addressed to the Issuer, the Servicer and
the Lender, to the effect that the purchase and holding of Notes by the
Purchaser will not (a) result in a non-exempt prohibited transaction under, or
otherwise violate, ERISA or the Code, (b) cause the Servicer to be deemed a
fiduciary of an "employee benefit plan" (within the meaning of Section 3 (3) of
ERISA) or (c) result in the imposition of an excise tax under the Code on the
Servicer.
10. If the Purchaser sells any of the Notes, the Purchaser will either (a)
obtain from any subsequent purchaser one of the alternative representations
contained in the foregoing paragraph 8 or (b) provide you with an opinion of
counsel of the type described in paragraph 9 above. The Purchaser understands
that under current law it may not be possible to render such an opinion.
11. The Purchaser is not a partnership, grantor trust or S corporation of which
(i) substantially all of the value of the interest of a person owning an
interest in such entity is attributable to the entity's (direct or indirect)
interest in the Note, and (ii) a principal purpose of the use of the tiered
arrangement is to permit the Issuer to satisfy the 100-person limitation in
paragraph (h) (1) (ii) of Section 1.7704-1 of the Treasury Regulations.
Very truly yours,
[PURCHASER]
By: __________________________
Name:
Title:
B-4
EXHIBIT C
Form of Rule 144A Representation Letter
C-1
[date]
CAKEWALK BRE LLC
______________________________
______________________________
and
RZO Corporate Administration, Inc.
Ladies and Gentlemen:
In connection with the purchase by _____________________ (the
"Purchaser") from _________________________________________ of $ __________ of
Royalty-Backed Notes, (the "Notes"), issued by CAKEWALK BRE LLC (the "Issuer")
pursuant to an indenture, dated as of June 29, 1999, by and among the Issuer,
RZO Corporate Administration, Inc., as servicer (the "Servicer") and
Entertainment Finance International, LLC, as lender (the "Lender") (the
"Indenture"), we hereby represent and warrant to, and covenant with, you that:
1. The Purchaser has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the purchase of
the Notes. The Purchaser is an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act of 1933, as amended (the "1933
Act")
2. The Purchaser understands that the Notes have not been registered or
qualified under the 1933 Act, or the securities laws of any state, and therefore
cannot be resold unless they are registered or qualified thereunder or unless an
exemption from registration or qualification is available.
3. The Purchaser's intention is to acquire the Notes (a) for investment for the
Purchaser's own account, or (b) for resale to "qualified institutional buyers"
in transactions under Rule 144A promulgated under the 1933 Act ("Rule 144A") and
not in any event with the view to, or for resale in connection with, any
distribution thereof. It understands that the Notes have not been registered
under the 1933 Act, by reason of a specified exemption from the registration
provisions of the 1933 Act which depends upon, among other things, the bona fide
nature of the Purchaser's investment intent (or intent to resell only in Rule
144A transactions) as expressed herein.
4. The Purchaser will not sell or otherwise transfer any Note, except in
compliance with the provisions of Section 3.05 of the Indenture.
5. The Purchaser is a "qualified institutional buyer" within the meaning of Rule
144A.
C-2
6. The Purchaser understands that the Seller may rely on the exemption from the
provisions of Section 5 of the 1933 Act provided by Rule 144A in connection with
the resale.
7. The Purchaser acknowledges either (a) that it has not requested from any
person the information required to be received by the Purchaser, upon request,
pursuant to Rule l44A (d) (4) (i) (the "Required Information"), or (b) that it
has requested and received the Required Information from the Seller or the
Servicer.
8. Unless the Purchaser has delivered to you an opinion of counsel of the type
described in paragraph 9 below, the Purchaser represents that, with respect to
the source of funds to be used by the Purchaser to purchase the Notes (the
"Source") either:
(a) The Purchaser is an insurance company and either (i) the Source
is the general account of the Purchaser; or (ii) the Source is a separate
account within the meaning of Section 3(17) of ERISA, which account is both a
"pooled separate account" within the meaning of Prohibited Transaction Class
Exemption 90-1 ("PTE 90-1") and an "investment fund" within the meaning of Part
V of Prohibited Transaction Class Exemption 84-14 ("PTE 84-14"); provided, with
respect to an investment from a source of funds pursuant to (ii) above: (A) all
requirements for exemption under PTE 90-1 are met with respect to the use of the
separate account's funds to purchase the Notes; (B) it meets the definition of a
"Qualified Professional Asset Manager" within the meaning of Part V(a) of PTE
84-14; (C) it has negotiated the terms, and made the decision, on behalf of the
separate account to enter into the purchase of the Notes, which was not a part
of an arrangement designed to benefit a party in interest; and (D) to the best
of its knowledge after reasonable investigation and on the basis of the
disclosure provided by the Issuer to date, all conditions for application of PTE
84-14 are met with respect to those plans holding interests of ten percent or
greater in the separate account; or
(b) The Purchaser is an entity other than an insurance company and
either (i) the Source is not an "employee benefit plan" (within the meaning of
Section 3(3) of ERISA), a "plan" (within the meaning of Section 4975 (e) (l) of
the Code) or an entity whose underlying assets include plan assets by reason of
the investment in the entity by such an "employee benefit plan" or "plan" and
the application of the DOL's "plan assets" regulation, 29 C.F.R. Section
2510.3-101 (Nov. 13, 1986); (ii) the Source is a "governmental plan" (within
the meaning of Section 3(32) of ERISA); or (iii) the Source is a "collective
investment fund maintained by a bank" (within the meaning of PTCE 91-38) and the
assets of no single employee benefit plan (treating as a single plan all
employee benefit plans maintained by the same employer or employee organization)
invested in such bank collective investment fund exceeds 10% of the total assets
in that fund.
C-3
9. If the Purchaser cannot make the representation set forth in Paragraph 8
above, the Purchaser has delivered to you an opinion of its counsel (who may be
a member of its in-house legal staff) addressed to the Issuer, the Servicer and
the Lender, to the effect that the purchase and holding of Notes by the
Purchaser will not (a) result in a non-exempt prohibited transaction under, or
otherwise violate, ERISA or the Code, (b) cause the Servicer to be deemed a
fiduciary of an "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) or (c) result in the imposition of an excise tax under the Code on the
Servicer.
10. If the Purchaser sells any of the Notes, the Purchaser will either (a)
obtain from any subsequent purchaser one of the alternative representations
contained in the foregoing paragraph 8 or (b) provide you with an opinion of
counsel of the type described in paragraph 9 above. The Purchaser understands
that under current law it may not be possible to render such an opinion.
11. The Purchaser is not a partnership, grantor trust or S corporation of which
(i) substantially all of the value of the interest of a person owning an
interest in such entity is attributable to the entity's (direct or indirect)
interest in the Note, and (ii) a principal purpose of the use of the tiered
arrangement is to permit the Issuer to satisfy the 100-person limitation in
paragraph (h) (1) (ii) of Section 1.7704-1 of the Treasury Regulations.
Very truly yours,
[PURCHASER]
By: _______________________
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇-▇
▇-▇
Request for Taxpayer Identification Number and Certification
PAYOR'S NAME: ____________
--------------------------------------------------------------------------------
PAYEE INFORMATION
(Please print or type)
Individual or business name (if joint account, list first and circle the name of
person or entity whose number you furnish in Part 1 below).
--------------------------------------------------------------------------------
Check appropriate box:
|_| Individual/Sole proprietor |_| Corporation |_| Partnership |_| Other
--------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.): ______________________________
--------------------------------------------------------------------------------
City, state, and ZIP code: ____________________________________________________
--------------------------------------------------------------------------------
PART I Taxpayer PART II Payecs Exempt
Identification Number ("TIN") Enter your TIN below. For from Backup Withholding
individuals, this is your social security number. For other Check box (See page 2 of the
entities, it is your employer identification number. Refer Guidelines for further clarification.
to the chart on page 1 of the Guidelines for Certification Even if you are exempt from backup
of Taxpayer Identification Number on Substitute Form W-9 withholding, you should still complete
(the "Guidelines") for fUrther clarification. If you do not and sign the certification below):
have a TIN, see instructions on how to obtain a TIN on page
2 of the Guidelines, check the appropriate box below |_| EXEMPT
indicating that you have applied for a TIN and, in addition
to the art III Certification, sign the attached
Certification of Awaiting Taxpayer Identification Number.
Social security number.
|_| |_| |_| - |_| |_| - |_| |_| |_| |_|
|_| Applied For
Employer identification number:
|_| |_| |_| - |_| |_| - |_| |_| |_| |_|
--------------------------------------------------------------------------------
PART III Certification
Certification Instructions: You must cross out item 2 below if you have been
notified by the Internal Revenue Service (the "IRS') that you are currently
subject to backup withholding because of underreporting interest or dividends on
your tax retum (See page 2 of the Guidelines for fUrther clarification).
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, (b) I have not been notified by the IRS that ▇▇▇
subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
Signature_________________________ Date__________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE OFFER
PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU CIIECKED TIlE BOX
"APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9
--------------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a TIN has not been issued to
me, and either (a) I have mailed or delivered an application to receive a TIN to
the appropriate IRS Service center or Social Security Administration Office, or
(b) I intend to mail or deliver an application in the near future. I understand
that I must provide a TIN to the payor within 60 days of submitting this
Substitute Form W-9 and that if I do not provide a TIN to the payor within 60
days, the payor is required to withhold 31% of all reportable payments
thereafter to me until I furnish the payor with a TIN.
_____________________________________
Signature
_____________________________________
Date
D-2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer. -
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
--------------------------------------------------------------------------------
Give the SOCIAL
For this type account: SECURITY Number of-
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint funds,
either person'
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and Minor (joint The adult or, if the minor is
account) the only contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
Give the EMPLOYER
IDENTIFICATION
For this type of account: Number of-
8. Sole proprietorship account The Owner(4)
9. A valid trust, estate, or pension Legal entity (Do not furnish
fund the identifying number of the
personal representative or
trustee unless the legal entity
itself is not designated in the
account title(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school
district, or prison) that receives
agricultural program payments
--------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ▇▇▇▇'▇, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
D-3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9
Obtaining a Number
If you don't have a taxpayer identification number ("TM") or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
Social Security Administration or the Internal Revenue Service ("IRS") and apply
for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution,
- An organization exempt from tax under section 501(a) or an individual
retirement plan.
- The United States or any agency or instrumentality thereof
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust or a non-exempt trust described in
section 4947(a)(l).
- An entity registered at all times under the Investment Company Act of
1940.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the Treasury regulations under sections 6041, 604
lA(a), 6045, 6050A. (All "section" references herein are to the Internal Revenue
Code of 1986)
Privacy Act Notice. Section 6109 requires you to furnish your correct TIN to
persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
▇▇▇. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish TIN.- If you fail to furnish your TIN to a
payer, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding. - If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information. - Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS.
D-4
- A foreign central bank of issue.
Exempt payees described above nevertheless should file Form W-9 to avoid
possible erroneous backup withholding.
FILE THIS FORM WITH THE PAYER FURNISH YOUR TIN, WRITE "EXEMPT" ON THE FACE OF
THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS,
OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
D-5