UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
MAY 9, 2000
Date of Report (Date of earliest event reported)
PLANET HOLLYWOOD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
DELAWARE 00028230 59-3283783
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
</TABLE>
8669 COMMODITY CIRCLE
ORLANDO, FLORIDA 32819
(Address of principal executive office, including zip code)
(407) 363-7827
(Registrant's telephone number, including area code)
<PAGE>
ITEM 1. CHANGE IN CONTROL OF REGISTRANT
In connection with the reorganization of Planet Hollywood International
Inc. (the "Company") described under Item 3 below (the "Reorganization"), the
Company experienced on the Effective Date of the Reorganization a change in its
equity ownership that constituted a change of control. A group of investors,
organized by the Company's Chairman and CEO, invested $30 million cash into the
Company for the right to direct ownership of approximately seven million shares
of new common stock (70% of the voting securities of the Company). The balance
of the outstanding shares of common stock (three million shares), together with
$47.5 million in cash and $60 million in new secured PIK Notes were distributed
to the Company's former bondholders in exchange for the cancellation of
approximately $282 million in debt. All previously existing common stock of the
Company was canceled in exchange for 200,000 warrants to purchase new common
stock in the reorganized Company. Each warrant is exercisable for the purchase
of one share of new Class A Common Stock at an exercise price of $65.50 per
share and will expire on the third anniversary of the Effective Date of the
Plan. The Company's Annual Report on Form 10-K filed on April 11, 2000 includes
a description of the new investors, their basis of control and certain other
information. See also, Item 3 for a discussion of the relevant cancellations and
issuances of equity interests of the Company in the Reorganization.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
As previously reported, on October 12, 1999, the Company and
twenty-five of its operating subsidiaries (the "Debtors") filed voluntary
petitions commencing cases under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the District of Delaware. The cases
were jointly administered under the case name IN RE: PLANET HOLLYWOOD
INTERNATIONAL, INC., et. al., Case No. 99-3612, with the Honorable Joseph J.
Farnan, Jr., United States District Judge, presiding over the cases. The Debtors
continued to operate their businesses as debtors-in-possession during such
cases.
Also as previously reported, on November 8, 1999, the Debtors filed a
Joint Plan of Reorganization and a proposed Disclosure Statement with the
Bankruptcy Court which were supported by the Official Committee of Unsecured
Creditors for the Debtors. Such documents were attached as Exhibit 99.1 and
Exhibit 99.2, respectively, to the Company's Current Report on Form 8-K filed on
November 15, 1999. Following a hearing held on December 9, 1999, the Bankruptcy
Court approved the Disclosure Statement as amended and scheduled a hearing on
confirmation of the reorganization plan, as amended, for January 20, 2000.
Also as previously reported, on December 13, 1999, the Debtors filed
their First Amended Joint Plan of Reorganization (the "Plan") and First Amended
Disclosure Statement (the "Disclosure Statement") with the Bankruptcy Court. A
hearing on the confirmation of the Plan was held on January 20, 2000 and the
Plan, as modified by the Confirmation Order, was confirmed by the Bankruptcy
Court pursuant to an Order dated January 21, 2000 (the "Confirmation Order").
Copies of the Plan, the Disclosure Statement and the Confirmation Order were
attached as Exhibits 2.1, 99.1 and 99.2, respectively, to the Company's Current
2
<PAGE>
Report on Form 8-K filed on February 4, 2000. Such Current Report included a
summary of the material terms of the Plan and a discussion of the relevant
cancellations and issuances of equity interests of the Company in the
Reorganization. The Company's Annual Report on Form 10-K filed on April 11,
2000, also includes a discussion of the effects and consequences of the
Reorganization, including pro forma financial statements.
The Effective Date of the Plan was May 9, 2000. On that date the
Company announced that it had successfully emerged from Chapter 11
reorganization. A copy of the Company's press release relating to the occurrence
of the Effective Date and the consequences thereof is attached hereto as Exhibit
99.1 and incorporated herein by reference.
The Effective Date of the Plan was delayed, in part, due to
modifications to the Company's exit financing necessitated by the sooner than
previously anticipated sale of the Company's Time Square retail unit. Such
property was recently sold by the Company for approximately $30 million, thus
eliminating the need for a previously anticipated $22 million bridge loan. In
addition, the Company obtained a $10 million standby term loan from Bay Harbour
Management, LC as a backstop to its $15 million working capital facility. The
term loan is evidenced by a Note Purchase Agreement between the Company, certain
other parties and Wilmington Trust Company, as agent, and matures two years
after the Effective Date of the Plan, subject to certain optional extensions. At
its option, until the maturity date of the term loan, the lender shall have the
right to convert any outstanding amount of the loan into shares of Class A
Common Stock, dollar for dollar, at $4.2857 per share. In addition, the lender
was granted, as part of its commitment fee, warrants to purchase 200,000 shares
of new Class A Common Stock at an exercise price of $4.2857 per share which will
expire on January 8, 2003.
See Item 7 for a listing of certain of the agreements described herein
and other material agreements which became operative on the Effective Date, and
which are attached hereto as exhibits and incorporated herein by reference.
Certain statements made herein and in the exhibits attached hereto,
including statements that are not a statement of historical fact, constitute
"forward-looking" statements as defined in the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended. Such statements
include, without limitation, statements regarding future liquidity, cash needs
and alternatives to address capital needs, and are indicated by words or phrases
such as "anticipate," "estimate," "plans," "projects," "continuing," "ongoing,"
"expects," "management believes," "the Company believes," "the Company intends,"
"we believe," "we intend," and similar words or phrases. The Company assumes no
responsibility to update forward-looking information contained herein or in the
exhibits attached hereto. Further information regarding factors that might cause
future results to differ from those projected in the forward-looking statements
is described from time to time in the Company's reports filed with the
Securities and Exchange Commission.
ITEM 7. EXHIBITS.
2.1* Debtors' First Amended Joint Plan of Reorganization dated
December 13, 1999
3
<PAGE>
2.2* First Amended Disclosure Statement Pursuant to Section 1125 of
the Bankruptcy Code For the First Amended Joint Plan of
Reorganization dated December 13, 1999 of Planet Hollywood
International, Inc. and Certain of its Subsidiaries
2.3* Order confirming the Company's First Amended Joint Plan of
Reorganization dated January 21, 2000
2.4** Motion for Entry of Order and Order Approving Documentation
Implementing Consummation of the Debtors' Plan of
Reorganization
2.5** Motion for Entry of Order and Order Approving (A) Modification
of Prior Order (B) $10 Million Standby Term Loan Agreement and
(C) Granting Debtors Authority to Pay Fees Required in
Connection with the Standby Loan
3.1** Amended and Restated Certificate of Incorporation of Planet
Hollywood International, Inc.
3.2** Fourth Amended and Restated Bylaws of Planet Hollywood
International, Inc.
4.1 Indenture dated as of May 8, 2000 between Planet Hollywood
International, Inc., as issuer and United States Trust Company
of New York, as trustee
4.2 Warrant Certificate dated May 9, 2000 issued to Bay Harbour
Management LC, relating to the ownership of 200,000 warrants
4.3 Form of First Amended and Restated Subscription Agreement
relating to aggregate $30 million investment in the Company by
certain new money investors
9.1** Voting Agreement Among Stockholders (New Money Investors)
9.2** Voting Agreement Among Stockholders (Creditor Directors)
10.1** Note Purchase Agreement among Planet Hollywood International,
Inc., certain other parties and Wilmington Trust Company, as
agent, dated as of May 8, 2000
10.2 Revolving Credit Agreement dated as of May 8, 2000, among
Planet Hollywood International, Inc., certain other parties
and The CIT Group/Business Credit, Inc., as agent
10.3 Employment Agreement between Planet Hollywood International,
Inc. and Robert I. Earl dated as of January 1, 2000
10.4 Consulting Agreement between Planet Hollywood International,
Inc. and OCS Consultants, Inc. dated as of January 1, 2000
4
<PAGE>
10.5 Registration Rights Agreement between Planet Hollywood
International, Inc. and certain other parties referred to as
"New Money Holders" and "Note Holders" dated as of May 8, 2000
10.6 Planet Hollywood International, Inc. 2000 Stock Award and
Incentive Plan
10.7 Planet Hollywood International, Inc. 2000 Celebrity Stock
Award and Incentive Plan
99.1 Press Release of Planet Hollywood International, Inc., dated
May 9, 2000
* Incorporated by reference to exhibits 2.1, 99.1 or 99.2 (as applicable)
in the Registrant's Current Report on Form 8-K dated January 21, 2000,
previously filed by the Registrant on February 4, 2000
** Incorporated by reference to the exhibits with the corresponding
exhibit numbers in the Registrant's Amendment No. 2 to Form 8-A for
Registration of Certain Classes of Securities Pursuant to Section 12(b)
or (g) of the Securities Exchange Act of 1934, previously filed by the
Registrant on May 15, 2000
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 17, 2000 PLANET HOLLYWOOD INTERNATIONAL, INC.
/s/ Thomas Avallone
-------------------------------------
Name: Thomas Avallone
Title: Executive Vice President and
Chief Financial Officer
6
<PAGE>
Exhibit Index
Exhibit
Number Description
------ -----------
4.1 Indenture dated as of May 8, 2000 between Planet Hollywood
International, Inc., as issuer and United States Trust Company
of New York, as trustee
4.2 Warrant Certificate dated May 9, 2000 issued to Bay Harbour
Management LC, relating to the ownership of 200,000 warrants
4.3 Form of First Amended and Restated Subscription Agreement
relating to aggregate $30 million investment in the Company by
certain new money investors
10.2 Revolving Credit Agreement dated as of May 8, 2000, among
Planet Hollywood International, Inc., certain other parties
and The CIT Group/Business Credit, Inc., as agent
10.3 Employment Agreement between Planet Hollywood International,
Inc. and Robert I. Earl dated as of January 1, 2000
10.4 Consulting Agreement between Planet Hollywood International,
Inc. and OCS Consultants, Inc. dated as of January 1, 2000
10.5 Registration Rights Agreement between Planet Hollywood
International, Inc. and certain other parties referred to as
"New Money Holders" and "Note Holders" dated as of May 8, 2000
10.6 Planet Hollywood International, Inc. 2000 Stock Award and
Incentive Plan
10.7 Planet Hollywood International, Inc. 2000 Celebrity Stock
Award and Incentive Plan
99.1 Press Release of Planet Hollywood International, Inc., dated
May 9, 2000
EXECUTION COPY
EX 4.1
================================================================================
PLANET HOLLYWOOD INTERNATIONAL, INC.,
as Issuer,
THE SUBSIDIARY GUARANTORS
NAMED HEREIN,
as Subsidiary Guarantors,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
10% Secured Deferrable Interest Notes Due 2005
----------------------------
INDENTURE
Dated as of May 8, 2000
----------------------------
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE 1. Definitions and Incorporation by Reference
<S> <C> <C>
SECTION 1.1. Definitions........................................................................................1
SECTION 1.2. Other Definitions..................................................................................17
SECTION 1.3. Incorporation by Reference of Trust Indenture Act..................................................17
SECTION 1.4. Rules of Construction..............................................................................18
ARTICLE 2. The Notes
SECTION 2.1. Form and Dating....................................................................................19
SECTION 2.2. Execution and Authentication.......................................................................19
SECTION 2.3. Registrar and Paying Agent.........................................................................19
SECTION 2.4. Paying Agent To Hold Money in Trust................................................................20
SECTION 2.5. Lists of Holders...................................................................................20
SECTION 2.6. Transfer and Exchange..............................................................................20
SECTION 2.7. Replacement Notes..................................................................................21
SECTION 2.8. Outstanding Notes..................................................................................21
SECTION 2.9. Temporary Notes....................................................................................21
SECTION 2.10. Cancellation......................................................................................22
SECTION 2.11. Defaulted Interest................................................................................22
SECTION 2.12. CUSIP Numbers.....................................................................................22
ARTICLE 3. Redemption
SECTION 3.1. Notices to the Trustee.............................................................................22
SECTION 3.2. Selection of Notes To Be Redeemed..................................................................22
SECTION 3.3. Notice of Redemption...............................................................................23
SECTION 3.4. Effect of Notice of Redemption.....................................................................23
SECTION 3.5. Deposit of Redemption Price........................................................................24
SECTION 3.6. Notes Redeemed in Part.............................................................................24
SECTION 3.7. Optional Redemption................................................................................24
SECTION 3.8. Mandatory Redemption...............................................................................24
ARTICLE 4. Covenants
SECTION 4.1. Payment of Notes...................................................................................24
SECTION 4.2. SEC Reports........................................................................................25
SECTION 4.3. Limitation on Consolidated Debt....................................................................25
SECTION 4.4. Future Guarantors..................................................................................27
SECTION 4.5. Limitation on Restricted Payments..................................................................27
SECTION 4.6. Dividend and other Payment Restrictions Affecting Subsidiaries.....................................28
SECTION 4.7. Asset Dispositions.................................................................................29
SECTION 4.8. Transactions with Affiliates.......................................................................30
SECTION 4.9. Limitation on Issuances and Sales of Capital, Stock of Restricted Subsidiaries.....................31
SECTION 4.10. Change of Control.................................................................................31
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 4.11. Limitation on Liens...............................................................................32
SECTION 4.12. Business Activities...............................................................................34
SECTION 4.13. Maintenance of Insurance..........................................................................34
SECTION 4.14. Compliance Certificates; Statement by Officers as to Default......................................34
SECTION 4.15. Creditor Directors.................................................................................35
SECTION 4.16. Voting Agreement Among Stockholders................................................................35
SECTION 4.17. Foreign Subsidiaries..............................................................................36
SECTION 4.18. Further Instruments and Acts......................................................................36
SECTION 4.19. Calculation of Original Issue Discount.............................................................36
ARTICLE 5. Successor Company
SECTION 5.1. When Company May Merge or Transfer Assets..........................................................36
ARTICLE 6. Defaults and Remedies
SECTION 6.1. Events of Default..................................................................................37
SECTION 6.2. Acceleration.......................................................................................39
SECTION 6.3. Other Remedies.....................................................................................39
SECTION 6.4. Waiver of Past Defaults............................................................................39
SECTION 6.5. Control by Majority................................................................................40
SECTION 6.6. Limitation on Suits................................................................................40
SECTION 6.7. Rights of Holders To Receive Payment...............................................................40
SECTION 6.8. Collection Suit by Trustee.........................................................................40
SECTION 6.9. Trustee May File Proofs of Claim...................................................................40
SECTION 6.10. Priorities 41
SECTION 6.11. Undertaking for Costs.............................................................................41
SECTION 6.12. Waiver of Stay or Extension Laws..................................................................41
SECTION 6.13. Actions of a Holder...............................................................................41
ARTICLE 7. Trustee
SECTION 7.1. Duties of Trustee..................................................................................42
SECTION 7.2. Rights of Trustee..................................................................................43
SECTION 7.3. Individual Rights of Trustee.......................................................................43
SECTION 7.4. Trustee's Disclaimer...............................................................................44
SECTION 7.5. Notice of Defaults.................................................................................44
SECTION 7.6. Reports by Trustee to Holders......................................................................44
SECTION 7.7. Compensation and Indemnity.........................................................................44
SECTION 7.8. Replacement of Trustee.............................................................................45
SECTION 7.9. Successor Trustee by Merger........................................................................45
SECTION 7.10. Eligibility; Disqualification.....................................................................46
SECTION 7.11. Preferential Collection of Claims Against Company.................................................46
ARTICLE 8. Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Notes; Defeasance........................................................46
SECTION 8.2. Conditions to Defeasance...........................................................................47
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 8.3. Application of Trust Money.........................................................................48
SECTION 8.4. Repayment to Company...............................................................................48
SECTION 8.5. Indemnity for Government Obligations...............................................................48
SECTION 8.6. Reinstatement......................................................................................48
ARTICLE 9. Amendments
SECTION 9.1. Without Consent of Holders.........................................................................49
SECTION 9.2. With Consent of Holders............................................................................49
SECTION 9.3. Compliance with Trust Indenture Act................................................................50
SECTION 9.4. Revocation and Effect of Consents and Waivers......................................................50
SECTION 9.5. Notation on or Exchange of Notes...................................................................50
SECTION 9.6. Trustee To Sign Such Amendments....................................................................50
SECTION 9.7. Payment for Consent................................................................................51
ARTICLE 10. Security
SECTION 10.1. Security Documents................................................................................51
SECTION 10.2. Opinions of Counsel...............................................................................52
SECTION 10.3. Release and Substitution of Collateral............................................................52
SECTION 10.4. Certificates of the Company.......................................................................52
SECTION 10.5. Authorization of Actions to be Taken by the Trustee Under the Security Documents..................53
SECTION 10.6. Authorization of Receipt of Funds by the Trustee Under the Security Documents.....................53
SECTION 10.7. Release upon Termination of the Obligations.......................................................53
ARTICLE 11. Subsidiary Guarantees
SECTION 11.1. Guarantees........................................................................................54
SECTION 11.2. Limitation on Liability...........................................................................55
SECTION 11.3. Successors and Assigns............................................................................55
SECTION 11.4. No Waiver.........................................................................................55
SECTION 11.5. Modification......................................................................................55
SECTION 11.6. Release of Subsidiary Guarantor...................................................................56
ARTICLE 12. Miscellaneous
SECTION 12.1. Trust Indenture Act Controls......................................................................56
SECTION 12.2. Notices...........................................................................................56
SECTION 12.3. Communication by Holders with Other Holders.......................................................57
SECTION 12.4. Certificate and opinion as to Conditions Precedent................................................57
SECTION 12.5. Statements Required in Certificate or Opinion.....................................................57
SECTION 12.6. When Notes Disregarded............................................................................57
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar......................................................58
SECTION 12.8. Legal Holidays....................................................................................58
SECTION 12.9. Governing Law; Consent to Jurisdiction; Waiver of Immunities......................................58
SECTION 12.10. No Recourse Against Others.......................................................................59
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 12.11. Successors.......................................................................................59
SECTION 12.12. Multiple Originals...............................................................................59
SECTION 12.13. Table of Contents; Headings......................................................................59
Exhibit A Form of Note
Exhibit B Form of Security Agreement
Exhibit C Form of Intercreditor Agreement
Exhibit D Form of Pledge Agreement
</TABLE>
(iv)
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- -------
<S> <C> <C>
310 (a)(1)..................................................................................... 7.10
(a)(2)..................................................................................... 7.10
(a)(3)..................................................................................... N.A.
(a)(4)..................................................................................... N.A.
(b)........................................................................................ 7.8;7.10
(c)........................................................................................ N.A.
311 (a)........................................................................................ 7.11
(b)........................................................................................ 7.11
(c)........................................................................................ N.A.
312 (a)........................................................................................ 2.5
(b)........................................................................................ 12.3
(c)........................................................................................ 12.3
313 (a)........................................................................................ 7.6
(b)(1)..................................................................................... N.A.
(b)(2)..................................................................................... 7.6
(c)........................................................................................ 7.6
(d)........................................................................................ 7.6
314 (a)........................................................................................ 12.2
(b)........................................................................................ 10.4
(c)(1)..................................................................................... 12.4
(c)(2)..................................................................................... 12.4
(c)(3)..................................................................................... N.A.
(d)........................................................................................ 10.2
(e)........................................................................................ 12.5
315 (a)........................................................................................ 7.1
(b)........................................................................................ 7.5;12.2
(c)........................................................................................ 7.1
(d)........................................................................................ 7.1;7.2
(e)........................................................................................ 6.11
316 (a)(last sentence)......................................................................... 12.6
(a)(1)(A).................................................................................. 6.5
(a)(1)(B).................................................................................. 6.4
(a)(2)..................................................................................... N.A.
(b)........................................................................................ 6.7
317 (a)(1)..................................................................................... 6.8
(a)(2)..................................................................................... 6.9
(b)........................................................................................ 2.4
318 (a)........................................................................................ 12.1
</TABLE>
N.A. means Not Applicable.
- ------------------
Note: This Cross-Reference Table shall not, for any purpose be deemed to be
part of this Indenture.
<PAGE>
THIS INDENTURE IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF MAY 8, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., FOR ITSELF
AND AS AGENT, WLR RECOVERY FUND L.P., WILMINGTON TRUST COMPANY, AS AGENT, UNITED
STATES TRUST COMPANY OF NEW YORK, AS JUNIOR SUBORDINATED TRUSTEE AND THE OTHER
PERSONS AND ENTITIES SIGNATORY THERETO (THE "INTERCREDITOR AGREEMENT"), WHICH
MATERIALLY AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN OBLIGATIONS AND
CERTAIN SECURITY INTERESTS AND LIENS, AND LIMITS RIGHTS TO ENFORCEMENT OF THE
PARTIES TO THIS INDENTURE. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME HOLD
INDEBTEDNESS HEREUNDER OR WHICH IS SECURED HEREBY ARE BOUND BY THE TERMS OF THE
INTERCREDITOR AGREEMENT, WHICH WILL BE MADE AVAILABLE UPON REQUEST TO ANY PARTY
HERETO.
INDENTURE dated as of May 8, 2000, among PLANET HOLLYWOOD
INTERNATIONAL, INC., a Delaware corporation ("Planet Hollywood" and the
"Company"), the parties whose names and signatures appear on the signature pages
hereto under the heading "Subsidiary Guarantors" (collectively, the "Subsidiary
Guarantors") and UNITED STATES TRUST COMPANY OF NEW YORK, a New York banking
corporation (the "Trustee").
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders.
ARTICLE 1.
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.1. Definitions.
-----------
"Acquired Debt" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Restricted Subsidiary of such specified Person
and (ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person, which Debt or Lien was not Incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; PROVIDED, HOWEVER, that beneficial
ownership of 10% or more of the voting securities of a Person shall be deemed to
be control. The terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Aggregate Asset Disposition Proceeds" means from and after the Issue
Date the aggregate Net Available Proceeds from all Asset Dispositions.
"Asset Disposition" means any transfer, conveyance, sale, lease or
other disposition (collectively, any "disposition") by the Company or any
Restricted Subsidiary (including any disposition by means of a consolidation,
merger or similar transaction or as a result of any
<PAGE>
Condemnation) other than (a) dispositions in the ordinary course of business
(including dispositions of Memorabilia in the ordinary course of business and
dispositions of obsolete or worn-out property), (b) [Intentionally Omitted], (c)
dispositions of Orlando Allstar Cafe owned by All Star Cafe (New York), Inc.,
the Dublin, Ireland location owned by Rivermist Limited, the Munich, Germany
location owned by Movie Restaurant GmbH & Co. KG and Planet Hollywood at 57th
Street in New York, New York owned by Planet Hollywood New York, Ltd., (d) a
disposition by a Restricted Subsidiary to the Company or a Restricted Subsidiary
or by the Company to a Restricted Subsidiary of (i) shares of Capital Stock or
other ownership interests of a Restricted Subsidiary, (ii) all or substantially
all of the assets of the Company or any Restricted Subsidiary representing a
division or line of business or (iii) other assets or rights of such Person or
any of its Restricted Subsidiaries, (e) a Restricted Payment which is permitted
pursuant to Section 4.5 or (f) a disposition that is subject to the provisions
set forth in Section 5.1(a).
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Notes, compounded annually) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Leaseback Transaction (including any period for which
such lease has been extended).
"Average Life" means, as of the date of determination with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Bank Credit Agreement" means any one or more credit agreements (which
may include or consist of revolving credits) between the Company or any
Restricted Subsidiary and one or more banks or other financial institutions
providing financing for the business of the Company and its Restricted
Subsidiaries, including without limitation the Revolving Credit Agreement and
the Senior Secured Note Purchase Agreement.
"Bankruptcy Court" means the United States District Court for the
District of Delaware, presiding over the Chapter 11 cases of the Company and
certain of its Subsidiaries and Affiliates.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" of any Person means an obligation that is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with GAAP (a "Capital
Lease"). The amount of such Debt represented by such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and shall (i) include any preferred equivalent
obligations and (ii) exclude debt securities convertible into Capital Stock.
2
<PAGE>
"Change of Control" means:
(i) the sale, lease or transfer, in one transaction or a
series of related transactions, of all or substantially all the assets
of the Company and the Restricted Subsidiaries taken as a whole, except
as permitted by the proviso to Section 5.1; or
(ii) the adoption of a plan relating to the
liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any assets of the Company or any of its Subsidiaries
defined as "Collateral" in any of the Security Documents and assets from time to
time in which a Lien exists as security for any of the Obligations under this
Indenture.
"Collateral Agent" means United States Trust Company of New York,
acting in its capacity as agent with respect to the Collateral under the
Security Documents.
"Commission" means the Securities and Exchange Commission and any
survivor agency.
"Condemnation" means any actual or threatened condemnation, taking or
exercise of the power of eminent domain or similar action or proceeding.
"Consolidated EBITDA" for any period means the Consolidated Net Income
of the Company and its Restricted Subsidiaries for such period PLUS the
following (to the extent deducted in calculating such Consolidated Net Income):
(i) Consolidated Interest Expense of the Company and its
Restricted Subsidiaries for such period,
(ii) Consolidated Income Tax Expense of the Company and its
Restricted Subsidiaries for such period,
(iii) the consolidated depreciation and amortization expense
included in the income statement of the Company and its Restricted
Subsidiaries for such period, and
(iv) any non-cash expense related to the issuance to employees
of the Company or any Restricted Subsidiary of the Company of options
to purchase Capital Stock of the Company or such Restricted Subsidiary;
PROVIDED, HOWEVER, that if Consolidated EBITDA for any period shall be less than
$1.00, Consolidated EBITDA for such period shall be deemed to be $1.00.
"Consolidated Income Tax Expenses" for any period means the
consolidated provision for income taxes of the Company and the Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
3
<PAGE>
"Consolidated Interest Expense" means, for any period, the consolidated
interest expense included in a consolidated income statement (excluding interest
income) of the Company and the Restricted Subsidiaries for such period
calculated on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; PROVIDED, HOWEVER,
that there shall be excluded therefrom:
(i) the net income (or loss) of any Person acquired by the
Company or a Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction,
(ii) the net income (and loss) of any Person that is not a
Restricted Subsidiary except to the extent of the amount of dividends
or other distributions actually paid to the Company or a Restricted
Subsidiary by such Person during such period,
(iii) all extraordinary gains and losses (including from Asset
Dispositions),
(iv) the cumulative effect of changes in accounting
principles,
(v) non-cash gains or losses resulting from fluctuations in
currency exchange rates,
(vi) any noncash gain or loss realized on the termination of
any employee pension benefit plan and
(vii) the tax effect of any of the items described in clauses
(i) through (vii) above;
PROVIDED FURTHER, HOWEVER, that for purposes of any determination pursuant to
the provisions of Section 4.5, there shall further be excluded therefrom the net
income of any Restricted Subsidiary that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"Consolidated Net Worth" of any Person means the consolidated
stockholders, equity of such Person, determined on a consolidated basis in
accordance with GAAP, LESS amounts attributable to Disqualified Stock of such
Person; PROVIDED, HOWEVER, that, with respect to the Company, adjustments
following the date of this Indenture to the accounting books and records of the
Company in accordance with Accounting Principles Board Opinions Nos. 16 and 17
(or successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.
"Core Asset" means any of the following assets: Planet Hollywood
copyrights and globe design and stylized lettering trademarks, classes 42 and
25; the Company's investment in the Planet Hollywood restaurant facilities
located in Orlando, Florida, London, England, Paris, France, Las Vegas, Nevada,
1540 Broadway, New York (currently Official All Star Cafe restaurant), Myrtle
Beach, South Carolina, Euro Disney, France, Cannes, France, Atlantic City, New
Jersey, Washington, D.C., San Antonio, Texas, St. Louis, Missouri, Dallas,
Texas, Atlanta, Georgia, Miami Beach, Florida (currently Official All Star Cafe
restaurant); Joint Ventures (excluding Times Square Partners, ECE de S.A., C.V.,
Planet Hollywood Asia Pte, Ltd. and PlanetHollywood Asia.com, Inc.); and
Memorabilia reasonably necessary to operate the foregoing Core Assets.
4
<PAGE>
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent,
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including any such
obligations Incurred in connection with the acquisition of property,
assets or businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers acceptances or similar facilities
issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person,
(vi) all Receivables Sales of such Person, together with any
obligation of such Person to pay any discount, interest, fees,
indemnities, penalties, recourse expenses or other amounts in
connection therewith,
(vii) all obligations to redeem Disqualified Stock issued by
such Person,
(viii) all Attributable Debt,
(ix) net obligations under Interest Rate and Currency
Protection Agreements of such Person,
(x) every obligation of the type referred to in clauses (i)
through (ix) of another Person secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the fair market value of such property or assets and the amount of the
obligation so secured and
(xi) every obligation of the type referred to in clauses (i)
through (ix) of another Person and all dividends of another Person the
payment of which, in either case, such Person has Guaranteed.
The "amount" or "principal amount" of any Debt at any time of determination as
used herein represented by (a) any Debt issued at a price that is less than the
principal amount at maturity thereof, shall be the amount of the liability in
respect thereof determined in accordance with GAAP, (b) any Receivables Sales
shall be the amount of the unrecovered capital or principal investment of the
purchaser (other than the Company or a Wholly-Owned Restricted Subsidiary)
thereof, excluding amounts representative of yield or interest earned on such
investment, (c) any Disqualified Stock, shall be the maximum fixed redemption or
repurchase price in respect thereof, (d) any Capital Lease Obligation, shall be
determined in accordance with the definition thereof and (e) any Permitted
Interest Rate or Currency Protection Agreement shall be zero. In no event shall
Debt include any liability for
5
<PAGE>
taxes. For purposes of determining any particular amount of Debt, Guarantees or
Liens with respect to letters of credit supporting Debt otherwise included in
the determination of a particular amount shall not be included.
"Default" means an event that is, or after the passing of time or the
giving of notice or both would be, an Event of Default.
"Defeasance Obligations" means Government Securities (or certificates
representing an ownership interest in such Government Obligations) which are not
callable or redeemable at the issuer's option.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
first anniversary of the final Stated Maturity of the Notes; PROVIDED, HOWEVER,
that any Preferred Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require the Company to
repurchase or redeem such Preferred Stock upon the occurrence of a change of
control occurring prior to the first anniversary of the final Stated Maturity of
the Notes shall not constitute Disqualified Stock if the change of control
provisions applicable to such Preferred Stock are no more favorable to the
holders of such Preferred Stock than the provisions applicable to the Notes
contained in Section 4.10 and such Preferred Stock specifically provides that
the Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Notes as are required to be
repurchased pursuant to Section 4.10.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated "A-311 or higher or "A--" or higher
according to Moody's Investors Service, Inc. or Standard & Poor's Ratings Group
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)) respectively, at the time as of which any investment or rollover therein
is made.
"Equity Offering" means any offering of common stock of the Company in
an underwritten sale to the public pursuant to a registration statement (other
than on Form S-8 or any other form relating to securities issuable under any
benefit plan of the Company) that is declared effective by the Commission.
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act) and the rules and regulations thereunder.
"Foreign Subsidiary" means any Subsidiary of the Company that is
organized in a jurisdiction outside of the United States of America.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the relevant date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements
6
<PAGE>
and pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person, (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purposes of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that the Guarantee by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business.
"Holders" means the registered holders from time to time of the Notes.
"Hospitality" shall mean Planet Hospitality Holdings, Inc.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including by acquisition of Subsidiaries or the recording, as required pursuant
to GAAP or otherwise, of any such Debt or other obligation on the balance sheet
of such Person (and "Incurrence", "Incurred" and "Incurring" shall have the
meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in GAAP
that results in an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt and that neither the accrual
of interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt. Notwithstanding the foregoing, the Company may elect to
treat all or any portion of revolving credit debt of the Company or a Subsidiary
as being Incurred from and after any date beginning the date the revolving
credit commitment is extended to the Company or a Subsidiary, by furnishing
notice thereof to the Trustee, and any borrowings or reborrowings by the Company
or a Subsidiary under such commitment up to the amount of such commitment
designated by the Company as Incurred shall not be deemed to be new Incurrence
of Debt by the Company or such Subsidiary; PROVIDED, HOWEVER, that the undrawn
portion of any such revolving credit debt shall be deemed to be outstanding Debt
until such time as the commitment thereunder is terminated. Neither the accrual
of interest nor the accretion of principal of a non-interest bearing or other
discount or deferrable security shall be deemed the Incurrence of Debt.
7
<PAGE>
"Indenture" means this Indenture as the same may be amended,
supplemented or otherwise modified from time to time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of the Board of Directors of the Company, qualified to perform the task
for which it has been engaged and disinterested and independent with respect to
the Company and its Subsidiaries and Affiliates.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
the Issue Date by and among the Company, the Revolving Credit Agent, the Senior
Secured Notes Agent and the Trustee and consented to by the Holders party
thereto, which agreement shall set forth the relative rights of the parties in
respect of the shared collateral and security interests granted by the Company
and the Subsidiary Guarantors to such parties, as the same may be amended,
supplemented or otherwise modified from time to time, and which shall be
substantially in the form of Exhibit C attached hereto.
"Interest Payment Dates" mean each of the semiannual interest payment
dates on April 1 and October 1 of each year, commencing October 1, 2000.
"Interest Rate or Currency Protection Agreement" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) to, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person, including any payment on a Guarantee of any
obligation of such other Person, but excluding any loan, advance or extension of
credit to an employee of the Company or any Restricted Subsidiary in the
ordinary course of business, accounts receivables and other commercially
reasonable extensions of trade credit.
"Issue Date" means the date on which the Notes are first issued and
delivered.
"Joint Venture" means (i) the joint ventures between Planet Hollywood
(Theatres), Inc. and AMCPH Holdings, Inc., (ii) Planet Hollywood Asia Pte, Ltd.,
(iii) ECE de S.A., C.V., (iv) PlanetHollywood Asia.com, Inc., (v)
PlanetHollywood.com, Inc., (vi) Times Square Partners and (vii) any joint
venture in which the Company or any Restricted Subsidiary does not have both a
majority ownership interest therein and the power to direct the policies,
management and affairs thereof.
"Lenders" means each of the institutions a party to and acting as
lenders under the Revolving Credit Agreement.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional
8
<PAGE>
sale or other title retention agreement having substantially the same economic
effect as any of the foregoing or any Sale and Leaseback Transaction).
"Memorabilia" means all memorabilia, collectibles, souvenirs, keepsakes
or any other tangible property owned by the Company or any Subsidiary Guarantor
the market value of which is to any extent derived from the association with (i)
a celebrity, entertainer or athlete or any other person reasonably understood to
be a celebrity, entertainer or athlete or (ii) any motion picture, television
program, series of television programs or sports or entertainment event.
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or Permitted Short-Term Investments received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of assumption by the acquiror of
Debt or other obligations relating to such properties or assets) therefrom by
such Person, net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred and all federal, state, provincial, foreign
and local taxes (including taxes payable upon payment or other distribution of
funds from a foreign subsidiary to the Company or another Subsidiary of the
Company) required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Debt which is secured by such assets in accordance with the
terms of any Lien upon or with respect to such assets or which must by the terms
of such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person or Joint Ventures as
a result of such Asset Disposition, (iv) appropriate amounts to be provided by
such Person or any Restricted Subsidiary thereof, as the case may be, as a
reserve in accordance with GAAP against any liabilities associated with such
assets and retained by such Person or any Restricted Subsidiary thereof, as the
case may be, after such Asset Disposition, including, without limitation,
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by the Board of Directors of the Company, in its reasonable good
faith judgment evidenced by a board resolution filed with the Trustee; PROVIDED,
HOWEVER, that any reduction in such reserve within twelve months following the
consummation of such Asset Disposition will be treated for all purposes of this
Indenture and the Notes as a new Asset Disposition at the time of such reduction
with Net Available Proceeds equal to the amount of such reduction, and (v) any
consideration for an Asset Disposition (which would otherwise constitute Net
Available Proceeds) that is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, but amounts under this
clause (v) shall become Net Available Proceeds at such time and to the extent
such amounts are released to such Person.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Debt:
(i) as to which neither the Company nor any Restricted
Subsidiary:
9
<PAGE>
(a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Debt);
(b) is directly or indirectly liable (as a guarantor or
otherwise); or
(c) constitutes the lender;
(ii) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against
the Company or any Unrestricted Subsidiary) would permit (upon notice,
lapse of time or both) any holder of any other Debt of the Company or
any Restricted Subsidiary to declare a default on such other Debt or
cause the payment thereof to be accelerated or payable prior to its
stated maturity; and
(iii) as to which the lenders have been notified in writing
that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Notes" means the Notes issued under this Indenture.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each holder at his address
appearing in the Notes register on the date of the Offer offering to purchase up
to the principal amount of Notes specified in such offer at the purchase price
specified in such offer (as determined pursuant to this Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such offer and a settlement date for purchase of Notes
within five Business Days after the Expiration Date. The Company shall notify
the Trustee at least 15 Business Days (or such shorter period as is acceptable
to the Trustee) prior to the mailing of the Offer of the Company's obligation to
make an Offer to Purchase, and the offer shall be mailed by the Company or, at
the Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain information concerning the business of the
Company and its Subsidiaries which the Company in good faith believes will
enable such holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the documents
required to be filed with the Trustee pursuant to this Indenture (which
requirements may be satisfied by delivery of such documents together with the
offer), (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring the Company to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such holders to tender Notes pursuant to the
Offer to Purchase.
"Officer" means the Chairman of the Board, the President, the Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company.
10
<PAGE>
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means an opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"Parent" means, with regard to any Person, any other entity of which
such Person is a Subsidiary.
"Permitted Interest Rate or Currency Protection Agreement" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary (i) in any Person as a result of which such Person becomes
a Restricted Subsidiary, (ii) in Permitted Short-Term Investments, (iii) in
Permitted Interest Rate or Currency Protection Agreements, (iv) made as a result
of the receipt of noncash consideration from an Asset Disposition that was made
pursuant to and in compliance with Section 4.7, (v) in TSP as and if required
under the TSP Agreement, (vi) in Joint Ventures, Foreign Subsidiaries or
Unrestricted Subsidiaries using only the net proceeds from dispositions of
existing Joint Ventures, Foreign Subsidiaries or Unrestricted Subsidiaries,
(vii) consisting of loans or advances to employees made in the ordinary course
of business not to exceed $250,000 in the aggregate outstanding at any one time
and (viii) in addition to any Investments in Joint Ventures pursuant to clause
(vi) above, in Joint Ventures, Foreign Subsidiaries and Unrestricted
Subsidiaries not to exceed in the aggregate the amounts set forth below during
the indicated periods:
<TABLE>
<CAPTION>
Amount of Permitted Investment in
Period... Joint Ventures During such Period
--------- ---------------------------------
<S> <C> <C>
Calendar Year 2000 $2.5 million
Calendar Year 2001 $3 million
Calendar Year 2002 $3 million
Calendar Year 2003 $4 million
Calendar Year 2004 $4 million
January 1, 2005 through Fifth
Anniversary of Issue Date $1 million
</TABLE>
"Permitted Short-Term Investments" means: (i) U.S. dollars, (ii)
Government Securities that mature or are subject to redemption at the option of
the holder not more than one year after the date of acquisition thereof; (iii)
any time deposit account, money market deposit and certificate of deposit
maturing not more than 270 days after the date of acquisition issued by, or
demand deposit in, an Eligible Institution; (iv) commercial paper maturing not
more than 270 days after the date of acquisition issued by a corporation (other
than an Affiliate of the Company) with a rating, at the date of acquisition, of
"P-1" or higher according to Moody's Investors Service, Inc. or "A-1" or higher
according to Standard & Poor's Ratings Group (or such similar equivalent rating
by at least one "nationally recognized statistical rating organization" (as
defined in Rule 436 under the Securities Act)); (iv) any banker's acceptances or
money market deposit accounts issued or offered by an Eligible Institution; (vi)
repurchase obligations with a term of not more than 7 days for Government
Securities
11
<PAGE>
entered into with an Eligible Institution; and (vii) any fund investing
primarily in investments of the types described in clauses (i) through (vi)
above.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Plan of Reorganization" means that certain First Amended Joint Plan of
Reorganization of the Company and certain of its Subsidiaries, dated as of
December 13, 1999, as amended, supplemented or otherwise modified, and as
confirmed by the United States Bankruptcy Court for the District of Delaware by
order dated January 21, 2000.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of the
date hereof, by the Company, Planet Hollywood Memorabilia, Inc. and each
Subsidiary Guarantor that is a pledgor hereunder in favor of the Collateral
Agent for the benefit of the Holders, as amended, modified or supplemented from
time to time, and which shall be substantially in the form of Exhibit D attached
hereto.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Principal" of a Note means the principal of the Note PLUS the premium,
if any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money in
respect of the sale of goods or services.
"Receivables Sale" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in connection
with a disposition of the business operations of such Person relating thereto or
a disposition of defaulted Receivables for purpose of collection and not as a
financing arrangement.
"Refinance" means in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Debt in
exchange or replacement for, such Debt. "Refinanced" and "Refinance" shall have
correlative meanings.
"Refinancing Debt" means Debt that Refinances any Debt of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in
compliance with this Indenture, including Debt that Refinances Refinancing Debt;
PROVIDED, HOWEVER, that:
(i) such Refinancing Debt has a Stated Maturity no earlier
than the Stated Maturity of the Debt being Refinanced,
(ii) such Refinancing Debt has an Average Life at the time
such Refinancing Debt is Incurred that is equal to or greater than the
Average Life of the Debt being Refinanced,
12
<PAGE>
(iii) such Refinancing Debt has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value)
then outstanding or committed (PLUS fees and expenses, including any
premium and defeasance costs) under the Debt being Refinanced;
PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
Refinancing Debt in respect of the Revolving Credit Agreement may be in
an amount not to exceed $25 million, if such Refinancing Debt is
secured by only Receivables, inventory and Memorabilia of the Company
and its Restricted Subsidiaries and (B) the aggregate principal amount
of all Refinancing Debt in respect of the Senior Secured Notes may be
in an amount not to exceed $10 million; and
(iv) in the event the Debt being Refinanced constitutes a
Subordinated Obligation, the Refinancing Debt is subordinated to the
Notes to at least the same extent as the Debt being Refinanced;
PROVIDED FURTHER, HOWEVER, that Refinancing Debt shall not include (x) Debt of a
Subsidiary that Refinances Debt of the Company or (y) Debt of the Company or a
Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
"Related Person" of any Person means any other Person directly or
indirectly owning (a) 10% or more of the outstanding common equity of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person) or (b) 10% or more of the combined voting
power of the Voting Stock of such Person.
"Restricted Payment" with respect to any Person means:
(i) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary,
and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly-Owned Restricted Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation)),
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any
Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary),
including the exercise of any option to exchange any Capital Stock
(other than into Capital Stock of the Company that is not Disqualified
Stock),
(iii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation
13
<PAGE>
of satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition)
or
(iv) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the Issue Date, unless such Subsidiary is an Unrestricted
Subsidiary.
"Revolving Credit Agent" means the Agent from time to time under the
Revolving Credit Agreement.
"Revolving Credit Agreement" means the Revolving Credit Agreement dated
as of the date hereof among the Company, Planet Hollywood Memorabilia, Inc., the
Subsidiary Guarantors, The CIT Group/Business Credit, Inc. and WLR Recovery Fund
L.P., as the same may be amended, supplemented or otherwise modified from time
to time.
"Sale and Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"Securities Act" means the Securities Act of 1933, as amended (or any
successor act) and the rules and regulations thereunder.
"Security Agreement" means the Security Agreement, dated as of the date
hereof, made by the Company and the Subsidiary Guarantors in favor of the
Collateral Agent as secured party thereunder, as the same may be amended,
supplemented or otherwise modified from time to time, and which shall be
substantially in the form of Exhibit B attached hereto.
"Security Documents" shall mean, collectively, the Security Agreement,
the Pledge Agreement, each Assignment for Security (Trademarks and Copyrights),
substantially in the form of Exhibit A to the Security Agreement and all Uniform
Commercial Code financing statements required by the Security Agreement to be
filed with respect to the security interests in personal property and fixtures
created pursuant to such agreements, and all other documents and agreements
executed and delivered by the Company and Planet Hollywood Memorabilia, Inc.
and/or the Subsidiary Guarantors in connection with any of the foregoing
documents.
"Senior Secured Notes" means the Company's Senior Secured Notes Due
2001.
"Senior Secured Notes Agent" means Wilmington Trust Company, together
with its successors and assigns in such capacity.
"Senior Secured Note Purchase Agreement" means the Note Purchase
Agreement dated as of the date hereof among the Company, each of the purchasers
signatory thereto and the Senior Secured Notes Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"Significant Subsidiary" means a Restricted Subsidiary that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
14
<PAGE>
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement to that
effect.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person or
(ii) any other Person (other than a corporation) in which such Person, or one or
more other Subsidiaries of such Person or such Person and one or more other
Subsidiaries of such Person, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.
Notwithstanding the foregoing, a Joint Venture shall be not be deemed to be a
Subsidiary of the Company or any Restricted Subsidiary.
"Subsidiary Guarantee" means the Guarantee by a Subsidiary Guarantor of
the Company's Obligations with respect to the Notes contained in Article 11
hereof.
"Subsidiary Guarantor" shall have the meaning set forth in the Preamble
and from and after the Issue Date shall include each Restricted Subsidiary that,
pursuant to Section 4.4 or Section 4.17, fully and unconditionally guarantees,
jointly and severally, on a senior basis to each Holder the Company's
Obligations under this Indenture and the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. H 77aaa-77bbbb)
as in effect on the date of this Indenture, except as provided by Section 9.3.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TSP" shall mean Times Square Partners LLC.
"TSP Agreement" means the Amended and Restated Limited Liability
Company Operating Agreement of TSP, dated as of December 3, 1997, among Intell
Times Square LLC, Madison Broadway Associates LLC, SPE Times Square, Inc.,
Hospitality and Ned White.
"TSP Membership Interest" shall mean the twenty percent (20%) equity
interest in TSP owned by Hospitality.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
15
<PAGE>
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
designated as such by the Board of Directors of the Company as set forth below
where (a) neither the Company nor any of its other Subsidiaries (other than
another Unrestricted Subsidiary) (1) provides credit support for, or Guarantee
of, any Debt of such Subsidiary or any Subsidiary of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Debt), (2) is directly
or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary, or (3) has any obligation to make additional Investments in such
Subsidiary or any Subsidiary of such Subsidiary, (b) such Subsidiary has no Debt
other than Non-Recourse Debt; PROVIDED, HOWEVER, that if any Unrestricted
Subsidiary Incurs any Debt other than Non-Recourse Debt or any Non-Recourse Debt
Incurred by such Unrestricted Subsidiary shall thereafter cease for any reason
to be Non-Recourse Debt, such event shall be deemed to constitute an Incurrence
of such Debt by the Company and such Unrestricted Subsidiary shall be deemed to
be a Restricted Subsidiary for purposes of Section 4.4 and (c) such Subsidiary
and each Subsidiary of such Subsidiary has at least one director on its board of
directors that is not a director or executive officer of the Company or any
Restricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, PROVIDED that, immediately after giving effect to such designation,
the Company could incur an additional $1.00 of Debt pursuant to Section 4.3(a).
"Vendor Financing Facility" means (i) any agreements between the
Company and/or any Restricted Subsidiary and one or more vendors or lessors of
the Company and/or any Restricted Subsidiary (or any affiliate of any such
vendor or lessor) providing financing for the acquisition by the Company or any
such Restricted Subsidiary of inventory, equipment or other assets used in the
business of the Company and/or any Restricted Subsidiary and (ii) the existing
agreement between the Company and INAC, Inc. providing financing for the
insurance premiums for certain insurance policies of the Company and its
Restricted Subsidiaries.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly-Owned Restricted Subsidiary" means a Restricted Subsidiary 99%
or more of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by the
Company or by one or more Wholly-Owned Restricted Subsidiaries of the Company or
by the Company and one or more Wholly-Owned Restricted Subsidiaries of the
Company.
16
<PAGE>
SECTION 1.2. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
- ---------------------------------------------------------------------------- ------------------
<S> <C>
"Affiliate Transaction"...................................................... 4.8
--------- -----------
"Appendix"................................................................... 2.1
--------
"Bankruptcy Law"............................................................. 6.1
---------- ---
"Cash Insurance"............................................................. 4.13
---- ---------
"Company".................................................................... Preamble
-------
"Covenant Defeasance Option"................................................. 8.1(b)
-------- ---------- ------
"Creditor Directors"......................................................... 4.15
-------- ---------
"Creditor Director Re-election Notice"....................................... 4.15
-------- -------- ----------- ------
"Custodian".................................................................. 6.1
---------
"Debt Coverage Ratio"........................................................ 4.3
---- -------- -----
"Event of Default"........................................................... 6.1
----- -- -------
"Holders Notice of Replacement Creditor Directors"........................... 4.15
------- ------ -- ----------- -------- ---------
"Insurance Account".......................................................... 4.13
--------- -------
"Insurance Proceeds"......................................................... 4.13
--------- --------
"Company".................................................................... Preamble
-------
"Legal Defeasance Option".................................................... 8.1(b)
----- ---------- ------
"Legal Holiday".............................................................. 12.8
----- -------
"Mandatory Redemption"....................................................... 3.8
--------- ----------
"Notes"...................................................................... Recital
-----
"Notice of Default" 6.1
------ -- -------
"Obligations"................................................................ 10.1
-----------
"Paying Agent"............................................................... 2.3
------ -----
"Permitted Lien"............................................................. 4.11
--------- ----
"Planet Hollywood"........................................................... Preamble
------ ---------
"Proxy Statement"............................................................ 4.15
----- ---------
"Registrar".................................................................. 2.3
---------
"Replacement Director"....................................................... 4.15
----------- --------
"Successor Company".......................................................... 5.1
--------- -------
"Trustee".................................................................... Preamble
-------
</TABLE>
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. The
provisions of TIA ss.ss. 310 through 317 that impose a duty on any Person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture upon and so
long as the Indenture and Notes are subject to the TIA. If any provision of this
Indenture limits, qualifies or conflicts with such duties, the imposed duties
shall control. If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect. The following TIA terms have the
following meanings:
17
<PAGE>
"Commission" means the Commission;
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words
in the plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate
or junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any noninterest bearing or other
discount or deferrable interest security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP, but accretion
of principal on such security shall not be deemed to be the Incurrence
of Debt;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater;
(9) the terms "redemption" and "redeemable" shall not be
deemed to refer to Offers to Purchase or to repurchases pursuant to
Section 4.10 or similar offers or repurchases.
18
<PAGE>
ARTICLE 2.
The Notes
---------
SECTION 2.1. Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (PROVIDED
that any such notation, legend or endorsement is in a form acceptable to the
Company). Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in the Exhibit A are part of the terms of this Indenture.
SECTION 2.2. Execution and Authentication. Two officers shall sign the
Notes for the Company by manual or facsimile signature.
If an officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company, authenticate and deliver Notes for original issue up
to the aggregate principal amount of $95,000,000. Such order shall specify the
amount of the Notes to be authenticated and the date on which the original issue
of Notes is to be authenticated. The aggregate principal amount of Notes
outstanding at any time may not exceed $95,000,000 except as provided in Section
2.7.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency where Notes may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. Whenever the Company must issue or
deliver Notes pursuant to this Indenture, the Trustee shall authenticate the
Notes at the Company's request.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated wholly owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
19
<PAGE>
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
SECTION 2.4. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Note, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Notes and shall notify the Trustee of
any default by the Company in making any such payment. If either Company or a
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.5. Lists of Holders. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.
SECTION 2.6. Transfer and Exchange. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(l) (or any
successor provision thereto) of the Uniform Commercial Code are met. When Notes
are presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Notes of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met.
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section.
The Company shall not be required to make and the Registrar need not
register transfers or exchanges of Notes selected for redemption (except, in the
case of Notes to be redeemed in part, the portion thereof not to be redeemed) or
any Notes for a period of 15 days before a selection of Notes to be redeemed or
15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any Note,
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
may deem and treat the person in whose name a Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of and
interest on such Note and for all other purposes whatsoever, whether or not such
Note
20
<PAGE>
is overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary.
All Notes issued upon any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.7. Replacement Notes. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 (or any
successor provision thereto) of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. Such Holder
shall furnish an indemnity bond sufficient in the judgment of the Company and
the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar
and any co-registrar from any loss which any of them may suffer if a Note is
replaced. The Company and the Trustee may charge the Holder for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Company.
SECTION 2.8. Outstanding Notes. The Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note; PROVIDED, HOWEVER, that, in determining whether
the Holders of the requisite principal amount at maturity of the outstanding
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, Notes owned by the Company or any other obligor upon the
Notes or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee actually knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Affiliate of the Company or of such other
obligor.
SECTION 2.9. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company consider
21
<PAGE>
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes and deliver them in
exchange for Temporary Notes.
SECTION 2.10. Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and may,
but shall not be required to, destroy (subject to the record retention
requirements of the Exchange Act) all Notes surrendered for registration of
transfer, exchange, payment or cancellation unless the Company directs the
Trustee to deliver canceled Notes to the Company. The Company may not issue new
Notes to replace securities they have redeemed, paid or delivered to the Trustee
for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are Holders on a
subsequent special record date. The Company shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail to each Holder a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3.
Redemption
SECTION 3.1. Notices to the Trustee. If the Company elects to redeem
Notes pursuant to Sections 3.7 or 3.8 hereof, it shall notify the Trustee in
writing of the redemption date, the principal amount of Notes to be redeemed and
the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.2. Selection of Notes To Be Redeemed. If less than all the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed by a method that complies with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or if the
Notes are not listed, on a pro rata basis, by lot or by such method as the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the
22
<PAGE>
time of selection by fiduciaries in similar circumstances. The Trustee shall
make the selection from outstanding Notes not previously called for redemption.
The Trustee may select for redemption portions of the principal of Notes that
have denominations larger than $1,000. Notes and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. The Trustee shall notify the Company
promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Notes, the Company shall mail a notice
of redemption by first-class mail to each Holder of Notes to be redeemed at such
Holder's registered address.
The notice shall identify the Notes (including CUSIP number(s), if any)
to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be
redeemed, the identification and principal amounts of the particular
Notes to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Notes pursuant to which the
Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the redemption
date and at the redemption price stated in the notice. Upon surrender to the
Paying Agent, such Notes shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date. Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
23
<PAGE>
SECTION 3.5. Deposit of Redemption Price. On or prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date other than Notes or portions of Notes called for
redemption which have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.6. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
for the Holder (at the Company's expense) a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.
SECTION 3.7. Optional Redemption. At any time following the Issue Date,
the Notes will be redeemable, in whole or in part, at the option of the Company,
upon not less than 30 and no more than 60 days' prior notice, on any April 1,
July 1, October 1 or January 2 of any year at a redemption price equal to 100%
of the principal amount thereof PLUS accrued and unpaid interest, if any, to the
date of redemption.
SECTION 3.8. Mandatory Redemption. If (i) as reflected in the Company's
financial statements for the most recently completed period of four fiscal
quarters immediately preceding any Interest Payment Date (commencing with the
four-quarter fiscal period ending immediately prior to the first anniversary of
the Issue Date), the ratio of the Company's Consolidated EBITDA to Consolidated
Interest Expense for such four-quarter period is greater than 2.00 to 1.00 and
(ii) the sum of the Company's cash on hand at the last day of such period PLUS
the lesser of the borrowing base or the commitments under the Revolving Credit
Agreement exceeds $25,000,000, then the Company shall be required to use 50% of
such excess amount to redeem the Notes, in whole or in part, on the next
Interest Payment Date, at a redemption price equal to 100% of the principal
amount thereof PLUS accrued and unpaid interest, if any, to the date of
redemption (a "Mandatory Redemption"); PROVIDED, however, that the Company shall
not be required to make a Mandatory Redemption if such redemption is not
otherwise permitted under the Revolving Credit Agreement or the Senior Secured
Note Purchase Agreement.
ARTICLE 4.
Covenants
SECTION 4.1. Payment of Notes. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal, interest and other amounts due on
the Notes shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all such amounts then due and the Trustee or the Paying Agent is not
prohibited from paying such amounts to the Holders on such date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Notes, and shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
Notwithstanding any other provision of this Indenture or the Notes, the
Company may elect to defer and compound to principal the first five semi-annual
installments of interest on the Notes by providing written notice of such
election to the Trustee at least 10 days prior to, but no more than 45 days
prior to, the record date for the applicable interest payment date, which
election (other than an
24
<PAGE>
election with respect to the first two semi-annual installments of interest
following the Issue Date) shall be accompanied by an Officers' Certificate (i)
certifying that for the most recently completed period of four fiscal quarters
the ratio of the Company's Consolidated EBITDA to Consolidated Interest Expense
is less than or equal to 1.75 to 1.00 and (ii) setting forth the detailed
computations made to determine such ratio. To the extent that interest on the
Notes is deferred and compounded pursuant to the foregoing sentence, such
installments of interest shall be calculated at the rate of 12.75% per annum
(rather than 10% per annum).
SECTION 4.2. SEC Reports. Notwithstanding that the Company may not be,
or may not be required to remain, subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Commission (unless the Commission will not accept such filing) and provide the
Trustee and Holders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
The Company will also comply with the other provisions of TIA ss. 314(a).
In addition, for so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, promptly following their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company,
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Consolidated Debt. (a) The Company may not,
and may not permit any Restricted Subsidiary to, Incur any Debt; PROVIDED,
HOWEVER, that the Company or any Restricted Subsidiary may Incur Debt so long as
the ratio of (i) the aggregate consolidated principal amount of Debt of the
Company and the Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred since such balance sheet
date and the receipt and application of the proceeds thereof to (ii)
Consolidated EBITDA for the four full fiscal quarters ending on the date of such
balance sheet determined on a pro forma basis as if any such Debt had been
Incurred and the proceeds thereof had been applied at the beginning of such four
fiscal quarters, would be less than 3.00 to 1.00 (the "Debt Coverage Ratio").
(b) Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur the following:
(i) Debt Incurred under any one or more Vendor Financing
Facilities;
(ii) Debt under the Revolving Credit Agreement or other
agreements or arrangements to finance working capital requirements of
the Company and any Refinancing Debt in respect of such Debt; PROVIDED,
HOWEVER, at the time of the Incurrence of such Debt and after giving
effect thereto, the aggregate principal amount of all Debt Incurred
pursuant to this clause (ii) and then outstanding shall not exceed
25
<PAGE>
(A) $16.5 million or (B) $25 million, if such Debt is secured by only
Receivables, inventory and Memorabilia of the Company and the
Restricted Subsidiaries;
(iii) Debt represented by the Senior Secured Notes and any
Refinancing Debt in respect of such Debt; PROVIDED that at the time of
the Incurrence of such Debt and after giving effect thereto, (A) the
aggregate principal amount of all Debt Incurred under the Senior
Secured Notes and then outstanding shall not exceed $10 million;
(iv) Debt owed by the Company to any Wholly-Owned Restricted
Subsidiary or Debt owed by any Wholly-Owned Restricted Subsidiary to
the Company or to another Wholly-Owned Restricted Subsidiary; PROVIDED,
HOWEVER, that upon either (x) the transfer or other disposition by such
Wholly-Owned Restricted Subsidiary or the Company of any Debt so
permitted to a Person other than the Company or another Wholly-Owned
Restricted Subsidiary or (y) the issuance (other than directors'
qualifying shares), sale, lease, transfer or other disposition of
shares of Capital Stock (including by consolidation or merger) of such
Wholly-Owned Restricted Subsidiary to a Person other than the Company
or another such Wholly-Owned Restricted Subsidiary, the provisions of
this clause (iii) shall no longer be applicable to such Debt and such
Debt shall be deemed to have been Incurred by the Company thereof at
the time of such issuance, sale, lease, transfer or other disposition;
(v) Refinancing Debt Incurred to Refinance Debt Incurred
pursuant to the first paragraph of this covenant or pursuant to clause
(i), (vii) or (viii) or this clause (v) of this paragraph;
(vi) Debt consisting of Permitted Interest Rate and
Currency Protection Agreements;
(vii) Debt represented by the Notes;
(viii) Debt (including Capital Lease Obligations) of the
Company or any Restricted Subsidiary financing the purchase, lease or
improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any
Person owning such assets); PROVIDED, HOWEVER, that at the time of the
Incurrence of such Debt and after giving effect thereto, the aggregate
amount of all Debt Incurred pursuant to this clause (viii) and then
outstanding shall not exceed $10 million;
(ix) Debt consisting of performance and other similar bonds
and reimbursement obligations Incurred in the ordinary course of
business securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect of
a letter of credit obtained to secure such performance;
(x) Guarantees by the Company or any Restricted Subsidiary of
Debt of any Joint Venture of the Company or any Restricted Subsidiary,
PROVIDED that such Guarantees are unsecured and expressly subordinated
to the prior payment in full in cash of all Obligations with respect to
the Notes and this Indenture; and
26
<PAGE>
(xi) other Debt of the Company or any Restricted Subsidiary
that is unsecured and expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes and this
Indenture.
(c) For purposes of determining compliance with this Section 4.3,
in the event that an item of Debt meets the criteria of more than one of the
types of Debt the Company and the Restricted Subsidiaries are permitted to
Incur, the Company or such Restricted Subsidiary, as the case may be, shall have
the right, in its sole discretion, to classify such item of Debt at the time of
its Incurrence and shall only be required to include the amount and type of such
Debt under the clause permitting the Debt as so classified.
SECTION 4.4. Future Guarantors. In the event that, after the Issue
Date, the Company shall acquire or create a Subsidiary, the Company shall cause
such Subsidiary (unless such Subsidiary is a Foreign Subsidiary or an
Unrestricted Subsidiary) to become a Subsidiary Guarantor and to Guarantee the
Notes pursuant to a Subsidiary Guarantee.
SECTION 4.5. Limitation on Restricted Payments. (a) The Company may
not, and may not permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment. Notwithstanding the foregoing, the Company may (i)
Refinance, and permit its Restricted Subsidiaries to Refinance, any Debt
otherwise permitted to be Refinanced by clause (v) of Section 4.3(b); and (ii)
make any Restricted Payment by exchange for, or out of the proceeds of the sale
of, or capital contribution in respect of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit of their
employees).
(b) Notwithstanding the foregoing, the Company may, and may permit
any Restricted Subsidiary, directly or indirectly, to make an Investment if at
the time the Company or such Restricted Subsidiary makes such Investment:
(1) a Default shall not have occurred and be continuing (or
would not result therefrom);
(2) the Company is able to Incur an additional $1.00 of Debt
pursuant to Section 4.3(a); and
(3) the aggregate amount of such Investment and all other
Investments made pursuant to this Section 4.5(b) since the Issue Date
would not exceed the sum of:
(A) 20% of the Consolidated Net Income of the Company
accrued during the period (treated as one accounting period)
from the beginning of the fiscal quarter immediately following
the fiscal quarter during which the Issue Date occurs to the
end of the most recent fiscal quarter for which internal
financial statements are available at the time of such
Investment (or, in case such Consolidated Net Income shall be
a deficit, MINUS 20% of such deficit);
(B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Issue Date (other
than an issuance
27
<PAGE>
or sale to a Subsidiary of the Company and other than an
issuance or sale to an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries
for the benefit of its employees) less any Net Cash Proceeds
used to make Restricted Payments pursuant to Section 4.5(a);
(C) the amount by which Debt of the Company is reduced
on the balance sheet of the Company upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Debt of the Company
convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (LESS the amount of any
cash, or the fair value of any other property, distributed by
the Company upon such conversion or exchange); and
(D) an amount equal to the sum of (i) the net
reduction in Investments in Joint Ventures or Unrestricted
Subsidiaries resulting from dividends, repayments of loans or
advances or other transfers of assets, in each case to the
Company or any Restricted Subsidiary from Joint Ventures or
Unrestricted Subsidiaries, and (ii) the portion (proportionate
to the Company's equity interest in such Subsidiary) of the
fair market value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; PROVIDED, HOWEVER, that
the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously
made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary.
SECTION 4.6. Dividend and other Payment Restrictions Affecting
Subsidiaries. (a) The Company may not, and may not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries on its Capital Stock
or with respect to any other interest or participation in, or measured
by, its profits;
(ii) pay any indebtedness owed to the Company or any
Restricted Subsidiary;
(iii) make loans or advances to the Company or any
Restricted Subsidiary; or
(iv) transfer any of its properties or assets to the
Company or any Restricted Subsidiary.
(b) Notwithstanding the foregoing, the Company may, and may permit
any Restricted Subsidiary to, suffer to exist any such encumbrance or
restriction:
(i) pursuant to any agreement in effect on the Issue Date;
28
<PAGE>
(ii) pursuant to an agreement relating to any Acquired Debt,
which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person so
acquired and its Subsidiaries;
(iii) pursuant to an agreement effecting a Refinancing of Debt
Incurred pursuant to an agreement referred to in clause (i) or (ii)
above or clause (iv) below, PROVIDED, HOWEVER, that the provisions
contained in such Refinancing agreement relating to such encumbrance or
restriction are no more restrictive taken as a whole (as determined in
good faith by the Chief Financial Officer of the Company) than the
provisions contained in the predecessor agreement the subject thereof;
(iv) in the case of clause (iii) of Section 4.6(a), consisting
of restrictions contained in any security agreement (including a
Capital Lease Obligation) securing Debt of the Company or a Restricted
Subsidiary otherwise permitted under this Indenture, but only to the
extent such encumbrances or restrictions restrict the transfer of the
property subject to such security agreement;
(v) in the case of clause (iv) of Section 4.6(a), consisting
of customary nonassignment provisions entered into in the ordinary
course of business in leases governing leasehold interests, but only to
the extent such provisions restrict the transfer of the lease or the
property thereunder;
(vi) with respect to a Restricted Subsidiary, imposed pursuant
to an agreement which has been entered into for the sale or disposition
of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary; PROVIDED, HOWEVER, that after giving effect to
such transaction no Default shall have occurred or be continuing, that
such restriction terminates if such transaction is not consummated and
that such consummation or abandonment of such transaction occurs within
one year of the date such agreement was entered into;
(vii) imposed pursuant to applicable law or regulations;
(viii) imposed pursuant to the Revolving Credit Agreement;
(ix) imposed pursuant to the Senior Secured Note Purchase
Agreement and the Senior Secured Notes;
(x) imposed pursuant to this Indenture and the Notes; or
(xi) consisting of any restriction on the sale or other
disposition of assets or property securing Debt as a result of a
Permitted Lien on such assets or property.
SECTION 4.7. Asset Dispositions. (a) The Company may not, and may not
permit any Restricted Subsidiary to, directly or indirectly, make any Asset
Disposition unless: (i) the Company or such Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Disposition at least
equal to the fair market value (including as to the value of all non-cash
consideration) of the shares and assets subject to such Asset Disposition, as
determined by the Board of Directors of the Company in good faith and evidenced
by a resolution filed with the Trustee; (ii) at least 80% of the consideration
thereof received by the Company or such Restricted Subsidiary, as the
29
<PAGE>
case may be, consists of (A) cash or Permitted Short-Term Investments or (B) the
assumption of Debt (other than Subordinated Obligations) of the Company or such
Restricted Subsidiary and the release of the Company and the Restricted
Subsidiaries, as applicable, from all liability on the Debt assumed; and (iii)
if (A) no Event of Default has occurred and is then continuing and if (x) the
Aggregate Asset Disposition Proceeds then exceed the greater of $15 million or
33% of the Consolidated EBITDA for the most recently ended period of four fiscal
quarters or (y) the asset being disposed of is a Core Asset or (B) an Event of
Default has occurred and is then continuing and the Trustee has not exercised
any remedies pursuant to Section 6.2 or 6.3), all Net Available Proceeds, less
any amounts invested within 180 days of such disposition in assets that comply
with Section 4.12, are applied within 180 days of such disposition:
(A) first, to the repayment of Debt then outstanding under any
Bank Credit Agreement and a corresponding permanent reduction in the
commitments thereunder, if any; and
(B) second, to the extent that the Net Available Proceeds
exceed the amount of Debt then outstanding under the Bank Credit
Agreements, to a permanent reduction in the commitments thereunder, if
any, by an amount equal to such excess Net Available Proceeds; and
(C) third, if the commitments under all Bank Credit Agreements
have been reduced to zero and to the extent that the remaining Net
Available Proceeds exceed $2.5 million, to make an Offer to Purchase
outstanding Notes at 100% of their principal amount plus accrued and
unpaid interest to the date of purchase thereon and, to the extent
required by the terms thereof, any other Debt of the Company or a
Restricted Subsidiary that ranks PARI PASSU with the Notes at a price
no greater than 100% of the principal amount thereof plus accrued and
unpaid interest to the date of purchase. To the extent that the
aggregate amount of Notes tendered pursuant to an Offer to Purchase
pursuant to this Section 4.7 exceeds the amount of remaining Net
Available Proceeds, the Trustee shall select the Notes to be purchased
on a pro rata basis. To the extent any Net Available Proceeds remain
after such uses, the Company and the Restricted Subsidiaries may use
such amounts for any purposes not prohibited by this Indenture.
(b) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.7, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.7 by virtue
thereof.
SECTION 4.8. Transactions with Affiliates. (a) Except for transactions
the terms of which are set forth in agreements existing on the Issue Date, the
Company may not, and may not permit any Restricted Subsidiary, directly or
indirectly, to enter into any transactions (or series of related transactions)
with an Affiliate or Related Person of the Company (other than the Company or a
Wholly-Owned Restricted Subsidiary) (an "Affiliate Transaction") unless:
30
<PAGE>
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary, as the case may be, with an
unrelated Person; and
(ii) the Company delivers to the Trustee (A) with respect to
any Affiliate Transaction involving aggregate consideration in excess
of $500,000, a certificate of the Chief Executive officer of the
Company to the effect that such Affiliate Transaction complies with
clause (i) above; and (B) with respect to any Affiliate Transaction
involving aggregate consideration in excess of $5 million, an opinion
as to the fairness to the Company or such Restricted Subsidiary, as the
case may be, of such Affiliate Transaction from a financial point of
view issued by an Independent Financial Advisor.
(b) Notwithstanding the foregoing Section 4.8(a), the following
shall be deemed not to be Affiliate Transactions:
(i) employee compensation arrangements entered into in the
ordinary course of business and approved by the Board of Directors of
the Company;
(ii) transactions solely between or among the Company and the
Restricted Subsidiaries;
(iii) Restricted Payments permitted by Section 4.5;
(iv) Investments by an Affiliate or Related Person of the
Company in the Capital Stock (other than Disqualified Stock) of the
Company or any Restricted Subsidiary; and
(v) transactions contemplated under the Plan of
Reorganization.
SECTION 4.9. Limitation on Issuances and Sales of Capital, Stock of
Restricted Subsidiaries. The Company may not, and may not permit any Restricted
Subsidiary to, issue, transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of a Restricted Subsidiary or securities convertible or
exchangeable into, or options, warrants, rights or any other interest with
respect to, Capital Stock of a Restricted Subsidiary to any person other than
the Company or a Wholly-Owned Restricted Subsidiary except (i) in a transaction
consisting of a sale of all the Capital Stock of such Restricted Subsidiary and
that complies with the provisions of Section 4.7 to the extent such provisions
apply; (ii) if required, the issuance, transfer, conveyance, sale or other
disposition of directors' qualifying shares; (iii) in a transaction in which, or
in connection with which, the Company or a Restricted Subsidiary acquires at the
same time sufficient Capital Stock of such Restricted Subsidiary to at least
maintain the same percentage ownership interest it had prior to such
transaction; and (iv) Disqualified Stock of a Restricted Subsidiary Incurred to
Refinance Disqualified Stock of such Restricted Subsidiary; PROVIDED, HOWEVER,
that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being Refinanced.
SECTION 4.10. Change of Control. (a) Upon the occurrence of a Change of
Control, each Holder of Notes shall have the right to require that the Company
repurchase such Holder's Notes at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest
31
<PAGE>
to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date).
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Notes at
a purchase price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date);
(ii) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization, each after giving
effect to such Change of Control);
(iii) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company, consistent
with this Section 4.10, that a Holder must follow in order to have its
Notes purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such
Note purchased.
(d) On the purchase date, all Notes purchased by the Company under
this Section shall be delivered by the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.11. Limitation on Liens. The Company may not, and may not
permit any Restricted Subsidiary, directly or indirectly, to Incur or permit to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except for the following Liens (each, a "Permitted Lien"):
(i) Liens to secure the Debt outstanding at any time under the
Revolving Credit Agreement or the Senior Secured Notes, subject to the
Intercreditor Agreement;
32
<PAGE>
(ii) Liens to secure up to $5 million of other Debt permitted
to be Incurred under this Indenture so long as effective provision is
made to secure the Notes on a senior basis to the obligations so
secured;
(iii) Liens under the Security Documents;
(iv) Liens in favor of the Company;
(v) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such
Person; PROVIDED, HOWEVER, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such other Person
becoming such a Subsidiary; PROVIDED FURTHER, HOWEVER, that such Lien
may not extend to any other property owned by such Person or any of its
Subsidiaries (other than inventory and receivables generated in the
ordinary course of business and substitute property);
(vi) Liens on property at the time such Person or any of its
Subsidiaries acquires such property, including any acquisition by means
of a merger or consolidation with or into such Person or a Subsidiary
of such Person; PROVIDED, HOWEVER, that such Liens are not created,
incurred or assumed in connection with, or in contemplation of, such
acquisition; PROVIDED FURTHER, HOWEVER, that the Liens may not extend
to any other property owned by such Person or any of its Subsidiaries;
(vii) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of
business;
(viii) Liens existing on the Issue Date;
(ix) Liens to secure any Refinancing Debt incurred to
refinance any Debt secured by any Lien referred to in the foregoing
clauses (i) through (viii);
(x) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; PROVIDED, HOWEVER, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been
made therefor;
(xi) Carriers', warehousemens', mechanics', landlords'
materialmens', repairmens' or other like Liens arising in the ordinary
course of business is respect of obligations not overdue for a period
in excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
PROVIDED, HOWEVER, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(xii) purchase money Liens solely on the asset being acquired;
PROVIDED that each such Lien does not secure Debt in excess of $3
million;
(xiii) Liens arising from precautionary UCC financing
statement filings;
33
<PAGE>
(xiv) statutory and common law landlords' liens under leases
to which the Company or any of its Subsidiaries is a party;
(xv) Easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred, or leases or
subleases granted to others, in the ordinary course of business, which
do not in any case materially detract from the value of the property
subject thereto or do not interfere with or adversely affect in any
material respect the ordinary conduct of the business of the Company
and its Restricted Subsidiaries taken as a whole;
(xvi) any attachment or judgment Lien not constituting an
Event of Default under clause (9) of the first paragraph of Section
6.1; and
(xvii) Liens incurred in the ordinary course of business of
the Company and the Restricted Subsidiaries with respect to obligations
that do not exceed $1 million at any one time outstanding and that:
(A) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business); and
(B) do not in the aggregate materially detract from
the value of the property or materially impair the use thereof
in the operation of business by the Company and the Restricted
Subsidiaries.
SECTION 4.12. Business Activities. The Company shall not, and shall not
permit any Restricted Subsidiary to, make any material change in the nature of
the businesses as carried on at the date hereof.
SECTION 4.13. Maintenance of Insurance.
(a) The Company will and will cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to the respective properties and businesses of the
Company and its Restricted Subsidiaries against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
(b) In the event that the Company or any of its Restricted
Subsidiaries receives any proceeds of any insurance that they are required to
maintain pursuant to this Section 4.13, such proceeds shall constitute
"Insurance Proceeds". Promptly following the receipt of any Insurance Proceeds,
the Company shall apply such Insurance Proceeds in accordance with the
provisions of Section 4.7; PROVIDED, HOWEVER, that Insurance Proceeds shall only
be required to be so applied to the extent that the aggregate amount of all
Insurance Proceeds received by the Company exceeds $1 million in any 12-month
period.
SECTION 4.14. Compliance Certificates; Statement by Officers as to
Default. The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate, one of the signers
of which shall be the principal executive, principal financial or
34
<PAGE>
principal accounting officer of the Company, stating that in the course of the
performance by the signers of their duties as officers of the Company they would
normally have knowledge of any Default and whether or not the signers know of
any Default that occurred during such period. If they do, the certificate shall
describe the Default, its status and what action the Company is taking or
propose to take with respect thereto. The Company also shall comply with TIA ss.
314(a)(4).
SECTION 4.15. Creditor Directors.
(a) On or prior to the 90th day prior to the date on which the
Company shall file with the Commission a proxy statement (the "Proxy Statement")
to be sent to the stockholders of the Company in connection with a meeting of
the Company's stockholders to re-elect the two individuals that were nominated
to serve as Class III directors by the Creditors' Committee (as defined in the
Plan of Reorganization) and elected to such directorships immediately following
consummation of the Plan of Reorganization (the "Creditor Directors"), the
Company shall mail a notice to each Holder, with a copy to the Trustee, stating
that the Company shall nominate for re-election the Creditor Directors then
serving on the Company's Board of Directors (the "Creditor Directors Re-election
Notice"), subject to receiving the notice provided for in the following
sentence. The Holders of at least a majority in principal amount of the Notes
then outstanding shall have the right to notify the Company in writing within 60
days from the date the Company mails the Creditor Directors Re-election Notice
to the Holders that the Company shall nominate one or two other named
individuals (each a "Replacement Director") to serve as the Creditor Directors
in place of a specified then serving Creditor Director or both then serving
Creditor Directors, as the case may be (a "Holders Notice of Replacement
Creditor Directors"). Upon receipt of a Holders Notice of Replacement Creditor
Directors, the Company shall nominate each Replacement Director for election as
a Creditor Director and shall recommend in the Proxy Statement that the
Company's stockholders vote in favor of each such Replacement Director.
(b) In the event of a vacancy in a directorship of a Creditor
Director or Replacement Director resulting from death, resignation, removal or
other causes, the Company shall mail a notice to each Holder, with a copy to the
Trustee, stating that such vacancy has occurred and that the Company shall
nominate for election as a Replacement Director to fill such vacancy an
individual specified by the holders of at least a majority in principal amount
of the Notes then outstanding in a Holders Notice of Replacement Director. Upon
receipt of such Holders Notice of Replacement Creditor Director, unless such
Replacement Director is appointed by the Company's Board of Directors to fill
such vacancy, the Company shall nominate such Replacement Directors for election
as a Creditor Director to fill such vacancy and shall recommend in a proxy
statement that the Company's stockholders vote in favor of such Replacement
Director. Until such vacancy is filled in accordance with the foregoing, such
directorship shall remain vacant.
(c) The Company shall not amend its Bylaws in any manner that
would adversely affect the right of Holders of at least a majority in principal
amount of the Notes then outstanding to consent to the removal of any Creditor
Director from the Company's Board of Directors.
SECTION 4.16. Voting Agreement Among Stockholders. The Company shall
not amend the Voting Agreement among Stockholders, dated as of the date hereof,
among the Company, Holst Trust, Leisure Ventures PTE Ltd., Kingdom Planet
Hollywood Ltd., Philip Green and Claudio Gonzalez in any manner that would
adversely affect the ability of Holders or the Company to cause the Creditor
Directors or any Replacement Directors to serve on the Company's Board of
Directors.
35
<PAGE>
SECTION 4.17. Foreign Subsidiaries. In the event that, after the Issue
Date, the Company shall acquire or create a Foreign Subsidiary, except as
permitted under Section 4.5 neither the Company nor any Restricted Subsidiary
(other than a Foreign Subsidiary) shall transfer any assets to such Foreign
Subsidiary unless such Foreign Subsidiary becomes a Subsidiary Guarantor and
Guarantees the Notes pursuant to a Subsidiary Guarantee.
SECTION 4.18. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.19. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Notes as of the end of such year and
(ii) such other specific information relating to such original issue discount as
may then be relevant under the Code, as amended from time to time.
ARTICLE 5.
Successor Company
SECTION 5.1. When Company May Merge or Transfer Assets. (a) The Company
may not consolidate with or merge with or into, or convey, transfer or lease, in
one transaction or a series of transactions, all or substantially all its assets
to any Person; PROVIDED, HOWEVER, that the Company may consolidate with or merge
with or into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all its assets to any Person, if:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
Obligations of the Company under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the Successor Company
or any Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Subsidiary at the time of
such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of Debt
pursuant to Section 4.3(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that
is not less than the Consolidated Net Worth of the Company immediately
prior to such transaction; and
36
<PAGE>
(v) prior to such transaction, the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such transaction and such supplemental
indenture (if any) comply with this Indenture.
The Successor Company shall be the successor to the Company and shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture, and the Company (other than in the case of a
lease) shall be released from the obligation to pay the principal of and
interest on the Notes.
(a)(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless: (i) the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by a guarantee agreement in a form
acceptable to the Trustee, all the obligations of such Subsidiary, if any, under
its Subsidiary Guarantee; (ii) immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Debt which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
the Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
guarantee agreement, if any, complies with this Indenture.
ARTICLE 6.
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any
Note when the same becomes due and payable, and such default continues
for a period of 30 days;
(2) the Company (i) defaults in the payment of the principal
of any Note when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, or (ii) fails to redeem or purchase Notes
when required pursuant to this Indenture or the Notes;
(3) the Company fails to comply with Section 5.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4,
4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 or
4.19 (other than a failure to purchase Notes when required under
Section 4.7 or 4.10) and such failure continues for 30 days after the
notice specified below;
(5) the Company fails to comply with any of its agreements in
the Notes or this Indenture (other than those referred to in clause
(1), (2), (3) or (4) above) and such failure continues for 60 days
after the notice specified below;
37
<PAGE>
(6) Debt of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Debt unpaid or accelerated exceeds $1 million;
(7) any Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $1 million, or its foreign currency equivalent at the time is
entered against the Company or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such
judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary
Guarantee) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment,
38
<PAGE>
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5), or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes notify the Company of the Default and the Company does not
cure such Default, or it is not waived, within the time specified after receipt
of such notice. Such notice must specify the Default, demand that it be
remedied, to the extent consistent with law, and state that such notice is a
"Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
propose to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 6.1(7) or (8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the Notes by notice to the Company and
the Trustee, may declare the principal of and accrued but unpaid interest on all
the Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.1(7) or (8) with respect to the Company occurs, the principal of
and interest on all the Notes shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders. The Holders of a majority in principal amount of the Notes by notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Notes by notice to the Trustee may waive an existing
Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Note or (ii) a Default in respect of a provision
that under Section 9.2 cannot be amended without the consent of each Holder
affected. When a Default is
39
<PAGE>
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Holders or would involve the Trustee in personal liability or
expense for which the Trustee has not received a satisfactory indemnity
therefore; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to reasonable
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the
Notes make a request to the Trustee to pursue the remedy;
(3) the Trustee either (i) gives to such Holders notice that
it will not comply with the request, or (ii) does not comply with the
request within 60 days after receipt of the request; and
(4) the Holders of a majority in principal amount of the Notes
do not give the Trustee a direction inconsistent with the request prior
to the earlier of the date, if ever, on which the Trustee delivers a
notice under Section 6.6(3)(i) or the expiration of the period
described in Section 6.6(3)(ii).
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.7. Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Notes held by such Holder, on or after the
respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders approved or
allowed in any judicial proceedings relative to the Company, its creditors or
its property and any Custodian in any such judicial proceeding is hereby
authorized by
40
<PAGE>
each Holder to make payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.7. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment, or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section. At least 15 days before such record date, the Company
shall mail to each Holder and the Trustee a notice that states the record date,
the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys, fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by
Holders of more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent they may lawfully do so) shall 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 of this Indenture; and the Company (to
the extent that they may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.13. Actions of a Holder. For purposes of providing any
consent, waiver or instruction to the Company or the Trustee, a "Holder" shall
include a Person who provides to the Company or the Trustee, as the case may be,
an affidavit of beneficial ownership of a Note together with a satisfactory
indemnity against any loss, liability or expense to such party to the extent
that it acts upon such affidavit of beneficial ownership (including any consent,
waiver or instructions given by a Person providing such affidavit and
indemnity).
41
<PAGE>
ARTICLE 7.
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise
42
<PAGE>
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) The Trustee is hereby authorized and directed to acknowledge,
enter into, execute and deliver, as the case may be, and to perform all of its
obligations and exercise its rights under the following documents, which
documents shall be incorporated into this Indenture by reference:
(1) the Security Agreement;
(2) the Intercreditor Agreement; and
(3) the Pledge Agreement.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Trust Officer has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the principal corporate trust office of the Trustee, and such
notice references the Notes and this Indenture.
(g) Except in connection with compliance with Sections 7.10 and
7.11, the Trustee shall only be charged with knowledge of Trust Officers.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-
43
<PAGE>
registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Notes, it shall not be accountable for the Company's use of the proceeds
from the Notes, and it shall not be responsible for any statement of the Company
in this Indenture or in any document issued in connection with the sale of the
Notes or in the Notes other than the Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Holder notice
of the Default within 90 days after it occurs. Except in the case of a Default
in payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
SECTION 7.6. Reports by Trustee to Holders. If required by TIA ss.
313(a), as promptly as practicable after each October 15 beginning with October
15, 2000, and in any event prior to January 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of such October 15 that complies
with such TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange (if any) on which the Notes
are listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.7. Compensation and Indemnity. Company shall pay to the
Trustee from time to time reasonable compensation for its services (including
for any agent capacity in which it acts). The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Company shall indemnify
the Trustee against any and all loss, damage, claim, liability or reasonable
expense (including reasonable attorneys, fees and expenses) incurred by it
(including for any agent capacity in which it acts) in connection with the
acceptance or administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
44
<PAGE>
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time
by so notifying the Company. The Holders of a majority in principal amount of
the Notes may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, PROVIDED THAT such corporation or
banking association shall be eligible under this Article 7 and TIA ss. 310(a).
45
<PAGE>
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures undeR which other securities or
certificates of interest or participation in other securities of the Company is
outstanding if the requirements for such exclusion set forth in TIA ss. 310 (b)
(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been remoVed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8.
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Notes; Defeasance. (a) When (i)
the Company delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.7) for cancellation or (ii) all outstanding Notes
have become due and payable, whether at maturity or as a result of the mailing
of a notice of redemption pursuant to Article 3 hereof and the Company
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Notes, including interest thereon to maturity or
such redemption date (other than Notes replaced pursuant to Section 2.7), and if
in either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers, Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time
may terminate (i) all its Obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.19 and the
operation of Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but,
in the case of Sections 6.1(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Sections 5.1(a)(iii) and (iv)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Notes may not be accelerated because of an Event of Default
46
<PAGE>
specified in Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but,
in the case of Sections 6.1(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.1(a)(iii) or (iv). If the Company exercises its legal defeasance option or its
covenant defeasance option, (i) each Subsidiary Guarantor, if any, shall be
released from all its obligations with respect to its Subsidiary Guarantee, (ii)
all rights of the Trustee or the Holders under any of the Security Documents
shall terminate and (iii) the Company's obligations under Section 3.8 shall
terminate.
Upon satisfaction of the conditions set forth in Section 8.2, the
Trustee shall acknowledge in writing the discharge of those obligations that the
Company terminates under the Indenture, the release of the Subsidiary Guarantees
and the termination of such rights under the Security Documents.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 7.7 and 7.8 and in this
Article 8 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or Defeasance Obligations for the payment of principal of and
interest on the Notes to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited Defeasance Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest
when due on all the Notes to maturity or redemption, as the case may
be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.1(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the Issue Date there
has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon, such Opinion of Counsel
shall confirm that, the Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will
be subject to Federal income tax on
47
<PAGE>
the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Notes as contemplated
by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or Defeasance Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from Defeasance Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
SECTION 8.5. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited Defeasance Obligations or the principal and
interest received on such Defeasance obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or Defeasance Obligations in accordance with this Article 8 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's Obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or Defeasance Obligations in accordance with this Article
8; PROVIDED, HOWEVER, that, if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its Obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Defeasance Obligations held by the
Trustee or Paying Agent.
48
<PAGE>
ARTICLE 9.
Amendments
SECTION 9.1. Without Consent of Holders. The Company and the Trustee
may amend this Indenture or the Notes without notice to or consent of any
Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; PROVIDED, HOWEVER, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Notes, including any
Subsidiary Guarantees, or to secure the Notes or to release such
guarantees in accordance with the terms of Section 4.4;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(6) to comply with any requirements of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(7) to make any change that does not adversely affect the
rights of any Holder.
After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company and the Trustee may
amend this Indenture or the Notes without notice to any Holder but with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange for the Notes). However, without the consent of each Holder
affected thereby, an amendment may not:
(1) reduce the amount of Notes whose Holders must consent to
an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Note;
(3) reduce the principal of or extend the Stated Maturity of
any Note;
(4) reduce the premium payable upon the redemption of any Note
or change the time at which any Note may be redeemed in accordance with
Article 3;
49
<PAGE>
(5) make any Note payable in money other than that stated in
the Note;
(6) make any change in Section 6.4 or 6.7 or the second
sentence of this Section; or
(7) make any change in any Subsidiary Guarantee that would
adversely affect the Holders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Note shall bind the Holder and
every subsequent Holder of that Note or portion of the Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent or
waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder. An amendment or waiver becomes effective upon the
execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Notes. If an amendment changes
the terms of a Note, the Trustee may require the Holder of the Note to deliver
it to the Trustee. The Trustee may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms. Failure to make the appropriate notation or to issue a new security shall
not affect the validity of such amendment.
SECTION 9.6. Trustee To Sign Such Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to
50
<PAGE>
receive, and (subject to Section 7.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that such amendment
is authorized or permitted by this Indenture.
SECTION 9.7. Payment for Consent. Neither the Company nor any Affiliate
of the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid to all Holders that so consent, waive or agree to amend (and, if
appropriate, tender their Notes) in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 10.
Security
SECTION 10.1. Security Documents.
The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable, by
acceleration, repurchase, redemption or otherwise, interest on the overdue
principal of and interest (to the extent permitted by law), if any, on the Notes
and under this Indenture, and performance of all other Obligations shall be
secured as provided in the Security Documents.
The Trustee, the Company and the Subsidiary Guarantors hereby consent
and agree that, with respect to that portion of the Collateral in which the
security interest is being perfected by possession, the Revolving Credit Agent
and/or the Senior Secured Notes Agent shall hold the Collateral for the benefit
of the Trustee in accordance with the terms of the Intercreditor Agreement, for
the purpose of perfecting the Trustee's security interest therein for so long as
any obligations or commitments are outstanding under the Revolving Credit
Agreement, the Senior Secured Note Purchase Agreement or the Senior Secured
Notes.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Collateral Agent the security interest in the
Collateral contemplated hereby and by the Security Documents, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby and thereby, according
to the intent and purposes herein and therein expressed. The Company shall, and
shall cause each of its Restricted Subsidiaries to, take, upon request of the
Trustee or the Collateral Agent, any and all actions required to cause the
Security Documents to create and maintain, as security for the Obligations,
valid and enforceable, perfected (except as expressly provided herein or
therein), Liens in and on all the Collateral, in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons, and subject to no
other Liens, other than as provided herein and therein.
Each Holder of a Note, by its acceptance thereof, consents and agrees
to the terms of the Security Documents and the Intercreditor Agreement
(including, without limitation, the provisions providing for the foreclosure and
release of Collateral and indemnification of the Collateral Agent) as the same
may be in effect or may be amended from time to time in accordance with their
terms, and authorizes and directs (i) the Collateral Agent, with respect to each
of the Security Documents, and (ii) the Trustee, with respect to the
Intercreditor Agreement, to perform their respective obligations and
51
<PAGE>
exercise their respective rights thereunder in accordance therewith; PROVIDED
that upon qualification of this Indenture with the TIA, if any provision of the
Intercreditor Agreement limits, qualifies or conflicts with the duties imposed
by the provisions of the TIA, the TIA shall control.
SECTION 10.2. Opinions of Counsel.
To the extent required by the TIA, the Company shall furnish to the
Trustee on the Issue Date and within ten days after each anniversary of the
Issue Date, an Opinion of Counsel, dated as of such date, stating either that
(i) in the opinion of such counsel, all action has been taken with respect to
the recording, registering, filing, re-recording, re-registering and refiling of
all supplemental indentures, financing statements, continuation statements or
other instruments of further assurance as is necessary to maintain the Liens of
the Security Documents and reciting the details of such action or (ii) in the
opinion of such counsel, no such action is necessary to effect and maintain the
validity and perfection of such Liens in full force and effect.
SECTION 10.3. Release and Substitution of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.3,
(i) in the event that any Collateral is sold, transferred or otherwise disposed
of in an Asset Disposition (including the application of Insurance Proceeds) or
any other transaction permitted by this Indenture, such Collateral shall,
concurrently with the disposition of such Collateral automatically be released
from the Lien of the relevant Security Documents and (ii) the Company and its
Subsidiaries may (but shall not be required to) from time to time substitute
property or securities released from the Lien of the Security Documents in
connection with the sale, transfer or other disposition thereof for other
property or securities to be subjected to the Lien of the Security Documents, in
each case in accordance with the provisions of the Security Documents and as
provided hereby.
(b) Except as otherwise provided for in the Intercreditor
Agreement, at any time when an Event of Default shall have occurred and be
continuing and the maturity of the Notes shall have been accelerated (whether by
declaration or otherwise) and such acceleration shall not have been rescinded or
annulled, no release of Collateral pursuant to the provisions of this Indenture
or of the Security Documents shall be effective as against the Holders of the
securities without the consent of the Collateral Agent. The Trustee shall
promptly notify the Collateral Agent of any rescission or annulment, pursuant to
Section 6.4 hereof, of an acceleration of the Notes.
(c) The release of any Collateral from the terms of the Security
Documents will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to the Security Documents. At all time after qualification of
this Indenture under the TIA, to the extent applicable, the Company shall cause
TIA Section 314(d) relating to the release of property or securities from the
Lien of the Security Documents and relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Security Documents to
be complied with. Any certificate or opinion required by TIA Section 314(d) may
be made by Officers of the Company, except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
SECTION 10.4. Certificates of the Company.
52
<PAGE>
The Company shall furnish to the Trustee prior to each
proposed release of Collateral all documents required by TIA Section 314(d). The
Trustee may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments. Any certificate or opinion required by
TIA Section 314(d) may be made by Officers of the Company except in cases where
TIA Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other such expert within the meaning of TIA
Section 314(d).
SECTION 10.5. Authorization of Actions to be Taken by the Trustee Under
the Security Documents.
Subject to the provisions of the Security Documents and the
Intercreditor Agreement, the Trustee may, in its sole discretion and without the
consent of the Holders, take all actions it deems necessary or appropriate in
order to (a) enforce any of the terms of the Security Documents and (b) collect
and receive any and all amounts payable in respect of the Obligations. The
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Security Documents or to
preserve or protect its interest and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of or compliance with such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or the Trustee).
SECTION 10.6. Authorization of Receipt of Funds by the Trustee Under
the Security Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
SECTION 10.7. Release upon Termination of the Obligations.
(a) If (i) the Company delivers Officers' Certificates certifying
that all of its Obligations under this Indenture have been indefeasably
satisfied and discharged by complying with the provisions of Article 8 or (ii)
all outstanding Notes issued under this Indenture shall be surrendered to the
Trustee for cancellation and an Opinion of Counsel that the delivery of such a
notice is authorized, the Trustee shall deliver to the Collateral Agent a notice
stating that the Trustee, for itself and on behalf of the Holders, disclaims and
has given up any and all rights it has in or to the Collateral, and any rights
it has under the Security Documents, and, upon and after the receipt by the
Collateral Agent of such notice, the Collateral Agent shall no longer be deemed
to hold the Lien in the Collateral on behalf of the Trustee for the benefit of
itself and the Holders.
(b) Any release of Collateral made in compliance with this Section
10.7 shall not be deemed to impair the Lien under the Security Documents or the
Collateral thereunder in contravention of the provisions of this Indenture or
the Security Documents.
53
<PAGE>
ARTICLE 11.
Subsidiary Guarantees
SECTION 11.1. Guarantees. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Notes (all the foregoing
being hereinafter collectively called the "Obligations"). Each Subsidiary
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article 11 notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Notes or the Obligations. The Obligations of each Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Notes or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Notes or any other agreement; (d) the release
of any security held by any Holder or the Trustee for the Obligations or any of
them; (e) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or (f) any change in the
ownership of the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Except as expressly set forth in Sections 8.1(b), 11.2 and 11.6, the
Obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
Obligations of each Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal
54
<PAGE>
of or interest on any Obligation is rescinded or must otherwise be restored by
any Holder or the Trustee upon the bankruptcy or reorganization of the Company
or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations Guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys, fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.2. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
Obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed
the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 11.3. Successors and Assigns. This Article 11 shall be binding
upon each Subsidiary Guarantor and its successors and assigns and shall ensure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Notes shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.4. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.5. Modification. No modification, amendment or waiver of any
provision of this Article 11, nor the consent to any departure by any Subsidiary
Guarantor therefrom, shall in any
55
<PAGE>
event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to any
other or further notice or demand in the same, similar or other circumstances.
SECTION 11.6. Release of Subsidiary Guarantor. Upon the sale or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor (in each case other than to the Company or an
Affiliate of the Company), such Subsidiary Guarantor shall be deemed released
from all Obligations under this Article 11 without any further action required
on the part of the Trustee or any Holder. At the request of the Company, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 12.
Miscellaneous
SECTION 12.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company or any Subsidiary Guarantor:
Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, Florida 32819
Attention: Chief Financial Officer
Facsimile: (407) 352-7310
if to the Trustee:
United States Trust Company of New York
Corporate Trust & Agency Division
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Administration
Facsimile: (212) 852-1627
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
56
<PAGE>
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 12.3. Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA ss. 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Company, thE Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 12.4. Certificate and opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 12.6. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so disregarded. Also, subject to the foregoing, only Notes outstanding at the
time shall be considered in any such determination.
57
<PAGE>
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Holders. The Registrar
and the Paying Agent may make reasonable rules for their functions.
SECTION 12.8. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 12.9. Governing Law; Consent to Jurisdiction; Waiver of
Immunities.
(a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT
REGARD TO CONFLICT OF LAWS RULES.
(b) THE COMPANY AND Each SUBSIDIARY GUARANTOR hereby irrevocably
submit to the jurisdiction of any New York State or Federal court sitting in New
York County in any action or proceeding arising out of or relating to THIS
INDENTURE AND THE NOTES, and THE COMPANY AND each SUBSIDIARY GUARANTOR hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such New York State or Federal court. Each SUBSIDIARY
GUARANTOR hereby irrevocably appoints THE COMPANY (the "Process Agent"), with an
office on the date hereof at 8669 Commodity circle, orlando, florida 32819, as
its agent to receive on behalf of each SUBSIDIARY GUARANTOR and its property
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding. Such service may be made by mailing
(by certified or registered mail, postage prepaid and return receipt requested)
or delivering a copy of such process to each SUBSIDIARY GUARANTOR in care of the
Process Agent at the Process Agent's above address, and each SUBSIDIARY
GUARANTOR hereby irrevocably authorizes and directs the Process Agent to accept
such service on its behalf. the company and Each SUBSIDIARY GUARANTOR agree that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(c) The Company and each Subsidiary Guarantor hereby expressly and
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of venue of any such litigation
brought in any such court referred to above and any claim that any such
litigation has been brought in an inconvenient forum. To the extent that a
Subsidiary Guarantor has or hereafter may acquire any immunity from jurisdiction
of any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or its property, such Subsidiary Guarantor hereby irrevocably
waives such immunity in respect of its Obligations under this Indenture.
58
<PAGE>
SECTION 12.10. No Recourse Against Others. Any past, present or future
director, officer, partner (including any general partner) employee,
incorporator or stockholder, as such, of the Company shall not have any
liability for any Obligations of the Company under the Notes or this Indenture
or for any claim based on, in respect of or by reason of such Obligations or
their creation. By accepting a Note, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Notes.
SECTION 12.11. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 12.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
59
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
PLANET HOLLYWOOD INTERNATIONAL, INC.
By__________________________
Name:
Title:
SUBSIDIARY GUARANTORS
---------------------
PLANET HOLLYWOOD MEMORABILIA, INC.
ALL STAR CAFE INTERNATIONAL, INC.
ALL STAR CAFE (NEW YORK), INC.
COOL PLANET, INC.
COOL PLANET II, INC.,
PLANET HOLLYWOOD (ATLANTIC CITY), INC.
PLANET HOLLYWOOD (HONOLULU), INC.
PLANET HOLLYWOOD (LP), INC.
PLANET HOLLYWOOD (NEW YORK CITY), INC.
PLANET HOLLYWOOD (NEW YORK), LTD.
By: Planet Hollywood International, Inc.,
a General Partner
PLANET HOLLYWOOD (ORLANDO) INC.
PLANET HOLLYWOOD (REGION II), INC.
PLANET HOLLYWOOD (REGION III), INC.
PLANET HOLLYWOOD (REGION IV), INC.
PLANET HOLLYWOOD (REGION VI), INC.
PLANET HOLLYWOOD (REGION VII), INC.
PLANET HOLLYWOOD (WAREHOUSE), INC.
308 AVIATION, INC.
308-III AVIATION, INC.
ALL STAR CAFE (LP), INC.
ALL STAR CAFE (REGION V), INC.
ALL STAR CAFE (REGION VII), INC.
COAST LICENSING, INC.
COOL PLANET I, INC.
EBCO MANAGEMENT, INC.
OFFICIAL ALL STAR CAFE, INC.
PLANET HOLLYWOOD (ASPEN), INC.
PLANET HOLLYWOOD (CHEFS), INC.
PLANET HOLLYWOOD (CHICAGO), INC.
PLANET HOLLYWOOD (COSTA MESA), INC.
PLANET HOLLYWOOD (FRANCE), L.C.
PLANET HOLLYWOOD (GAMING), INC.
60
<PAGE>
PLANET HOLLYWOOD (ISRAEL), L.C.
PLANET HOLLYWOOD (LONDON), INC.
PLANET HOLLYWOOD (MAIL ORDER), INC.
PLANET HOLLYWOOD (ORLANDO DISTRIBUTION), INC.
PLANET HOLLYWOOD (PARIS), INC.
PLANET HOLLYWOOD (PHOENIX), INC.
PLANET HOLLYWOOD (REGION I), INC.
PLANET HOLLYWOOD (TEL AVIV), INC.
PLANET HOLLYWOOD (THEATRES), INC.
PLANET HOLLYWOOD TRANSPORTATION, INC.
PLANET HOLLYWOOD (TROCADERO), L.C.
PLANET HOSPITALITY HOLDINGS, INC.
SILVER BRACELETS, INC.
SOUND REPUBLIC I, INC.
SOUND REPUBLIC, INC.
On behalf of each of the above
Subsidiary Guarantors
By:__________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (REGION V), INC.
PLANET HOLLYWOOD (TEXAS), LTD.
By: Planet Hollywood (Region V), Inc.,
a General Partner
KARMALANNE, INC.
ROCKY PIT, INC.
TEN ALPS, INC.
On behalf of each of the above
Subsidiary Guarantors
By:__________________________
Name: Mark S. Helm
Title: Vice President
MEANT 2 BE, INC.
By:__________________________
Name: Mark S. Helm
Title: Treasurer
61
<PAGE>
TRUSTEE
-------
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By__________________________
Name:
Title:
62
<PAGE>
Exhibit A
[The face of the Notes shall be substantially as follows:]
THIS NOTE IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS OF
MAY __, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., FOR ITSELF AND AS
AGENT, WLR RECOVERY FUND L.P., WILMINGTON TRUST COMPANY, AS AGENT, UNITED STATES
TRUST COMPANY OF NEW YORK, AS JUNIOR SUBORDINATED TRUSTEE AND THE OTHER PERSONS
AND ENTITIES SIGNATORY THERETO (THE "INTERCREDITOR AGREEMENT"), WHICH MATERIALLY
AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN OBLIGATIONS AND CERTAIN
SECURITY INTERESTS AND LIENS, AND LIMITS RIGHTS TO ENFORCEMENT OF THE HOLDER OF
THIS NOTE. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME HOLD THIS NOTE HEREBY
ARE BOUND BY THE TERMS OF THE INTERCREDITOR AGREEMENT, WHICH WILL BE MADE
AVAILABLE UPON REQUEST TO ANY SUCH HOLDER.
PLANET HOLLYWOOD INTERNATIONAL, INC.
10% Secured Deferrable Interest Notes Due 2005.
No. __________ $_____________ Initial Principal Amount
Interest Payment Dates: April 1 and October 1 of each year, commencing
October 1, 2000
CUSIP No. 72702Q AA 0
PLANET HOLLYWOOD INTERNATIONAL, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to_____________________
________________________, or registered assigns, the Initial Principal Amount
set forth above (as the same may be increased through the compounding of
deferred interest as provided in the immediately succeeding paragraph) on May
__, 2005 and to pay interest thereon from the date hereof, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on each Interest Payment Date in each year, at the rate of
10% per annum, until the principal hereof is paid or duly provided for, PROVIDED
that any principal and premium, if any, and any such installment of interest,
which is overdue shall bear interest at the rate of 12.75% per annum (to the
extent that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or duly provided for, and such
interest shall be payable on demand.
Notwithstanding the foregoing, the Company may elect to defer and
compound to principal the first five semi-annual installments of interest on the
Notes by providing written notice of such election to the Trustee at least 10
days prior to, but no more than 45 days prior, to the record date for the
applicable interest payment date, which election (other than an election with
respect to the first two semi-annual installments of interest following the
Issue Date) shall be accompanied by an Officers Certificate (i) certifying that
for the most recently completed period of four fiscal quarters the ratio of
<PAGE>
the Company's Consolidated EBITDA to Consolidated Interest Expense is less than
or equal to 1.75 to 1.00 and (ii) setting forth the detailed computations made
to determine such ratio. To the extent that interest on this Note is deferred
and compounded pursuant to the foregoing sentence, such installments of interest
shall be calculated at the rate of 12.75% per annum (rather than 10% per annum).
The interest so payable in cash, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note is registered at the close of business on
the fifteenth day of the calendar month (whether or not a Business Day) next
preceding such Interest Payment Date.
In the case of a default in payment of principal upon acceleration,
redemption or repurchase, the overdue principal and any overdue premium shall
bear interest at the rate of 12.75% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of 12.75%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or duly provided for, and such shall be payable on demand.
Payment in respect of the principal of (and premium, if any) and any
interest on this Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at such additional offices or agencies as the Company from time to time may
designate for such purpose, 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, PROVIDED, HOWEVER, that payment of the principal of (and premium,
if any, on) this Note shall be made only upon presentation and surrender hereof
at any such office or agency and, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PLANET HOLLYWOOD INTERNATIONAL, INC.
By __________________________
Title:
Dated:
-2-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, certifies that
this is one of the 10% Secured Deferrable Interest Notes Due 2005 referred to in
the Indenture dated as of May __, 2000 among Planet Hollywood International,
Inc., the Subsidiary Guarantors party thereto and the Trustee.
By _________________________
Authorized Signatory
-3-
<PAGE>
[Form of Reverse of Note:]
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10% Secured Deferrable Interest Notes Due 2005 (herein called
the "Notes"), limited in aggregate principal amount to $95,000,000, issued and
to be issued under an Indenture, dated as of May __, 2000 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee (herein called the "Trustee" which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders and of the terms upon
which the Notes are, and are to be, authenticated and delivered. Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture.
To guarantee (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
the Indenture and the securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
the Indenture and the Notes, the Subsidiary Guarantors have unconditionally and
irrevocably guaranteed, jointly and severally, such obligations pursuant to the
terms of Article 11 of the Indenture.
The Notes are secured to the extent set forth in the Security Documents
and Article 10 of the Indenture.
At any time following the Issue Date, the Notes will be redeemable, in
whole or in part, at the option of the Company, upon not less than 30 and no
more than 60 days' prior notice, on any April 1, July 1, October 1 or January 2
of any year at a redemption price equal to 100% of the principal amount thereof
PLUS accrued and unpaid interest, if any, to the date of redemption.
If (i) as reflected in the Company's financial statements for the most
recently completed period of four fiscal quarters immediately preceding any
Interest Payment Date (commencing with the four-quarter fiscal period ending
immediately prior to the first anniversary of the Issue Date), the ratio of the
Company's Consolidated EBITDA to Consolidated Interest Expense for such
four-quarter period is greater than 2.00 to 1.00 and (ii) the sum of the
Company's cash on hand at the last day of such period PLUS the lesser of the
borrowing base or the commitments under the Revolving Credit Agreement exceeds
$25,000,000, then the Company shall be required to use 50% of such excess amount
to redeem the Notes, in whole or in part, on the next Interest Payment Date, at
a redemption price equal to 100% of the principal amount thereof PLUS accrued
and unpaid interest, if any, to the date of redemption (a "Mandatory
Redemption"); PROVIDED, HOWEVER, that the Company shall not be required to make
a Mandatory Redemption if such redemption is not otherwise permitted under the
Revolving Credit Agreement or the Senior Secured Note Purchase Agreement.
The Notes do not have the benefit of any sinking fund obligations.
Under the Indenture, the Company is obligated to make Offers to
Purchase Notes as described below:
(i) If a Change of Control occurs, the Company will be
required to make an Offer to Purchase all of the outstanding Notes at a
purchase price in cash equal to
<PAGE>
100% of the principal amount thereof, plus accrued and unpaid interest,
if any, on such principal amount, to the date of purchase; and
(ii) If the Company or any Restricted Subsidiary consummates
an Asset Disposition, under certain circumstances, the Company will be
required to make an Offer to Purchase up to all or a specified portion
of the Notes at a purchase price in cash equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, on such
principal amount to the date of purchase, in an aggregate principal
amount equal to any Net Available Proceeds from such an Asset
Disposition which are not used to make a permanent repayment or
reduction of (i) Debt then outstanding under any Bank Credit Agreement
or Vendor Financing Facility, to the extent such agreement or facility
would require such application or prohibit an Offer to Purchase Notes
or (ii) Debt then outstanding of the Company or a Restricted Subsidiary
that ranks PARI PASSU with the Notes at a price no greater than 100% of
the principal amount thereof plus accrued and unpaid interest to the
date of purchase.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Note in part only, a new Note or Notes for the unredeemed or
unpurchased portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire Debt of this Note and for defeasance of certain covenants (including
covenants relating to the making of Offers to Purchase the Notes) and Events of
Default with respect to this Note, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, the Notes may be
declared due and payable, in the manner and with the effect provided in the
Indenture. Upon payment of (i) the principal of the Notes so declared due and
payable, any overdue premium and any overdue installment of interest in respect
of this Note and (ii) as provided on the face hereof, any interest on any
overdue principal, premium or interest in respect of this Note (to the extent
that the payment of such interest shall be legally enforceable), all of the
Company's obligations in respect of the payment of the principal of and any
premium and interest on this Note shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the outstanding Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
In addition, without the consent of any Holder, the Indenture and the Notes may
be amended and supplemented to cure any ambiguity or inconsistency, make other
changes which will not adversely affect in any material aspect the rights of the
Holders or certain other matters set forth in the Indenture. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
-2-
<PAGE>
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver, or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in principal amount of the outstanding Notes a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to certain suits described in the Indenture, including any suit
instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein (or, in the case of redemption, on or after the
Redemption Date or, in the case of any purchase of this Note required to be made
pursuant to an Offer to Purchase, on or after the Purchase Date).
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Note Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in the Borough of Manhattan, The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
A director, officer, employee, stockholder or incorporator of the
Company shall not have any liability for any obligations of the Company under
this Note or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting this Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Note.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
-3-
<PAGE>
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES.
THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, AND THE COMPANY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE COMPANY
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
The Company hereby expressly and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any such litigation brought in any such court referred to
above and any claim that any such litigation has been brought in an inconvenient
forum.
-4-
<PAGE>
[FORM OF GUARANTEE]
THIS GUARANTEE IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF MAY __, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., FOR ITSELF
AND AS AGENT, WLR RECOVERY FUND L.P., WILMINGTON TRUST COMPANY, AS AGENT, UNITED
STATES TRUST COMPANY OF NEW YORK, AS JUNIOR SUBORDINATED TRUSTEE AND THE OTHER
PERSONS AND ENTITIES SIGNATORY THERETO (THE "INTERCREDITOR AGREEMENT"), WHICH
MATERIALLY AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN OBLIGATIONS AND
CERTAIN SECURITY INTERESTS AND LIENS, AND LIMITS RIGHTS TO ENFORCEMENT OF THE
HOLDER OF THIS GUARANTEE. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME HOLD
INDEBTEDNESS GUARANTEED HEREBY ARE BOUND BY THE TERMS OF THE INTERCREDITOR
AGREEMENT, WHICH WILL BE MADE AVAILABLE UPON REQUEST TO ANY SUCH HOLDER.
Each Subsidiary Guarantor hereby unconditionally and irrevocably
guarantees jointly and severally, on a subordinated basis to the extent and in
the manner provided in the Intercreditor Agreement, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Notes when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Indenture and the securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under the Indenture and the Notes (all the foregoing being hereinafter
collectively called the "Obligations"). Each Subsidiary Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under Article 11 of the Indenture notwithstanding
any extension or renewal of any Obligation.
Each Subsidiary Guarantor further agrees that its Guarantee constitutes
a guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Obligations.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The terms of the Guarantees evidences hereby are qualified in their
entirety and remain subject to the terms of Article 11 of the Indenture, as such
Article may be amended, modified or changes from the date hereof, including but
not limited to the addition of additional Subsidiary Guarantors and the release
of existing Subsidiary Guarantors from their obligations under the Indenture.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES.
EACH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK
-5-
<PAGE>
COUNTY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE,
AND EACH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR FEDERAL COURT. EACH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY
APPOINTS PLANET HOLLYWOOD INTERNATIONAL, INC. (THE "PROCESS AGENT"), WITH AN
OFFICE ON THE DATE HEREOF AT 8669 COMMODITY CIRCLE, ORLANDO, FLORIDA 32819, AS
ITS AGENT TO RECEIVE ON BEHALF OF EACH SUBSIDIARY GUARANTOR AND ITS PROPERTY
SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING
(BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID AND RETURN RECEIPT REQUESTED)
OR DELIVERING A COPY OF SUCH PROCESS TO EACH SUBSIDIARY GUARANTOR IN CARE OF THE
PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH SUBSIDIARY
GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. EACH SUBSIDIARY GUARANTOR AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
Each Subsidiary Guarantor hereby expressly and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any such litigation brought in any such court
referred to above and any claim that any such litigation has been brought in an
inconvenient forum. To the extent that a Subsidiary Guarantor has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to itself or its
property, such Subsidiary Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guarantee.
[THE SIGNATURE PAGE FOLLOWS.]
-6-
<PAGE>
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
instrument to be duly executed.
PLANET HOLLYWOOD MEMORABILIA, INC.
ALL STAR CAFE INTERNATIONAL, INC.
ALL STAR CAFE (NEW YORK), INC.
COOL PLANET, INC.
COOL PLANET II, INC.,
PLANET HOLLYWOOD (ATLANTIC CITY), INC.
PLANET HOLLYWOOD (HONOLULU), INC.
PLANET HOLLYWOOD (LP), INC.
PLANET HOLLYWOOD (NEW YORK CITY), INC.
PLANET HOLLYWOOD (NEW YORK), LTD.
By: Planet Hollywood International, Inc.,
a General Partner
PLANET HOLLYWOOD (ORLANDO) INC.
PLANET HOLLYWOOD (REGION II), INC.
PLANET HOLLYWOOD (REGION III), INC.
PLANET HOLLYWOOD (REGION IV), INC.
PLANET HOLLYWOOD (REGION VI), INC.
PLANET HOLLYWOOD (REGION VII), INC.
-7-
<PAGE>
PLANET HOLLYWOOD (WAREHOUSE), INC.
308 AVIATION, INC.
308-III AVIATION, INC.
ALL STAR CAFE (LP), INC.
ALL STAR CAFE (REGION V), INC.
ALL STAR CAFE (REGION VII), INC.
COAST LICENSING, INC.
COOL PLANET I, INC.
EBCO MANAGEMENT, INC.
OFFICIAL ALL STAR CAFE, INC.
PLANET HOLLYWOOD (ASPEN), INC.
PLANET HOLLYWOOD (CHEFS), INC.
PLANET HOLLYWOOD (CHICAGO), INC.
PLANET HOLLYWOOD (COSTA MESA), INC.
PLANET HOLLYWOOD (FRANCE), L.C.
PLANET HOLLYWOOD (GAMING), INC.
PLANET HOLLYWOOD (ISRAEL), L.C.
PLANET HOLLYWOOD (LONDON), INC.
PLANET HOLLYWOOD (MAIL ORDER), INC.
PLANET HOLLYWOOD (ORLANDO DISTRIBUTION), INC.
PLANET HOLLYWOOD (PARIS), INC.
PLANET HOLLYWOOD (PHOENIX), INC.
PLANET HOLLYWOOD (REGION I), INC.
PLANET HOLLYWOOD (TEL AVIV), INC.
PLANET HOLLYWOOD (THEATRES), INC.
PLANET HOLLYWOOD TRANSPORTATION, INC.
PLANET HOLLYWOOD (TROCADERO), L.C.
PLANET HOSPITALITY HOLDINGS, INC.
SILVER BRACELETS, INC.
SOUND REPUBLIC I, INC.
SOUND REPUBLIC, INC.
On behalf of each of the above
Subsidiary Guarantors
By:__________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-8-
<PAGE>
PLANET HOLLYWOOD (REGION V), INC.
PLANET HOLLYWOOD (TEXAS), LTD.
By: Planet Hollywood (Region V), Inc.,
a General Partner
KARMALANNE, INC.
ROCKY PIT, INC.
TEN ALPS, INC.
On behalf of each of the above
Subsidiary Guarantors
By:__________________________
Name: Mark S. Helm
Title: Vice President
MEANT 2 BE, INC.
By:__________________________
Name: Mark S. Helm
Title: Treasurer
-9-
<PAGE>
ASSIGNMENT FORM
To assign this Note and Guarantee (this "Security"), fill in the form
below: (I) or (we) assign and transfer this Security to:
-----------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint:
-----------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________ Your Signature: _______________________________
(sign exactly as name appears on the
other side of this Security)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the Security
Registrar in addition to, or in substitution for, STAMP, SEMP or MSP,
all in accordance with the Securities Exchange Act of 1934, as
amended.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety by
the Company pursuant to Section 4.7 or 4.10 of the Indenture, check here:
_________
If you want to elect to have only a part of the principal amount of
this Security purchased by the Company pursuant to Section 4.7 or 4.10 of the
Indenture, state the portion of such amount: $________.
Dated: __________________ Your Signature: _______________________________
(sign exactly as name appears on the
other side of this Security)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program
-10-
<PAGE>
("SEMP"), the New York Stock Exchange, Inc. Medallion Signature Program
("MSP") or such other signature guarantee program as may be determined
by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act
of 1934, as amended.)
-11-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED,
QUALIFIED, APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS AND NEITHER THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE REGULATORY
AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THESE SECURITIES.
WARRANT CERTIFICATE NO. 1
DATED: MAY 9, 2000
WARRANTS
TO PURCHASE SHARES OF NEW CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
PLANET HOLLYWOOD INTERNATIONAL, INC.
THIS CERTIFICATE CERTIFIES THAT BAY HARBOUR MANAGEMENT LC, or
its registered assigns (the "PURCHASER"), is the owner of Two Hundred Thousand
(200,000) warrants (the "WARRANTS"), each of which entitles the registered
holder thereof to purchase from PLANET HOLLYWOOD INTERNATIONAL, INC., a Delaware
corporation (the "COMPANY"), one share of New Class A Common Stock, par value
$.01 per share, of the Company (the "CLASS A STOCK"), at any time or from time
to time on or before 5:00 p.m., New York City time, on January 9, 2003 (the
"EXPIRATION DATE"), at the Exercise Price, all on the terms and subject to the
conditions hereinafter set forth.
The aggregate number of shares of Class A Stock or other
Securities issuable upon exercise of the Warrants (the "NUMBER ISSUABLE") and
the Exercise Price are each subject to adjustment from time to time pursuant to
the provisions of Section 2 of this Warrant certificate.
<PAGE>
Capitalized terms used herein but not otherwise defined herein
have the meanings given them in Section 13 hereof or, if not therein defined,
then in the Note Purchase Agreement (as defined in Section 13).
1. Exercise of Warrant.
-------------------
(a) Exercise. Subject to Section 1(e), the Warrants may be exercised,
in whole or in part, by the registered holder hereof at any time or from time to
time on or before 5:00 p.m., New York City time, on the Expiration Date, upon
delivery to the Company at the principal executive office of the Company in the
United States of America of (i) this Warrant certificate, (ii) a written notice
stating that such holder elects to exercise the Warrants and specifying the name
or names in which such holder wishes the certificate or certificates for shares
of Class A Stock to be issued and (iii) payment of the Exercise Price for the
shares of Class A Stock issuable upon exercise of such Warrants (the "AGGREGATE
EXERCISE PRICE"), which may be payable in cash, by check, wire transfer or other
permitted means (collectively, the "WARRANT EXERCISE DOCUMENTATION").
(b) Cashless Exercise. In lieu of the payment methods set forth in
Section 1(a)(iii), the holder may elect to pay some or all of the Aggregate
Exercise Price payable upon the exercise of the Warrants by surrendering a
portion of the Warrants as is determined by dividing (i) the Aggregate Exercise
Price payable in respect of the number of shares of Class A Stock being
purchased in such manner by (ii) the excess of the Market Price on the Business
Day next preceding the date of exercise of the Warrants of one share of Class A
Stock over the Exercise Price.
All references herein to an "EXERCISE" of the Warrants include
an exchange pursuant to this Section 1(b).
(c) Delivery of Shares. As promptly as practicable, and in any event
within three (3) Business Days after receipt of the Warrant Exercise
Documentation, the Company shall deliver or cause to be delivered (i)
certificates representing the number of validly issued, fully paid and
nonassessable shares of Class A Stock specified in the Warrant Exercise
Documentation, (ii) if applicable, cash in lieu of any fraction of a share, as
provided in Section 1(e), and (iii) if less than the full number of Warrants are
being exercised, a new Warrant certificate or certificates, of like tenor
herewith, for the number of Warrants evidenced by this Warrant certificate, less
the sum of (i) the number of Warrants then being exercised and (ii) any Warrants
surrendered, in the case of an Exercise pursuant to Section 1(b). Such exercise
shall be deemed to have been made at the close of business on the date of
delivery of the Warrant Exercise Documentation so that the Person entitled to
receive shares of Class A Stock upon such exercise shall be treated for all
purposes as having become the record holder of such shares of Class A Stock at
such time.
(d) Payment of Expenses. The Company shall pay all documentary stamp
taxes that may be imposed in respect of, the issue or delivery of any shares of
Class A Stock issuable upon the exercise of the Warrants. The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Class A
Stock in any name other than that of the registered holder of the Warrants.
2
<PAGE>
(e) No Fractional Shares. In connection with the exercise of any
Warrants, no fractions of shares of Class A Stock shall be issued, but in lieu
thereof the Company shall pay a cash adjustment in respect of any such
fractional interest in an amount equal to such fractional interest multiplied by
the Current Market Price per share of Class A Stock on the Business Day which
next precedes the day of exercise. If more than one Warrant certificate shall be
exercised by the holder thereof at the same time, the number of full shares of
Class A Stock issuable on such exercise shall be constituted on the basis of the
total number of Warrants so exercised.
2. Adjustments.
-------------
(a) Number Issuable and Exercise Price. The Number Issuable and the
Exercise Price shall be subject to adjustment from time to time as follows:
(i) MECHANICAL ADJUSTMENTS. In case the Company shall at any
time or from time to time after the Issue Date:
(A) split or subdivide the outstanding shares of
Common Stock into a larger number of shares;
(B) pay a dividend or make a distribution on the
outstanding shares of any Common Stock in Capital Stock of the
Company in any transaction, in each case, without payment of
any consideration by such holder thereof; or
(C) decrease the outstanding shares of any Common
Stock into a smaller number of shares by virtue of a
combination or reverse stock split;
then, and in each such case, the Number Issuable and the Exercise Price
in effect immediately prior to such event shall be proportionately
adjusted (and any other appropriate actions shall be taken by the
Company) so that the holder of any Warrant thereafter exercised shall
be entitled to receive the number of shares of Class A Stock or other
Securities of the Company which such holder would have owned or had
been entitled to receive upon or by reason of any of the events
described above, had such Warrant been exercised immediately prior to
the happening of such event (taking into account the effect of Section
2(a)(xvi)). An adjustment made pursuant to this clause (i) shall become
effective as of (x) the record date of such transaction (or the date of
such transaction if no record date is fixed), or (y) in the case of
Rights or Convertible Securities that are not immediately exercisable
or exchangeable for or convertible into underlying Capital Stock, the
date on which such Rights or Convertible Securities become exercisable,
exchangeable or convertible.
(ii) DISTRIBUTIONS OF CASH OR PROPERTY. If the Company shall
at any time or from time to time after the Issue Date distribute
Property or cash (other than cash dividends paid in the ordinary
course) to any holder of shares of its Common Stock, including without
limitation in connection with a voluntary or involuntary dissolution,
liquidation or winding up of the Company, then, and in each such case,
the Number Issuable in effect immediately prior to such event shall be
proportionately adjusted (and
3
<PAGE>
any other appropriate actions shall be taken by the Company) so that
the holder of each Warrant thereafter exercised shall be entitled to
receive additional shares of Class A Stock or, if applicable, Property
or cash, with a fair market value equal to the fair market value of the
Property or cash such holder would have owned or been entitled to
receive had such Warrant been exercised immediately prior to such
transaction at the Exercise Price then in effect (taking into account
the effect of Section 2(a)(xvi)). Such adjustment shall be made
whenever any such distribution is made and shall become effective on
the date of such distribution.
(iii) ISSUANCES BELOW CURRENT MARKET PRICE. If from time to
time after the date hereof the Company shall issue or sell Additional
Shares at a consideration per share that is less than the Current
Market Price in effect immediately prior to such issuance, then, as of
the record date of such transaction (or the date of such transaction if
no record date is fixed), the Exercise Price shall be adjusted to equal
the Exercise Price in effect immediately prior to such date multiplied
by a fraction, (A) the numerator of which shall be (1) the number of
shares of Common Stock outstanding immediately prior to such date
(taking into account the effect of Section 2(a)(xvi)), plus (2) the
number of shares of Common Stock that the aggregate consideration
received for such Additional Shares would purchase at a price per share
equal to such Exercise Price and (B) the denominator of which shall be
(1) the number of shares of Common Stock outstanding immediately prior
to such date (taking into account the effect of Section 2(a)(xvi)),
plus (2) the number of Additional Shares so issued. For purposes of
this Section 2, the issuance of any Additional Shares or other
securities, warrants, options or rights includes any sale by the
Company and any reissuance or resale by the Company.
(iv) RIGHTS AND CONVERTIBLE SECURITIES. If the Company issues
any Rights entitling the holders thereof to subscribe for or purchase
either any Additional Shares or Convertible Securities that are
convertible into or exchangeable for, with or without payment of
additional consideration, Additional Shares (such Rights being called
"COMMON STOCK RIGHTS" and such Convertible Securities being called
"COMMON STOCK EQUIVALENTS"), and the consideration per share for which
Additional Shares may at any time thereafter be issuable pursuant to
such Common Stock Rights or Common Stock Equivalents (when added to the
consideration per share of Common Stock, if any, received for such
Common Stock Rights or Common Stock Equivalents, as the case may be),
is less than the Current Market Price, the Exercise Price shall be
adjusted as provided in Section 2(a)(iii) on the basis that (A) the
maximum number of Additional Shares issuable pursuant to all such
Common Stock Rights or necessary to effect the conversion or exchange
of all such Common Stock Equivalents shall be deemed to have been
issued and (B) the aggregate consideration for such maximum number of
Additional Shares shall be deemed to be the consideration received and
receivable by the Company for the issuance of such Additional Shares
pursuant to such Common Stock Rights or Common Stock Equivalents (plus
the consideration, if any, received for such Common Stock Rights or
Common Stock Equivalents).
(v) FURTHER ADJUSTMENT. If the Company issues Common Stock
Equivalents and the consideration per share of which Additional Shares
may at any time thereafter be issuable pursuant to such Common Stock
Equivalents is less than the Current Market
4
<PAGE>
Price, the Exercise Price shall be adjusted as provided in Section
2(a)(iii) on the basis that (A) the maximum number of Additional Shares
necessary to effect the conversion or exchange of all such Common Stock
Equivalents shall be deemed to have been issued and (B) the aggregate
consideration for such maximum number of Additional Shares shall be
deemed to be the consideration received and receivable by the Company
for the issuance of such Additional Shares pursuant to such Common
Stock Equivalents. No adjustment of the Exercise Price shall be made
under this Section 2(a)(v) upon the issuance of any Common Stock
Equivalents issued pursuant to the exercise of any Common Stock Rights,
to the extent that such adjustment was previously made upon the
issuance of such Common Stock Rights pursuant to Section 2(a)(iv).
(vi) RELEVANT EXERCISE PRICE. For purposes of Sections
2(a)(iv) and 2(a)(v), the relevant Exercise Price shall be the Exercise
Price in effect immediately prior to the earlier of (A) the record date
for the holders of Common Stock entitled to receive the Common Stock
Rights or Common Stock Equivalents and (B) the initial issuance of the
Common Stock Rights or Common Stock Equivalents, and the adjustment
provided for in either such Section shall become effective immediately
after the earlier of the times specified in clauses (A) and (B).
(vii) NO ADJUSTMENT. No adjustment of the Exercise Price shall
be made under Section 2(a)(iv) or 2(a)(v) upon the issuance of any
Additional Shares pursuant to the exercise of any Common Stock Rights
or of any conversion or exchange rights pursuant to any Common Stock
Equivalents if such adjustment was previously made in connection with
the issuance of such Common Stock Rights or Common Stock Equivalents
(or in connection with the issuance of any Common Stock Rights
therefor) pursuant to Section 2(a)(iv) or 2(a)(v).
(viii) (a) EXPIRATION. If any Common Stock Rights (or any
portions thereof) that gave rise to an adjustment pursuant to Section
2(a)(iv) or any conversion or exchange rights pursuant to any Common
Stock Equivalents that gave rise to an adjustment pursuant to Section
2(a)(iv) or 2(a)(v) expire or terminate without the exercise thereof,
the Exercise Price shall be readjusted (but to no greater extent than
originally adjusted) on the basis of (A) eliminating from the
computation Additional Shares corresponding to such expired or
terminated Common Stock Rights or conversion or exchange rights, (B)
treating the Additional Shares, if any, actually issued or issuable
pursuant to the previous exercise of such Common Stock Rights or
conversion or exchange rights as having been issued for the
consideration actually received and receivable therefor and (C)
treating any such Common Stock Rights or conversion or exchange rights
that remain outstanding as being subject to exercise on the basis of
the consideration payable upon the exercise or conversion thereof as is
in effect at such time; provided, however, that any consideration
actually received by the Company in connection with the issuance of
such Common Stock Rights shall form part of the readjustment
computation even though such Common Stock Rights expired without being
exercised.
(b) MODIFICATION OF TERMS. The Exercise Price shall be
readjusted as provided in Section 2(a)(iii) and any applicable
provisions of Section 2(a)(iv) or 2(a)(v) if, following the initial
adjustment, there is any increase in the number of Additional Shares
issuable, or any decrease in the consideration payable upon any
issuance of
5
<PAGE>
Additional Shares, pursuant to any antidilution provisions of any
Common Stock Rights or Common Stock Equivalents.
(ix) (A) ADDITIONAL SHARES. If any Additional Shares, Common
Stock Rights or Common Stock Equivalents are issued for cash, the
consideration received therefor shall be deemed to be the amount of
cash received.
(B) If any Additional Shares, Common Stock Rights or
Common Stock Equivalents are offered by the Company for
subscription, the consideration received therefor shall be
deemed to be the subscription price.
(C) If any Additional Shares, Common Stock Rights or
Common Stock Equivalents are sold to underwriters or dealers
for public offering without a subscription offering, the
consideration received therefor shall be deemed to be the
public offering price.
(D) In any case not covered by Section 2(a)(ix)(A),
(B) or (C), in determining the amount of any consideration
received by the Company in whole or in part other than in
cash, the amount of such consideration shall be deemed to be
the fair market value of such consideration as determined in
good faith by the Board of Directors of the Company, and
evidence of such determination shall be filed with the minutes
of the Company. If Additional Shares are issued as part of a
unit with Common Stock Rights, the consideration received for
the Common Stock Rights shall be deemed to be the portion of
the consideration received for such unit determined in good
faith at the time of issuance by the Board of Directors of the
Company, and evidence of such determination shall be filed
with the minutes of the Company. If the Board of Directors of
the Company does not make any such determination, the
consideration received for the Common Stock Rights shall be
deemed to be zero. In either event, the consideration received
for the Additional Shares shall be deemed to be the
consideration received for such unit less the consideration
deemed to have been received for the Common Stock Rights.
(E) In any case covered by Section 2(a)(ix)(A), (B),
(C) or (D), in determining the amount of consideration
received by the Company, (I) any amounts received or
receivable for accrued interest or accrued dividends shall be
excluded and (II) any compensation, underwriting commissions
or concessions or expenses paid or incurred in connection
therewith shall not be deducted.
(F) In any case covered by Section 2(a)(ix)(A), (B),
(C) or (D), there shall be added to the consideration received
by the Company at the time of issuance or sale (I) the minimum
aggregate amount of additional consideration payable to the
Company upon the exercise of rights that relate to Common
Stock Equivalents and (II) the minimum aggregate amount of
consideration payable upon the conversion or exchange thereof.
(G) If any Additional Shares, Common Stock Rights or
Common Stock Equivalents are issued in connection with any
merger, consolidation or
6
<PAGE>
other reorganization in which the Company is the surviving
corporation, the amount of consideration received therefor
shall be deemed to be the fair market value, as determined in
good faith by the Board of Directors of the Company, of such
portion of the assets and business of the non-surviving person
or persons as the Board of Directors of the Company determines
in good faith to be attributable to such Additional Shares,
Common Stock Rights or Common Stock Equivalents, and evidence
of such determination shall be filed with the minutes of the
Company.
(x) DE MINIMIS CHANGES IN EXERCISE PRICE. Notwithstanding
anything herein to the contrary, no adjustment under this Section 2(a)
need be made to the Exercise Price unless such adjustment would require
an increase or decrease of at least 1% of the Exercise Price then in
effect. Any lesser adjustment shall be carried forward and shall be
made at the time of and together with the next subsequent adjustment,
which, together with any adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least 1% of such Number
Issuable. Any adjustment to the Exercise Price carried forward and not
theretofore made shall be made immediately prior to the exercise of any
Warrants pursuant hereto.
(xi) EFFECT OF ADJUSTMENT. All Warrants originally issued by
the Company hereunder shall, subsequent to any adjustment made pursuant
to this Section 2(a), evidence the right to purchase, at the adjusted
Exercise Price, the number of shares of Class A Stock or other
Securities equal to the Number Issuable determined to be purchasable
from time to time hereunder upon exercise of such Warrants, all subject
to further adjustment as provided herein. Each such adjustment shall be
valid and binding upon the Company and the holders of Warrants
irrespective of whether Warrant certificates theretofore and thereafter
issued express the Exercise Price per share of Class A Stock or other
Securities and the number of shares of Class A Stock or other
Securities that were expressed upon the initial Warrant certificate
issued hereunder.
(xii) OTHER SECURITIES. If at any time, as a result of an
adjustment made pursuant to this Section 2(a), the holder of Warrants
shall become entitled to purchase any Securities other than shares of
Class A Stock, the number or amount of such other Securities so
purchasable and the purchase price of such Securities shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained in Section
2(a)(i) through Section 2(a)(vi), inclusive, and all other relevant
provisions of this Section 2 that are applicable to shares of Class A
Stock shall be applicable to such other Securities.
(xiii) UPWARD ADJUSTMENTS. Notwithstanding anything contrary
contained in this Section 2(a), the Company shall be entitled to make
such upward adjustments in the Number Issuable, in addition to those
otherwise required by this Section 2(a), as the Board of Directors of
the Company in its discretion shall determine to be advisable in order
that any stock dividend, subdivision or combination of shares,
distribution of Rights or Convertible Securities exercisable or
exchangeable for or convertible into additional shares of Class A Stock
or other Securities of the Company hereafter made by the Company to its
shareholders shall not be taxable; PROVIDED, HOWEVER, that any such
adjustment shall be made, as nearly as practicable, in a manner which
treats all holders of Warrants with similar protections on an equal
basis.
7
<PAGE>
(xiv) OTHER ADJUSTMENTS. In case the Company at any time or
from time to time shall take any action which could have a dilutive
effect on the number of shares of Class A Stock that may be issued upon
any exercise of the Warrants, other than an action described in any of
Sections 2(a)(i) through 2(a)(viii), inclusive, then the Number
Issuable and the Exercise Price shall be adjusted in such manner and at
such time as the Board of Directors of the Company reasonably
determines to be equitable under the circumstances (such determination
to be evidenced in a resolution, a certified copy of which shall be
mailed to the holder of the Warrants evidenced hereby).
(xv) MISCELLANEOUS. Adjustments shall be made pursuant to this
Section 2(a) successively whenever any of the events referred to in
Sections 2(a)(i) through 2(a)(vi), inclusive, shall occur. If any
Warrant shall be exercised subsequent to the record date for any of the
events referred to in this Section 2(a), but prior to the effective
date thereof, appropriate adjustments shall be made immediately after
such effective date so that the holder of such Warrant on such record
date shall have received, in the aggregate, the kind and number of
shares of Class A Stock or other Securities or Property or cash that it
would have owned or been entitled to receive on such effective date had
such Warrant been exercised prior to such record date.
(xvi) ADJUSTMENTS IN RESPECT OF CLASS B STOCK. Without
limiting the generality of the foregoing, the Company acknowledges and
agrees that the number of Warrants granted to the Purchaser on the date
hereof was agreed to and determined by reference to the fully diluted
aggregate number of shares of Class A Stock and Class B Stock
outstanding on the date hereof (the "HOLDER'S PROPORTIONATE INTEREST").
If at any time any of the events referred to in Section 2(a) occur in
respect of Class B Stock but not Class A Stock, the Number Issuable and
the Exercise Price shall be appropriately adjusted so that an event
with respect to Class B Stock does not have a dilutive effect on the
Holder's Proportionate Interest.
(b) Reclassification. If the Company, by reclassification of securities
or otherwise, will change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant will thereafter
represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to
the securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other change and
the Exercise Price therefore will be appropriately adjusted, all
subject to further adjustment as provided in this Section 2.
(c) Adjustment for Capital Reorganization, Merger or Consolidation. In
case of any capital reorganization of the Capital Stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another Person, or the sale of all or substantially all the assets
of the Company then, and in each such case, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision will be made so that
the holder of this Warrant will thereafter be entitled to receive upon exercise
of this Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property (including cash) of the successor Person resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in
8
<PAGE>
such reorganization, consolidation, merger, sale or transfer if this Warrant had
been exercised immediately before such reorganization, merger, consolidation,
sale or transfer, all subject to further adjustment as provided in this Section
2. The foregoing provisions of this Section 2(c) will similarly apply to
successive reorganizations, consolidations, mergers, sales and transfers and to
the stock or securities of any other Person that are at the time receivable upon
the exercise of this Warrant. If the per-share consideration payable to the
holder of this Warrant for shares in connection with any such transaction is in
a form other than cash or marketable securities, then the value of such
consideration will be determined in good faith by the Board of Directors of the
Company. In all events, appropriate adjustment (as determined in good faith by
the Board of Directors of the Company) will be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
will be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
(d) Notice of Adjustment. Whenever the Number Issuable upon the
exercise of Warrants is adjusted or the Exercise Price in respect thereof is
adjusted, as herein provided, the Company shall promptly (and in any case within
five Business Days after the effective date of any such adjustment) give to each
holder of Warrants notice of such adjustment or adjustments and shall promptly
(and in any case within five Business Days after the effective date of such
adjustment or adjustments) deliver to each holder of Warrants a certificate of
the Company's chief financial officer setting forth (i) the number of shares of
Class A Stock or other Securities issuable upon the exercise of each Warrant and
the Exercise Price for such shares after such adjustment; (ii) a brief statement
of the facts requiring such adjustment; and (iii) the computation by which such
adjustment was made.
(e) Special Distributions. If the holder so elects by sending a Special
Notice to the Company, in the event that the Company shall declare a dividend or
make any other distribution (including, without limitation, in cash, in capital
stock (which shall include, without limitation, any options, warrants or other
rights to acquire capital stock) of the Company, whether or not pursuant to a
shareholder rights plan, "poison pill" or similar arrangement or in other
Property) to holders of Class A Stock or other Securities for which Warrants may
then be exercisable (a "SPECIAL DISTRIBUTION"), then the Board of Directors of
the Company shall set aside the amount of such dividend or distribution that
such holder of Warrants would have been entitled to receive had it exercised
such Warrants prior to the record date for such dividend or distribution (taking
into account the effect of Section 2(a)(xvi)). Upon the exercise of a Warrant
evidenced hereby, the holder shall be entitled to receive the Special
Distributions that such holder would have received had such Warrant been
exercised immediately prior to the record date for each such Special
Distribution or distribution. The Company shall notify each holder not less than
ten Business Days prior to the occurrence of each Special Distribution of its
intent to make such Special Distribution. If a holder elects to have such
Special Distribution set aside for its benefit upon exercise of the Warrant
rather than have an adjustment made to the Number Issuable or the Exercise Price
as provided in Section 2(a), the holder shall notify the Company by sending a
Special Notice prior to the date of any such Special Distribution.
3. Redemption. The Company shall not have any right to redeem any of the
Warrants evidenced hereby.
9
<PAGE>
4. Certain Covenants. The Company covenants and agrees that all Securities of
the Company which may be issued upon the exercise of the Warrants evidenced
hereby will be duly authorized, validly issued and, if such Securities consist
of Capital Stock, fully paid and nonassessable. The Company shall at all times
reserve and keep available for issuance upon the exercise of the Warrants, such
number of its authorized but unissued shares of Class A Stock or other
Securities as will from time to time be sufficient to permit the exercise of all
outstanding Warrants, and shall take all action required to increase the
authorized number of shares of Class A Stock or other Securities if at any time
there shall be insufficient authorized but unissued shares of Class A Stock or
other Securities to permit such reservation or to permit the exercise of all
outstanding Warrants. The Company shall bear all of its own expenses and all of
its own out-of-pocket expenses (including reasonable attorneys' fees, charges
and expenses) and filing fees of such holder in connection with any such
preparation and filing.
5. Registered Holder. The person in whose name this Warrant certificate is
registered shall be deemed the owner hereof and of the Warrants evidenced hereby
for all purposes.
6. Transfer of Warrants. Any transfer of the rights represented by this Warrant
certificate shall be effected by the surrender of this Warrant certificate,
along with the form of assignment attached hereto, properly completed and
executed by the registered holder hereof, at the principal executive office of
the Company in the United States of America, together with an appropriate
investment letter, if deemed reasonably necessary by counsel to the Company to
assure compliance with applicable securities laws. Thereupon, the Company shall
issue in the name or names specified by the registered holder hereof and, in the
event of a partial transfer, in the name of the registered holder hereof, a new
Warrant certificate or certificates evidencing in the aggregate the right to
purchase such number of shares of Class A Stock as shall be equal to the number
of shares of Class A Stock then purchasable hereunder.
7. Denominations. The Company covenants that it will, at its expense, promptly
upon surrender of this Warrant certificate at the principal executive office of
the Company in the United States of America, execute and deliver to the
registered holder hereof a new Warrant certificate or certificates in
denominations specified by such holder for an aggregate number of Warrants equal
to the number of Warrants evidenced by this Warrant certificate.
8. Replacement of Warrants. Upon receipt of evidence satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant certificate and,
in the case of loss, theft or destruction, upon delivery of an indemnity
reasonably satisfactory to the Company (in the case of an insurance company or
other institutional investor, its own unsecured indemnity agreement shall be
deemed to be reasonably satisfactory), or, in the case of mutilation, upon
surrender and cancellation thereof, the Company will issue a new Warrant
certificate of like tenor for a number of Warrants equal to the number of
Warrants evidenced by this Warrant certificate.
9. Governing Law. THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
10. Rights to Inure to Registered Holder. The Warrants evidenced by this Warrant
certificate, and the corresponding rights under the Note Purchase Agreement and
the Registration Rights Agreement, will inure to the benefit of and be binding
upon the registered holder hereof and the Company and their respective
successors and permitted assigns. Nothing
10
<PAGE>
in this Warrant certificate, the Note Purchase Agreement or the Registration
Rights Agreement shall be construed to give to any Person other than the Company
and the registered holder hereof any legal or equitable right, remedy or claim
under this Warrant certificate, the Note Purchase Agreement or the Registration
Rights Agreement, and this Warrant certificate shall be for the sole and
exclusive benefit of the Company and such registered holder. Nothing in this
Warrant certificate shall be construed to give the registered holder hereof any
rights as a holder of shares of Class A Stock until such time, if any, as the
Warrants evidenced by this Warrant certificate are exercised in accordance with
the provisions hereof.
11. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation (or any certificate of designation) or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant certificate, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of the Warrants against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase the
par value of any shares of stock issuable upon the exercise of this Warrant
certificate above the amount payable therefor upon such exercise, and (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Class A Stock upon exercise of this Warrant certificate.
12. Notices of Record Date. In the event of:
(a) any taking by the Company of a record of the holders of its Class A
Stock or Class B Stock (or other stock or securities at the time receivable upon
the exercise of the Warrants), for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right;
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any transfer of all or
substantially all the assets of the Company to, or consolidation or merger of,
the Company with or into any person,
(c) any voluntary or involuntary dissolution, liquidation or winding-
up of the Company,
(d) a sale of substantially all of the outstanding capital stock of the
Company or the issuance of new shares representing the majority of the Company's
right to vote, or
(e) any redemption or conversion of all outstanding Class A Stock or
Class B Stock,
then and in each such event the Company will mail to the holder of
Warrants a notice specifying the record date for voting or the date of closing,
as applicable, of any event (a) through (e) above. Such notice shall be
delivered to the holder of Warrants at least 15 days prior to the date of the
relevant event.
11
<PAGE>
Failure to give such notice or any defect therein shall not affect the
validity of any action taken.
13. Definitions. For the purpose of this Warrant certificate, the following
terms shall have the meanings indicated below:
"ADDITIONAL SHARES" means any Common Stock of the Company
issued by the Company after the Issue Date other than (i) Common Stock issued to
the holder of this Warrant certificate upon an Exercise of the Warrants or of
the Conversion Option under the Note Purchase Agreement, (ii) stock options
issued, and shares of Common Stock issued upon exercise of such stock options,
pursuant to the Company's existing stock option plans or any stock option plans
hereafter adopted by the Company, (iii) any shares of Common Stock issued
pursuant to any restricted share agreement adopted by the Company or hereafter
adopted by the Company and (iv) shares of Common Stock issued in connection with
any merger, consolidation or reorganization of the Company with and into another
Person, or the sale of all or substantially all of the assets of the Company.
"CAPITAL STOCK" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or membership interests (or equivalent ownership
interests) whether now outstanding or hereafter issued, including, without
limitation, all common stock and preferred stock, and any equity or debt
securities or rights, warrants or options convertible into or exchangeable or
exercisable for such Person's Capital Stock.
"CLASS B STOCK" means the New Class B Common stock, par value
$.01 per share, of the Company.
"COMMON STOCK" means the Class A Stock or the Class B Stock or
any other common stock of the Company authorized to be issued.
"CONVERTIBLE SECURITIES" means notes, debentures or other
equity or debt securities convertible into shares of capital stock, membership
interests or other equity securities of a specified Person.
"CURRENT MARKET PRICE" per share means, on any date specified
herein for the determination thereof, (a) the average daily Market Price of the
Class A Stock for those days during the period of 15 days, ending on such date,
on which the national securities exchanges were open for trading, and (b) if the
Class A Stock is not then listed, designated as a national market system
security or quoted in the over-counter market, the Market Price on such date.
"EXERCISE PRICE" means an initial exercise price of $4.2857
per share and thereafter, as adjusted from time to time in accordance with the
terms and conditions of this Warrant certificate.
"ISSUE DATE" means the date hereof.
"MARKET PRICE" means, per share of Class A Stock, on any date
specified herein: (a) if the Class A Stock is then listed or admitted to trading
on any national securities exchange, the closing price of the Class A Stock on
such date; (b) if the Class A Stock is not
12
<PAGE>
then listed or admitted to trading on any national securities exchange but is
traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the last
sale price of the Class A Stock on such date; or (c) if there shall have been no
trading on such date, the average of the reported closing bid and asked price of
the Class A Stock, on such date as reported by such national securities exchange
or Nasdaq; or (d) if neither (a), (b) nor (c) is applicable, the fair market
value per share determined in good faith by the Board of Directors of the
Company.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement,
dated as of the date hereof, between the Purchaser, the Company, the agent
thereunder and certain other note purchasers party thereto as the same may be
amended or modified from time to time in accordance with the terms thereof.
"NUMBER ISSUABLE" has the meaning given it in the second
paragraph hereof.
"PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PROPERTY" means any property; any assets; any evidences of
indebtedness of the Company or other Person; any capital stock of the Company or
any other Person; any Rights; or any Convertible Securities.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of May__, 2000 between the Purchaser, the New Money
Investors (as defined therein) and certain other note purchasers party thereto,
as the same may be amended or modified from time to time in accordance with the
terms thereof.
"RIGHTS" means warrants, options or other rights to acquire
capital stock, membership interests or other equity securities of a specified
Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" shall have the meaning specified in section 2(1) of
the Securities Act.
"SPECIAL DISTRIBUTION" has the meaning given it in Section
2(e).
"SPECIAL NOTICE" means the notice sent by a holder to the
Company indicating its preference to have any Special Distribution set aside for
its benefit upon exercise of any Warrants.
"WARRANT EXERCISE DOCUMENTATION" has the meaning given it in
Section 1 hereof.
14. Notices. All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be by facsimile with
confirmation of receipt, nationally recognized commercial overnight courier
services or personal delivery, (a) if to the holder of a Warrant, at such
holder's last known address appearing on the books of the Company; and (b) if to
the Company, at its principal executive office in the United States located at
the address designated for notices in the Note Purchase Agreement, or such other
13
<PAGE>
address as shall have been furnished to the party given or making such notice,
demand or other communication. All such notices and communications shall be
deemed to have been duly given (a) when delivered by hand, if personally
delivered, (b) two days after delivery to a courier if delivered by a nationally
recognized overnight courier service and (c) upon conformation of receipt, if
delivered by facsimile.
15. Amendments and Waivers. No modification, amendment or waiver of any
provision of this Warrant certificate, nor any consent to any departure from the
terms of this Warrant certificate, shall be effective unless it is in writing
and signed by the Company and the holder of this Warrant certificate. Any such
waiver or consent shall be effective only in the specific instance and for the
purpose given.
16. HSR Act. The Company shall make all filings with, and obtain all approvals,
consents and actions by, any Governmental Authority necessary to ensure that any
exercise of Warrants complies with the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder
(the "HSR Act"). In the event that the Expiration Date occurs before the date of
expiration or early termination of the waiting period under the HSR Act, the
Expiration Date shall be automatically extended until the date of such
expiration or early termination or such later date on which all necessary
consents and approvals are obtained thereunder.
17. Transfer Taxes and Expenses. The Company shall pay, or cause to be paid, all
delivery expenses and stamp, transfer, issue, documentary and similar taxes and
charges levied under the laws of any applicable jurisdiction in connection with
the issuance of Class A Stock or other securities to be issued upon exercise of
the Warrants and will hold any holder of Warrants harmless, without limitation
as to time, against any and all liabilities with respect to all such delivery
expenses, taxes and charges.
18. Injunctive Relief. The Company acknowledges that damages at law would be an
inadequate remedy for the breach of any provision of this Warrant certificate
and agrees in the event of such breach that the holder may obtain temporary and
permanent injunctive relief restraining the breaching party from such breach,
and, to the extent permissible under applicable statutes and rules of procedure,
a temporary injunction may be granted immediately upon the commencement of any
such suit. Nothing contained in the foregoing sentence shall be construed as
prohibiting the holder from pursuing any other remedies available at law or
equity for such breach or threatened breach of this Warrant certificate nor
limiting the amount of damages recoverable in the event of a breach or
threatened breach by any party of such provisions.
[Remainder of page intentionally left blank]
14
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant
certificate to be duly executed and delivered as of the Issue Date.
PLANET HOLLYWOOD INTERNATIONAL, INC.
By:__________________________________
Name:
Title:
15
<PAGE>
[Form of Assignment Form]
[To be executed upon assignment of Warrants]
The undersigned hereby assigns and transfers the attached
Warrant Certificate to _____________________ whose Social Security Number or Tax
ID Number is __________________ and whose record address is_____________________
_____________________________, and irrevocably appoints ________________ as
agent to transfer this security on the books of the Company. Such agent may
substitute another to act for such agent.
Signature:
-----------------------------------
Signature Guarantee:
-----------------------------------
Date:______________________________
16
FIRST AMENDED AND RESTATED
SUBSCRIPTION AGREEMENT
(Planet Hollywood International, Inc.)
THIS FIRST AMENDED AND RESTATED SUBSCRIPTION AGREEMENT (the
"Agreement") is entered into as of ________________, 2000, by and between PLANET
HOLLYWOOD INTERNATIONAL, INC., a Delaware corporation (the "Company") and LAUREN
INVESTMENTS HOLDINGS LIMITED, a corporation organized under the laws of the
British Virgin Islands, as trustee of the HOLST TRUST, a British Virgin Islands
Trust U/A/D 9/10/99 (the "New Money Investor").
WHEREAS, on October 12, 1999, the Company and certain of its
affiliates (collectively, the "Debtors") commenced cases under Chapter 11 of
Title 11 of the United States Code by filing voluntary petitions in the United
States Bankruptcy Court for the District of Delaware, Case No. 99-03612 (the
"Bankruptcy Court").
WHEREAS, on November 8, 1999, the Debtors filed their Joint
Plan of Reorganization and Disclosure Statement with the Bankruptcy Court, which
was supported by the Official Committee of Unsecured Creditors for the Debtors.
WHEREAS, following a hearing held on December 9, 1999, the
Bankruptcy Court approved the Disclosure Statement as amended and scheduled a
hearing on confirmation of the reorganization plan for January 20, 2000.
WHEREAS, on December 13, 1999 the Debtors filed their First
Amended Joint Plan of Reorganization (the "Plan") and First Amended Disclosure
Statement (the "Disclosure Statement") with the Bankruptcy Court.
WHEREAS, the parties entered into a Subscription Agreement,
dated as of January 20, 2000 (the "Initial Agreement"),with respect to the
purchase and sale of certain equity interests in the Company in accordance with
the terms of the Plan.
WHEREAS, a hearing on the confirmation of the Plan was held on
January 20, 2000 and the Plan, as modified by the Confirmation Order, was
confirmed by the Bankruptcy Court pursuant to an order entered January 21, 2000
(the "Confirmation Order").
WHEREAS, the parties desire to amend and restate the Initial
Agreement in its entirety in order to clarify and modify various provisions
contained therein.
Page 1 of 10
<PAGE>
WHEREAS, this Agreement is being entered into in accordance
with the terms of the Plan, such terms outlining the investment of approximately
$30 million in the Company by certain persons or entities (collectively, the
"New Money Investors") in order to acquire seven million shares of the Company's
New Class B Common Stock (as defined in the Plan) to be issued upon consummation
of the Plan.
WHEREAS, the New Money Investor desires to purchase from the
Company, and the Company desires to issue and sell to the New Money Investor,
2,333,341 shares of the Company's New Class B Common Stock, par value $0.01 per
share, (the "Shares"), in a transaction exempt from registration under state and
federal securities laws, in accordance with the terms and conditions set forth
in this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereby agree
as follows:
1. SALE AND PURCHASE. Subject to the terms and conditions
hereof, and in reliance on the respective representations, warranties and
covenants of the parties contained herein, the Company hereby agrees to sell the
Shares to the New Money Investor, and the New Money Investor hereby agrees to
purchase the Shares from the Company.
2. PURCHASE PRICE, ESCROW AND CLOSING.
2.1 The aggregate purchase price for the Shares is Ten
Million Dollars ($10,000,000.00) (approximately $4.2857 per Share), payable by
bank wire transfer of immediately available funds. The New Money Investor agrees
that said purchase price shall be deposited in an interest bearing escrow
account (the "Escrow Account") with Gray, Harris & Robinson, P.A. acting as
escrow agent, within five (5) business days of the Company's request for such
deposit. The parties further agree that the New Money Investor has previously
deposited approximately One Million Six Hundred Sixty-Six Thousand Six Hundred
Sixty Six and 67/100 Dollars ($1,666,666.67) as a good faith deposit with the
escrow agent and that such sum shall be applied toward the purchase price.
2.2 In accordance with the terms hereof, all monies
deposited into the Escrow Account (the "Escrowed Funds") shall be released to
the Company on that date (the "Closing Date") which is on or after the Effective
Date of the Plan (as such date is defined in the Plan); provided, that all of
the following conditions have been satisfied:
(i) all modifications to the Plan subsequent to the
date of this Agreement have been approved by the New Money Investor;
(ii) the Company has delivered to the New Money
Page 2 of 10
<PAGE>
Investor, or its designee, stock certificates representing the Shares, other
than the Celebrity Shares (as defined herein) (the "Delivered Shares");
(iii) the Company and the New Money Investor have
entered into a Registration Rights Agreement relating to the Delivered Shares
(as described in Section 4.2 hereof);
(iv) the Company and the New Money Investor have
entered into a Voting Agreement relating to the Delivered Shares (as described
in Section 4.3 hereof);
(v) the Company shall have delivered a certificate to
the New Money Investor representing that the representations and warranties of
the Company under this Agreement shall be true and correct in all material
respects when made and shall continue to be true and correct as of the Closing
Date as though such representations and warranties were made on the Closing
Date, and that the Company has complied with all covenants required of the
Company under this Agreement; and
(vi) the Company (and any other appropriate parties)
shall have delivered a certificate to the New Money Investor representing that
the Plan has been declared effective and that all conditions to the
effectiveness of the Plan have been satisfied or otherwise waived.
2.3 Unless otherwise agreed to between the parties, in the
event the Effective Date has not occurred by _______________, 2000, the Escrowed
Funds (and all interest accruing thereon) shall be returned to the New Money
Investor.
2A. CELEBRITY SHARES AND DELIVERY. The New Money Investor acknowledges
that the terms of the Plan contemplate the New Money Investors agreeing to allow
the Company to redirect up to approximately one million of their seven million
shares of New Class B Common Stock to celebrities in consideration for their
involvement with the Company. Consequently, the New Money Investor agrees and
acknowledges that the Company will withhold from delivery to the New Money
Investor approximately fourteen and 29/100 percent (14.29%) of the Shares (the
"Celebrity Shares") in order to deliver the Celebrity Shares to certain
celebrities and other parties in consideration for their involvement with the
Company. Such delivery shall be at the discretion of the Company, and the New
Money Investor shall not be entitled to the return of any of the Celebrity
Shares. The New Money Investor also acknowledges that under the terms of the
Company's Restated Certificate of Incorporation and Bylaws, upon delivery of the
Celebrity Shares to such celebrities and other parties, such shares shall
automatically convert to an equal number of the Company's New Class A Common
Stock (as defined in the Plan).
Page 3 of 10
<PAGE>
3. NEW MONEY INVESTOR'S REPRESENTATIONS AND WARRANTIES. The New Money
Investor represents and warrants to the Company as follows:
3.1 Residence. The New Money Investor's principal residence
or principal office is as shown next to the New Money Investor's signature
hereto.
3.2 Investment Representation. The New Money Investor is
acquiring the Shares for its own account and not on behalf of other persons and
for investment purposes only and not with a view to or for resale or
distribution of the Shares; the New Money Investor has no contract, agreement or
arrangement with any person or entity, to sell, transfer, or pledge to such
person or entity, the Shares nor has any present intention of distributing the
Shares or of selling the Shares under any contract, agreement, or arrangement.
3.3 Access to Information.
(i) The New Money Investor has had an opportunity to
ask questions of, and receive answers from, appropriate executive officers of
the Company concerning the Company and the terms and conditions of the issuance
of the Shares.
(ii) The New Money Investor has had access to full
and fair disclosure of all material information concerning the Company,
including, but not limited to, the Plan, the Disclosure Statement, all material
books and records of the Company and all material contracts and documents
relating to the sale and purchase of the Shares.
(iii) The Company has made available for inspection
all material documents relating to the Company's business and has not refused in
any way to permit the New Money Investor to inspect any document requested by
the New Money Investor.
3.4 Suitability.
(i) The New Money Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Act"). If the New Money Investor is an individual,
the New Money Investor has adequate means for providing for his/her current
anticipated needs and personal contingencies without respect to his/her
investment in the Company and any income therefrom, if any, and does not
anticipate any need to sell, assign, transfer or hypothecate his/her interest in
the Shares purchased by him/her in the foreseeable future.
(ii) The New Money Investor also has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of investing in the Shares.
Page 4 of 10
<PAGE>
3A. COMPANY REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the New Money Investor as follows:
3A.1 Organization; Authorization and Validity of Agreement.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the performance of the Company's
obligations hereunder have been, or will have been on the Closing Date, duly
authorized by the Board of Directors of the Company and/or the Bankruptcy Court,
and no other corporate proceedings on the part of the Company are necessary to
authorize such execution, delivery and performance. This Agreement has been duly
executed by the Company and is the legal, valid and binding obligation of the
Company.
3A.2 Capitalization. On the Effective Date and the Closing
Date, there shall be approximately ten million (10,000,000) shares of New Class
A Common Stock and New Class B Common Stock, in the aggregate, issued and
outstanding, with such number including the Celebrity Shares. All of the issued
and outstanding shares of New Class A Common Stock and New Class B Common Stock
have been, or will be on the Effective Date duly authorized, validly issued,
fully paid, and nonassessable. Except as provided in the Plan: (i) there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock and (ii) there are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Company.
3A.3 No Conflict or Violation. The execution, delivery and
performance by the Company of this Agreement do not and will not violate or
conflict with any provision of the amended certificate of incorporation or
by-laws of the Company, and do not and will not violate any provision of any
agreement or instrument to which the Company is a party or by which it is bound,
or any order, judgment or decree of any court or other governmental or
regulatory authority to which the Company is subject.
3A.4 Title. Subject only to the retention of the Celebrity
Shares by the Company in accordance with Section 2A hereof (i) the Shares are
and, as of the Closing Date, will be legally and beneficially owned by the New
Money Investor, and (ii) the Shares will be, on the Closing Date, free from and
unaffected by any option or right to acquire, interest or other equity or
encumbrance whatsoever in favor of any other person.
4. NEW MONEY INVESTOR'S ACKNOWLEDGMENTS. The New Money Investor hereby
acknowledges and agrees:
4.1 Restrictions. The Shares purchased pursuant to this
Agreement have been acquired pursuant to certain investment representations by
the New
Page 5 of 10
<PAGE>
Money Investor and shall not be sold, pledged, hypothecated, donated or
otherwise transferred, whether or not for consideration, by the New Money
Investor, and the Company may not permit the transfer of such Shares, except
upon the registration of the Shares under the Act and any applicable state
securities laws, or issuance to the Company of a favorable opinion of counsel
satisfactory to counsel for the Company, or the submission to the Company of
such other evidence as may be satisfactory to counsel for the Company, in any
case, to the effect that any such transfer shall not be in violation of the Act
and any applicable state securities laws. The New Money Investor acknowledges
and agrees that a conspicuous and appropriate legend shall be placed on any
certificate or certificates delivered to it in connection with this Agreement in
substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED
PURSUANT TO AN INVESTMENT REPRESENTATION ON THE PART OF THE
PURCHASER HEREOF AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED,
DONATED, OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR
CONSIDERATION, BY THE PURCHASER EXCEPT UPON THE REGISTRATION
OF THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE ISSUANCE TO THE COMPANY OF A FAVORABLE
OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE COMPANY,
OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY
BE SATISFACTORY TO SUCH COUNSEL, IN ANY CASE TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT
AND APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE ACT OR
ANY STATE SECURITIES LAWS.
The certificates will also bear any other legends required by
applicable securities laws.
4.2 Registration. The parties acknowledge and agree that in
connection with this Agreement, and in accordance with the terms of the Plan,
the parties shall enter into a Registration Rights Agreement simultaneously
herewith (the "Registration Agreement"), providing for the filing of a "shelf"
registration statement with the Securities and Exchange Commission covering the
resale of the Delivered Shares. The registration of the Delivered Shares shall
be in accordance with the terms of the Registration Agreement.
4.3 Voting Agreement. The parties acknowledge and agree
that in connection with this Agreement, and in accordance with the terms of the
Plan, the
Page 6 of 10
<PAGE>
parties shall enter into a Voting Agreement simultaneously herewith
(the "Voting Agreement"), providing for the election of certain directors of the
Company. The New Money Investor shall be required to vote the Delivered Shares
in accordance with the terms of the Voting Agreement.
4.4 Operating History. The Company is in the process of
emerging from Chapter 11 bankruptcy protection and does not have a recent
history of profitable operations. The New Money Investor acknowledges that the
ownership of the Shares involves a high degree of risk of loss of the New Money
Investor's entire investment. The New Money Investor has made such investigation
of the business and prospects of the Company as it deems adequate and
specifically recognizes there is no assurance of any income from this
investment.
5. INDEMNIFICATION. In the event any litigation or controversy arises
out of or in connection with this Agreement, the New Money Investor agrees that
in consideration for the issuance and transfer of the Shares, the New Money
Investor will indemnify the Company, and any officer, director, employee, agent,
or any other person controlling any of them against all liabilities, damages,
expenses, or claims, including reasonable attorneys' fees, expenses and costs,
including those associated with any appellate or post-judgment collection
proceedings, incurred by the Company or such persons, if such liabilities,
damages or claims arise from a misrepresentation or a breach of warranty made by
the New Money Investor in connection with this Agreement.
6. NOTICES. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein shall be given in
writing by registered or certified mail, which shall be addressed to the
addresses of the parties set forth herein, or, if none, to the last known
address of the addressee.
7. INVALID PROVISION. The invalidity or unenforceability of any term or
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated, but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
8. WAIVER OR MODIFICATION. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration or litigation between the
parties arising out of or affecting this Agreement, or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provision of this paragraph may not be waived
except as herein set forth.
Page 7 of 10
<PAGE>
9. COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter (including the Initial Agreement).
10. APPLICABLE LAW AND BINDING EFFECT. This Agreement shall be
construed and regulated under and by the laws of the State of Florida, U.S.A.,
excluding the choice of law rules thereof, and shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns. All references herein to "Dollars" and
"$" shall refer to United States Dollars.
11. ARBITRATION. In the event a dispute arises under this Agreement
which cannot be resolved, such dispute shall be submitted to arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. All such arbitration shall take place at the office
of the American Arbitration Association located in Orlando, Florida. The award
or decision rendered by the arbitrator(s) (including an allocation of the costs
of arbitration) shall be final, binding and conclusive and judgment may be
entered upon such award by any court. The arbitration provisions of this
Agreement shall not prevent any party from obtaining injunctive relief from a
court of competent jurisdiction to enforce the obligations of the other party
hereunder for which such party may require provisional relief pending a decision
on the merits by the arbitrator(s). The arbitrator(s) shall have authority to
award any remedy or relief that a court of the State of Florida could grant in
conformity to applicable law, including the authority to award attorneys' fees
or punitive damages. If any party to this Agreement brings an arbitration or
action to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees and fees of experts, incurred in connection with such
action, including any appeal of such action.
12. SECTION AND PARAGRAPH HEADINGS. Section and paragraph headings used
throughout this Agreement are for reference and convenience and in no way
define, limit or describe the scope or intent of this Agreement or affect is
provisions.
13. MULTIPLE COPIES OR COUNTERPARTS OF AGREEMENT. The original and one
or more copies of this Agreement may be executed by one or more of the parties
hereto. In such event, all of such executed copies shall have the same force and
effect as the executed original and all of such counterparts taken together
shall have the effect of a fully executed original.
14. NUMBER AND GENDER. Whenever used herein, singular numbers shall
include the plural, the plural the singular, and the use of any gender shall
include all genders.
Page 8 of 10
<PAGE>
15. SURVIVAL. The warranties, representations and acknowledgments
contained in this Agreement shall survive execution of this Agreement by the
parties hereto and issuance of the Shares by the Company to the New Money
Investor. Notwithstanding any investigation made by or on behalf of the New
Money Investor or the Company, whether before or after the date hereof, the New
Money Investor and the Company shall be entitled to rely upon the respective
representations, warranties and acknowledgments given or made by each to the
other herein.
[remainder of page intentionally left blank]
Page 9 of 10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.
NEW MONEY INVESTOR:
Holst Trust
---------------------------------
Entity Name, if any
Address:
By: Lauren Investments Holdings Limited
Title: Trustee
--------------------------
__________________________
__________________________ By:_____________________________
Name:___________________________
Title:____________________________
By:_____________________________
Name:___________________________
Title:____________________________
COMPANY:
Address:
Planet Hollywood International, Inc.
8669 Commodity Circle
------------------------ By:___________________________
Orlando, Florida 32819 Name: ________________________
------------------------
Title: ________________________
Page 10 of 10
EXECUTION COPY
================================================================================
REVOLVING CREDIT AGREEMENT
dated as of May 8, 2000
among
PLANET HOLLYWOOD INTERNATIONAL, INC.,
and
THE BORROWERS LISTED ON ANNEX I HERETO
AS BORROWERS,
THE CIT GROUP/BUSINESS CREDIT, INC.,
WLR RECOVERY FUND L.P.,
and
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS,
and
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT
THIS AGREEMENT IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF MAY 8, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., FOR ITSELF
AND AS AGENT, WLR RECOVERY FUND L.P., WILMINGTON TRUST COMPANY, AS AGENT, UNITED
STATES TRUST COMPANY OF NEW YORK, AS JUNIOR SUBORDINATED TRUSTEE AND THE OTHER
PERSONS AND ENTITIES SIGNATORY THERETO (THE "INTERCREDITOR AGREEMENT"), WHICH
MATERIALLY AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN OBLIGATIONS AND
CERTAIN SECURITY INTERESTS AND LIENS, AND LIMITS RIGHTS TO ENFORCEMENT OF THE
PARTIES TO THIS AGREEMENT. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME HOLD
INDEBTEDNESS HEREUNDER OR WHICH IS SECURED HEREBY ARE BOUND BY THE TERMS OF THE
INTERCREDITOR AGREEMENT, WHICH WILL BE MADE AVAILABLE UPON REQUEST TO ANY PARTY
HERETO.
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS; CONSTRUCTION........................................................................1
1.01. Certain Definitions...........................................................................1
1.02. Construction.................................................................................23
1.03. Accounting Principles........................................................................23
ARTICLE II THE CREDITS................................................................................... 24
2.01. Revolving Credit Loans.......................................................................24
2.02. Notes........................................................................................24
2.03. Notice of Borrowing; Making of Loans.........................................................24
2.04. Reduction of Current Commitment; Mandatory Prepayment; Optional Prepayment...................27
2.05. Interest Rate................................................................................29
2.06. Interest Payment Dates.......................................................................30
2.07. Maturity Date................................................................................30
2.08. Payments.....................................................................................30
2.09. Use of Proceeds..............................................................................33
2.10. Eurodollar Rate Not Determinable; Illegality or Impropriety..................................33
2.11. Reserve Requirements; Capital Adequacy Circumstances.........................................33
2.12. Indemnity; Agent Duty to Change Eurodollar Loan Office.......................................35
2.13. Sharing of Setoffs...........................................................................36
2.14. Continuation and Conversion of Loans.........................................................36
2.15. Taxes........................................................................................37
2.16. Joint and Several Liability..................................................................39
2.17. Inter-Lender Arrangements....................................................................39
2.18. Equity Contributions.........................................................................39
ARTICLE III LETTERS OF CREDIT.............................................................................39
3.01. Letters of Credit............................................................................39
3.02. Participations...............................................................................43
ARTICLE IV BORROWING BASE.................................................................................44
4.01. Condition of Lending and Assisting in Establishing or Opening Letters of Credit..............44
4.02. Mandatory Prepayment.........................................................................44
4.03. Rights and Obligations Unconditional.........................................................44
4.04. Borrowing Base Certificate...................................................................45
4.05. General Provisions...........................................................................45
ARTICLE V SECURITY........................................................................................45
5.01. Collateral...................................................................................45
5.02 Trademarks....................................................................................46
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VI CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT ISSUANCE AND LENDING.............................46
6.01. Conditions Precedent to Effectiveness........................................................46
6.02. Conditions Precedent to Loans and Letters of Credit..........................................51
ARTICLE VII REPRESENTATIONS AND WARRANTIES................................................................52
7.01. Organization, Good Standing, Etc.............................................................52
7.02. Authority and Authorization..................................................................53
7.03. Execution and Binding Effect.................................................................53
7.04. Governmental Approvals.......................................................................53
7.05. Absence of Conflicts.........................................................................54
7.06. Subsidiaries.................................................................................54
7.07. Litigation...................................................................................54
7.08. Financial Condition; Historical Statements...................................................54
7.09. Compliance with Law, Etc.....................................................................54
7.10. ERISA........................................................................................55
7.11. Taxes, Etc...................................................................................55
7.12. Full Disclosure..............................................................................56
7.13. Operating Lease Obligations; Existing Liens; Unpaid Rent.....................................56
7.14. Environmental Matters........................................................................56
7.15. Schedules....................................................................................57
7.16. Insurance....................................................................................57
7.17. Use of Proceeds..............................................................................57
7.18. Financial Accounting Practices, Etc..........................................................57
7.19. No Material Adverse Effect...................................................................58
7.20. Real Property; Leases........................................................................58
7.21. Location of Bank Accounts....................................................................59
7.22. No Event of Default..........................................................................59
7.23. Capitalized Leases...........................................................................59
7.24. Inventory and Memorabilia....................................................................59
7.25. Collateral...................................................................................59
7.26. Tradenames...................................................................................59
7.27. Intellectual Property........................................................................59
7.28. Regulation T, U or X.........................................................................60
7.29. Nature of Business...........................................................................60
7.30. Adverse Agreements, Etc......................................................................60
7.31. Holding Company and Investment Company Acts..................................................60
7.32. Permits, Etc.................................................................................61
7.33. Priority; Title..............................................................................61
7.34. Labor Relations; Collective Bargaining Agreements............................................61
7.35. Loan Documents...............................................................................61
7.36. Solvency.....................................................................................62
7.37. Ownership of Planet Hollywood Memorabilia, Inc. and the Memorabilia..........................62
7.38. Corporate Structure..........................................................................62
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
7.39. Delivery of Authenticity Documents...........................................................62
7.40. Material Contracts...........................................................................62
7.41. [Intentionally omitted]......................................................................62
7.42. TSP Agreement................................................................................62
7.43. Additional Representations and Warranties....................................................63
ARTICLE VIII AFFIRMATIVE COVENANTS........................................................................63
8.01. Reporting Requirements.......................................................................63
8.02. Compliance with Laws, Etc....................................................................67
8.03. Preservation of Existence, Etc...............................................................68
8.04. Keeping of Records and Books of Account......................................................68
8.05. Inspection Rights............................................................................68
8.06. Maintenance of Properties, Etc...............................................................69
8.07. Maintenance of Insurance.....................................................................69
8.08. Environmental................................................................................70
8.09. Further Assurances...........................................................................71
8.10. Financial Accounting Practices, Etc..........................................................71
8.11. Cash Management System.......................................................................72
8.12. Store Openings and Closings..................................................................73
8.13. Memorabilia and Inventory....................................................................73
8.14. Change in Collateral; Collateral Records.....................................................73
8.15. Leases.......................................................................................74
8.16. Landlord and Warehouse Waivers...............................................................74
8.17. Authenticity Documents.......................................................................74
8.18 TSP Agreement................................................................................74
ARTICLE IX NEGATIVE COVENANTS.............................................................................75
9.01. Liens, Etc...................................................................................75
9.02. Indebtedness.................................................................................76
9.03. Guarantees, Etc..............................................................................77
9.04. Merger, Consolidation, Sale of Assets, Etc...................................................77
9.05. Change in Nature of Business.................................................................78
9.06. Loans, Advances and Investments, Etc.........................................................78
9.07. Lease Obligations............................................................................79
9.08. Dividends, Prepayments, Etc..................................................................79
9.09. Transactions with Affiliates.................................................................80
9.10. Sale Policies................................................................................80
9.11. Environmental................................................................................80
9.12. ERISA........................................................................................80
9.13. Subsidiaries.................................................................................81
9.14. Capital Expenditures.........................................................................81
9.15. Federal Reserve Regulations..................................................................81
9.16. Limitation on Plan of Reorganization Payments................................................81
9.17. Inactive Guarantors..........................................................................81
9.18. Negative Pledge..............................................................................81
9.19. Foreign Entities.............................................................................82
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
9.20. Note Maturity Date...........................................................................82
ARTICLE X DEFAULTS........................................................................................82
10.01. Events of Default...........................................................................82
10.02. Consequences of an Event of Default.........................................................85
10.03. Deposit for Letters of Credit...............................................................86
10.04. Certain Remedies............................................................................86
ARTICLE XI MISCELLANEOUS..................................................................................86
11.01. Holidays....................................................................................86
11.02. Records.....................................................................................87
11.03. Amendments and Waivers......................................................................87
11.04. No Implied Waiver; Cumulative Remedies......................................................87
11.05. Notices.....................................................................................88
11.06. Expenses; Taxes; Attorneys' Fees; Indemnification...........................................88
11.07. Application.................................................................................90
11.08. Severability................................................................................90
11.09. Governing Law...............................................................................90
11.10. Prior Understandings........................................................................90
11.11. Duration; Survival..........................................................................90
11.12. Counterparts................................................................................90
11.13. Assignments; Participations.................................................................91
11.14. Successors and Assigns......................................................................93
11.15. Confidentiality.............................................................................93
11.16. Waiver of Jury Trial........................................................................94
11.17. Right of Setoff.............................................................................94
11.18. Headings....................................................................................94
11.19. Forum Selection and Consent to Jurisdiction.................................................94
ARTICLE XII THE AGENT.....................................................................................95
12.01. Appointment.................................................................................95
12.02. Nature of Duties............................................................................96
12.03. Rights, Exculpation, Etc....................................................................96
12.04. Reliance....................................................................................97
12.05. Indemnification.............................................................................97
12.06. Lenders Individually........................................................................97
12.07. Successor Agent.............................................................................98
12.08. Collateral Matters..........................................................................98
ARTICLE XIII OTHER MATTERS...............................................................................100
13.01. Members and TSP Membership Interest........................................................100
13.02. Affirmative Covenant.......................................................................100
13.03. Negative Covenant..........................................................................100
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A - Form of Note
Exhibit B - Form of Security Agreement
Exhibit C - Form of Pledge Agreement
Exhibit D - Form of Guarantor Security Agreement
Exhibit E - Form of Guaranty
Exhibit F - [Intentionally Omitted]
Exhibit G - Form of Letter of Credit Application
Exhibit H - Form of Borrowing Base Certificate
Exhibit I - Form of Assignment and Acceptance
Exhibit J - Form of Credit Card Depository Account Agreement
Exhibit J-1 - Form of Payment Direction Letter
Exhibit K - Form of Notice Letter to Depository Banks
Exhibit L - Form of Depository Account Agreement
Exhibit M - Form of Section 2.15(c) Tax Certificate
Exhibit N - Form of Notice of Borrowing
Exhibit O - Form of Blocked Account Agreement
Schedule 1.01(A) - List of Active Guarantors
Schedule 1.01(B) - Locations of Inventory and Memorabilia as of the Closing Date
Schedule 1.01(C) - List of UCC-1 Filing Locations
Schedule 1.01(D) - List of Foreign Entities
Schedule 1.01(E) - List of Guarantors
Schedule 1.01(F) - List of Inactive Guarantors
Schedule 1.01(G) - Revolving Credit Commitments
Schedule 1.01(H) - Credit Card Agreements
Schedule 3.01(c) - Existing Letters of Credit
Schedule 5.02 - PH Trademarks
Schedule 6.01(u) - Warehouse Waivers Required by the Closing Date
Schedule 7.06 - U.S. Subsidiaries
Schedule 7.07 - Litigation
Schedule 7.10 - Employee Plans
Schedule 7.13 - Operating Lease Obligations
Schedule 7.14 - Environmental Matters
Schedule 7.16 - Insurance
Schedule 7.20(a) - Real Property
Schedule 7.20(b) - Leases
Schedule 7.21 - Bank Accounts
Schedule 7.26 - Tradenames
Schedule 7.34 - Collective Bargaining Agreements
Schedule 7.42 - TSP Information
Schedule 7.38 - Corporate Structure Chart
Schedule 7.40 - Material Contracts
Schedule 8.11 - State Tax Payments
Schedule 8.12 - Store Closing Locations
Schedule 8.13 - Permitted Memorabilia and Inventory Locations
Schedule 8.16 - Landlord, Warehouse and Franchisee Waiver Locations
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Schedule 9.01 - Existing Liens
Schedule 9.02 - Permitted Indebtedness
Schedule 9.06 - Existing Investments
Schedule 9.09 - Transactions Contemplated by the Plan of Reorganization
</TABLE>
-vi-
<PAGE>
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of May 8, 2000,
among PLANET HOLLYWOOD INTERNATIONAL, INC., a Delaware corporation ("Planet
Hollywood"), the Borrowers signatory hereto listed on Annex I hereto (together
with Planet Hollywood, and jointly and severally, the "Borrowers" and
individually, each a "Borrower"), THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"),
WLR RECOVERY FUND L.P. ("WLR"), and the financial institutions from time to time
party hereto (collectively, the "Lenders" and each individually, a "Lender"),
and CIT, as agent for the Lenders under this Revolving Credit Agreement and as
Memorabilia Agent (as hereinafter defined) hereunder (in such capacity, the
"Agent").
RECITALS
--------
WHEREAS, the Borrowers have requested that the Lenders provide
the Borrowers with a $15,000,000 revolving credit facility, including a
$5,000,000 subfacility for the issuance of letters of credit (the "Facility"),
for working capital purposes and, subject to the terms and conditions set forth
herein, the Lenders have agreed to provide the Facility.
In consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
-------------------------
1.01. Certain Definitions. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the following words
and terms shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires:
"Accountant's Opinion" shall have the meaning given that term
in Section 8.01(a) hereof.
"Active Guarantor" and "Active Guarantors" shall mean (i) the
direct or indirect existing Subsidiaries of the Borrowers (other than Inactive
Guarantors) listed on Schedule 1.01(A) annexed hereto, and (ii) any other entity
that, after the Closing Date, becomes a direct or indirect U.S. Subsidiary of
any Borrower, has business operations or assets located within the United States
of America, and executes a Guaranty and Guarantor Security Agreement in
accordance with the terms of this Agreement.
"Affiliate" of a Person shall mean any other Person (other
than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes of
this definition (i) "control" of a Person means the power, directly or
indirectly, either to (A) vote twenty percent (20%) or more of the securities
having ordinary voting power for the election of directors of such Person, or
(B) direct or cause the direction of
<PAGE>
the management and policies of such Person whether by contract or otherwise (no
Lender is an Affiliate of any Borrower).
"Agent" shall have the meaning set forth in the introductory
paragraph to this Agreement.
"Agent Account" shall mean an account in the name of the Agent
designated to the Borrowers from time to time into which the Borrowers shall
make all payments to the Agent under this Agreement.
"Agent Advances" shall have the meaning given that term in
Section 12.08 hereof.
"Agent Fees" shall have the meaning given that term in Section
2.08(h) hereof.
"Agreement" shall mean this Revolving Credit Agreement, as
amended, modified, supplemented or restated from time to time.
"Agreement Regarding Leases" means the Agreement between
Robert Earl and the Purchasers under the Note Purchase Agreement dated as of the
date hereof, with respect to the Employment Agreement and certain leases.
"Asset" means any asset, property, right or other interest of
any Borrower or Subsidiary as of, and from time to time after, the Closing Date.
"Asset Disposition Proceeds" means the aggregate amount of Net
Proceeds received by or on behalf of the Borrower or any Subsidiary from Asset
Sales (including Asset Sales in respect of Core Assets and non-Core Assets).
"Asset Sale" means the sale, assignment, lease, transfer or
other disposition by any Borrower or any Subsidiary to any Person other than the
Borrower or any of their wholly-owned Subsidiaries of any Asset; provided,
however, that the repayment to any Borrower or any Subsidiary of any loan or
advance permitted under Section 9.06 hereof or the redemption by any Borrower or
any Subsidiary of any Permitted Investment at maturity shall not be an Asset
Sale.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the Agent,
substantially in the form of Exhibit I hereto.
"Authenticity Documents" shall mean all documents and other
written evidence, including, without limitation, computer files, establishing
the authenticity of the Memorabilia or evidencing the chain of title of an item
or items of Memorabilia.
"Availability" shall mean the amount equal to (i) the lesser
of (A) the Borrowing Base and (B) the Current Commitment, minus (ii) the sum of
(A) the aggregate outstanding principal amount of all Loans, (B) the Letter of
Credit Exposure and (C) the Reserves.
-2-
<PAGE>
"Bank" shall mean The Chase Manhattan Bank, its successors or
any other bank designated by the Agent to the Borrowers from time to time that
is reasonably acceptable to the Borrowers.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the District of Delaware.
"Bay Harbour" shall mean Bay Harbour Management, L.C.
"BH Notes" shall mean the notes issued under the Note Purchase
Agreement.
"Blocked Account" shall mean the account in the name of Agent
at the Blocked Account Bank.
"Blocked Account Agreement" shall mean an agreement, in form
and substance satisfactory to the Agent, between the Blocked Account Bank and
the Agent delivered to the Agent pursuant to Section 8.11 hereof, as such
Agreement may be modified and supplemented and in effect from time to time.
"Blocked Account Bank" shall mean a bank mutually acceptable
to the Borrowers and the Agent (which on the date hereof shall be SunTrust Bank,
Central Florida, National Association).
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Book Value" shall mean, as to any (x) Inventory in respect of
which such amount is to be determined, the lower of (a) the cost of such
Inventory (as reflected in the ledgers of the Borrowers), or (b) the market
value of such Inventory; both cost and market value being determined in
accordance with GAAP calculated on the first-in, first-out basis, or (y)
Memorabilia in respect of which such amount is to be determined, the value
carried on the date hereof on the books and records of Planet Hollywood
Memorabilia, Inc. or Planet Hollywood.
"Borrower" and "Borrowers" shall have the meaning given that
term in the introductory paragraph to this Agreement.
"Borrowers' Account" shall have the meaning given that term in
Section 2.08(a) hereof.
"Borrowing Base" shall mean (i) ninety percent (90%) of
Eligible Credit Card Receivables plus (ii) fifty percent (50%) of the Book Value
of the Eligible Inventory but not in excess of the Inventory Sublimit, plus
(iii) eighty percent (80%) of the "desktop" appraised forced liquidation value
of such Eligible Memorabilia, but not in excess of the Memorabilia Sublimit
minus the Reserves.
"Borrowing Base Certificate" shall have the meaning given that
term in Section 4.04(a) hereof.
-3-
<PAGE>
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banking institutions are authorized or obligated to
close in New York, New York; provided, however, that with respect to the
borrowing, payment, conversion to or continuation of Eurodollar Loans, Business
Day shall also mean a day on which dealings in Dollars are carried on in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of the Bank's eurodollar loans are then being
conducted.
"Capitalized Lease" shall mean any lease which is required
under GAAP to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" shall mean the aggregate
amount which is required under GAAP to be reported as a liability on the balance
sheet of a Person as lessee under a Capitalized Lease.
"Cash Concentration Account" shall mean the account maintained
by the Borrowers in the name of Planet Hollywood at Suntrust Bank, Central
Florida, National Association.
"Casualty" shall mean damage to, destruction or loss of or
other casualty with respect to any of the Mortgaged Property.
"CIT" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"Closing Date" shall mean the date on which the conditions set
forth in Section 6.01 hereof shall be satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import. References to sections of
the Code shall be construed also to refer to any successor sections.
"Collateral" shall mean all assets and other property
interests of any kind or nature whether now existing or hereafter acquired as
more fully described in the Security Documents.
"Commitment Letter" shall mean that certain letter agreement,
dated January 18, 2000, by and between Planet Hollywood and CIT.
"Condemnation" means any actual or threatened condemnation,
taking or exercise of the power of eminent domain or similar action or
proceeding.
"Condemnation Proceeds" means, at any time, any award or
payment paid or payable by reason of any Condemnation, whether from the exercise
of the right of Condemnation or any transfer made in lieu thereof or any injury
to in decrease in value of any property in connection with a Condemnation,
including all amounts paid pursuant to any agreement with any condemning
authority that has been made in settlement of any proceeding relating to a
Condemnation and any interest earned on such award, payment or amounts, less the
reasonable costs and expenses (including reasonable attorney's fees and
expenses) of the Borrowers, any
-4-
<PAGE>
Subsidiary and the Agent in collecting such award payment or amounts, which
costs and expenses shall be paid out of such award, payment or amounts.
"Confirmation Order" shall mean that certain order of the
Bankruptcy Court, dated January 21, 2000, confirming the Plan of Reorganization,
as the same may be amended from time to time.
"Consolidated Subsidiary" of a Person at any time shall mean
those Subsidiaries or other Affiliates of such Person whose accounts are or
should in accordance with GAAP be consolidated with those of such Person.
"Core Assets" means any of the following Assets: Planet
Hollywood copyrights and globe design and stylized lettering trademarks, classes
42 and 25; the investment of any Borrower or any Subsidiary in the Planet
Hollywood restaurant facilities located in Orlando, Florida, London, England,
Paris, France, Las Vegas, Nevada, 1540 Broadway, New York (currently Official
All Star Cafe restaurant), Myrtle Beach, South Carolina, Euro Disney, France,
Cannes, France, Atlantic City, New Jersey, Washington, D.C., San Antonio, Texas,
St. Louis, Missouri, Dallas, Texas, Atlanta, Georgia, Miami Beach, Florida
(currently Official All Star Cafe restaurant); Joint Ventures (excluding Times
Square Partners, ECE de S.A., C.V., Planet Hollywood Asia Pte, Ltd. and
PlanetHollywood Asia.com, Inc.); and Memorabilia reasonably necessary to operate
the foregoing Core Assets.
"Credit Card Agreements" or "Credit Card Agreement" shall mean
those agreements listed on Schedule 1.01(H) hereto, as amended from time to time
in accordance with the terms of this Agreement.
"Credit Card Depository Account Agreement" shall have the
meaning given that term in subsection 6.01(v) hereof.
"Credit Card Obligor" shall mean any of American Express
Travel Related Services Company, Inc., Master Card, VISA, Diners Club, Discover,
and, after the Closing Date, any other Person that the Agent deems reasonably
acceptable in its sole discretion; provided, however, that on the Closing Date
the Borrowers shall (i) notify each of the above entities (and after the Closing
Date, the credit card obligors subsequently approved as aforesaid) and inform
such Person in writing of the Agent's security interest in the Receivables due
to any of the Borrowers from such Person and direct such Person to remit all
payments with respect to such Receivables directly to the Blocked Account, such
notice and direction to be substantially in the form of Exhibit J-1 hereto (each
a "Payment Direction Notice"), and (ii) deliver a Credit Card Bank Depository
Agreement executed by such Person.
"Credit Extension" shall mean (a) the making of any Loan by a
Lender or the Agent on behalf of the Lenders or (b) the issuance, increase in
the Stated Amount, or extension of the expiration date, of any Letter of Credit
which the Agent or any Lender assists the Borrowers in opening or establishing.
-5-
<PAGE>
"Current Commitment" shall mean the lesser of $15,000,000 or
the Reduced Commitment.
"Default Rate" shall have the meaning set forth in subsection
2.08(d) hereof.
"Depository Accounts" shall mean the lock-box or blocked
depository accounts maintained by the Borrowers when required pursuant to
Section 8.11 hereof for the collection of the cash of the Borrowers and the
proceeds from the sale of the Inventory or Memorabilia of the Borrowers.
"Depository Account Agreement" shall mean each agreement,
substantially in the form of Exhibit L hereto, among a Depository Bank, the
Borrowers, and the Agent delivered to the Agent when required pursuant to
Section 8.11 hereof, as each such Agreement may be modified and supplemented and
in effect from time to time.
"Depository Bank" shall mean each financial institution at
which a Depository Account is maintained.
"Designated Borrowing Officer" shall mean the Financial
Officer or treasurer of Planet Hollywood, or such other officer as shall be
designated from time to time in writing by Planet Hollywood to the Agent.
"Designated Financial Officer" shall mean the Financial
Officer of Planet Hollywood.
"Disbursement Account" shall mean the deposit account in the
name of the Borrowers maintained at a bank in the United States of America
designated by the Borrowers to the Agent into which there shall be deposited
proceeds of Loans and funds disbursed to the Borrowers by the Agent.
"Dollar", "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Early Termination Fee" shall have the meaning set forth in
subsection 2.04(c) hereof.
"Eligible Credit Card Receivables" shall mean, as of the date
of determination thereof, Receivables of any Borrower or any Guarantor payable
in Dollars and deemed by the Agent in the exercise of its discretion to be
eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, unless otherwise approved in writing by the Agent, none
of the following shall be deemed to be Eligible Credit Card Receivables:
(i) Receivables that have been outstanding for more than five
(5) Business Days from the date of sale;
-6-
<PAGE>
(ii) Receivables not owned solely by the Borrowers or the
Guarantors or with respect to which the Borrowers or the Guarantors do not have
good, valid and marketable title thereto;
(iii) Receivables which the Agent determines in its reasonable
commercial judgment to be uncertain of collection; and
(iv) Receivables not subject to a perfected first-priority
security interest in favor of the Agent on behalf of the Lenders.
"Eligible Inventory" shall mean finished goods Inventory of
any Borrower or any Guarantor (excluding Pro-Player blanks, guard lines, and
accessories) which at the time of determination meets all the following
qualifications:
(i) it is lawfully owned by a Borrower or a Guarantor and not
subject to any Lien (other than Permitted Liens) and it is not held on
consignment and may be lawfully sold;
(ii) it is (i) located in a Borrower's or a Guarantor's retail
locations listed on Schedule 1.01(B) hereto, or (ii) located in other locations
in the continental United States of America as the Agent shall have approved in
writing from time to time, which approval shall be given when the Agent has
caused a UCC financing statement to be filed with respect to such location
(unless one is previously in effect) and upon Planet Hollywood providing the
Agent with evidence, reasonably satisfactory to the Agent, of the absence of any
Liens (other than Permitted Liens) on any Inventory of a Borrower or a Guarantor
located in such locations; and
(iii) it is determined in the reasonable commercial judgment
of the Agent to be, when taken as a whole, substantially similar in quality and
mix to the Inventory maintained by a Borrower or a Guarantor in recent
historical operations prior to the Closing Date; provided, however, that the
Agent shall be entitled to impose a reserve in an amount it believes (determined
in the reasonable commercial judgment of the Agent) to be necessary or
appropriate on account of discounted or outlet inventory, and such amount shall
constitute a Reserve hereunder.
"Eligible Memorabilia" shall mean Memorabilia that at the time
of determination meets all of the following qualifications:
(i) it is identified in the Memorabilia Report which lists
Memorabilia, such Memorabilia Report to be dated no later than the Closing Date
and updated weekly by a Memorabilia Change Report (such update to reflect any
Memorabilia bought, sold, transferred or moved from any place where it is
located on the Closing Date to any other location, unless the aggregate of all
such Memorabilia bought, sold, transferred or moved has a Book Value at any time
of less than $50,000);
(ii) it is owned by Planet Hollywood Memorabilia, Inc.;
-7-
<PAGE>
(iii) it is at a location within the United States of America
where the Agent has (x) filed a UCC-1 financing statement, with such locations
as of the date hereof listed on Schedule 1.01(C) hereto, and (y) a perfected
first priority lien with respect thereto;
(iv) the Authenticity Documents (if Authenticity Documents
exist for each such item of Memorabilia) with respect to which are in the
possession of the Memorabilia Agent;
(v) it complies with the representations, warranties and
covenants relating to the Memorabilia contained in the Loan Documents; and
(vi) it is not subject to any contractual limitation that
would affect the Lenders' ability to sell such Memorabilia pursuant to the
exercise of any remedies under any Loan Document.
"Employee Savings Plan" shall mean that certain qualified cash
or deferred arrangement plan administered pursuant to Section 401(k) of the
Code.
"Employment Agreement" shall mean that certain employment
agreement dated on or about the date hereof between Planet Hollywood and Robert
Earl.
"Environmental Actions" shall mean any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation,
proceeding, judgment, letter or other communication from any Governmental
Authority or any third party involving a Release (i) from or onto any of the
properties presently or formerly owned or leased by any Borrower, or (ii) from
or onto any facilities which received Hazardous Materials from any Borrower, or
involving any violation of any Environmental Law.
"Environmental Law" shall mean all federal, state and local
laws, statutes, ordinances and regulations, now or hereafter in effect relating
to the regulation and protection of human health, safety, the environment and
natural resources. Environmental Laws include but are not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C.ss.9601 et seq.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C.ss.180 et seq.); the Resource
Conservation and Recovery Act, as amended (42 U.S.C.ss.6901 et seq.) ("RCRA");
the Toxic Substance Control Act, as amended (15 U.S.C.ss.2601 et seq.); the
Clean Air Act, as amended (42 U.S.C.ss.7401 et seq.); the Federal Water
Pollution Control Act, as amended (33 U.S.C.ss.1251 et seq.); and their state
and local counterparts or equivalents.
"Environmental Liabilities and Costs" shall mean all
liabilities, monetary obligations (including any and all remedial or clean-up
costs but excluding ordinary course compliance costs), Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of counsel,
expert and consulting and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Action relating to any environmental condition, violation of
Environmental Law, Remedial Actions or a Release
-8-
<PAGE>
of Hazardous Materials from or onto (i) any property presently or formerly owned
by any Borrower, or (ii) any facility which received Hazardous Materials
generated by any Borrower.
"Environmental Lien" shall mean any Lien securing
Environmental Liabilities and Costs incurred by a Governmental Authority.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import. References to
sections of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrowers, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with the Borrowers, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
any Borrower, any corporation described in clause (i) above or any partnership
or trade or business described in clause (ii) above.
"Eurodollar Base Rate" shall mean, with respect to a
Eurodollar Loan for the relevant Interest Period, the rate per annum for
deposits in Dollars for a period equal to the Interest Period quoted by the
British Banker's Association as set forth on Dow Jones Markets Service (formerly
known as Telrate) (or appropriate successor or, if the British Banker's
Association or its successor ceases to provide such quotes, a comparable
replacement determined by the Agent) display page 3750 (or such other display
page on the Dow Jones Markets Service system as may replace display page 3750)
at approximately 11:00 a.m., New York City time, two (2) Business Days prior to
the commencement of the applicable Interest Period (rounded upwards, if
necessary to the next higher 1/100th of one percent (.01%), in the approximate
amount of the relevant Eurodollar Loan and having a maturity equal to such
Interest Period. If, for any reason, such rate is not available, then
"Eurodollar Base Rate" shall mean, with respect to a Eurodollar Loan for the
relevant Interest Period, the rate per annum determined by the Agent to be the
rate at which deposits in Dollars are offered by the Bank to first-class banks
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its eurodollar loans are then being conducted
at approximately 11:00 a.m., New York City time, two (2) Business Days prior to
the first day of such Interest Period, in the approximate amount of the relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" shall mean a Loan bearing interest at the
Eurodollar Rate.
"Eurodollar Rate" means with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of one percent (.01%)):
Eurodollar Base Rate
--------------------
1.00 - Reserve Requirements
-9-
<PAGE>
"Events of Default" shall mean any of the Events of Default
described in Section 10.01 hereof.
"Excluded Asset Sale" means an Asset Sale described in and
permitted by clauses of Section 9.04(b)(i), (ii), (iv), (v) and (vi) hereof.
"Facility" shall have the meaning given that term in the
RECITALS to this Agreement.
"Facility Fee" shall have the meaning given that term in
Section 2.08(g) hereof.
"Federal Emergency Management Agency" shall mean that certain
agency of government of the United States of America known as the Federal
Emergency Management Agency.
"Financial Officer" shall mean, with respect to each Borrower,
that individual designated from time to time by the Board of Directors or
governing body performing like functions of such Borrower to be the chief
financial officer or treasurer of such Borrower (and individuals designated from
time to time by the Board of Directors or governing body performing like
functions of such Borrower to act in lieu of the chief financial officer or the
treasurer).
"Flood Zone" shall mean any area designated by the Federal
Emergency Management Agency as a special flood hazard area (Zone A or Zone V).
"Foreign Entity" and "Foreign Entities" shall mean any
Subsidiary that is organized under the laws of a jurisdiction other than the
United States of America (consisting of each State thereof and the District of
Columbia). All Foreign Entities existing as of the Closing Date are listed on
Schedule 1.01(D) hereto.
"GAAP" shall mean generally accepted accounting principles as
such principles shall be in effect in the United States of America at the
relevant date.
"Governmental Authority" shall mean any nation or government,
any federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee" of or by any Person shall mean any obligation of
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor"), directly or indirectly through an agreement (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness against
loss, or (iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness; provided, however, that the
-10-
<PAGE>
term Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Guarantor" and "Guarantors" shall mean (i) the direct or
indirect existing Subsidiaries of the Borrowers listed on Schedule 1.01(E)
annexed hereto, and (ii) any other entity that, after the Closing Date, becomes
a direct or indirect existing U.S. Subsidiary of any Borrower, and executes a
Guaranty and Guaranty Security Agreement in accordance with the terms of this
Agreement.
"Guarantor Security Agreement" shall mean the Guarantor
Security Agreement substantially in the form of Exhibit D hereto, made by the
Guarantors in favor of the Agent for the benefit of the Lenders, as amended,
modified, or supplemented from time to time.
"Guaranty" shall mean a guaranty containing the joint and
several obligations of the Guarantor substantially in the form of Exhibit E
hereto made by the Guarantor in favor of the Agent for the benefit of the
Lenders, as amended, modified or supplemented from time to time.
"Hazardous Materials" shall mean (i) any element, compound or
chemical that is defined, listed or otherwise classified as a solid waste,
contaminant, pollutant, toxic pollutant, hazardous substance, extremely
hazardous substance, toxic substance, hazardous waste, or special waste under
any Environmental Law, (ii) petroleum and its refined fractions, (iii) any
polychlorinated biphenyls, (iv) any flammable, explosive or radioactive
materials, and (v) any asbestos-containing materials.
"Hospitality" shall mean Planet Hospitality Holdings, Inc., a
Florida Corporation.
"Inactive Guarantor" and "Inactive Guarantors" shall mean (i)
the direct or indirect existing Subsidiaries of the Borrowers listed on Schedule
1.01(F) annexed hereto, and (ii) any other entity that, after the Closing Date,
becomes a direct or indirect U.S. Subsidiary of any Borrower, has no business
operations (other than those operations that directly relate to maintaining
corporate existence) or assets (unless less than $50,000), and executes a
Guaranty and Guaranty Security Agreement in accordance with the terms of this
Agreement.
"Indebtedness" shall mean as to any Person (i) indebtedness
for borrowed money; (ii) indebtedness for the deferred purchase price of
property or services (other than current trade payables incurred in the ordinary
course of business and payable in accordance with customary practices); (iii)
indebtedness evidenced by bonds, debentures, notes or other similar instruments
(other than performance, surety and appeal or other similar bonds arising in the
ordinary course of business); (iv) obligations and liabilities secured by a Lien
upon property owned by such Person, whether or not owing by such Person and even
though such Person has not assumed or become liable for the payment thereof; (v)
obligations and liabilities of the type otherwise referred to in this definition
directly or indirectly Guaranteed by such Person; (vi) obligations or
liabilities created or arising under any conditional sales contract or other
title retention agreement with respect to property used and/or acquired by such
Person, even though the rights and remedies of the lessor, seller and/or lender
thereunder are limited to repossession of such property; (vii) Capitalized Lease
Obligations; (viii) all liabilities in respect of letters of credit,
-11-
<PAGE>
acceptances and similar obligations created for the account of such Person; and
(ix) net liabilities of such Person under interest rate cap agreements, interest
rate swap agreements, foreign currency exchange agreements and other hedging
agreements or arrangements calculated on a basis satisfactory to the Agent and
in accordance with accepted practice.
"Indemnified Parties" shall have the meaning given that term
in Section 11.06 hereof.
"Insurance Proceeds" means, at any time, all proceeds or
payments to which any Borrower or any Subsidiary may be or become entitled under
any of the insurance policies and any and all unearned premiums accrued,
accruing or to accrue under any insurance policies and all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
liquidated claims, plus (i) the amount of any deductibles under such policies
and (ii) any interest earned on such proceeds, payments or amounts and less
(iii) the reasonable costs and expenses of the Borrower or any Subsidiary and
the Agent in collecting such proceeds, payments or amounts, which costs and
expenses shall be paid out of such proceeds, payments or amounts.
"Inter-Lender Agreement" shall mean that certain intercreditor
agreement dated the date hereof by and among CIT and WLR reflecting their
respective agreements concerning the making of loans hereunder and the
allocation of payments and proceeds among them, as the same may be amended,
modified or supplemented from time to time.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement, dated of even date herewith among the Agent on behalf
of the Lenders hereunder, the Note Agent, as agent on behalf of the Note Holders
existing as of the Closing Date under the Note Purchase Agreement, the PIK
Trustee, as Indenture Trustee under the PIK Indenture and consented to by the
PIK Holders signatory thereto, in form and substance satisfactory to the Lenders
establishing, among other things, lien and payment priority.
"Interest Period" shall mean, with respect to any Eurodollar
Loan the period commencing on the borrowing date for, or the date of any
continuation of or conversion to, such Eurodollar Loan, as the case may be, and
ending one (1), two (2), three (3) or six (6) months thereafter as the Borrowers
may elect in the applicable notice given to the Agent pursuant to Section
2.03(a) or Section 2.14, as appropriate; provided, however, that (i) any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day, unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; (ii) any Interest Period that begins on the
last Business Day of a calendar month or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the applicable calendar month; and
(iii) no Interest Period for any Loan shall end after the Maturity Date.
Interest shall accrue from and include the first date of an Interest Period, but
exclude the last day of such Interest Period.
"Inventory" shall mean all goods and merchandise of the
Borrowers including, but not limited to, all raw materials, work in process,
finished goods, materials and supplies of every nature used or usable in
connection with the shipping, storing, advertising or sale of such goods
-12-
<PAGE>
and merchandise, whether now owned or hereafter acquired and all such property,
the sale or disposition of which would give rise to accounts receivable or cash.
"Inventory Sublimit" shall mean $5,000,000 or an amount equal
to the Current Commitment if such Current Commitment is less than $5,000,000.
"L/C Notice" shall have the meaning given that term in Section
3.01(b).
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Governmental Authority.
"Leases" shall mean any lease of real property to which any
Borrower or Guarantor is a party as lessee or lessor.
"Lenders" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"L/C Indemnitors" and "L/C Indemnitor" shall have the meaning
given that term in Section 3.01(a) hereof.
"Letter of Credit" shall have the meaning given that term in
Section 3.01(a) hereof.
"Letter of Credit Application" shall have the meaning given
that term in subsection 3.01(a) hereof.
"Letter of Credit Cash Collateral Account" shall mean the
deposit account maintained at the Bank or such other bank as the Agent may
select, and be under the sole dominion and control of the Agent; provided,
however, that, at a Borrower's request, the funds contained in such deposit
account may be invested in Permitted Investments (which may be maintained and
renewed so long as there has been no acceleration hereunder).
"Letter of Credit Exposure" shall mean, at any time, the sum
at such time of (a) the aggregate amount of all Unreimbursed Draws under Letters
of Credit (whether or not such Letters of Credit are then outstanding) and (b)
the aggregate Undrawn Letter of Credit Availability under all outstanding
Letters of Credit.
"Letter of Credit Fee" shall have the meaning given that term
in Section 2.08(f) hereof.
"Letter of Credit Guaranty" shall mean the guaranty delivered
by either CIT or WLR to the Letter of Credit Issuer or other agreement between
either CIT or WLR and the Letter of Credit Issuer, guaranteeing or making other
arrangements with respect to the Borrowers' reimbursement obligations with
respect to Letters of Credit under a reimbursement agreement, Letter of Credit
Application or other like document.
-13-
<PAGE>
"Letter of Credit Issuer" shall mean the issuer of the Letters
of Credit, which shall initially be either The Chase Manhattan Bank or Bear
Stearns Custodial Trust Co.; provided, however, that, the Letter of Credit
Issuer may be replaced with an issuer acceptable to the Agent and Planet
Hollywood if (i) such substitute issuer is a Lender, and (ii) such substitute
issuer and the Agent agree upon the mechanics and documentation with respect to
such substitution, which mechanics and documentation shall be reasonably
acceptable to the Agent.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security.
"Loan" or "Loans" shall mean any and all loan or loans made by
the Lenders or by the Agent on behalf of the Lenders to the Borrowers or made as
a result of charges made to the Borrowers' Account, in each case pursuant to the
terms of this Agreement.
"Loan Documents" shall have the meaning given that term in the
definition of "Related Documents" set forth in this Section 1.01.
"Majority Lenders" shall mean, at any time, Lenders whose Pro
Rata Shares aggregate at least fifty one percent (51%); (it being understood
that on the Closing Date, the Lenders consist only of CIT and WLR, each having a
fifty percent (50%) interest and that determinations, when one Lender does not
agree with the other, are made under the Inter-Lender Agreement).
"Material Adverse Effect" shall mean a material adverse effect
upon (i) the business, operations, condition (financial or otherwise),
properties, Assets or performance of Planet Hollywood or Planet Hollywood
Memorabilia, Inc. individually or the Borrowers as a whole, (ii) the ability of
Planet Hollywood or Planet Hollywood Memorabilia, Inc. individually or the
Borrowers and the Active Guarantors as a whole to perform their obligations
hereunder or under any other Related Document in accordance with their terms,
(iii) the legality, validity or enforceability of this Agreement or any Related
Document, or (iv) saleability or the value of the Memorabilia taken as a whole,
as determined by a third party appraiser acceptable to the Agent in its sole
discretion.
"Material Contracts" shall mean any and all contracts,
instruments, guaranties, licenses or other arrangements to which the Borrower or
any Guarantor is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto would or could reasonably be expected to
have a Material Adverse Effect.
"Maturity Date" shall have the meaning given that term in
Section 2.01 hereof.
"Memorabilia" shall mean (i) all memorabilia, collectibles,
souvenirs, keepsakes or any other tangible personal property (and Authenticity
Documents related thereto) owned by any Borrower or any Guarantor the market
value of which is to any extent derived from any association with (A) a
celebrity, entertainer or athlete or any other person reasonably understood
-14-
<PAGE>
to be a celebrity, entertainer or athlete, or (B) any motion picture, television
program, series of television programs or sports or entertainment event, and
(ii) all memorabilia, collectibles, souvenirs or keepsakes recognized as such by
the Agent, to or in which any Borrower or any Guarantor has a right of ownership
(including, without limitation, all items at any time appearing on the
Memorabilia Report and any Memorabilia Change Report).
"Memorabilia Agent" shall mean The CIT Group/Business Credit,
Inc. or any successor memorabilia agent.
"Memorabilia Change Report" shall have the meaning given that
term in Section 8.01(f).
"Memorabilia Report" shall mean the master report listing all
items of Memorabilia generated by a computer program maintained by Planet
Hollywood which identifies the Memorabilia by item number as the same is
updated, amended or supplemented from time to time.
"Memorabilia Sublimit" shall mean $10,000,000.
"Minority Lenders" shall have the meaning given that term in
Section 11.03(b).
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 3(37) of ERISA and subject to Title IV of ERISA which is, or
within the immediately preceding six (6) years was, contributed (or required to
be contributed) to by the Borrowers or any ERISA Affiliate.
"Net Cash Proceeds" means with respect to any Asset Sale or
multiple Asset Sales to one Person or a group of related Persons, any aggregate
payments of cash or Cash Equivalents received by any Borrower or any Subsidiary
from or in respect of any such Asset Sale(s), net of repayment of Indebtedness
secured by a Permitted Lien on the Asset which is the subject of the Asset Sale
having a priority senior to the priority of the Lien of the Agent on the Asset
subject to such Asset Sale and also net of reasonable direct out-of-pocket
expenses and customary fees of such sale(s) and net of taxes paid (or
anticipated to be paid and that are escrowed for such purpose); provided,
however, that no sales commissions or other fees in connection with any such
sale(s) shall be paid to any Affiliate of any Borrower or any Subsidiary. "Net
Cash Proceeds" shall include all payments or other distributions to any Borrower
or any Subsidiary of cash or property in respect of the Membership Interest.
"Net Proceeds" means with respect to any Asset Sale or
multiple Asset Sales to one person or a group of related Persons, the sum of all
Net Cash Proceeds and all non-cash proceeds received by any Borrower or any
Subsidiary from or in respect of any such Asset Sale(s).
"Note Agent" shall mean Wilmington Trust Company, solely in
its capacity as agent on behalf of the Note Holders pursuant to the Note
Purchase Agreement.
-15-
<PAGE>
"Note Holders" shall mean the purchasers from time to time of
any of the BH Notes, including Bay Harbour.
"Note Purchase Agreement" shall mean that certain Note
Purchase Agreement, dated of even date herewith, pursuant to which the Purchaser
(as defined therein) has committed to make loans secured by a second priority
lien in the Collateral, as amended, modified, supplemented or restated from time
to time.
"Notes" shall mean the promissory notes of the Borrowers
executed and delivered to the Lenders under this Agreement and substantially in
the form of Exhibit A hereto, as modified or restated from time to time and any
promissory note or notes issued in exchange or replacement thereof, including
all extensions, renewals, refinancings or refundings thereof in whole or part.
"Notice Letter" shall have the meaning given that term in
Section 6.01(w) hereof.
"Notice of Borrowing" shall have the meaning given that term
in Section 2.03(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of the Borrowers and the Guarantors collectively or any Borrower or
Guarantor individually to any Lender or the Agent incurred under or related to
this Agreement, the Notes, any Guaranty, or any other Related Document, whether
such indebtedness, obligations or liabilities are direct or indirect, secured or
unsecured, joint or several, absolute or contingent, due or to become due,
whether for payment or performance, now existing or hereafter arising, including
without limitation those which are described in either of the following clauses
(i) or (ii):
(i) All indebtedness, obligations (including Reimbursement
Obligations) and liabilities of any nature whatsoever, including amounts due
under Section 11.06 hereof and similar agreements contained in the other Related
Documents, from time to time arising under or in connection with or evidenced or
secured by this Agreement, the Notes, any Guaranty, the Letters of Credit or any
other Related Document, including, but not limited to, the principal amount of
Loans outstanding, together with interest thereon (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of one or more of the Borrowers and/or the Guarantors, whether or
not a claim for post-filing interest is allowed in such proceeding), the amount
of the Letter of Credit Exposure, together with interest thereon and all
expenses, fees and indemnities hereunder or under any other Related Document.
Without limitation, such amounts include all Loans and interest thereon and the
amount of all Letter of Credit Exposure whether or not such Loans were made or
any Letters of Credit to which such Letter of Credit Exposure relates were
issued or created, as the case may be, in compliance with the terms and
conditions hereof or in excess of any Lender's obligation to lend and arrange
for the issuance of Letters of Credit or any Lender's obligation to participate
therein. If and to the extent any amounts in any account (including the Agent
Account, the Letter of Credit Cash Collateral Account, the Depository Accounts,
the Blocked Account or otherwise) constituting Collateral are applied to
Obligations hereunder, and any Lender or the Agent is subsequently obligated to
return or repay
-16-
<PAGE>
any such amounts to any Person for any reason, the amount so returned or repaid
shall be deemed a Loan hereunder and shall constitute an Obligation.
(ii) All indebtedness, obligations and liabilities from time
to time arising under or in connection with any account from time to time
maintained by any Borrower with any Lender or the Agent, including but not
limited to all reimbursement obligations, service charges and interest in
connection with any overdrafts or returned items from time to time arising under
or in connection with any such account, or arising under or in connection with
any investment services, cash management services or other services from time to
time performed by any Lender or the Agent pursuant to or in connection with this
Agreement or any other Related Document.
"Office" when used in connection with the Agent shall mean its
office located at 1211 Avenue of the Americas, New York, New York 10036 or at
such other office or offices of the Agent as may be designated in writing from
time to time by the Agent to the Borrowers and when used in connection with the
Bank or the Letter of Credit Issuer shall mean the office of such entity
designated in writing from time to time by the Agent to the Borrowers.
"Operating Lease Obligations" shall mean all obligations and
indebtedness of the Borrowers and their respective Subsidiaries in respect of
leases of property (whether real, personal or mixed) other than Capitalized
Lease Obligations.
"Other Taxes" shall have the meaning given that term in
Section 2.15.
"Payment Direction Notice" shall have the meaning given that
term in the definition of "Credit Card Obligor".
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Investments" shall mean: (a) direct obligations of
the United States of America or of any agency thereof or obligations guaranteed
as to principal and interest by the United States of America or of any agency
thereof, in either case maturing not more than one hundred eighty (180) days
from the date of acquisition thereof by such Person; (b) deposit accounts with
or certificates of deposit issued by any bank or trust company organized under
the laws of the United States of America or any state thereof and having
capital, surplus and undivided profits of at least $500,000,000, maturing not
more than ninety (90) days from the date of acquisition thereof by such Person;
(c) commercial paper rated A-1 or better or P-1 or better by Standard & Poor's
Corporation ("S&P") or Moody's Investors Services, Inc. ("Moody's"),
respectively, maturing not more than ninety (90) days from the date of
acquisition thereof by such Person; and (d) Investments in money market funds
rated AAAm or AAAm-G by S&P and Aaa by Moody's.
"Permitted Liens" shall have the meaning given that term in
Section 9.01.
"Permitted PIK Note Payments" shall mean any payment of
principal or interest required to be made under the PIK Notes but only to the
extent that the Borrowers have at the
-17-
<PAGE>
time such payment is due and payable, on a consolidated basis, readily available
cash plus Availability (as determined by the Agent in its reasonable judgment)
of at least $25,000,000.
"Permitted BH Note Payments" shall mean (i) interest at the
rate of fourteen percent (14%) per annum, and (ii) principal, interest, fees and
expenses at the times and in the amounts permitted to be paid pursuant to the
terms of the Intercreditor Agreement.
"Person" shall mean an individual, corporation, partnership,
limited liability company, limited liability partnership, trust, unincorporated
association, joint venture, joint-stock company, government (including political
subdivisions), Governmental Authority or agency, or any other entity.
"PH Trademarks" shall mean the trademarks listed on Schedule
5.02 hereof.
"PIK Indenture" shall mean that certain indenture, dated of
even date herewith, among Planet Hollywood, as issuer, the Guarantors, and the
PIK Trustee, as trustee, pursuant to which the PIK Notes were issued, as
amended, modified, supplemented or restated from time to time.
"PIK Holders" shall mean the holders of the PIK Notes, and the
third lienholder with respect to the Collateral.
"PIK Notes" shall mean the 10% Secured Deferrable Interest
Notes Due 2005 issued pursuant to the PIK Indenture, as amended, modified,
supplemented or restated from time to time.
"PIK Trustee" shall mean United States Trust Company of New
York (including its successors and assigns), as trustee under the PIK Indenture
pursuant to which the PIK Notes were issued, and the third lienholder with
respect to the Collateral.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA (other than a Multiemployer Plan) in respect of which any Borrower
or any ERISA Affiliate is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA, or in respect of which
any Borrower or any ERISA Affiliate has any liability under ERISA.
"Plan of Reorganization" shall mean that certain First Amended
Joint Plan of Reorganization of Planet Hollywood International, Inc. and certain
of its Subsidiaries, dated December 13, 1999, as amended, restated, supplemented
or otherwise modified, and as confirmed by the Confirmation Order.
"Planet Hollywood" shall have the meaning given that term in
the RECITALS to this Agreement.
"Pledge Agreement" shall mean the Pledge Agreement
substantially in the form of Exhibit C hereto by such Borrowers and Guarantors
that are pledgors thereunder in favor of the Agent for the benefit of the
Lenders, as amended, modified or supplemented from time to time.
-18-
<PAGE>
"Potential Default" shall mean any event or condition which,
with notice or passage of time, or any combination of the foregoing, would
constitute an Event of Default.
"Prime Loan" shall mean a Loan bearing interest at the Regular
Rate.
"Prime Rate" shall mean the interest rate per annum publicly
announced from time to time by the Bank in New York, New York as its Prime Rate,
such interest rate to change automatically from time to time effective as of the
announced effective date of each change in the Prime Rate. The Prime Rate is not
intended to be the lowest rate of interest charged by the Bank to its borrowers.
"Prior L/C Collateral" shall mean existing cash collateral for
letters of credit issued and outstanding as of the date of the Closing Date.
"Pro Rata Share" shall mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Lender's Revolving Credit Commitment and the denominator of which shall
be the aggregate amount of all of the Lenders' Revolving Credit Commitments, as
adjusted from time to time in accordance with the provisions of Section 11.13
hereof; provided, however, that, if the Revolving Credit Commitments have been
terminated, the numerator shall be the unpaid amount of such Lender's Loans and
its interest in the Letter of Credit Exposure and the denominator shall be the
aggregate amount of all unpaid Loans and Letter of Credit Exposure.
"Receivables" shall mean, with respect to any Credit Card
Obligor, the amount owed by such Credit Card Obligor to the Borrowers under a
charge account agreement arising from sale of merchandise or services by the
Borrowers.
"Reduced Commitment" shall mean any reductions in the Current
Commitment pursuant to Section 2.04(a)(i) or (a)(ii).
"Region III" shall mean Planet Hollywood (Region III), Inc., a
Florida corporation.
"Register" shall have the meaning given that term in Section
11.13(c) hereof.
"Regular Rate" shall mean, for any day, the Prime Rate for
such day plus one percent (1%) per annum.
"Reimbursement Obligation" shall mean the obligation of the
Borrowers to reimburse the Agent or the Lenders for amounts payable by the Agent
or the Lenders under a Letter of Credit Guaranty in respect of any payments
made, together with interest thereon and all fees and expenses related thereto.
"Related Documents" or "Loan Documents" shall mean this
Agreement, the Security Documents, the Notes, the Letters of Credit, each Letter
of Credit Application, the Letter of Credit Guaranty, the Blocked Account
Agreement, the Depository Account Agreements, each Notice Letter, each
Depository Account Agreement, each Payment Direction
-19-
<PAGE>
Notice, and each Credit Card Depository Account Agreement delivered to a
Depository Bank or other financial institution pursuant to Section 8.11 hereof,
and the other documents, instruments and agreements referred to in Section 6.01
hereof, and all other instruments, agreements and documents from time to time
delivered in connection with or otherwise relating to any Related Document.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, injection, discharging, injecting, escaping, leaching,
dumping or disposing (including abandonment or discarding of barrels, containers
and other closed receptacles containing any hazardous substance, pollutant or
contaminant) of a Hazardous Material into the indoor or outdoor environment or
onto or from any property presently or formerly owned or operated by the
Borrowers or any of their respective Subsidiaries, or at any disposed facility
that received Hazardous Materials generated by the Borrowers or any of their
respective Subsidiaries including the migration of Hazardous Materials through
or in the air, soil, surface water, groundwater or property.
"Remedial Action" shall mean all actions taken to (i) monitor,
assess, evaluate, investigate, clean up, remove, remediate, treat, contain or in
any other way address Hazardous Materials in the indoor or outdoor environment;
(ii) prevent or minimize a Release or threatened Release of Hazardous Materials
so that the Release or threatened Release does not migrate or endanger or
threaten to endanger public health or welfare or the environment; or (iii)
perform pre-remedial studies and investigations and post-remedial operation and
maintenance activities, or any other actions authorized by 42 U.S.C. ss. 9601.
"Replacement Notice" shall have the meaning set forth in
Section 2.03(e)(iv) hereof.
"Reportable Event" shall mean any of the events described in
Section 4043(c) of ERISA with respect to a Plan (other than events for which the
notice requirements have been waived).
"Reserve" or "Reserves" shall include, without limitation, (a)
a reserve of up to $4,000,000, and (b) any other reserves imposed by the Agent
that it believes to be commercially reasonable (it shall be deemed commercially
reasonable to impose reserves related to any changes affecting the Memorabilia).
"Reserve Requirements" shall mean, for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System. Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time to time to any
Lender or the Affiliate of any Lender under Regulation D.
-20-
<PAGE>
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the amount set forth on Schedule 1.01(G) to this Agreement or assigned
to such Lender in accordance with Section 11.13, as such amounts may be reduced
from time to time pursuant to the terms of this Agreement, and "Revolving Credit
Commitments" shall, collectively, mean the aggregate amount of the Revolving
Credit Commitments of all the Lenders, the maximum amount of which shall not
exceed the Current Commitment.
"Section 2.15(c) Tax Certificate" shall have the meaning given
that term in subsection 2.15(c) hereof.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit B hereto, made by the Borrowers in favor of
the Agent, for the benefit of the Lenders, as amended, modified and supplemented
from time to time.
"Security Documents" shall mean, collectively, the Guaranty,
the Security Agreement, the Guarantor Security Agreement, the Pledge Agreement,
the Assignment for Security (Trademarks), substantially in the form of Exhibit A
to the Security Agreement, executed and delivered by the Borrowers, the
Assignment for Security (Copyrights), substantially in the form of Exhibit B to
the Security Agreement, executed and delivered by the Borrowers, and all Uniform
Commercial Code financing statements required by this Agreement, the Security
Agreement to be filed with respect to the security interests in personal
property and fixtures created pursuant to such agreements, and all other
documents and agreements executed and delivered by the Borrowers and/or their
respective Subsidiaries in connection with any of the foregoing documents.
"Settlement Period" shall have the meaning set forth in
subsection 2.03(f) hereof.
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is not
less than the total amount of its liabilities, (b the present fair salable value
of the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its existing debts as they
become absolute and matured, (c) such Person is able to pay its debts and other
liabilities as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction for
which such Person's property would constitute unreasonably small capital.
"Stated Amount" shall mean, with respect to a Letter of
Credit, the face amount thereof, drawn or undrawn, regardless of the existence
or satisfaction of any conditions or limitations on drawing.
"Store Specific Inventory" shall mean Inventory from a closed
store which contains any reference of any kind to a specific Planet Hollywood
location or retail facility.
"Subsidiary" shall mean Planet Hollywood Memorabilia, Inc.,
Region III, Hospitality and, with respect to any Person, any corporation,
limited or general partnership,
-21-
<PAGE>
limited liability company, limited liability partnership, trust, association or
other business entity of which an aggregate of more than fifty percent (50%) of
the outstanding stock or other interests entitled to vote in the election of the
Board of Directors or governing body performing like functions of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency), managers, trustees or other controlling
persons, or an equivalent controlling interest therein, of such Person is, at
the time, directly or indirectly, owned or controlled by such Person and/or one
or more Subsidiaries of such Person; provided, however, that if Planet Hollywood
has the power to direct or cause the direction of the management and/or policies
of such Person, then the language "more than fifty percent (50%)" in this
definition shall read "fifty percent (50%) or more".
"Taxes" shall have the meaning given that term in Section 2.15
hereof.
"Termination Date" shall have the meaning given that term in
Section 2.01 hereof.
"Termination Event" shall mean (i) a Reportable Event with
respect to any Plan, (ii) the withdrawal of any Borrower, or any ERISA Affiliate
from a Plan during a plan year in which any Borrower or any ERISA Affiliate was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (iii) the
imposition of an obligation on any Borrower, or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA, or (iv) the institution by the PBGC of proceedings to terminate a Plan.
"TSP" shall mean Times Square Partners LLC.
"TSP Agreement" shall mean the Amended and Restated Limited
Liability Company Agreement of TSP, dated as of December 3, 1997, among Intell
Times Square LLC, Madison Broadway Associates LLC, SPE Times Square, Inc.,
Hospitality, and Ned White.
"TSP Membership Interest" shall mean the twenty percent (20%)
equity interest in TSP owned by Hospitality.
"Undrawn Letter of Credit Availability" shall mean with
respect to a Letter of Credit, at any time, the maximum amount available to be
drawn under such Letter of Credit at such time, regardless of the existence or
satisfaction of any conditions or limitations on drawing.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year, determined
in accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Plan's actuary in the most recent
annual valuation of the Plan, exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unreimbursed Draws" shall mean with respect to a Letter of
Credit created thereunder, at any time, the aggregate amount at such time of all
payments made by the Letter of Credit Issuer or payments made by the L/C
Indemnitor or the Lenders under a Letter of Credit
-22-
<PAGE>
Guaranty in respect of such payments under such Letter of Credit, to the extent
not repaid by the Borrower; provided, however, that Unreimbursed Draws shall not
include any such payments that have been charged to the Borrowers' Account and
constitute a Loan pursuant to the terms of this Agreement.
"Unused Line Fee" shall have the meaning given that term in
subsection 2.08(e).
"U.S. Subsidiaries" or "U.S. Subsidiary" shall mean any
Subsidiary that has (i) its domicile in the United States of America, and/or
(ii) its principal place of business or assets in the United States of America.
"WLR" shall have the meaning given that term in the
introductory paragraph to this Agreement.
1.02. Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determination" by the Agent include good faith estimates by the Agent (in the
case of quantitative determinations) and good faith beliefs by the Agent (in the
case of qualitative determinations). The words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
1.03. Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP. Notwithstanding
the definition of GAAP contained in this Agreement, no change in GAAP that would
affect the method or calculation of any of the financial covenants, restrictions
or standards or definitions of terms used herein shall be given effect in such
calculations until such financial covenants, restrictions or standards or
definitions are amended in a manner satisfactory to the Borrowers and the
Majority Lenders so as to reflect such change in GAAP.
-23-
<PAGE>
ARTICLE II
THE CREDITS
-----------
2.01. Revolving Credit Loans. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender severally agrees to make Loans to the Borrowers at any time and from
time to time on or after the date hereof and to, but not including, the
Termination Date, in an aggregate principal amount not exceeding at any one time
its Pro Rata Share of the Current Commitment at such time. No Lender shall have
an obligation to make Loans hereunder or arrange for the issuance of Letters of
Credit on or after the Termination Date or which, when added to the aggregate
amount of all outstanding and contemporaneous Loans and the Letter of Credit
Exposure at such time, would cause the aggregate amount of all Loans and the
Letter of Credit Exposure at any time to exceed the Current Commitment at such
time. The "Maturity Date" means the date on which the Revolving Credit
Commitment of each Lender expires, which shall be the second anniversary of the
date of this Agreement. The "Termination Date" shall mean the earlier of the
Maturity Date and any earlier date pursuant to which this Agreement may be
terminated as expressly provided herein. Within the limits of time and amount
set forth in this Section 2.01, and subject to the provisions of this Agreement,
the Borrowers may borrow, repay, and reborrow hereunder.
2.02. Notes. The obligation of the Borrowers to repay the
unpaid principal amount of the Loans made to it by each Lender and to pay
interest thereon shall be evidenced in part by a Note dated as of the date
hereof in the principal amount of such Lender's Revolving Credit Commitment with
the blanks appropriately filled in. An executed Note for each Lender shall be
delivered by each Borrower to the Agent on the date hereof.
2.03. Notice of Borrowing; Making of Loans.
(a) The Borrowers shall not be permitted to borrow
hereunder when available cash is in excess of $1,000,000. Whenever the Borrowers
desire to borrow, the Designated Borrowing Officer shall provide telephonic
notice of a proposed borrowing or written notice of such proposed borrowing (a
"Notice of Borrowing") shall be provided by the Designated Borrowing Officer to
the Agent (i) not later than 12:00 noon (New York City time) on the date of such
proposed borrowing, in the case of a borrowing consisting of Prime Loans, or
(ii) not later than 12:00 noon (New York City time) on the third (3rd) Business
Day before the date of such borrowing, in the case of a borrowing consisting of
Eurodollar Loans. The Notice of Borrowing shall set forth: (a) the date, which
shall be a Business Day, on which such borrowing is to occur, (b) whether such
Loan is requested to be a Prime Loan or a Eurodollar Loan and, if a Eurodollar
Loan, the Interest Period requested with respect thereto, (c) the principal
amount of the Loan being borrowed, and (d) the account information where such
Loan is to be received. Such notice shall be given by telephone or in writing;
provided, however, that, if requested by the Agent, any such telephonic notice
shall be confirmed in writing by delivery to the Agent on or before the close of
business on the date on which such Loan is to be made (but prior to such Loan
being made) a notice containing the original or facsimile signature of the
Designated Borrowing Officer. The Agent shall provide each Lender with prompt
notice of each Notice of Borrowing. Except as otherwise provided in subsection
2.03(e), on the date specified in such notice, each
-24-
<PAGE>
Lender shall, subject to the terms and conditions of this Agreement, make its
Pro Rata Share of such Loan in immediately available funds by wire transfer to
the Agent at its Office not later than 1:30 p.m. (New York City time). Unless
the Agent determines that any applicable conditions in Section 6.02 have not
been satisfied, the Agent shall make the funds so received from the Lenders
available to the Borrowers not later than 2:30 p.m. (New York City time), on the
date specified in such notice in immediately available funds by (i) depositing
such proceeds in the Disbursement Account if the Disbursement Account is located
at the Bank, and (ii) initiating a wire transfer if the Disbursement Account is
not located at the Bank.
(b) The Agent and each Lender shall be entitled to
rely conclusively on the Designated Borrowing Officer's authority to request a
Loan on behalf of the Borrowers until the Agent receives written notice to the
contrary. The Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing and,
with respect to an oral request for a Loan, the Agent and the Lenders shall have
no duty to verify the identity of any Person representing himself as a
Designated Borrowing Officer.
(c) The Agent and the Lenders shall not incur any
liability to the Borrowers in acting upon any telephonic notice referred to
above which the Agent and the Lenders believe in good faith to have been given
by the Designated Borrowing Officer or for otherwise acting in good faith under
this Section 2.03; and, upon the funding of a Loan by the Lenders (or by the
Agent on behalf of the Lenders) in accordance with this Agreement pursuant to
any such telephonic notice, the Borrowers shall have effected a Loan hereunder.
(d) Each Notice of Borrowing pursuant to this Section
2.03 shall be irrevocable and the Borrowers shall be bound to make a borrowing
in accordance therewith. Each Prime Loan shall be in a minimum amount of
$100,000, and each Eurodollar Loan shall be in a minimum amount of $500,000 and
in multiples of $100,000 if in excess thereof; provided, however, that the
Borrowers shall not be entitled to request any Loan that, if made, would result
in an aggregate of more than fifteen (15) separate Eurodollar Loans of any
Lender being outstanding hereunder at any one (1) time.
(e) (i) Except as otherwise provided in this
subsection 2.03(e), all Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares, it being understood
that no Lender shall be responsible for any default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder or to be an L/C
Indemnitor nor shall the Revolving Credit Commitment of any Lender be increased
or decreased as a result of the default by any other Lender in that other
Lender's obligation to make a Loan requested hereunder or to be an L/C
Indemnitor; provided, however, that this subsection (e) is for the benefit of
the Lenders and pursuant to the Inter-Lender Agreement (and as between the
Lenders only), a Lender may be a L/C Indemnitor and another Lender may make
advances up to certain specific dollar amounts before the Lenders both advance
hereunder.
(ii) Notwithstanding any other provision of this
Agreement, and in order to reduce the number of fund transfers among the
Borrowers, the Lenders and the Agent, the Borrowers, the Lenders and the Agent
agree that the Agent may, but shall not be obligated to, and the Borrowers and
the Lenders hereby irrevocably authorize the Agent to, fund,
-25-
<PAGE>
on behalf of the Lenders, Loans pursuant to Section 2.01, subject to the
procedures for settlement set forth in subsection 2.03(f); provided, however,
that (a) the Agent shall in no event fund such Loans if the Agent shall have
received written notice from the Majority Lenders on the Business Day prior to
the day of the proposed Loan that one or more of the conditions precedent
contained in Section 6.02 will not be satisfied on the day of the proposed Loan,
and (b) the Agent shall not otherwise be required to determine that, or take
notice whether, the conditions precedent in Section 6.02 have been satisfied.
(iii) Unless (A) the Agent has notified the
Lenders that the Agent, on behalf of the Lenders, will fund a particular Loan
pursuant to subsection 2.03(e)(ii), or (B) the Agent shall have been notified by
any Lender on the Business Day prior to the day of a proposed Loan that such
Lender does not intend to make available to the Agent such Lender's Pro Rata
Share of the Loan requested on such day, the Agent may assume that such Lender
has made such amount available to the Agent on such day and the Agent, in its
sole discretion, may, but shall not be obligated to, cause a corresponding
amount to be made available to the Borrowers on such day. If the Agent makes
such corresponding amount available to the Borrowers and such corresponding
amount is not in fact made available to the Agent by such Lender, the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three (3) Business
Days and thereafter at the Regular Rate. During the period in which such Lender
has not paid such corresponding amount to the Agent, notwithstanding anything to
the contrary contained in this Agreement or any other Related Document, the
amount so advanced by the Agent to the Borrowers shall, for all purposes hereof,
be a Loan made by the Agent for its own account. Upon any such failure by a
Lender to pay the Agent, the Agent shall promptly thereafter notify the
Borrowers of such failure and the Borrowers shall immediately pay such
corresponding amount to the Agent for its own account.
(iv) Nothing in this subsection 2.03(e) shall be
deemed to relieve any Lender from its obligation to fulfill its Revolving Credit
Commitment hereunder or to prejudice any rights that the Agent or the Borrowers
may have against any Lender as a result of any default by such Lender hereunder.
(f) (i) With respect to all periods for which the
Agent has funded Loans pursuant to subsection 2.03(e)(ii), on the Friday, or the
next Business Day if such Friday is not a Business Day, following the last day
of each week, or such shorter period as it may from time to time select (any
such week or shorter period being herein called a "Settlement Period"), the
Agent shall notify each Lender of the average daily unpaid principal amount of
the Loans outstanding during such Settlement Period. In the event that such
amount is greater than the average daily unpaid principal amount of the Loans
outstanding during the Settlement Period immediately preceding such Settlement
Period (or, if there has been no preceding Settlement Period, the amount of the
Loans made on the date of such Lender's initial funding), each Lender shall
promptly make available to the Agent its Pro Rata Share of the difference in
immediately available funds. In the event that such amount is less than such
average daily unpaid principal amount, the Agent shall promptly pay over to each
other Lender its Pro Rata Share of the difference in immediately available
funds. In addition, if the Agent shall so request at any time
-26-
<PAGE>
when a Potential Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Agent shall determine that it is desirable to present claims against the
Borrowers for repayment, each Lender shall promptly remit to the Agent or, as
the case may be, the Agent shall promptly remit to each Lender, sufficient funds
to adjust the interests of the Lenders in the then outstanding Loans to such an
extent that, after giving effect to such adjustment, each Lender's interest in
the then outstanding Loans will be equal to its Pro Rata Share thereof. The
obligations of each Lender under this subsection 2.03(f) shall be absolute and
unconditional. Each Lender shall only be entitled to receive interest on its Pro
Rata Share of the Loans which have been funded by such Lender.
(ii) In the event that any Lender fails to make
any payment required to be made by it pursuant to subsection 2.03(f)(i), the
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three (3) Business
Days and thereafter at the Regular Rate. During the period in which such Lender
has not paid such corresponding amount to the Agent, notwithstanding anything to
the contrary contained in this Agreement or any other Related Document, the
amount so advanced by the Agent to the Borrowers shall, for all purposes hereof,
be a Loan made by the Agent for its own account. Upon any such failure by a
Lender to pay the Agent, the Agent shall promptly thereafter notify the
Borrowers of such failure and the Borrowers shall immediately pay such
corresponding amount to the Agent for its own account. Nothing in this
subsection 2.03(f)(ii) shall be deemed to relieve any Lender from its obligation
to fulfill its Revolving Credit Commitment hereunder or to prejudice any rights
that the Borrowers or the Agent may have against any Lender as a result of any
default by such Lender hereunder.
(g) The foregoing provisions of this Section 2.08 may
be varied as between CIT as Agent and Lender and WLR (but not as to the
Borrowers) by the terms of the Inter-Lender Agreement.
2.04. Reduction of Current Commitment; Mandatory Prepayment;
Optional Prepayment.
(a) (i) Voluntary Reduction of the Current
Commitment. The Borrowers may at any time or from time to time and without
penalty or premium reduce the Revolving Credit Commitments of the Lenders to an
amount (which may be zero) not less than the sum of (i) the unpaid principal
amount of all Loans then outstanding plus (ii) the principal amount of all Loans
not yet made as to which notice has been given by the Borrowers under Section
2.03 hereof plus (iii) the Letter of Credit Exposure at such time plus the
Stated Amount of all Letters of Credit not yet issued as to which a request has
been made unless the request is withdrawn and the Letter of Credit is not issued
by the Letter of Credit Issuer under Section 3.01 hereof. Any reduction shall be
in an amount which is an integral multiple of $500,000. Reduction of the
Revolving Credit Commitments of the Lenders shall be made by providing not less
than two (2) Business Days' written notice (which notice shall be irrevocable)
to such effect to the Agent (which notice the Agent shall promptly transmit to
each Lender). Reductions of the Revolving Credit Commitments of the Lenders
under this Section 2.04(a)(i) are irrevocable and
-27-
<PAGE>
may not be reinstated. Each such reduction shall reduce the Revolving Credit
Commitment of each Lender proportionately in accordance with its Pro Rata Share.
(ii) Mandatory Reduction of the Current
Commitment. To the extent that either (x) the Loans are prepaid pursuant hereto
or (y) the BH Notes are prepaid pursuant to the Note Purchase Agreement in each
case from the Net Proceeds of Asset Sales, the Current Commitment shall be
reduced as follows:
(A) Permanently and dollar-for-dollar in an
amount equal to the aggregate interest paid by the Borrowers
or any Subsidiary under the Note Purchase Agreement from the
original date thereof through the date of partial or full
prepayment thereof (or in the case of more than one partial
payment, from the date of the prior prepayment through the
date of the subsequent prepayment); and
(B) Until such time as the BH Notes are paid in
full and any obligation to fund thereunder is terminated,
dollar-for-dollar by an amount equal to the Net Cash Proceeds
of Asset Sales received by the Agent hereunder or the Agent
under the Note Purchase Agreement; provided, however, that
such reduction shall occur only when (1) Section 3.4 of the
Note Purchase Agreement requires that the Current Commitment
hereunder be reduced and (2) there is an outstanding
commitment or outstanding obligations under such Note Purchase
Agreement (it being the understanding of the parties that at
such time as the Note Purchase Agreement is terminated and
there are no outstanding obligations thereunder, the Current
Commitment shall be reinstated to $15,000,000 (minus amounts
specified in Section 2.04(a)(ii)(A) and any other permanent
reductions hereunder). For purposes of this Section
2.04(a)(ii)(B), only Asset Distribution Proceeds shall not
include any Net Proceeds that are not cash or Cash Equivalents
until such time as such amounts have been reduced to cash or
Cash Equivalents.
(b) Mandatory Prepayment.
(i) Exceeding Current Commitment. If at any time
either the Borrowing Base or the Current Commitment is less than the aggregate
unpaid principal amount of the Loans then outstanding plus the Letter of Credit
Exposure at such time, the Borrowers shall prepay an amount of the Loans not
less than the amount of such difference or, if the Loans then outstanding are
less than the amount of such difference, provide cash collateral to the Agent in
an amount equal to one hundred and five percent (105%) of such excess, which
cash collateral shall be deposited and held in the Letter of Credit Cash
Collateral Account until such time as such excess no longer exists. Any such
prepayment will not otherwise reduce the Revolving Credit Commitments of the
Lenders. Concurrently with any notice of reduction of the Revolving Credit
Commitments of the Lenders as set forth in Section 2.04(a), the Borrowers shall
give notice to the Agent of any mandatory prepayment which notice shall specify
a prepayment date no later than the effective date of such reduction of the
Revolving Credit Commitments of the Lenders.
-28-
<PAGE>
(ii) Asset Sales. Simultaneously with the
consummation of any Asset Sale (other than an Excluded Asset Sale), to the
extent permitted by and sold or otherwise disposed of in accordance with this
Agreement and subject to the terms and conditions of the Intercreditor Agreement
as to the application of the Net Proceeds of such Asset Sale to the obligations
owed to each party thereto, the Borrowers shall prepay the Loans (but not Letter
of Credit Exposure so long as at the time of such prepayment no Event of Default
has occurred and is continuing) in an aggregate principal amount equal to one
hundred percent (100%) of the Net Proceeds of such sale or disposition;
provided, however, that any proceeds of sales referred to in subsections
9.04(b)(i), (ii), (iv), (v) and (vi) shall be excluded from any prepayment
requirements set forth in this subsection. Upon and during the continuance of a
Default or an Event of Default, if any Asset Sale, Casualty or Condemnation
shall occur with respect to any Collateral or any other Asset, the Borrowers
shall (or shall cause any Subsidiary to) apply the Net Cash Proceeds, Insurance
Proceeds or Condemnation Proceeds therefrom to the Agent to the prepayment of
the Loans (but not Letter of Credit Exposure so long as at the time of such
prepayment no Event of Default has occurred and is continuing) in an aggregate
principal amount equal to one hundred percent (100%) of the Net Proceeds from
such Asset Sale, Casualty or Condemnation.
(iii) Other Mandatory Prepayments. The Agent
shall on each Business Day apply all funds deposited in the Agent Account to the
payment, in whole or in part, of the Obligations outstanding.
(c) Optional Prepayment. The Borrowers may at any
time or from time to time prepay, in whole or in part, any or all Loans then
outstanding. Any partial prepayment of a Eurodollar Loan shall not reduce the
aggregate principal amount of such Eurodollar Loan to less than $1,000,000. The
Borrowers may at any time pay all outstanding Obligations under the Loan
Documents, so long as simultaneously therewith the Borrowers shall pay two
percent (2%) of the Revolving Loan Commitment if the Revolving Loan Commitment
is terminated on or before the first anniversary of the Closing Date and one
percent (1%) of the Revolving Loan Commitment if the Revolving Loan Commitment
is terminated on any day prior to the Maturity Date (the "Early Termination
Fee").
(d) Prepayment Penalty. All prepayments of Loans
under this Section 2.04 shall be without premium or penalty, except that any
prepayment (x) of Eurodollar Loans shall be subject to the provisions of Section
2.12 hereof and (y) shall be subject to subsection (c) above.
2.05. Interest Rate.
(a) Each Prime Loan shall bear interest at a rate per
annum for each day until paid equal to the Regular Rate for such day.
(b) Each Eurodollar Loan shall bear interest at a
rate per annum equal to the Eurodollar Rate plus three and one quarter percent
(3.25%) for the Interest Period in effect for such Eurodollar Loan.
-29-
<PAGE>
2.06. Interest Payment Dates. The Borrowers shall pay interest
on the unpaid principal amount of each Loan from the date of such Loan until
such principal amount shall be paid in full, which interest shall be payable (i)
if such Loan is a Prime Loan, monthly in arrears on the first day of each month,
commencing June 1, 2000, and (ii) if such Loan is a Eurodollar Loan, (A) on the
last day of the Interest Period of such Eurodollar Loan, and (B) for any
Interest Period longer than three (3) months, on the day that occurs during such
Interest Period every three (3) months from the first day of such Interest
Period. After maturity of any principal amount of any Loan (by acceleration, at
scheduled maturity or otherwise), interest on such amount shall be due and
payable on demand.
2.07. Maturity Date. To the extent not due and payable earlier
pursuant to the terms of this Agreement, the entire unpaid principal amount of
each of the Loans shall be due and payable on the Maturity Date.
2.08. Payments.
(a) Time, Place and Manner. All payments and
prepayments to be made in respect of principal, interest, fees or other amounts
due from the Borrowers hereunder, the Notes or any other Related Document shall
be payable at or before 12:00 noon, New York City time, on the day when due
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived. Such payments shall be made to the Agent for the
account of the Agent on behalf of the Lenders at the Agent Account in Dollars in
funds immediately available at the Bank's Office without setoff, counterclaim or
other deduction of any nature. The Agent shall maintain a separate loan account
(the "Borrowers' Account") on its books in the name of the Borrowers in which
the Borrowers will be charged with Loans made by the Agent or the Lenders to the
Borrowers hereunder and with any other Obligations. The Borrowers and the
Lenders hereby authorize the Agent to, and the Agent may, from time to time
charge the Borrowers' Account with any interest, fees, expenses and other
Obligations that are due and payable under this Agreement or any Related
Document. The Borrowers and the Lenders confirm that any charges which the Agent
may so make to the Borrowers' Account as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion, and shall
constitute a Loan to the Borrowers funded by the Agent on behalf of the Lenders
and subject to subsections 2.03(e) and 2.03(f) of this Agreement. Each of the
Lenders and the Borrowers agree that the Agent shall have the right to make such
charges regardless of whether any Event of Default or Potential Default shall
have occurred and be continuing or whether any of the conditions precedent in
Section 6.02 have been satisfied. The Borrowers' Account will be credited upon
receipt of "good funds" in the Agent Account with all amounts actually received
by the Agent from the Borrowers or others for the account of the Borrowers.
Interest on all Loans and all fees that accrue on a per annum basis shall be
computed on the basis of the actual number of days elapsed in the period during
which interest or such fee accrues and a year of three hundred sixty (360) days.
In computing interest on any Loan, the date of the making of such Loan shall be
included and the date of payment shall be excluded; provided, however, that if a
Loan is repaid on the same day in which it is made, one (1) day's interest shall
be paid on such Loan.
-30-
<PAGE>
(b) Periodic Statements. The Agent shall provide the
Lenders and Planet Hollywood promptly after the end of each calendar month a
summary statement (in the form from time to time used by the Agent) of (A) the
opening and closing daily balances in the Borrowers' Account during such month,
(B) the amounts and dates of all Loans made during such month, (C) the amounts
and dates of all payments on account of the Loans made during such month and
each Lender's interest in the Loans, (D) the amount of interest accrued on the
Loans during such month, (E) any Letters of Credit issued by the Letter of
Credit Issuer during such month, specifying the Stated Amount thereof, (F) the
amount of charges to the Borrowers' Account or Loans to be made during such
month to reimburse the L/C Indemnitor, the Agent, the Lenders or the Letter of
Credit Issuer for drawings made under Letters of Credit or payments made by the
L/C Indemnitor, the Agent or the Lenders under the Letter of Credit Guaranty,
and (G) the amount and nature of any charges to the Borrowers' Account made
during such month on account of interest, fees and expenses and other
Obligations. All entries on any such statement shall, thirty (30) days after the
same is sent, be presumed to be correct and shall constitute prima facie
evidence of the information contained in such statement, subject to the
Borrowers' and each Lender's express right to rebut such presumption by
demonstrating to the reasonable satisfaction of the Agent the existence of any
error on the part of the Agent.
(c) Apportionment of Payments. Except as otherwise
provided in this subsection, aggregate principal and interest payments shall be
apportioned among all outstanding Loans to which such payments relate and
payments of the Unused Line Fee and the Letter of Credit Fee required to be paid
by the Borrowers to the Lenders under subsections 2.08(e) and (f) shall, as
applicable, be apportioned ratably among the Lenders, in each case according to
their Pro Rata Shares. All payments shall be remitted to the Agent and all such
payments and any other amounts, including, without limitation, proceeds of
Collateral received by the Agent from or on behalf of the Borrowers shall be
applied subject to the provisions of this Agreement first, to pay principal of
and interest on any Obligations funded by the Agent on behalf of the Lenders and
any reasonable fees, expense reimbursements or indemnities then due to the Agent
from the Borrower; second, to pay any reasonable fees, expense reimbursements or
indemnities then due to the Lenders or the Letter of Credit Issuer hereunder;
third, to pay interest due in respect of Loans and Unreimbursed Draws under
Letters of Credit; and fourth, to pay, prepay or provide cash collateral in
respect of principal of Loans and Letter of Credit Exposure. The Agent shall
promptly distribute to each Lender at its primary address set forth on the
appropriate signature page hereof, or at such other address as such Lender may
designate in writing, such funds as it may be entitled to receive. The foregoing
apportionment of payments is solely for the purpose of determining the
obligations of the Borrowers hereunder and, notwithstanding such apportionment,
any Lender may on its books and records allocate payments received by it in a
manner different from that contemplated hereby. No such different allocation
shall alter the rights and obligations of the Borrowers under this Agreement
determined in accordance with the apportionments contemplated by this Section
2.08(c). To the extent that the Borrowers make a payment or payments to the
Agent or the Agent receives any payment or other amount, which payment(s) or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause then, to the extent of such payment or proceeds
received, the Obligations or part thereof intended to be satisfied
-31-
<PAGE>
shall be revived and continue in full force and effect, as if such payment or
proceeds had not been received by the Agent.
(d) Interest Upon Events of Default. To the extent
permitted by law, after there shall have occurred and so long as there is
continuing an Event of Default pursuant to Section 10.01, all principal,
interest, fees, indemnities or any other Obligations of the Borrowers hereunder,
under any Note or any other Related Document (and including interest accrued
under this subsection 2.08(d)) shall compound on a daily basis and shall bear
interest for each day until paid (before and after judgment), payable on demand,
at a rate per annum of two percent (2%) above the Prime Rate for such day, such
interest rate to change automatically from time to time effective as of the
announced effective date of each change in the Prime Rate (the "Default Rate").
(e) Unused Line Fee. From and after the Closing Date
until the Termination Date, the Borrowers shall pay to the Agent, for the
account of each Lender in accordance with such Lender's Pro Rata Share, an
unused line fee (the "Unused Line Fee") accruing at the rate of one-half of one
percent (0.50%) per annum, on the excess, if any, of the aggregate Revolving
Credit Commitments over the sum of the Loans and Letter of Credit Exposure
outstanding from time to time. All Unused Line Fees shall be payable monthly in
arrears on the first day of each month commencing on June 1, 2000.
(f) Letter of Credit Fees. From and after the Closing
Date, the Borrowers shall pay to the Agent for the benefit of the L/C
Indemnitor, a letter of credit fee accruing at the rate of two percent (2%) per
annum on the average daily face amount of the Letter of Credit Exposure
(collectively, the "Letter of Credit Fee"); provided, however, that the
Borrowers may maintain Letters of Credit with third parties in an aggregate
amount not to exceed $100,000 at any time that shall not be subject to the
Letter of Credit Fee. All Letter of Credit Fees shall be payable monthly in
arrears on the first day of each month commencing on June 1, 2000. The Borrowers
shall also pay the customary letter of credit fees, acceptance fees and charges
of the L/C Indemnitor and the Letter of Credit Issuer for the administration,
issuance, amendment and processing of any Letters of Credit issued by the Letter
of Credit Issuer. Promptly following the Agent's receipt of any Letter of Credit
Fees described above, the Agent shall pay to each Lender its Pro Rata Share of
the amount of the Letter of Credit Fees received by the Agent.
(g) Facility Fees. The Borrowers shall pay to the
Agent for the ratable benefit of the Lenders in accordance with their respective
Pro Rata Shares a fee of $337,500 payable on the Closing Date (a "Facility
Fee").
(h) Agent Fees. The Borrowers shall pay to the Agent
an Agent Fee of $75,000 payable on the Closing Date and payable annually
thereafter in advance on each anniversary of the Closing Date hereof (such fee
to be payable whether or not the Agent is a Lender hereunder so long as it is
the Agent) (the "Agent Fee"); provided, however, that the Agent Fee shall not be
payable upon the Maturity Date.
-32-
<PAGE>
(i) Payment of Fees. The Borrowers shall pay to the
Agent the fees set forth in this Section 2.08 at the times set forth herein
which (other than the Agent Fees) are allocated as between CIT and WLR under the
Inter-Lender Agreement. All fees under this Agreement and the other Related
Documents are non-refundable under all circumstances.
2.09. Use of Proceeds. The proceeds of the Loans shall be used
for working capital and other general corporate purposes. The Letters of Credit
shall be standby or documentary letters of credit, and will be used for general
corporate purposes.
2.10. Eurodollar Rate Not Determinable; Illegality or
Impropriety.
(a) In the event, and on each occasion, that on or
before the day on which the Eurodollar Rate is to be determined for a borrowing
that is to include Eurodollar Loans, the Agent has determined in good faith
that, or has been advised by the Bank that, the Eurodollar Rate cannot be
determined for any reason or the Eurodollar Rate will not adequately and fairly
reflect the cost of maintaining Eurodollar Loans or Dollar deposits in the
principal amount of the applicable Eurodollar Loans are not available in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of the Bank's eurodollar loans are then being
conducted, the Agent shall, as soon as practicable thereafter, give written
notice of such determination to the Borrowers and the other Lenders. In the
event of any such determination, any request by the Borrowers for a Eurodollar
Loan pursuant to Section 2.03 shall, until the Agent shall have advised the
Borrowers and the other Lenders that the circumstances giving rise to such
notice no longer exist, be deemed to be a request for a Prime Loan. Each
determination by the Agent hereunder shall be conclusive and binding absent
manifest error.
(b) In the event that it shall be unlawful or
improper for any Lender to make, maintain or fund any Eurodollar Loan as
contemplated by this Agreement, then such Lender shall forthwith give notice
thereof to the Agent and the Borrowers describing such illegality or impropriety
in reasonable detail. Effective immediately upon the giving of such notice, the
obligation of such Lender to make Eurodollar Loans shall be suspended for the
duration of such illegality or impropriety and, if and when such illegality or
impropriety ceases to exist, such suspension shall cease, and such Lender shall
notify the Agent and the Borrowers. If any such change shall make it unlawful or
improper for any Lender to maintain any outstanding Eurodollar Loan as a
Eurodollar Loan, such Lender shall, upon the happening of such event, notify the
Agent and the Borrowers, and the Borrowers shall immediately, or if permitted by
applicable law, rule, regulation, order, decree, interpretation, request or
directive, no later than the date permitted thereby, convert each such
Eurodollar Loan into a Prime Loan.
2.11. Reserve Requirements; Capital Adequacy Circumstances.
(a) Notwithstanding any other provision herein, if
any change in applicable law or regulation after the Closing Date or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall impose any tax on or change the basis of taxation of
payments to the Letter of Credit Issuer or any Lender or any Affiliate of a
Lender (in lieu of or
-33-
<PAGE>
in addition to the Lender) on the principal of or interest on any Eurodollar
Loan made by such Lender or of any amounts payable hereunder (other than taxes
imposed on the overall net income of the Letter of Credit Issuer or such Lender
or such Affiliate by the jurisdiction in which the Letter of Credit Issuer or
such Lender or such Affiliate has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by the Letter of
Credit Issuer or such Lender or Affiliate of such Lender (except any such
reserve requirement that is reflected in Reserve Requirements) or shall impose
on the Letter of Credit Issuer or such Lender or such Affiliate any other
condition affecting this Agreement or any Eurodollar Loans made by such Lender
or any Letter of Credit, and the result of any of the foregoing shall be to
increase the cost to the Letter of Credit Issuer or such Lender of making or
maintaining any Eurodollar Loan or issuing or participating in any Letter of
Credit or to reduce the amount of any sum received or receivable by the Letter
of Credit Issuer or such Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount reasonably deemed by the Letter of
Credit Issuer or such Lender to be material, then the Borrowers shall pay to the
Letter of Credit Issuer or such Lender such additional amount or amounts as will
compensate the Letter of Credit Issuer or such Lender for such additional costs
incurred or reduction suffered. Any amount or amounts payable by the Borrowers
to the Letter of Credit Issuer or any Lender in accordance with the provisions
of this Section 2.11(a) shall be paid by the Borrowers to the Letter of Credit
Issuer or such Lender within twenty (20) days after receipt by the Borrowers
from the Letter of Credit Issuer or such Lender of a statement setting forth in
reasonable detail the amount or amounts due and the basis for the determination
from time to time of such amount or amounts, which statement shall be conclusive
and binding absent manifest error.
(b) If the Letter of Credit Issuer or any Lender
shall have reasonably determined that the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Letter of Credit Issuer or by such
Lender (or any lending office of such Lender) or by any Affiliate of such
Lender, as the case may be, with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has the effect of reducing the rate of return on the
Letter of Credit Issuer's or such Lender's capital or on the capital of such
Lender's Affiliate, as the case may be, as a consequence of the Letter of Credit
Issuer's obligations or such Lender's obligations under this Agreement and the
Related Documents to a level below that which the Letter of Credit Issuer or
such Lender or such Lender's Affiliate, as the case may be, could have achieved
but for such adoption, change or compliance (taking into consideration the
Letter of Credit Issuer's or such Lender's policies or such Lender's Affiliate's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by the Letter of Credit Issuer or such Lender to be material, then, from
time to time, the Borrowers shall reimburse the Letter of Credit Issuer or such
Lender for such reduction. Any amount or amounts payable by the Borrowers to the
Letter of Credit Issuer or any Lender in accordance with the provisions of this
Section 2.11(b) shall be paid by the Borrowers to the Letter of Credit Issuer or
such Lender within ten (10) days after receipt by the Borrowers from the Letter
of Credit Issuer or such Lender of a statement
-34-
<PAGE>
setting forth (i) in reasonable detail the amount or amounts due, (ii) the basis
for the determination from time to time of such amount or amounts and (iii) that
such amount(s) have been determined in good faith, which statement shall be
conclusive and binding absent manifest error.
(c) The protection of this Section 2.11 shall be
available to the Letter of Credit Issuer or any Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
2.12. Indemnity; Agent Duty to Change Eurodollar Loan Office.
(a) Each Borrower, jointly and severally, shall
indemnify each Lender against any loss or expense that such Lender actually
sustains or incurs as a consequence of (i) any failure by the Borrowers to
borrow any Eurodollar Loan hereunder or to convert any Prime Loan into a
Eurodollar Loan after notice of such borrowing or conversion has been given
pursuant to Section 2.03(a) or Section 2.14, as the case may be, (ii) any
payment, prepayment (mandatory or optional) or conversion of a Eurodollar Loan
required by any provision of this Agreement or otherwise made on a date other
than the last day of the Interest Period applicable thereto, or (iii) any
default in payment or prepayment of the principal amount of any Eurodollar Loan
or any part thereof or interest accrued thereon, as and when due and payable (at
the due date thereof, by notice of prepayment or otherwise), including, in each
such case, any loss (including, without limitation, loss of margin) or
reasonable expense sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall include but not be
limited to an amount equal to the excess, if any, as reasonably determined by
such Lender, of (A) its cost of obtaining the funds for the Loan being paid,
prepaid or converted or not borrowed or converted (based on the Eurodollar Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow or convert to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow or convert, the
last day of the Interest Period for such Loan that would have commenced on the
date of such failure to borrow or convert) over (B) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in
re-employing the funds so paid, prepaid or converted or not borrowed or
converted for such Interest Period. A certificate of any Lender setting forth in
reasonable detail any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.12 and the basis for the determination of such amount
or amounts shall be delivered to the Borrowers and shall be conclusive and
binding absent manifest error.
(b) The Agent agrees that, in the event it becomes
aware of the occurrence of an event or the existence of a condition that would
cause the Lenders to be entitled to receive payments under clauses (ii), (iii),
or (iv) of Section 2.12(a), it will, if requested by Planet Hollywood, exercise
its reasonable best efforts to make, fund, or maintain each affected Eurodollar
Loan through another Office if, as a result thereof, the additional monies which
would otherwise be required to be paid to the Lenders pursuant to clauses (ii),
(iii), or (iv) of Section 2.12(a) would be reduced.
-35-
<PAGE>
2.13. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrowers or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Obligation as a result of
which the aggregate unpaid amount of the Obligations owing to it shall be
proportionately less than the aggregate unpaid amount of the Obligations owing
to any other Lender, it shall simultaneously purchase from such other Lender at
face value a participation in the Obligations owing to such other Lender, so
that the aggregate unpaid amount of the Obligations and participations in
Obligations held by each Lender shall be in the same proportion to the aggregate
unpaid amount of all Obligations owing to such Lender prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the aggregate unpaid
amount of all Obligations outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.13
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustments restored without interest. The
Borrowers expressly consent to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrowers to such Lender by reason
thereof as fully as if such Lender had made a loan directly to the Borrowers in
the amount of such participation.
2.14. Continuation and Conversion of Loans. Subject to Section
2.03 and Section 2.10 hereof, the Borrowers shall have the right, at any time,
(a) on three (3) Business Days' prior irrevocable written or telephonic notice
to continue any Eurodollar Loan or any portion thereof into a subsequent
Interest Period or to convert any Prime Loan or portion thereof into a
Eurodollar Loan, or (b) on one (1) Business Day's prior irrevocable written or
telecopy notice to the Agent, to convert any Eurodollar Loan or portion thereof
into a Prime Loan, subject to the following:
(i) in the case of a continuation of a Eurodollar
Loan or portion thereof as such or a conversion of a Prime Loan or portion
thereof into a Eurodollar Loan (A) no Event of Default or Potential Default
shall have occurred and be continuing at the time of such continuation or
conversion, and (B) Eurodollar Loans resulting from this Section 2.14 shall be
limited in number as provided in subsection 2.03(d);
(ii) in the case of a continuation or conversion of
less than all Loans, the aggregate principal amount of any Eurodollar Loan
continued or converted shall not be less than $500,000 and in multiples of
$100,000 if in excess thereof;
(iii) each conversion shall be effected by the
Lenders by applying the proceeds of the new Loan to the Loan (or portion
thereof) being converted; and, in the case of a conversion from a Eurodollar
Loan to a Prime Loan, accrued interest on the Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrowers at the time of
conversion;
-36-
<PAGE>
(iv) if the new Loan made in respect of a conversion
shall be a Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of conversion;
(v) no portion of any Loan shall be continued or
converted to a Eurodollar Loan with an Interest Period ending later than the
Maturity Date; and
(vi) if any conversion of a Eurodollar Loan shall be
effected on a day other than the last day of an Interest Period, the Borrowers
shall reimburse each Lender on demand for any loss incurred or to be incurred by
it in the reemployment of the funds released by such conversion as provided in
Section 2.12 hereof.
In the event that the Borrowers shall not give notice to continue any Eurodollar
Loan into a subsequent Interest Period, such Eurodollar Loan (unless repaid)
shall automatically become a Prime Loan at the expiration of the then current
Interest Period.
2.15. Taxes.
(a) All payments made by each Borrower hereunder,
under the Notes or under any other Loan Document, will be made without setoff,
counterclaim, deduction or other defense. All such payments shall be made free
and clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding taxes on the overall net income of
the Lenders or the Letter of Credit Issuer (such nonexcluded taxes are
hereinafter collectively referred to as the "Taxes"). If any Borrower shall be
required by law to deduct or to withhold any Taxes from or in respect of any
amount payable hereunder, (i) the amount so payable shall be increased to the
extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to the Lenders or the Letter of Credit
Issuer pursuant to this sentence) the Lenders or the Letter of Credit Issuer
receive an amount equal to the sum they would have received had no such
deductions or withholdings been made, (ii) such Borrower shall make such
deductions or withholdings, and (iii) such Borrower shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law. Whenever any Taxes are payable by any Borrower, as promptly as
possible thereafter, such Borrower shall send the Lenders, the Letter of Credit
Issuer and the Agent an official receipt showing payment. In addition, each
Borrower agrees to pay any present or future taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery,
performance, recordation or filing of, or otherwise with respect to, this
Agreement, the Notes, the Letters of Credit or any other Loan Document
(hereinafter referred to as "Other Taxes").
(b) Each Borrower shall jointly and severally
indemnify the Lenders and the Letter of Credit Issuer for the amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.15) paid by any Lender
or the Letter of Credit Issuer and any liability (including
-37-
<PAGE>
penalties, interest and expenses for nonpayment, late payment or otherwise)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be paid
within thirty (30) days from the date on which such Lender or such Letter of
Credit Issuer makes written demand.
(c) Each Lender that is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes (each, a "Non-U.S. Lender") agrees to deliver to the
Borrowers and the Agent on or prior to the Closing Date or, in the case of a
Non-U.S. Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 11.13 (unless such Non-U.S. Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Non-U.S. Lender, (i) two (2) accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI, Form
W-8IMY, or Form W-8BEN (or successor forms) certifying that such Non-U.S. Lender
is entitled as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if such Non-U.S. Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form W-8ECI, Form W-8IMY or Form 8BEN (or any successor forms)
(with respect to a complete exemption under an income tax treaty), (x) a
certificate substantially in the form of Exhibit M (any such certificate, a
"Section 2.15(c) Tax Certificate"), and (y) two (2) accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN or Form W-8IMY.
In addition, each Non-U.S. Lender agrees that from time to time after the
Closing Date, when the passage of time or a change in facts or circumstances
renders the previous certification obsolete or inaccurate in any material
respect, such Non-U.S. Lender will deliver to Planet Hollywood and the Agent two
(2) new accurate and complete original signed copies of Internal Revenue Service
Form W-8ECI, Form W-8BEN (with respect to a complete exemption under an income
tax treaty), or Form W-8BEN or Form W-8IMY and a Section 2.15(c) Tax
Certificate, as the case may be or such Non-U.S. Lender shall immediately notify
Planet Hollywood and the Agent of its inability to deliver any such form or
Section 2.15(c) Tax Certificate, in which case such Non-U.S. Lender shall not be
required to deliver any such form or Section 2.15(c) Tax Certificate.
Notwithstanding anything to the contrary contained in Section 2.15(a), but
subject to the immediately succeeding sentence, (x) the Borrowers shall be
entitled, to the extent required to do so by law, to deduct or withhold income
taxes imposed by the United States from interest payable hereunder or under a
Note for the account of any Non-U.S. Lender to the extent that such Non-U.S.
Lender has not provided to the Borrowers Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding, and (y) the
Borrowers shall not be obligated pursuant to Section 2.15(a) to make increased
payments to a Non-U.S. Lender in respect of income taxes imposed by the United
States if such Non-U.S. Lender has not provided to the Borrowers the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 2.15(c). Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 2.15, the Borrowers agree to pay
any additional amounts and to indemnify each Non-U.S. Lender in the manner set
forth in subsections 2.15(a) and 2.15(b) in respect of any United States income
Taxes deducted or withheld by them (and, if any Non-U.S. Lender is a withholding
foreign partnership within the meaning of Treas. Reg. Sec.1-1441-5, in respect
of any United States income Taxes withheld by such Non-U.S. Lender with respect
to
-38-
<PAGE>
amounts received by such Non-U.S. Lender pursuant to this Agreement) if such
Taxes would not have been deducted or withheld but for any change that is
effective after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof.
(d) If the Borrowers fail to perform their
obligations under this Section 2.15, the Borrowers shall jointly and severally
indemnify the Agent, the Lenders and the Letter of Credit Issuer for any
incremental taxes, interest or penalties that may become payable as a result of
any such failure.
2.16. Joint and Several Liability. In addition to the
Borrowers' joint and several indemnification of the Agent and Lenders, as
provided under this Agreement and the Loan Documents, the Borrowers shall be
jointly and severally liable for the repayment in full of all Obligations.
2.17. Inter-Lender Arrangements. The Inter-Lender Agreement
specifies the arrangements between CIT and WLR in the event they do not agree
with respect to a decision required to be made hereunder. The Borrowers agree
that they are not third party beneficiaries of the Inter-Lender Agreement, have
no rights to enforce the terms thereof, and that the Inter-Lender Agreement may
be amended or modified without the consent of the Borrowers.
2.18. Equity Contributions. Additional contributions to the
Borrowers of equity may be utilized or employed by the Borrowers without
restriction hereunder.
ARTICLE III
LETTERS OF CREDIT
-----------------
3.01. Letters of Credit.
(a) General. In order to assist the Borrowers in
establishing or opening standby or documentary letters of credit, which shall
not have expiration dates that exceed one (1) year from the date of issuance
(the "Letters of Credit"), with the Letter of Credit Issuer, the Borrowers have
requested that either CIT or WLR (the "L/C Indemnitor") join in the applications
for such Letters of Credit, and/or guarantee payment or performance of such
Letters of Credit thereunder through the issuance of a Letter of Credit
Guaranty, thereby lending the L/C Indemnitor's credit to the Borrowers, and each
of CIT and WLR has agreed to do so. These arrangements shall be handled by the
L/C Indemnitor subject to the terms and conditions set forth below. The L/C
Indemnitor shall have no obligation to arrange for the issuance of Letters of
Credit on or after the Termination Date or which, when added to the aggregate
amount of all outstanding and contemporaneous Loans and the Letter of Credit
Exposure at such time, would cause the amount of all Loans and the Letter of
Credit Exposure at any time to exceed the Current Commitment at such time. In
addition, the L/C Indemnitor shall not be required to be the issuer of any
Letter of Credit. Any Borrower may be the account party for any application for
a Letter of Credit, which shall be substantially in the form of Exhibit G hereto
or on a computer transmission system approved by the L/C Indemnitor and the
Letter of Credit Issuer or such other
-39-
<PAGE>
written form or computer transmission system as may from time to time be
approved by the Letter of Credit Issuer and the L/C Indemnitor, and shall be
duly completed in a manner acceptable to the L/C Indemnitor, together with such
other certificates, agreements, documents and other papers and information as
the Letter of Credit Issuer or the L/C Indemnitor may request (the "Letter of
Credit Application").
(i) The aggregate Letter of Credit Exposure shall
not exceed $5,000,000 or an amount equal to the Current Commitment if such
Current Commitment is less than $5,000,000. In addition, changes or
modifications of the Letters of Credit by Planet Hollywood and/or the Letter of
Credit Issuer of the terms and conditions thereof shall in all respects be
subject to the prior approval of the L/C Indemnitor in the exercise of its
reasonable discretion, provided, however, that (x) the expiry date of all
Letters of Credit shall be no later than fifteen (15) days prior to the Maturity
Date unless, in the case of Letters of Credit, on or prior to fifteen (15) days
prior to the Maturity Date such Letters of Credit shall be cash collateralized
in an amount equal to at least one hundred and five percent (105%) of the Stated
Amount of such Letters of Credit, and (y) the Letters of Credit, and all
documentation in connection therewith, shall be in form and substance
satisfactory to the L/C Indemnitor and the Letter of Credit Issuer.
(ii) The Agent shall have the right, without
notice to the Borrowers, to charge the Borrowers' Account with the amount of any
and all indebtedness, liability or obligation of any kind (including
indemnification for breakage costs, capital adequacy and reserve requirement
charges) incurred by the Agent, the L/C Indemnitor or the Lenders under the
Letter of Credit Guaranty at the earlier of (x) payment by the L/C Indemnitor or
the Lenders under the Letter of Credit Guaranty, or (y) with respect to any
Letter of Credit which is not cash collateralized as provided in this Agreement,
the occurrence of an Event of Default. Any amount charged to the Borrowers'
Account shall be deemed a Loan hereunder made by the Lenders to the Borrowers,
funded by the Agent on behalf of the Lenders and subject to subsections 2.03(e)
and (f) of this Agreement. Any charges, fees, commissions, costs and expenses
charged to the L/C Indemnitor for the account of the Borrowers by the Letter of
Credit Issuer in connection with or arising out of Letters of Credit issued
pursuant to this Agreement or out of transactions relating thereto will be
charged to the Borrowers' Account in full when charged to or paid by the L/C
Indemnitor and any such charges to the Borrowers' Account shall be conclusive
and binding on the Borrowers and the Lenders absent manifest error. Each of the
Lenders and the Borrowers agree that the Agent shall have the right to make such
charges regardless of whether any Event of Default or Potential Default shall
have occurred and be continuing or whether any of the conditions precedent in
Section 6.02 have been satisfied.
(iii) Each Borrower agrees to unconditionally,
and jointly and severally, indemnify the Agent, CIT, WLR, the L/C Indemnitor and
each Lender, and to hold the Agent, CIT, WLR the L/C Indemnitor and each Lender
harmless from any and all loss, claim or liability incurred by the Agent, CIT,
WLR, the L/C Indemnitor or any such Lender arising from any transactions or
occurrences relating to Letters of Credit established or opened for the
Borrowers' Account and any drafts thereunder, and all Obligations thereunder,
including any such loss or claim due to any action taken by the Letter of Credit
Issuer, other than for any such loss, claim or liability arising out of the
gross negligence or willful misconduct of the Agent, CIT,
-40-
<PAGE>
WLR, the L/C Indemnitor or any Lender as determined by a final judgment of a
court of competent jurisdiction. Each Borrower's unconditional obligation to the
Agent, CIT, WLR, the L/C Indemnitor and each Lender hereunder shall not be
modified or diminished for any reason or in any manner whatsoever, other than as
a result of the Agent's, CIT's, WLR's, the L/C Indemnitor's or such Lender's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction. The Borrowers agree that any charges incurred
by the L/C Indemnitor for the Borrowers' account shall be conclusive and binding
on the Borrowers absent manifest error and may be charged to the Borrowers'
Account.
(iv) None of the Agent, CIT, WLR, the L/C
Indemnitor, the Letter of Credit Issuer or any of the Lenders shall be
responsible for the existence, character, quality, quantity, condition, packing,
value or delivery of the goods purporting to be represented by any documents;
any difference or variation in the character, quality, quantity, condition,
packing, value or delivery of the goods from that expressed in the documents;
the validity, sufficiency or genuineness of any documents or of any endorsements
thereof even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged; the time, place, manner or order in
which shipment is made; partial or incomplete shipments, or failure or omission
to ship any or all of the goods referred to in the Letters of Credit or
documents; any deviation from instructions; delay, default, or fraud by the
shipper and/or anyone else in connection with any such goods or the shipping
thereof; or any breach of contract between the shipper or vendors and the
Borrowers. Furthermore, without being limited by the foregoing, none of the
Agent, CIT, WLR, the L/C Indemnitor, the Letter of Credit Issuer or any of the
Lenders shall be responsible for any act or omission with respect to or in
connection with any goods covered by Letters of Credit.
(v) The Borrowers agree that any action taken by
the Agent, CIT, WLR, the Letter of Credit Issuer, the L/C Indemnitor, or any
Lender, if taken in good faith (and not constituting gross negligence or willful
misconduct), under or in connection with the Letters of Credit, the guarantees,
the drafts, or the goods purported to be represented by any documents, shall be
binding on the Borrowers (with respect to the Letter of Credit Issuer, the L/C
Indemnitor, the Agent, CIT, WLR, and the Lenders) and shall not put the Agent,
CIT, WLR, the Letter of Credit Issuer, the L/C Indemnitor, or the Lenders in any
resulting liability to the Borrowers. In furtherance thereof, the L/C Indemnitor
shall have the full right and authority to clear and resolve any questions of
non-compliance of documents; to give any instructions as to acceptance or
rejection of any documents or goods; to execute any and all steamship or airways
guaranties (and applications therefore), indemnities or delivery orders; to
grant any extensions of the maturity of, time of payment for, or time of
presentation of, any drafts or documents; and to agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Letters of Credit or drafts; all
in the L/C Indemnitor's sole name, and the Letter of Credit Issuer shall be
entitled to comply with and honor any and all such documents or instruments
executed by or received solely from the L/C Indemnitor, all without any notice
to or any consent from the Borrower; provided, however, that, notwithstanding
the foregoing, in the absence of a continuing Event of Default, the L/C
Indemnitor shall not take any of the foregoing actions that result in a
departure in any material respect from the terms of the relevant Letter of
Credit or Letter of Credit Application.
-41-
<PAGE>
(vi) Without the L/C Indemnitor's express consent
and endorsement in writing, which, in the case of clause (x) below, in the
absence of a continuing Event of Default shall not be unreasonably withheld or
delayed, the Borrowers agree: (x) not to execute any applications for steamship
or airway guaranties, indemnities or delivery orders; to grant any extensions of
the maturity of, time of payment for, or time of presentation of, any drafts or
documents, or to agree to any amendments, renewals, extensions, modifications,
changes or cancellations of any of the terms or conditions of any of the
applications or Letters of Credit; and (y) after the occurrence and during the
continuance of an Event of Default not to (A) clear and resolve any questions of
non-compliance of documents, or (B) give any instructions as to acceptances or
rejection of any documents or goods.
(vii) The Borrowers agree that any necessary and
material import, export or other license or certificates for the import or
handling of Inventory or Memorabilia will have been promptly procured; all
foreign and domestic governmental Laws and regulations in regard to the shipment
and importation of Inventory or Memorabilia or the financing thereof will have
been promptly and fully complied with, except where instances of non-compliance
with any such Law or regulation, individually or in the aggregate, would not
result in and could not reasonably be expected to result in a Material Adverse
Effect, and any certificates in that regard that the Agent may at any time
reasonably request will be promptly furnished. In this connection, the Borrowers
represent and warrant that all shipments made under any such Letters of Credit
are in compliance with the Laws and regulations of the countries in which the
shipments originate and terminate, except where any such non-compliance would
not result in and could not reasonably be expected to result in a Material
Adverse Effect. As between the Borrowers, on the one hand, and the Agent, CIT,
WLR, the Lenders and the Letter of Credit Issuer, on the other hand, the
Borrowers assume all risk, liability and responsibility for, and agree to pay
and discharge, all present and future local, state, federal or foreign taxes,
duties, or levies (other than based on the net income of the Lender). As between
the Borrowers, on the one hand, and the Agent, CIT, WLR, the Lenders and the
Letter of Credit Issuer, on the other hand, any embargo, restriction, Laws,
customs or regulations of any country, state, city, or other political
subdivision, where such Inventory or Memorabilia is or may be located, or
wherein payments are to be made, or wherein drafts may be drawn, negotiated,
accepted, or paid, shall be solely the Borrowers' risk, liability and
responsibility.
(viii) Upon any payments made by the L/C
Indemnitor to the Letter of Credit Issuer under the Letter of Credit Guaranty,
CIT, WLR or the Lenders, as the case may be, shall, without prejudice to its
rights under this Agreement (including that such unreimbursed amounts shall
constitute Loans hereunder), acquire (to the extent of such payment) by
subrogation, any rights, remedies, duties or obligations granted or undertaken
by the Borrowers to the Letter of Credit Issuer in any Letter of Credit
Application, any standing agreement relating to Letters of Credit or otherwise,
all of which shall be deemed to have been granted to CIT, WLR, the Agent and the
Lenders and apply in all respects to CIT, WLR, the Agent and the Lenders and
shall be in addition to any rights, remedies, duties or obligations contained
herein.
(ix) In the event that the Borrowers are required
to provide cash collateral for any Letter of Credit, the Borrowers shall deposit
such cash collateral in the Letter of
-42-
<PAGE>
Credit Cash Collateral Account, which cash collateral shall be held in the
Letter of Credit Cash Collateral Account until all Obligations have been paid in
full in cash; provided, however, that, when the Borrowers elect, and are not
required to provide cash collateral for a Letter of Credit, the cash collateral
for such Letter of Credit shall be returned to the Borrowers if at such time (A)
an Event of Default or Potential Default has not occurred and is not continuing,
and (B) no amounts are available to be drawn on such Letter of Credit and all
Unreimbursed Draws have been paid in full.
(b) Request for Issuance. Planet Hollywood may from
time to time, upon notice (an "L/C Notice") not later than 12:00 noon, New York
City time, at least three (3) Business Days in advance, make a request that it
be assisted in establishing or opening a Letter of Credit by delivering to the
Agent and the Letter of Credit Issuer, a Letter of Credit Application, together
with any necessary related documents. Neither CIT nor WLR shall provide support,
pursuant to the Letter of Credit Guaranty, if the Agent shall have received
written notice from the Majority Lenders on the Business Day immediately
preceding the proposed issuance day for such Letter of Credit that one or more
of the conditions precedent in Section 6.02 will not have been satisfied on such
date, and neither CIT, WLR nor the Agent shall otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 6.02 have been satisfied.
(c) Existing Letters of Credit. Planet Hollywood
represents and warrants that Schedule 3.01(c) hereto sets forth all Letters of
Credit existing as of the Closing Date.
3.02. Participations.
(a) Purchase of Participations. Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit in accordance
with the procedures set forth in Section 3.01, each Lender (other than the L/C
Indemnitor) shall be deemed to have irrevocably and unconditionally purchased
and received from the L/C Indemnitor, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Pro Rata Share, in
all obligations of the L/C Indemnitor with respect to such Letter of Credit
created thereunder (including, without limitation, all Undrawn Letter of Credit
Availability and Reimbursement Obligations of the Borrowers with respect thereto
pursuant to the Letter of Credit Guaranty or otherwise).
(b) Sharing of Letter of Credit Payments. In the
event that the L/C Indemnitor makes any payment in respect of the Letter of
Credit Guaranty with respect to a Letter of Credit and the Borrowers shall not
have repaid such amount to the Agent for the account of L/C Indemnitor, the
Agent shall charge the Borrowers' Account in the amount of the Reimbursement
Obligation, in accordance with Section 3.01(a)(ii).
(c) Obligations Irrevocable. The obligations of a
Lender to make payments to the Agent for the account of the Agent, CIT or WLR
with respect to a Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be
-43-
<PAGE>
made in accordance with, but not subject to, the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of
this Agreement or any of the other Related Documents;
(ii) the existence of any claim, setoff, defense
or other right which the Borrowers may have at any time against a beneficiary
named in a Letter of Credit or any transferee of any Letter of Credit or any
holder of a draft (or any Person for whom any such transferee may be acting),
the Agent, Letter of Credit Issuer, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, or any unrelated
transactions (including any underlying transactions between the Borrowers or any
other party and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other
document presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the Related
Documents;
(v) any failure by the Agent to provide any
notices required pursuant to this Agreement relating to Letters of Credit; or
(vi) the occurrence of any Event of Default or
Potential Default.
ARTICLE IV
BORROWING BASE
--------------
4.01. Condition of Lending and Assisting in Establishing or
Opening Letters of Credit. CIT, WLR and the other Lenders, if any, shall have no
obligation to make a Loan or assist in establishing or opening a Letter of
Credit to the extent that the aggregate unpaid principal amount of the Loans
plus the Letter of Credit Exposure exceeds, or after giving effect to a
requested Credit Extension, would exceed, the Borrowing Base or the Current
Commitment at such time.
4.02. Mandatory Prepayment. Concurrently with the delivery of
any Borrowing Base Certificate, the Borrowers shall give notice to the Agent in
the event of any mandatory prepayment pursuant to Section 2.04(b)(i), which
notice shall specify a prepayment date no later than the earlier of the date on
which such Borrowing Base Certificate is given and the date on which such
Borrowing Base Certificate is required to be provided to the Lenders.
4.03. Rights and Obligations Unconditional. Without limitation
of any other provision of this Agreement, the rights of the Agent, CIT, WLR and
the Lenders, and the obligations of the Borrowers under this Article IV are
absolute and unconditional, and the Agent, CIT, WLR and the Lenders, shall not
be deemed to have waived the condition set forth in Section
-44-
<PAGE>
4.01 hereof or their right to payment in accordance with Section 4.02 hereof in
any circumstance whatever, including but not limited to circumstances wherein,
the Agent or the Lenders (knowingly or otherwise) make an advance hereunder in
excess of the Borrowing Base.
4.04. Borrowing Base Certificate.
(a) By 12:00 noon, New York City time three (3)
Business Days after Saturday of each week, or more often if required in the
discretion of the Agent, the Borrowers shall furnish to the Agent a certificate
(a "Borrowing Base Certificate") substantially in the form attached hereto as
Exhibit H certified as true and correct by the Designated Financial Officer,
setting forth the Borrowing Base and the other information required therein as
of the Planet Hollywood's close of business on the Saturday of the preceding
week, based on the Borrowers' interim perpetual Records, together with such
other information with respect to the Inventory and the Memorabilia of the
Borrowers as the Agent may reasonably request.
(b) In the event of any dispute about the eligibility
of any asset for inclusion in the Borrowing Base or the valuation thereof, the
Agent's good faith and reasonable judgment shall control.
(c) The Borrowing Base set forth in a Borrowing Base
Certificate shall be effective from and including the date such Borrowing Base
Certificate is duly received by the Agent to but not including the date on which
a subsequent Borrowing Base Certificate is duly received by the Agent, unless
the Agent disputes the eligibility of any asset for inclusion in the Borrowing
Base or the valuation thereof by notice of such dispute to the Borrowers, in
which case the value of such asset shall, at the discretion of the Borrowers,
either not be included in the Borrowing Base or be included in the Borrowing
Base with a value reasonably acceptable to the Agent.
(d) Each Borrowing Base Certificate shall be
accompanied by backup schedules showing the derivation thereof and containing
such detail and such other and further information as the Agent may reasonably
request from time to time.
4.05. General Provisions. Notwithstanding anything to the
contrary in this Article IV, in no event shall any single element of value or
asset be counted twice in determining the Borrowing Base.
ARTICLE V
SECURITY
--------
5.01. Collateral. As security for the full and timely payment
and performance of all of the Obligations, each Borrower hereby as of the
Closing Date, assigns, pledges, transfers, grants, bargains and sells, conveys,
releases, confirms and sets over unto the Agent, for the ratable benefit of each
of the Lenders, and hereby grants and creates in favor of the Agent, for the
ratable benefit of each of the Lenders, a security interest in the Collateral.
-45-
<PAGE>
5.02 Trademarks. Any Borrower shall have the right to allow
any trademark (other than the PH Trademarks) to lapse if such Borrower
determines to do so in its reasonable business judgment and there would be no
Material Adverse Effect.
ARTICLE VI
CONDITIONS OF EFFECTIVENESS,
LETTER OF CREDIT ISSUANCE AND LENDING
-------------------------------------
6.01. Conditions Precedent to Effectiveness. This Agreement
shall become effective as of the Business Day when each of the following
conditions precedent shall have been satisfied and the obligation of any Lender
to make the initial Loan hereunder or the obligation of the L/C Indemnitor or
any Lender to assist the Borrowers in obtaining the issuance of the initial
Letter of Credit hereunder shall be subject to the satisfaction of the following
conditions precedent (the "Closing Date"):
(a) Noteholders. A loan is made available by the Note
Holders on terms and conditions satisfactory to the Lenders, such term loan
being subject to the terms and conditions of the Intercreditor Agreement.
(b) Payment of Fees, Etc. The Borrowers shall have
paid all fees, costs and expenses then payable by the Borrowers including,
without limitation, those due and payable pursuant to Sections 2.08 and 11.06
hereof. The Borrowers shall have paid to counsel to the Agent and WLR all
reasonable fees and other client charges due to such counsel on the Closing
Date.
(c) Representations and Warranties; No Event of
Default. Except with respect to Inactive Guarantors, the representations and
warranties contained in Article VII of this Agreement and in each other Loan
Document and certificate or other writing delivered to the Agent, the Lenders or
the Letter of Credit Issuer pursuant hereto or thereto or prior to the Closing
Date shall be correct on and as of the Closing Date as though made on and as of
such date; and no Potential Default or Event of Default shall have occurred and
be continuing on the Closing Date or would result from this Agreement becoming
effective in accordance with its terms.
(d) Legality. The making of the initial Loans and the
issuance of the initial Letter of Credit shall not contravene any law, rule or
regulation applicable to the Agent, the L/C Indemnitor, the Lenders or the
Letter of Credit Issuer.
(e) Delivery of Documents. The Agent shall have
received on or before the Closing Date the following, each in form and substance
satisfactory to the Agent and, unless indicated otherwise, dated the Closing
Date:
(i) a Note payable to the order of each Lender,
duly executed by the Borrowers and dated as of the Closing Date;
(ii) a copy of the resolutions adopted by the
Boards of Directors or governing bodies performing like functions of each
Borrower and each Guarantor (other than
-46-
<PAGE>
Inactive Guarantors), certified by authorized officers thereof, authorizing (A)
the transactions contemplated by the Loan Documents to which such Borrower or
such Guarantor is or will be a party, and (B) the execution, delivery and
performance by such Borrower or such Guarantor of each Loan Document and the
execution and delivery of the other documents to be delivered by such Borrower
or such Guarantor in connection therewith;
(iii) a certificate of authorized officers of
each Borrower and each Guarantor (other than Inactive Guarantors), certifying
the names and true signatures of the officers of such Borrower or such Guarantor
authorized to sign each Loan Document to which such Borrower or such Guarantor
is or will be a party and the other documents to be executed and delivered by
such Borrower or such Guarantor in connection therewith, together with evidence
of the incumbency of such authorized officers;
(iv) as to each Borrower, a copy of the charter
of each Borrower certified as of a date not more than ten (10) Business Days
prior to the Closing Date by the appropriate official(s) of the state of
incorporation of such Borrower and certified and by an authorized officer of
such Borrower, and, as to each Guarantor (other than Inactive Guarantors), a
copy of the charter of such Guarantor certified as of a date not more than ten
(10) Business Days prior to the Closing Date by an authorized officer of such
Guarantor;
(v) a copy of the by-laws of each Borrower and
each Guarantor (other than Inactive Guarantors), certified as of the Closing
Date by an authorized officer of such Borrower and each Guarantor;
(vi) an opinion of (a) Stroock & Stroock & Lavan
LLP, counsel to the Borrowers and the Guarantors (other than Inactive
Guarantors) (as to bankruptcy matters, New York law and Delaware law, as
applicable), (b) Gray, Harris & Robinson, P.A. and Florida counsel to the
Borrowers and Guarantors as to matters governed under Florida law, (c) law firms
qualified in Texas, Minnesota and Nevada as to due authorization, execution and
delivery of the Loan Documents under the laws of such states.
(vii) a certificate of the Designated Financial
Officer certifying as to the matters set forth in subsection (c) of this Section
6.01;
(viii) a copy of the financial statements and
projections of the Borrowers referred to in Section 7.08 hereof certified by the
Designated Financial Officer;
(ix) a Borrowing Base Certificate, current as of
the close of business on the date required by the Agent, certified by the
Designated Financial Officer;
(x) a certificate of an authorized officer of
each Borrower certifying the names and true signatures of those officers or
agents of the Borrowers that are authorized to provide Notices of Borrowing and
all other notices under this Agreement and the Loan Documents;
(xi) copies of each Credit Card Agreement to
which any Borrower is a party, certified as true and correct by the Designated
Financial Officer;
-47-
<PAGE>
(xii) a certificate of an authorized officer of
each Borrower and each Guarantor stating that it has no Plans or any
Multiemployer Plans other than the Planet Hollywood Employee Savings Plan;
(xiii) a certificate of insurance evidencing
insurance on the property of such Borrower or such Guarantor (other than
Inactive Guarantors) as is required by Section 8.07 of this Agreement, naming
the Agent as additional insured or loss payee, for all insurance maintained by
such Borrower and such Guarantor;
(xiv) such other agreements, instruments,
approvals, opinions and other documents as the Agent may reasonably request;
(xv) evidence, including a listing of all
effective financing statements which name as debtor each Borrower and each
Guarantor, tax Liens and judgment Liens, establishing the absence of any liens
on Collateral (other than Permitted Liens), including Inventory or Memorabilia,
and upon the request of the Agent, the execution and delivery of any public
filings deemed necessary or desirable by the Agent;
(xvi) the Loan Documents duly executed by the
parties thereto;
(xvii) appropriate financing statements on Form
UCC-1, duly executed by each Borrower and each Guarantor and duly filed in such
office or offices as may be necessary or, in the opinion of the Agent, desirable
to perfect the security interests purported to be created by the Loan Documents
and evidence that all necessary filing fees and taxes or other expenses related
to such filings have been paid in full; and
(xviii) for each Borrower and each Guarantor
(other than Inactive Guarantors), a certificate, dated as of a date not more
than ten (10) Business Days prior to the Closing Date, of the appropriate
official(s) of such state where such Borrower's or such Guarantor's formation
documents are filed and each state of foreign qualification of such Borrower or
such Guarantor, certifying as to the subsistence in good standing of, and the
payment of taxes by, such Borrower in such states.
(f) Receipt of Documents. All Loan Documents and all
documents incidental thereto, shall be satisfactory to the Agent and its special
counsel, and the Agent and such special counsel shall have received all such
information and such counterpart originals or certified or other copies of such
documents, in form and substance reasonably satisfactory to the Agent, as the
Agent or such special counsel may reasonably request.
(g) Cash Management System. The cash management
system of each Borrower and its Subsidiaries (other than Inactive Guarantors)
shall be satisfactory to the Agent.
(h) Lien Priority. The Liens in favor of the Lenders
pursuant to the Loan Documents hereof shall be valid and perfected first
priority Liens on the Collateral, which Collateral shall be subject to no other
Liens except for Permitted Liens.
-48-
<PAGE>
(i) Compliance. The Agent shall be satisfied as to
each Borrower's and each Guarantor's (other than Inactive Guarantors) compliance
with all Environmental Laws, ERISA, tax, and labor matters.
(j) Inventory Appraisal. The Agent shall have
completed and shall be satisfied (in its sole discretion) with the results of an
update of the appraisal of the Inventory, and the Borrowers shall have paid all
fees and expenses payable in connection with such update.
(k) Memorabilia Appraisal. The Agent shall have
completed and shall be satisfied (in its sole discretion) with the results of an
update of the appraisal of the Memorabilia and shall be satisfied that any
stored or "in transit" Memorabilia is appropriately stored and held for
safekeeping. The Borrowers shall have paid all fees and expenses payable in
connection with such appraisal.
(l) No Liens. There are no liens or encumbrances of
any kind on any Collateral other than Permitted Liens.
(m) No Material Adverse Effect. Since December 31,
1999, there shall have been no Material Adverse Effect (other than with respect
to the Inactive Guarantors), excluding events related to the bankruptcy cases of
the Borrowers.
(n) Due Diligence. The Agent shall have completed its
due diligence to its satisfaction, including, without limitation, review of the
Borrowers' books and records, systems and controls and analysis of the Inventory
and Memorabilia by an outside consultant selected by the Agent. The results of
such review shall be in form and substance satisfactory to the Agent. In
connection with the Agent's due diligence investigation of any Borrower or any
Guarantor, reasonable out-of-pocket travel expenses (including those incurred in
connection with periodic field audits by employees of the Agent), reasonable
out-of-pocket fees and expenses incurred by the Agent or Lenders in connection
with above. Any oral or written request by the Borrowers for any Credit
Extension hereunder shall constitute a representation and warranty by the
Borrowers that the conditions set forth in this Section 6.02 have been satisfied
as of the date of such request. Failure of the Agent to receive notice from the
Borrowers to the contrary before such Credit Extension is made shall constitute
a further representation and warranty by the Borrowers that the conditions set
forth in this Section 6.02 have been satisfied as of the date of such Credit
Extension.
(o) Outstanding Letters of Credit. The terms,
conditions and amounts of all outstanding standby and documentary letters of
credit related to the Borrowers shall be reasonably satisfactory to the Agent.
(p) Court Order Approving Loan Documents. The
Confirmation Order shall not have been amended or modified (without the consent
of the Lenders) and there shall not have been any appeal or stay with respect
thereto. A court order shall be entered approving the Loan Documents and such
other matters as may be requested by the Lenders, including, without
-49-
<PAGE>
limitation, a finding with respect to the binding nature of the Intercreditor
Agreement on the parties thereto or the parties purported to be bound thereby,
including, without limitation, the PIK Holders, and such Order shall not be
subject to any application for a stay pending appeal or other reconsideration
with respect thereto and shall not be subject to any such stay or other
injunctive relief affecting the enforceability thereof.
(q) Cash and Availability. Cash plus Availability (as
determined by the Lenders in accordance with the Loan Documents) under the
Facility shall not be less than $6,000,000.
(r) Plan of Reorganization; Limitation on Plan of
Reorganization Payments. The Plan of Reorganization, and all ancillary
documents, shall be satisfactory to the Lenders in all respects. No payments to
fund the Plan of Reorganization or pay any creditor on account of a prepetition
claim on the Closing Date shall exceed $66,000,000.
(s) Certain Post-Confirmation Obligations. The
Lenders shall be satisfied as to the nature of any post-confirmation obligations
arising from pre-petition obligations (including any continuing guarantee
obligations).
(t) Intercreditor Agreement and the Inter-Lender
Agreement. The Intercreditor Agreement and the Inter-Lender Agreement shall be
in form and substance satisfactory to the Agent.
(u) Warehouse Waivers. The Borrowers shall deliver
the warehouse waivers for warehouses listed in Schedule 6.01(u) in form and
substance satisfactory to the Agent.
(v) Credit Card Depository Account Agreements and
Credit Card Payment Direction Notices. The Borrowers and the Guarantors (other
than the Inactive Guarantors) shall deliver to each Credit Card Obligor a Credit
Card Depository Account Agreement substantially in the form annexed as Exhibit J
hereto (the "Credit Card Depository Account Agreement") and the Payment
Direction Notice substantially in the form annexed as Exhibit J-1 hereto.
(w) Depository Account Agreements and Notice Letters
to Depository Banks. The Borrowers and the Guarantors (other than the Inactive
Guarantors) shall deliver to each Depository Bank the Depository Account
Agreement substantially in the form annexed as Exhibit L hereto and the Notice
Letter to Depository Bank substantially in the form annexed as Exhibit K hereto
(the "Notice Letter") (in the Agent's sole discretion, the delivery requirement
to the Depository Banks may be delayed by five (5) days from the Closing Date so
long as fully executed notices (Exhibit K) are delivered on the Closing Date).
(x) Memorabilia Report. The Memorabilia Report shall
be delivered dated the Closing Date updated to reflect all transactions from the
date of the prior report including, without limitation, new acquisitions, sold
Memorabilia, transfers of the location or ownership of the Memorabilia.
-50-
<PAGE>
(y) Times Square Letter. Hospitality shall deliver a
direction letter in form and substance satisfactory to the Agent to Times Square
Partners and SPF Times Square Inc. directing distributions from Times Square
Partners LLC to be delivered to the Agent.
(z) Employment Agreement. The Employment Agreement
and the Agreement Regarding Leases shall each be duly executed by Robert Earl.
6.02. Conditions Precedent to Loans and Letters of Credit. In
addition to the requirements of Section 6.01, the obligation of each Lender to
make any Loan and the obligation of the L/C Indemnitor or any Lender to assist
the Borrowers in obtaining the issuance of any Letter of Credit is subject to
the fulfillment, in a manner satisfactory to the Agent, of each of the following
conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall have
paid all fees, costs, expenses and taxes then payable by the Borrowers pursuant
to Sections 2.08 and 11.06 hereof.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true, and the submission by the
Borrowers to the Agent of a Notice of Borrowing with respect to a Loan and the
Borrowers' acceptance of the proceeds of such Loan, or the submission by the
Borrowers to the Agent and the Letter of Credit Issuer of an L/C Notice with
respect to a Letter of Credit and the issuance of such Letter of Credit shall be
deemed to be a representation and warranty by the Borrowers on the date of such
Loan and the date of the issuance of such Letter of Credit that, (i) the
representations and warranties contained in Article VII of this Agreement and in
each other Loan Document and certificate or other writing delivered to the
Agent, the Lenders and the Letter of Credit Issuer pursuant hereto on or prior
to the date of such Loan or Letter of Credit are correct on and as of such date
as though made on and as of such date (except for representations and warranties
which relate to a specific date); and (ii) no Potential Default or Event of
Default has occurred and is continuing or would result from the making of the
Loan to be made on such date or the issuance of the Letter of Credit to be
issued on such date.
(c) Legality. The making of such Loan or the issuance
of such Letter of Credit shall not contravene any law, rule or regulation
applicable to the Agent, the L/C Indemnitor, the Lenders or the Letter of Credit
Issuer.
(d) Borrowing Notice. The Agent shall have received a
Notice of Borrowing pursuant to Section 2.03 hereof no later than 12:00 noon
(New York City time) three (3) Business Days prior to the date of the proposed
borrowing with respect to a Eurodollar Loan or on the date of a proposed
borrowing of a Prime Loan or an L/C Notice and a Letter of Credit Application
pursuant to Section 3.01 hereof not later than 12:00 noon (New York City time)
three (3) Business Days prior to the proposed date of issuance of a Letter of
Credit.
(e) Receipt of Documents. The Agent shall have
received such other agreements, instruments, approvals and other documents, each
in form and substance reasonably satisfactory to the Agent, as the Agent may
reasonably request.
-51-
<PAGE>
(f) Proceedings; Receipt of Documents. All
proceedings in connection with the making of such Loan or the issuance of such
Letter of Credit and the other transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory to the Agent
and its special counsel, and the Agent and such special counsel shall have
received all such information and such counterpart originals or certified or
other copies of such documents, in form and substance reasonably satisfactory to
the Agent, as the Agent or such special counsel may reasonably request.
(g) Commitment. The aggregate unpaid principal amount
of the Loans and the Letter of Credit Exposure shall not exceed, and after
giving effect to the requested Credit Extension will not exceed, the Current
Commitment.
(h) Plan of Reorganization and Confirmation Order in
Full Force and Effect. The Plan of Reorganization and the Confirmation Order
shall be in full force and effect and shall not have been appealed, reversed,
modified, amended or stayed (or application therefor made), except for appeals,
modifications and amendments that are acceptable to the Lenders and not adverse
to their interests.
(i) Certain Payments. No payments to fund the Plan of
Reorganization pursuant to the Confirmation Order or thereafter (with respect to
amounts not fixed on the Effective Date of the Plan of Reorganization) shall
exceed $66,000,000 plus $7,900,000.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
------------------------------
As of the Closing Date and any date a Loan is made or Letter
of Credit is issued hereunder, the Borrowers hereby represent and warrant to the
Agent and the Lenders as follows (but none of the following representations and
warranties shall apply to the Inactive Guarantors):
7.01. Organization, Good Standing, Etc. Each Borrower and each
of its respective Subsidiaries (i) is a corporation, partnership or limited
liability company duly organized, validly existing and in good standing under
the laws of the state of its formation, (ii) has all requisite power and
authority to conduct its business as now conducted and as presently contemplated
and (in the case of such Borrower) to make the borrowings hereunder and to
consummate the transactions contemplated hereby, except in the case where
instances of failure to obtain such power and authority, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary, except where instances of a failure to qualify or
remain in good standing or a failure to maintain rights and privileges,
individually or in the aggregate, would not result in and could not reasonably
be expected to result in a Material Adverse Effect.
-52-
<PAGE>
7.02. Authority and Authorization. The execution, delivery and
performance by each Borrower and their Subsidiaries of each Loan Document to
which it is a party, (i) have been duly authorized by all necessary corporate
action, (ii) do not and will not contravene its charter or by-laws, any other
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties or result in a default under any agreement or
instrument to which each Borrower or any of their Subsidiaries is a party or by
which they or their respective properties may be subject, except in the case of
contractual restrictions where instances of such contravention, individually or
in the aggregate, would not result in and could not reasonably be expected to
result in a Material Adverse Effect, (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any such Loan Document,
as modified by the Intercreditor Agreement or with respect to Inactive
Guarantors) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties, except with respect to Inactive Guarantors
and where instances of such suspension, revocation, impairment, forfeiture or
nonrenewal, individually or in the aggregate, would not result in and could not
reasonably be expected to result in a Material Adverse Effect.
7.03. Execution and Binding Effect. As of the Closing Date,
this Agreement and each of the other Loan Documents required to be executed and
delivered on or prior to the date hereof has been duly and validly executed and
delivered by each such Borrower and Guarantor party thereto, and constitutes the
legal, valid and binding obligations of each Borrower and each Guarantor
enforceable in accordance with the terms hereof or thereof. Each Loan Document
that is not required to be executed and delivered by a Borrower or a Guarantor
prior to the Closing Date, when executed and delivered, will be validly executed
and delivered by such Borrower or Guarantor and will constitute legal, valid and
binding obligations of such Borrower or Guarantor enforceable against it in
accordance with the terms thereof, except as enforceability may be limited by
(a) applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, reorganization, moratorium or similar laws from time to time in effect
affecting generally the enforcement of creditors' rights and remedies, and (b)
general principles of equity, including, without limitation, principles of
reasonableness, good faith and fair dealing and an implied covenant of good
faith and fair dealing (regardless of whether enforcement is sought in equity or
at law), principles requiring consideration of the impracticability or
impossibility of performance at any time, and principles affording defenses
based on unconscionability, and such principles may include a requirement that a
creditor act reasonably and in good faith.
7.04. Governmental Approvals. Other than as obtained
heretofore, or with respect to the filing of UCC-1 forms with the appropriate
filing officer, no authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declaration or
filing with, any Governmental Authority is or will be necessary in connection
with the execution and delivery by any Borrower or any of their respective
Subsidiaries of each Loan Document to which it is a party, consummation of the
transactions therein contemplated, performance of or compliance with the terms
and conditions thereof or to ensure the legality, validity, enforceability and
admissibility in evidence thereof.
-53-
<PAGE>
7.05. Absence of Conflicts. Neither the execution and delivery
of this Agreement or the other Loan Documents to which the Borrowers or the
Guarantors are a party nor consummation of the transactions herein or therein
contemplated nor performance of or compliance with the terms and conditions
hereof or thereof will (a) violate any Law, (b) conflict with or result in a
breach of or default under its charter or by-laws, or any material agreement or
instrument to which the Borrowers or the Guarantors are a party or by which it
or any of their properties (now owned or hereafter acquired) may be subject or
bound, or (c) result in the creation or imposition of any Lien upon any property
(now owned or hereafter acquired) of the Borrowers and the Guarantors, except
the Liens in favor of the Agent with respect to the Collateral, as modified by
the Intercreditor Agreement, except where instances of such violation of Law,
conflict, or breach of any agreement or instrument, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect.
7.06. Subsidiaries. Schedule 7.06 hereto is a complete and
correct description of the name, jurisdiction of organization and ownership of
the outstanding equity interests of each Subsidiary of the Borrowers in
existence on the Closing Date. All shares of such stock owned by the Borrowers
or one or more of their Subsidiaries, as indicated in such Schedule, are owned
free and clear of all Liens.
7.07. Litigation. Except as set forth in the financial
statements referred to in Section 7.08 hereof and on Schedule 7.07 hereto (which
has previously been delivered to the Agent), there is not, to the best knowledge
of any Borrowers, any pending or threatened proceeding by or before any
Governmental Authority, arbitrator or grand jury against or affecting any
Borrower or any ERISA Affiliate with respect to any Environmental Law or ERISA,
which, if adversely decided, can reasonably be expected to have a Material
Adverse Effect.
7.08. Financial Condition; Historical Statements. The
Borrowers have heretofore furnished to the Agent a balance sheet of Planet
Hollywood and its Consolidated Subsidiaries for the fiscal year ended December
31, 1998 and the related statements of operations and cash flows for the fiscal
year then ended, as examined and reported on by PricewaterhouseCoopers LLP,
independent certified public accountants, and a balance sheet and related
statements of operations and cash flows of Planet Hollywood and its Consolidated
Subsidiaries for and as of the end of the nine (9) month period ended September
30, 1999, as certified by the Designated Financial Officer. Such financial
statements present fairly, in all material respects, the financial condition of
Planet Hollywood and its Consolidated Subsidiaries as of the end of such fiscal
year and as of the end of such period, as applicable, and the results of its
operations and the cash flows for the fiscal year then ended and for the period
then ended, as applicable, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal year, subject (in the case of the
interim financial statements) to year-end adjustments. Except as disclosed
therein and in the Plan of Reorganization, the Borrowers and their Subsidiaries
do not have any material contingent liabilities (including liabilities for
taxes), unusual forward or long term commitments or unrealized or anticipated
losses from unfavorable commitments.
7.09. Compliance with Law, Etc. Each of the Borrowers and each
of the Guarantors is not in violation of its charter or by-laws, in violation of
any Law (including but not
-54-
<PAGE>
limited to violations pertaining to the conduct of its business or the use,
maintenance or operation of the real and personal properties owned or possessed
by it), or in breach of any material term of any agreement or instrument binding
on or otherwise affecting it or any of its properties, except, in the case of
such violations and breaches (other than violations relating to the payment of
Taxes which, if unpaid, could result in a Lien on any Collateral or any other
violation or breach that may result in a Lien on any Collateral), where
instances of violation or breach of any agreement or instrument, individually or
in the aggregate, would not result in and could not reasonably be expected to
result in a Material Adverse Effect.
7.10. ERISA. Except as disclosed on Schedule 7.10 hereto, (i)
each Plan is in substantial compliance with ERISA and the Code, (ii) no
Termination Event has occurred nor is reasonably expected to occur with respect
to any Plan, (iii) the most recent annual report (Form 5500 Series) with respect
to each Plan, including Schedule B (Actuarial Information) thereto, copies of
which have been filed with the Internal Revenue Service, is complete and correct
and fairly presents the funding status of such Plan; and to the best of the
Borrowers' knowledge, there has been no material adverse change in such funding
status since the date of such report; (iv) no Plan has an Unfunded Current
Liability (other than an Unfunded Current Liability resulting from interest rate
fluctuations) in excess of $100,000; (v) no Plan had an accumulated or waived
funding deficiency or permitted decreases which would create a deficiency in its
funding standard account within the meaning of Section 412 of the Code at any
time during the previous sixty (60) months in excess of $100,000, (vi) all
contributions required to be made with respect to a Plan have been timely made;
(vii) neither the Borrowers nor any ERISA Affiliate has incurred any liability
to or on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062,
4063, 4064, 4069, 4201, 4204, or 4212(c) of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or reasonably expects to incur any liability (including any
indirect, contingent, or secondary liability) under any of the foregoing
Sections with respect to any Plan in excess of $100,000; (viii) no proceedings
have been instituted to terminate or appoint a trustee to administer any Plan;
(ix) no condition exists which presents a material risk to any Borrower or any
ERISA Affiliate of incurring a material liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; (x) no Lien imposed
under the Code or ERISA exists or is likely to arise on account of any Plan; and
(xi) there are no pending or, to the knowledge of the Borrowers, threatened
claims, actions, proceedings, or lawsuits (other than ordinary course claims for
benefits) asserted against any Plan or its assets, any fiduciary with respect to
any Plan, any Borrower, or any ERISA Affiliate. Neither any Borrower nor any
ERISA Affiliate has incurred any withdrawal liability under ERISA with respect
to any Multiemployer Plan, and neither any Borrower nor any ERISA Affiliate
expects to incur a withdrawal liability. Except as required by Section 4980B of
the Code, or as otherwise disclosed on Schedule 7.10 hereto, no Borrower nor any
ERISA Affiliate maintains a welfare plan (as defined in Section 3(1) of ERISA)
which provides benefits or coverage after a participant's termination of
employment. All Plans in existence on the Closing Date are set forth on Schedule
7.10 hereto.
7.11. Taxes, Etc. All Tax returns required to be filed by the
Borrowers and the Guarantors have been properly prepared, executed and filed.
All Taxes, assessments, fees and other governmental charges upon the Borrowers
and their Subsidiaries or upon any of their respective properties, income, sales
or franchises which are shown thereon as due and payable
-55-
<PAGE>
have been paid. The reserves and provisions for Taxes, if any, on the books of
the Borrowers are adequate for all open years and for its current fiscal period.
The Borrowers do not know of any proposed additional assessment or basis for any
material assessment for additional Taxes (whether or not reserved against),
which, if assessed, would cause a violation of Sections 6.01(r) or hereof. The
federal income Tax liabilities of the Borrowers have been finally determined by
the Internal Revenue Service, or the time for audit has expired, for all fiscal
periods ended on or prior to January 1, 1995, and all such liabilities
(including all deficiencies assessed following audit) have been satisfied.
7.12. Full Disclosure. No representation or warranty made by
any Borrower or any Guarantor under this Agreement or any other Loan Document is
false or misleading in any material respect and no Loan Document or schedule or
exhibit thereto and no certificate, report, statement or other document or
information furnished to the Agent or the Lenders in connection herewith or
therewith or with the consummation of the transactions contemplated hereby and
thereby, contains, taken as a whole, any material misstatement of fact or omits
to state a material fact or any fact necessary to make the statements contained
herein or therein not misleading. To the extent the Borrowers furnish any
projections of the financial position and results of operations of the Borrowers
and their respective Subsidiaries for, or as at the end of, certain future
periods, such projections are prepared in good faith on the basis of
assumptions, methods and tests stated therein which are reasonably believed by
the Borrowers to have been reasonable and information reasonably believed by the
Borrowers to have been accurate based upon the information available to the
Borrowers at the time such projections were furnished to the Agent. The
Borrowers have disclosed to the Agent all relevant information that, to the best
of their knowledge, is reasonably likely to result in a Material Adverse Effect.
7.13. Operating Lease Obligations; Existing Liens; Unpaid
Rent. On the Closing Date, the Borrowers and their Subsidiaries do not have any
obligations as lessee for the payment of rent for any real property other than
the Operating Lease Obligations set forth in Schedule 7.13 hereto. There are no
Liens on any assets of the Borrowers other than (i) the Lien created as of the
Closing Date in favor of the Agent hereunder, (ii) Liens securing Capitalized
Lease Obligations of the Borrowers, and (iii) Permitted Liens. As of the Closing
Date, the outstanding rent for the leased distribution centers, warehouses and
retail stores of the Borrowers is current as of June 1, 2000.
7.14. Environmental Matters. Except as disclosed in Schedule
7.14 hereto, (i) none of the operations of any Borrower or its Subsidiaries are
the subject of any federal, state or local investigation to determine whether
any Remedial Action is needed to address the presence, disposal, Release or
threatened Release which is reasonably likely to result in Environmental
Liabilities and Costs of $500,000 or more in the aggregate together with other
such Environmental Liabilities and Costs, (ii) the Borrowers and their
respective Subsidiaries do not have any contingent liability in connection with
any Release which is reasonably likely to result in Environmental Liabilities
and Costs of $500,000 or more in the aggregate together with other such
Environmental Liabilities and Costs, (iii) the operations of the Borrowers and
their respective Subsidiaries are in compliance with all Environmental Laws,
except those laws where a failure to comply is not reasonably likely to result
in Environmental Liabilities and Costs of $500,000 or more in the aggregate
together with such other Environmental Liabilities and Costs,
-56-
<PAGE>
(iv) there has been no Release at any of the properties owned or operated by the
Borrowers, their respective Subsidiaries or any predecessor in interest or
title, or at any disposal or treatment facility which received Hazardous
Materials generated by the Borrowers or their Subsidiaries or any predecessor in
interest or title which is reasonably likely to result in Environmental
Liabilities and Costs of $500,000 or more in the aggregate together with other
such Environmental Liabilities and Costs; (v) no Environmental Actions have been
asserted against the Borrowers or their Subsidiaries or any predecessor in
interest or title nor do the Borrowers or their Subsidiaries have knowledge or
notice of any threatened or pending Environmental Action against the Borrowers
or their Subsidiaries or any predecessor in interest or title which, if
adversely determined, is reasonably likely to result in Environmental
Liabilities and Costs of $500,000 or more in the aggregate together with other
such Environmental Liabilities and Costs; (vi) the Borrowers and their
Subsidiaries have obtained all permits, approvals, authorizations and licenses
required by Environmental Laws necessary for their operations, and all such
permits, approvals, authorizations and licenses are in effect and the Borrowers
and their Subsidiaries are in compliance with all terms and conditions of such
permits, approvals, authorizations and licenses, (vii) no Environmental Actions
have been asserted against any facilities that may have received Hazardous
Materials generated by the Borrowers and their Subsidiaries or any predecessor
in interest or title which, if adversely determined, is reasonably likely to
result in Environmental Liabilities and Costs of $500,000 or more in the
aggregate together with other such Environmental Liabilities and Costs.
7.15. Schedules. All of the information which is required to
be scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate (other inaccuracies of de minimus effect), and does not
omit to state any information material thereto.
7.16. Insurance. The Borrowers and their Subsidiaries keep
their properties adequately insured and maintain (i) insurance to such extent
and against such risks, including fire, as is customary with companies in the
same or similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance in the amount
customary with companies in the same or similar business against claims for
personal injury or death on properties owned, occupied or controlled by it, and
(iv) such other insurance as may be required by law or by the Loan Documents.
Schedule 7.16 hereto sets forth a list of all insurance maintained by the
Borrowers and their Subsidiaries on the Closing Date.
7.17. Use of Proceeds. The proceeds of the Loans shall be used
for working capital purposes and for other general corporate purposes. The
Letters of Credit will be used to support insurance policies and customs bonds
and for other general corporate purposes.
7.18. Financial Accounting Practices, Etc.
(a) The Borrowers and their Subsidiaries make and
keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect their respective transactions and dispositions of their
respective assets and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization, and (ii)
transactions are
-57-
<PAGE>
recorded as necessary (A) to permit preparation of financial statements in
conformity with GAAP except as previously disclosed to the Agent and (B) to
maintain accountability for assets.
(b) The Borrowers and their Subsidiaries maintain a
system of internal procedures and controls sufficient to provide reasonable
assurance that the information required to be set forth in each Borrowing Base
Certificate (including, without limitation, information relating to the
identification of assets which are Inventory and Memorabilia and the respective
valuation thereof) is accurate.
7.19. No Material Adverse Effect. Since December 31, 1999,
there shall have been no Material Adverse Effect (other than with respect to the
Inactive Guarantors), excluding events related to the bankruptcy cases of the
Borrowers.
7.20. Real Property; Leases.
(a) Schedule 7.20(a) hereto sets forth a complete and
accurate description and list as of the Closing Date of the location, by state
and street address, of all real property owned and leased by the Borrowers and
their respective Subsidiaries, together with, in the case of real property that
is owned, a statement as to whether such real property is the subject of a
contract of sale (and, if so, a statement as to the status of such sale).
(b) As of the Closing Date, the Borrowers and their
Subsidiaries have valid leasehold interests in the Leases described in Schedule
7.20(b) hereto. None of the Leases is subject to any Lien except Liens granted
to the Agent pursuant to the Security Documents and Permitted Liens. Schedule
7.20(b) hereto sets forth with respect to each Lease, the commencement date,
termination date, renewal options (if any) and annual base rents. Each such
Lease is valid and enforceable in accordance with its terms in all material
respects and is in full force and effect. Except as set forth on Schedule
7.20(b) hereto, no consent or approval of any landlord or other third party in
connection with the Leases is necessary for the Borrowers or any of their
Subsidiaries to enter into and execute the Loan Documents. Neither the Borrowers
nor any of their Subsidiaries or, to the knowledge of the Borrowers or any of
their Subsidiaries, any other party to any Lease is in default of its
obligations thereunder and neither the Borrowers nor any of their Subsidiaries
nor any other party to any such Lease has at any time delivered or received any
notice of default which remains uncured under any such Lease and, as of the
Closing Date, no event has occurred which, with the giving of notice or the
passage of time, or both, would constitute a default under any such Lease,
except for such defaults the consequence of which, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect.
(c) All permits required to have been issued to the
Borrowers or their Subsidiaries with respect to the real property owned or
leased by the Borrowers or any of their Subsidiaries to enable such property to
be lawfully occupied and used for all of the purposes for which it is currently
occupied and used (separate and apart from any other properties), have been
lawfully issued and are in full force and effect, and all such real property
complies in all material respects with all applicable legal and insurance
requirements,
-58-
<PAGE>
except where the failure to obtain such permits or instances of non-compliance
with applicable legal and insurance requirements, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect.
(d) No portion of any real property owned or leased
by the Borrowers or any of their Subsidiaries has suffered any damage by fire or
other casualty loss which has not heretofore been completely repaired and
restored to its condition existing prior to such casualty or which if not
repaired or restored is not reasonably likely to result in a Material Adverse
Effect. Except as disclosed to the Agent in writing, no portion of any of the
real property owned or leased by the Borrowers or any of their Subsidiaries is
located in a special flood hazard area as designated by any Governmental
Authority.
7.21. Location of Bank Accounts. Schedule 7.21 hereto sets
forth a complete and accurate list as of the Closing Date of all deposit and
other accounts, including the Cash Concentration Account and all Depository
Accounts, maintained by the Borrowers and their respective Subsidiaries together
with a description thereof (i.e., the bank at which such deposit or other
account is maintained and the account number and the purpose thereof).
7.22. No Event of Default. No event has occurred and is
continuing and no condition exists which constitutes an Event of Default or
Potential Default.
7.23. Capitalized Leases. As of the Closing Date, Capitalized
Lease Obligations of the Borrowers and their respective Subsidiaries (other than
Inactive Guarantors) do not exceed $5,000,000 in the aggregate.
7.24. Inventory and Memorabilia. There is no location at which
the Borrowers and the Guarantors have any Inventory or Memorabilia (except for
Inventory and Memorabilia in transit) other than (i) those locations listed on
Schedule 1.01(B) hereto, and (ii) any other locations approved in writing by the
Agent pursuant to the definition of "Eligible Inventory". Schedule 1.01(B)
hereto contains a true, correct and complete list, as of the Closing Date, of
the legal names and addresses of each warehouse at which Inventory and
Memorabilia of the Borrowers is stored. None of the receipts received by the
Borrowers from any warehouse states that the goods covered thereby are to be
delivered to bearer or to the order of a named Person or to a named Person and
such named Person's assigns.
7.25. Collateral. The Borrowers and the Guarantors have good
and marketable title to the Collateral.
7.26. Tradenames. Schedule 7.26 hereto sets forth a complete
and accurate list as of the Closing Date of all tradenames used by the Borrowers
and their Subsidiaries.
7.27. Intellectual Property. Each of the Borrowers and their
Subsidiaries owns or licenses or otherwise has the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights that are
necessary for the operations of their respective businesses and the ownership
and sale of Memorabilia and, to the knowledge of each such Borrower or each such
U.S. Subsidiary, without
-59-
<PAGE>
infringement upon or conflict with the rights of any other Person with respect
thereto, except where the failure to obtain the right to use licenses, permits,
patents, patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises, authorizations and
other intellectual property rights that are necessary for the operations of
their respective businesses and the ownership and sale of Memorabilia, and
infringements upon and conflicts with respect thereto which, individually or in
the aggregate, would not result in and could not reasonably be expected to
result in a Material Adverse Effect. To the best knowledge of the Borrowers and
their Subsidiaries, no slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by the Borrowers or any of their Subsidiaries infringes upon or
conflicts with any rights owned by any other Person, and no claim or litigation
regarding any of the foregoing is pending or threatened, except where such
infringements, conflicts and pending or threatened litigation, individually or
in the aggregate, would not result in and could not reasonably be expected to
result in a Material Adverse Effect. To the knowledge of the Borrowers and their
Subsidiaries, no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or proposed, which,
individually or in the aggregate, would result in or could reasonably be
expected to result in a Material Adverse Effect.
7.28. Regulation T, U or X. The Borrowers are not and will not
be engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation T, U or X issued by the
Board), and no proceeds of any Loan will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
7.29. Nature of Business. The Borrowers are not engaged in any
business other than (i) the operation of restaurants and retail stores selling
Planet Hollywood-related and Official All-Star Cafe-related merchandise, and
(ii) the sale and licensing of intellectual property and merchandise related
thereto, and the operation of websites in connection therewith and other
reasonably related activities (subject to the restrictions contained in the Loan
Documents related to the Memorabilia (including without limitation, the minimum
sales price and application of Net Proceeds)).
7.30. Adverse Agreements, Etc. Neither the Borrowers nor any
of their Subsidiaries is a party to any agreement or instrument, or subject to
any charter or other corporate restriction or any judgment, order, regulation,
ruling or other requirement of a court or other Governmental Authority or
regulatory body, which would result in a Material Adverse Effect, or, to the
best knowledge of the Borrowers, could reasonably be expected to result in a
Material Adverse Effect.
7.31. Holding Company and Investment Company Acts. Neither the
Borrowers nor any of their Subsidiaries is (i) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, or (ii) an "investment company" or an "affiliated person" or
"promoter" of, or "principal underwriter" of or for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.
-60-
<PAGE>
7.32. Permits, Etc. The Borrowers and their Subsidiaries have
all material permits, licenses, authorizations and approvals required for them
lawfully to own and operate their business.
7.33. Priority; Title. The Liens granted under the Security
Documents constitute, and shall at all times constitute, perfected, first
priority Liens on the Collateral. The Collateral is subject to no other Liens
other than Permitted Liens, and the Borrowers are the sole and absolute owner of
all of the Collateral with full right to pledge, sell, consign, transfer and
create Liens therein. No Person has any right of first refusal, option or other
preferential right to purchase any Collateral. The Borrowers will at their
expense warrant and, at the Agent's request, defend the same from any and all
claims and demands of any other Person other than the Permitted Liens. The
Borrowers will not grant, create or permit to exist, any Lien upon the
Collateral, or any proceeds thereof, in favor of any other Person other than
Permitted Liens. The Borrowers and their Subsidiaries have good and marketable
title or a valid leasehold interest in all of their properties and assets, free
and clear of all Liens except Permitted Liens.
7.34. Labor Relations; Collective Bargaining Agreements.
(a) Set forth on Schedule 7.34 hereto is a list
(including dates of termination) of all collective bargaining agreements between
or applicable to the Borrowers or any of their U.S. Subsidiaries and any union,
labor organization or other bargaining agent in respect of the employees of the
Borrowers or any of such U.S. Subsidiaries.
(b) Neither the Borrowers nor any of their U.S.
Subsidiaries is engaged in any unfair labor practice that would result in or
could reasonably be expected to result in a Material Adverse Effect. There is
(i) no significant unfair labor practice complaint pending against the Borrowers
or any of their U.S. Subsidiaries or, to the best knowledge of the Borrowers or
any of their U.S. Subsidiaries, threatened against any of them, before the
National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any Collective Bargaining
Agreement is now pending against the Borrowers or any of their U.S. Subsidiaries
or, to the best knowledge of the Borrowers or any of their U.S. Subsidiaries,
threatened against any of them, (ii) no significant strike, labor dispute,
slowdown or stoppage is pending against the Borrowers or any of their U.S.
Subsidiaries or, to the best knowledge of the Borrowers or any of their U.S.
Subsidiaries, threatened against the Borrowers or any of their U.S.
Subsidiaries, and (iii) to the best knowledge of the Borrowers or any of their
U.S. Subsidiaries, no union representation question existing with respect to the
employees of the Borrowers or any of their U.S. Subsidiaries, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) where such actual or threatened complaint,
grievance, or arbitration proceeding, strike, labor dispute, slowdown or
stoppage, or union representation question would not result in and could not
reasonably be expected to result in a Material Adverse Effect.
7.35. Loan Documents. The Loan Documents create and grant to
the Agent, for the benefit of the Lenders, a legal, valid and perfected first
priority Lien on the Collateral, subject to no other Liens except for Permitted
Liens.
-61-
<PAGE>
7.36. Solvency. After giving effect to the transactions
contemplated by this Agreement and the Related Documents and each Credit
Extension, the Borrowers and the Guarantors are, on a consolidated basis,
Solvent.
7.37. Ownership of Planet Hollywood Memorabilia, Inc. and the
Memorabilia. As of the date hereof, (i) Planet Hollywood owns one hundred
percent (100%) of Planet Hollywood Memorabilia, Inc., (ii) Planet Hollywood
Memorabilia, Inc. owns one hundred percent (100%) of the Memorabilia, all of
which was duly and properly transferred from Planet Hollywood to it pursuant to
an order, dated December 13, 1999, of the United States District Court for the
District of Delaware, and (iii) prior to the transfer described in clause (ii)
hereof, Planet Hollywood was the sole owner of and had good and marketable title
to one hundred percent (100%) of the owned Memorabilia.
7.38. Corporate Structure. The corporate chart evidencing the
corporate structure of the Borrowers and the Guarantors annexed as Schedule 7.38
hereto accurately reflects as of the Closing Date the corporate structure of the
Borrowers and the Guarantors in all material respects.
7.39. Delivery of Authenticity Documents. The Authenticity
Documents shall be promptly delivered to the Memorabilia Agent within ten (10)
days of the Closing Date (x) in a form to facilitate retrieval of such Documents
(notated by item number corresponding to the Memorabilia Report), and (y)
accompanied by a master list of the Authenticity Documents being delivered.
7.40. Material Contracts. Schedule 7.40 hereto sets forth a
complete listing of all Material Contracts.
7.41. [Intentionally omitted].
7.42. TSP Agreement.
(a) TSP Agreement. The Borrower has delivered to the
Agent a true and complete copy of the TSP Agreement. Except for the TSP
Agreement, there are no documents, instruments or agreements affecting or with
respect to the Membership Interest to which the Borrower or any of its
Subsidiaries is a party or bound or under which the Borrower or any of its
subsidiaries has any interest or estate, or which are binding on the Membership
Interest. The TSP Agreement is the valid and binding obligation of each of the
Borrower or any of its Subsidiaries that is a party thereto, enforceable against
and by each such Borrower or any of its Subsidiaries in accordance with its
terms except (i) as limited by application bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (ii) general principles of equity that
restrict the availability of equitable remedies.
(b) Title. Hospitality has good and marketable right,
title and interest in, to and under the Membership Interest, free and clear of
any Liens, except for the Permitted
-62-
<PAGE>
Liens and the right of first refusal of the other members of TSP under and in
accordance with the terms of the TSP Agreement.
(c) No Default. No default or event of default has
occurred under or with respect to the TSP Agreement, pursuant to the terms
thereof. Hospitality has fully performed all of its obligations under the TSP
Agreement which are required to be performed on or prior to the date hereof, and
its right, title and interest of any Borrower or any of its Subsidiaries in the
Membership Interest is not subject to any defense, offset, counterclaim or claim
(other than Permitted Liens), nor have any of the foregoing been asserted or
alleged against any Borrower or any of its Subsidiaries with respect to the
Membership Interest, nor has any Borrower or any of its Subsidiaries asserted
any of the same against any other party to the TSP Agreement.
(d) Consents. all consents, licenses, approvals and
authorizations of, or designations or declarations with, any Governmental
Authority or any other Person required to be obtained, effected, given or
received in connection with the execution, delivery and performance of the TSP
Agreement by any Borrower or any of its Subsidiaries have been duly obtained,
effected, given and received, are in full force and effect and do not subject
the provisions of the Membership Interest to any limitation, either specific or
general in nature.
(e) Members and Membership Interests. Schedule 7.42
hereto sets forth or attaches a true and complete list setting forth (i) each
member of TSP, (ii) the percentage membership interest in TSP currently owned by
each such Person, (iii) the current balance of such person's capital account in
TSP, (iv) a copy of each Schedule K-1 received by the Borrower or any of its
Subsidiaries with respect to the Membership Interest and each tax return filed
by TSP, and (v) a description, including the principal amount, interest, term
and lender, of all debt of TSP.
7.43. Additional Representations and Warranties. With respect
to advances subsequent to the initial advances, such other representations and
warranties as shall be satisfactory to the Agent in its reasonable discretion
and which are customary to transactions of this nature.
ARTICLE VIII
AFFIRMATIVE COVENANTS
---------------------
So long as any principal of or interest on the Loans or the
Reimbursement Obligations or any other Obligations (whether or not due) shall
remain unpaid or the Lenders shall have any Revolving Credit Commitment
hereunder, the Borrowers will, unless the Majority Lenders shall otherwise
consent in writing (there being no requirement under this Article VIII (except
Section 8.09) that encompasses or otherwise applies to the Inactive Guarantors):
8.01. Reporting Requirements. Furnish to the Lenders:
(a) As soon as practicable and in any event within
ninety (90) days after the close of each fiscal year of Planet Hollywood, a
consolidated (and consolidating)
-63-
<PAGE>
statement of operations and cash flows of Planet Hollywood and its Consolidated
Subsidiaries for such fiscal year and a consolidated (and consolidating) balance
sheet of Planet Hollywood and its Consolidated Subsidiaries as of the close of
such fiscal year, and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding fiscal year, which
statements and balance sheet shall be certified by PricewaterhouseCoopers or
other independent certified public accountants of recognized national standing
selected by the Borrowers and reasonably satisfactory to the Agent. The
certificate or report of such accountants (the "Accountant's Opinion") shall be
without an exception or qualification arising out of the scope of the audit with
respect to such statements and balance sheet being prepared in compliance with
GAAP and shall in any event contain a written statement of such accountants
substantially to the effect that (i) such accountants examined such statements
and balance sheet in accordance with generally accepted auditing standards and
accordingly made such tests of accounting records and such other auditing
procedures as such accountants considered necessary in the circumstances, and
(ii) in the opinion of such accountants such statements and balance sheet
present fairly, in all material respects, the financial position of Planet
Hollywood and its Consolidated Subsidiaries as of the end of such fiscal year
and the results of its operations and the changes in its financial position for
such fiscal year, in conformity with GAAP (except for changes in application in
which such accountants concur). A copy of the Accountant's Opinion shall be
delivered to the Agent and each Lender and signed by such independent public
accountants. Each set of statements and balance sheets delivered pursuant to
this Section 8.01(a) shall be accompanied by a certificate dated the date of the
delivery of such statements and balance sheet by the Designated Financial
Officer stating in substance that he has reviewed this Agreement and that in
making the examination necessary for this certification, he did not become aware
of any Event of Default or Potential Default, or if he did become so aware, such
certificate shall state the nature and period of existence thereof if
determinable.
(b) As soon as practicable and in any event within
forty-five (45) days after the close of each fiscal quarter of Planet Hollywood,
unaudited consolidated (and consolidating) statements of operations and cash
flows of Planet Hollywood and its Consolidated Subsidiaries and an unaudited
consolidated (and consolidating) balance sheet of Planet Hollywood and its
Consolidated Subsidiaries as of the close of such fiscal quarter, all in
reasonable detail setting forth in comparative form the corresponding figures
for the corresponding fiscal quarter for the preceding fiscal year, which
statements and balance sheet shall be certified by the Designated Financial
Officer as presenting fairly, in all material respects, the financial position
of Planet Hollywood and its Consolidated Subsidiaries as of the end of such
quarter and the results of its operations and the changes in its financial
position for such quarter, in conformity with GAAP applied in a manner
consistent except as otherwise disclosed therein with that of the most recent
audited financial statements furnished to the Lenders, subject to year-end
adjustments. Each set of statements and balance sheets delivered pursuant to
this Section 8.01(b) shall be accompanied by a certificate of the Designated
Financial Officer dated the date of the delivery of such statements and balance
sheet stating that he has reviewed this Agreement and that to the best of his
knowledge he did not become aware of any Event of Default or Potential Default,
or if he did become so aware, such certificate shall state the nature and period
of existence thereof, if determinable.
-64-
<PAGE>
(c) As soon as practicable and in any event within
thirty (30) days after the end of each fiscal month of Planet Hollywood that is
not the end of a fiscal quarter, unaudited consolidated (and consolidating)
statements of operations and cash flows for Planet Hollywood and its
Consolidated Subsidiaries for such fiscal month and for the period from the
beginning of such fiscal year to the end of such fiscal month, and an unaudited
consolidated (and consolidating) balance sheet of Planet Hollywood and its
Consolidated Subsidiaries as of the end of such fiscal month, all in reasonable
detail, setting forth in comparative form the corresponding figures for the
corresponding fiscal month during the preceding fiscal year (except for the
balance sheet, which shall set forth in comparative form the corresponding
balance sheet as of the prior fiscal year end), and accompanied by a certificate
of the Designated Financial Officer stating that (i) such statements present
fairly, in all material respects, the financial position of Planet Hollywood and
its Consolidated Subsidiaries as of the end of such fiscal month and the results
of its operations and cash flows for such fiscal month, in conformity with GAAP
applied in a manner consistent except as otherwise disclosed therein with that
of the most recent adjusted financial statements furnished to the Lenders,
subject to year-end adjustments, and (ii) he has reviewed this Agreement and
that to the best of his knowledge he did not become aware of any Event of
Default or Potential Default, or if he did become so aware, such certificate
shall state the nature and period of existence thereof, if determinable.
(d) As soon as practicable and in any event on the
third (3rd) Business Day of each week (including the week in which this
Agreement is executed) or at any other time, at the discretion of the Agent, a
Borrowing Base Certificate for the Borrowers as of Planet Hollywood's close of
business on the Saturday of the preceding week, each in form and substance
reasonably satisfactory to the Agent and certified by the Designated Financial
Officer; provided, however, that if there are no Loans hereunder the aforesaid
weekly requirement shall be changed to a twice monthly requirement.
(e) As soon as possible, and in any event within five
(5) days, after the occurrence of a Potential Default or an Event of Default or
a Material Adverse Effect with respect to any Borrower, the written statement of
the Designated Financial Officer of such Borrower, setting forth the details of
such Potential Default or Event of Default, Material Adverse Effect and the
action which such Borrower proposes to take with respect thereto.
(f) (i) By 12:00 noon New York City time three (3)
Business Days after Sunday of each week, or more often if requested by the
Agent, a report of all Memorabilia that was, during such week, (i) bought, sold
or otherwise disposed of by the Borrowers and the Guarantors, or (ii)
transferred or moved by the Borrowers and the Guarantors, including, without
limitation, the old and the new location for each such item of Memorabilia so
transferred or moved, in each case, unless the aggregate of all such Memorabilia
bought, sold, transferred or moved has a Book Value at any time of less than
$50,000 (the "Memorabilia Change Report"); provided, however, that (x) any such
purchases, sales, transfers or movements must be made in accordance with the
terms of this Agreement, (y) such Memorabilia Change Report may be made part of
the Borrowing Base Certificate and (z) in calculating the Book Value of
Memorabilia aggregating $50,000 as aforesaid, transfers and other movements of
Memorabilia among Borrowers and Guarantors to locations where the Agent has
filed a UCC financing statement are not required to be counted in the
calculation of such $50,000 threshold.
-65-
<PAGE>
(ii) On the last day of each fiscal quarter (or
such more frequent period as is required by the Agent), the Memorabilia Report.
(g) Promptly after receipt by any Borrower, copies of
all accountants' management letters, business plans and other reports which have
direct or indirect bearing on the Collateral.
(h) Promptly upon becoming available, a copy of (i)
all reports, financial statements or other information delivered by any Borrower
to its shareholders, (ii) all reports, proxy statements, financial statements
and other information generally distributed by any Borrower to its creditors or
the financial community in general, and (iii) any audit or other reports
submitted to any Borrower by independent accountants in connection with any
annual, interim or special audit of such Borrower.
(i) On the last day of each fiscal month, a
certification of the Designated Financial Officer indicating that all rent and
other charges due and payable by the Borrowers with respect to the Leases are
current, and that no default has occurred or is continuing (after giving effect
to grace periods) pursuant to any of the Leases as of the date of such
certification; provided, however, that, in the event any of the foregoing
payments are due and payable (whether or not disputed) or a potential default
exists under one or more of the Leases, then such certification shall identify
all such outstanding payments and defaults.
(j) (i) As soon as possible and in any event within
ten (10) days after any Borrower or any ERISA Affiliate knows or has reason to
know that a Termination Event with respect to any Plan has occurred, or that any
Borrower or any ERISA Affiliate has failed to make a required installment to a
Plan within the meaning of Section 412(m) of the Code, a statement of the
Financial Officer of such Borrower describing such Termination Event and the
action, if any, which such Borrower or ERISA Affiliate proposes to take with
respect thereto, (ii) promptly and in any event within two (2) Business Days
after receipt thereof by any Borrower or any ERISA Affiliate from the PBGC,
copies of each notice received by such Borrower or any ERISA Affiliate of the
PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan, (iii) promptly and in any event within thirty (30) days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan and Multiemployer Plan, (iv) promptly and in any event
within five (5) Business Days after receipt thereof by any Borrower or any ERISA
Affiliate from a sponsor of a Multiemployer Plan or from the PBGC, a copy of
each notice received by such Borrower or any ERISA Affiliate concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or
indicating that such Multiemployer Plan may enter reorganization status under
Section 4241 of ERISA, (v) promptly and in any event within ten (10) days after
any Borrower or any ERISA Affiliate takes action to establish an employee Plan
as defined in Section 3(3) of ERISA, a statement of the Financial Officer of
such Borrower describing such employee Plan and a copy of such employee Plan,
and (vi) promptly and in any event within five (5) days after any Borrower files
any notice with the PBGC under Section 4043(b) of ERISA, a copy of such notice.
-66-
<PAGE>
(k) Promptly after, and in any event within five (5)
days after, an officer of any Borrower learns of any of the following, notice
thereof:
(i) the receipt by such Borrower or any of its
Subsidiaries of notification that any real or personal property of such Borrower
or its Subsidiaries is subject to any Environmental Lien;
(ii) notice of violation of any Environmental Law
which could reasonably be expected to subject such Borrower or any of its
Subsidiaries to Environmental Liabilities and Costs of $500,000 or more; or
(iii) notice of the commencement of any judicial
or administrative proceeding or investigation alleging a violation by such
Borrower or any of its Subsidiaries of any Environmental Law, which if adversely
determined, could reasonably be expected to subject such Borrower or any of its
Subsidiaries to Environmental Liabilities and Costs of $500,000 or more.
(l) Promptly after submission to any Governmental
Authority all documents and information furnished to such Governmental Authority
in connection with any investigation of any of the Borrowers or any of their
respective Subsidiaries which, if adversely determined, could result in a
Material Adverse Effect; provided, however, that the Borrowers and their
respective Subsidiaries shall not be required to disclose any documents and
information that counsel has advised the Borrowers should not be disclosed under
any applicable law.
(m) Promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of the Borrowers
or any of their respective Subsidiaries as the Agent or any Lender from time to
time may reasonably request.
(n) Promptly after the commencement thereof but in
any event not later than five (5) days after service of process with respect
thereto on, or the obtaining of knowledge thereof by, the Borrowers or any of
their Subsidiaries, notice of each action, suit or proceeding involving the
Borrowers or any of their Subsidiaries before any court or other Governmental
Authority or other regulatory body or any arbitrator which, if adversely
determined, could result in a Material Adverse Effect.
8.02. Compliance with Laws, Etc. Comply and cause each of
their respective Subsidiaries to comply, with all applicable Laws (including but
not limited to Environmental Laws and compliance in respect of products that
they sell or service they perform, conduct of their businesses, or use,
maintenance or operation of real and personal properties owned or possessed by
them), except, in the case of instances of non-compliance (other than
non-compliance in the payment of Taxes which, if unpaid, could result in a Lien
on any Collateral or any other non-compliance that may result in a Lien on any
Collateral), where such instances of non-compliance, individually or in the
aggregate, will not result in and could not reasonably be expected to result in
a Material Adverse Effect.
-67-
<PAGE>
8.03. Preservation of Existence, Etc. Subject to Section
9.04(b) hereof, maintain and preserve, and cause each of their respective
Subsidiaries to maintain and preserve its existence, rights and privileges, and
become or remain duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by them or in which the
transaction of their business makes such qualification necessary, except where
instances of failure to qualify or remain in good standing or failure to
maintain rights and privileges, individually or in the aggregate, will not
result in and could not reasonably be expected to result in a Material Adverse
Effect.
8.04. Keeping of Records and Books of Account. Keep, and cause
each of their respective Subsidiaries (other than Inactive Guarantors) to keep,
adequate records and books of account, with complete entries made in accordance
with GAAP.
8.05. Inspection Rights.
(a) Permit, and cause each of their respective
Subsidiaries to permit, the Agent or any Lender, or any agents or
representatives thereof or such professionals or other Persons as the Agent may
designate (i) to examine and inspect the books and records of any of the
Borrowers and their Subsidiaries and take copies and extracts therefrom, (ii) to
verify materials, leases, notes, receivables, deposit accounts and other assets
and liabilities of the Borrowers and their Subsidiaries from time to time, and
(iii) to conduct Inventory and Memorabilia (including, without limitation, the
Eligible Memorabilia) appraisals and/or valuations at the distribution centers
and retail stores of the Borrowers and their Subsidiaries; provided, however,
that, in the absence of a continuing Event of Default, (A) the Agent and its
representatives shall be limited to four (4) visits per calendar year to Planet
Hollywood's corporate headquarters (or such other locations if deemed necessary
by the Agent) for purposes of conducting any such actions described in clauses
(i) through (iv) above, with all expenses related to such visits to be borne by
Planet Hollywood in accordance with Section 8.05(c) hereof, and (B) all such
actions described in clauses (i) through (iv) above shall be conducted at
reasonable times and during normal business hours. In addition, the Borrowers
and their Subsidiaries will cause to be conducted a physical inventory count on
or about March 31, 2000 and shall promptly after such count becomes available
provide to the Agent a copy of the written results of such physical Inventory
count. The Lender will endeavor to minimize the disruption of such Borrower's
business in connection with the exercise of its rights under this paragraph.
(b) Permit, and cause the Subsidiaries to permit, the
Agent or any Lender, or any agents or representatives thereof or such
professionals or other Persons as the Agent may designate to examine and
re-evaluate the value of the Collateral, including, without limitation, the
Memorabilia.
(c) All reasonable out-of-pocket expenses of the
Agent or the Lenders, as the case may be, in connection with the inspection
rights set forth in subsections 8.05(a) and 8.05(b) shall be payable by the
Borrowers directly or at the option of the Agent through direct charges to the
Borrowers' Account; such expenses shall include, without limitation, the (i)
reasonable fees and expenses including with respect to retaining a third party
consultants, (ii) reasonable out-of-pocket travel expenses (including those
incurred in connection with periodic
-68-
<PAGE>
field audits by employees of the Agent or the Lenders, as the case may be),
(iii) reasonable out-of-pocket fees and expenses incurred by the Agent or the
Lenders, as the case may be, in connection with the monitoring of the
Collateral, and (iv) out-of-pocket messenger and delivery expenses, and out-of
pocket duplicating expenses. So long as no Event of Default has occurred and is
continuing, the Agent and the Lenders agree to advise the Borrowers of their
respective intention to retain third parties (other than legal counsel) at any
time after the Closing Date and to consult with the Borrowers regarding same.
The Borrowers shall also pay on demand directly or at the option of the Agent
through direct charges to the outstanding balance of the Loans all reasonable
out-of-pocket costs and expenses incurred by the Agent or the Lenders, as the
case may be, in connection with any litigation, contest, dispute, suit or
proceeding relating to the Loan Documents or the transactions contemplated
hereby. The Agent or the Lenders, as the case may be, shall deliver to Planet
Hollywood a reasonably detailed statement of expenses in advance of the Agent
charging the Borrowers' Account.
8.06. Maintenance of Properties, Etc. Maintain and preserve,
and cause each of their respective Subsidiaries to maintain and preserve, all of
their properties (including all real properties leased or owned by them) which
are necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear and tear excepted, and comply, and cause each
of their respective Subsidiaries to comply, at all times with the provisions of
all Leases to which each of them is a party as lessee or under which each of
them occupies property, so as to prevent any loss or forfeiture thereof or
thereunder, except where any failure to maintain and preserve their properties
or failure to comply with the provisions of their Leases, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect.
8.07. Maintenance of Insurance.
(a) Maintain, and cause each of their respective
Subsidiaries to maintain, with responsible and reputable insurance companies or
associations insurance (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to
their properties and business, in such amounts and covering such risks, as is
required by any Governmental Authority or other regulatory body having
jurisdiction with respect thereto or as is carried generally in accordance with
sound business practice by companies in similar businesses similarly situated
and in any event in amount, adequacy and scope reasonably satisfactory to the
Agent as of the Closing Date and with such deductibles or self-insured
retentions as are in accordance with normal industry practice and all applicable
laws, rules and regulations; provided, however, that in no event will any such
deductible or self-insured retention in respect of liability claims or in
respect of casualty damage exceed, in each such case, $250,000 per occurrence.
Each insurance policy referred to in this Section 8.07 shall specify the Agent
(for the benefit of the Lenders) as loss payee thereof and contain a standard
endorsement satisfactory to the Agent effecting such specification. All policies
covering the Collateral are to be made payable to the Agent, in case of loss,
under a standard non-contributory "lender" or "secured party" clause and are to
contain such other provisions as the Agent may require to fully protect the
Agent's interest in the Collateral and to any payments to be made under such
policies. All original policies or true copies thereof are to be delivered to
the Agent, premium prepaid, with the additional insured endorsement in the
-69-
<PAGE>
Agent's favor, and shall provide for not less than thirty (30) days prior
written notice to the Agent of the exercise of any right of modification or
cancellation. So long as no Event of Default has occurred or is continuing,
amounts received by the Agent as payee shall, if in excess of $1,000,000, be
credited to the borrowings and shall be available for reborrowing, subject to
the terms and conditions hereof. Insurance proceeds of $1,000,000 or less may be
reinvested in the replacement of items which were the subject of the insurance
recovery. At the Borrowers' request, the Agent may arrange for such insurance,
but at the Borrowers' expense and without any responsibility on the Agent's part
for obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims.
(b) After the Closing Date, Planet Hollywood shall
have the right to change insurance carriers to one or more other insurance
carriers having the same "Best" rating or to modify existing insurance policies
upon notice to the Agent without the Agent's consent; provided, however, that on
the effective date of such changes and modifications, (i) the Borrowers remain
insured in such amounts and covering such risks as is required by any
Governmental Authority or other regulatory body having jurisdiction with respect
thereto, (ii) such insurance is adequate in amount and scope as is carried
generally in accordance with sound business practice by companies in similar
businesses similarly situated, (iii) the amount, adequacy and scope of such
insurance is substantially similar to that in existence as of the Closing Date,
and (iv) a loss payee endorsement is delivered to Agent simultaneously with the
effective date thereto (there being no grace period for any Event of Default
based on the requirements of this Section 8.07(b)).
(c) Upon the occurrence and during the continuance of
an Event of Default, the Agent on behalf of the Lenders shall have the sole
right, in the name of the Agent and the Borrowers, to file claims under any
insurance policies insuring any of the Collateral, provided that the Agent gives
prompt notice thereof to the Borrowers, to receive, receipt and give acquittance
for any payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.
8.08. Environmental. Comply, and cause each of their
respective Subsidiaries to comply, with the requirements of all Environmental
Laws and provide to the Agent all documentation in connection with such
compliance that the Agent may reasonably request; and not cause or permit the
Collateral or any property or facility owned, operated or occupied by the
Borrowers or their Subsidiaries to be used for any activities involving,
directly or indirectly, the use, generation, treatment, storage, release or
disposal of any Hazardous Materials, except in compliance with applicable Laws
and except where instances of non-compliance with the requirements of all
Environmental Laws or the use of the Collateral or any property or facility
owned, operated or occupied by the Borrowers or their Subsidiaries for any
activities involving, directly or indirectly, the use, generation, treatment,
storage, release or disposal of any Hazardous Materials, individually or in the
aggregate, would not result in and could not reasonably be expected to result in
a Material Adverse Effect. On behalf of the Borrowers and their Subsidiaries,
the Borrowers hereby agree to defend, indemnify, and hold harmless the Agent,
the Lenders and the Letter of Credit Issuer, their employees, agents, officers,
and directors, from and
-70-
<PAGE>
against any claims, demands, penalties, fines, liabilities (including strict
liability), settlements, damages, costs, or expenses (including, without
limitation, attorney and consultant fees, investigation and laboratory fees,
court costs, and litigation expenses) and Environmental Liabilities and Costs
arising out of (i) any Release, or threatened Release on any property presently
or formerly owned or occupied by any of the Borrowers or their Subsidiaries (or
their predecessors in interest or title) or at any disposal facility which
received Hazardous Materials generated by the Borrowers or their respective
Subsidiaries, (ii) any violation of Environmental Laws, (iii) any Environmental
Actions, (iv) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to exposure to Hazardous Materials
used, handled, generated, transported or deposited by the Borrowers or their
respective Subsidiaries (or any predecessor in interest or title), and/or (v)
the breach of any representation or warranty made by the Borrowers in Section
7.14 hereof or the breach of any covenant made by any of the Borrowers or their
Subsidiaries in this Section 8.08. This Environmental Indemnity shall survive
the repayment of the Obligations and discharge or release of any security
interest granted under the Loan Documents.
8.09. Further Assurances. Do, execute, acknowledge, deliver,
record, file, register and perform and cause each of their respective U.S.
Subsidiaries (or any other entity as to which the Lenders at any time have a
Lien on the assets or ownership interest thereof) to do, execute, acknowledge,
deliver, record, file, register and perform at the sole cost and expense of the
Borrowers all such further acts, deeds, conveyances, mortgages, assignments,
estoppel certificates, financing statements, notices of assignment, transfers
and assurances as the Agent may reasonably require from time to time in order
(a) to carry out more effectively the purposes of this Agreement or any other
Loan Document, (b) to subject to valid and perfected first priority Liens all
the Collateral, (c) to perfect and maintain the validity, effectiveness and
priority of any of the Loan Documents and the Lien intended to be created
thereby, and (d) to better assure, convey, grant, assign, transfer and confirm
unto the Agent, the Lenders and the Letter of Credit Issuer the rights now or
hereafter intended to be granted to the Agent, the Lenders and the Letter of
Credit Issuer under this Agreement, any Loan Document or any other instrument
under which the Borrowers or the Subsidiaries may be or may hereafter become
bound to convey, mortgage or assign to the Agent, the Lenders and the Letter of
Credit Issuer.
8.10. Financial Accounting Practices, Etc.
(a) Make and keep books, records and accounts which,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets of the Borrowers and their Subsidiaries and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are recorded as necessary
(A) to permit preparation of financial statements in conformity with GAAP, and
(B) to maintain accountability for assets, and (iii) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(b) Maintain a system of internal procedures and
controls sufficient to provide reasonable assurance that the information
required to be set forth in each Borrowing Base Certificate (including, without
limitation, information relating to the identification of assets
-71-
<PAGE>
which are Eligible Inventory and Eligible Memorabilia as provided herein and the
valuation thereof) is accurate in all material respects.
8.11. Cash Management System.
(a) The Borrowers agree and covenant to (i) cause all
cash and all proceeds from Receivables, other accounts receivable, and the sale
of Inventory and Memorabilia or any other Collateral to be deposited into the
Depository Accounts in the ordinary course of business of each of the Borrowers
consistent with past practice but in any event not less than twice each week,
(ii) cause all remittances on credit card sales to be transferred from the
Depository Account into the Blocked Account on a daily basis (or to be sent
directly into the Blocked Account), (iii) cause all funds in the Depository
Accounts to be transferred into the Blocked Account in the ordinary course of
business of each of the Borrowers consistent with past practice but in any event
not less than twice each week except for the amounts needed to make the payments
to state taxing authorities in the amounts, to the states and with the periodicy
set forth in Schedule 8.11 for a period of up to sixty (60) days, such funds
transfer to be automatic and under the control of CIT pursuant to notice letters
to Depository Accounts Banks (or Depository Account Agreements reflecting same)
and Credit Card Obligors (iv) deposit the Net Cash Proceeds of Asset Sales in
the Blocked Account, (except to the extent such Net Cash Proceeds are not
required to be paid to the Agent hereunder and are required to be paid to the
Note Agent under the Note Purchase Agreement), (v) instruct the Agent to cause
all funds transferred to the Blocked Account to be applied to reduce the
Obligations outstanding from time to time, with excess amounts to be credited to
the Cash Concentration Account, (vi) take all such actions as the Agent deems
necessary or advisable to send all cash, all proceeds from the sale of Inventory
and Memorabilia, all remittances or other proceeds of Collateral to the Blocked
Account to be applied to the Obligations and (vii) on or before the Closing
Date, (A) execute and deliver to the Agent an original notice letter for each
Depository Bank listed on Schedule 7.21 to this Agreement, substantially in the
form of Exhibit K hereto, and use its best efforts to obtain the Depository
Account Agreements, (B) deliver to the Agent a credit card depository account
agreement, satisfactory to the Agent, duly executed by Planet Hollywood and each
credit card servicer of Planet Hollywood, and (C) take such other actions as the
Agent deems necessary or advisable to grant to the Agent dominion and control
over the funds in the Blocked Account. The requirements of this Section 8.11(a)
must be completed by the earlier of (a) any loans or advances to be made
hereunder or (b) twenty-five (25) days of the Closing Date.
(b) The Borrowers shall promptly, and in any event
not later than five (5) days, after the opening of any new Depository Account,
notify the Agent in writing of the creation of such new Depository Account and
shall at the time of such notice execute and deliver to the Agent a notice
letter, substantially in the form of Exhibit K hereto. Upon and during the
continuance of an Event of Default, the Borrowers shall, upon the request of the
Agent, use their best efforts to cause each Depository Bank maintaining a
Depository Account (which has not previously delivered the Depository Account
Agreement as aforesaid) to promptly, and in any event within twenty (20) days
after the date of such request, enter into a Depository Account Agreement. If,
after any such request by the Agent, any Borrower is unable to obtain a
Depository Account Agreement from any financial institution that receives
remittances or other proceeds of sales of Inventory or Memorabilia within such
thirty (30) day period, such Borrower
-72-
<PAGE>
shall promptly thereafter terminate such accounts and establish new accounts at
a financial institution that will enter into a Depository Account Agreement.
(c) Each Borrower shall promptly, and in any event
not later than five (5) days after the establishment of any new credit card
relationship, notify the Agent in writing of the creation of such new
relationship, shall at the time of such notice execute and deliver to the Agent
a Payment Direction Letter, substantially in the form of Exhibit J-1 hereto, and
shall use its best efforts (but not requiring any payment to be made by such
Borrower) to deliver to the Agent a credit card bank depository account
agreement, substantially in the form of Exhibit J hereto, duly executed by such
Borrower and such new credit card servicer.
8.12. Store Openings and Closings. At no time during the term
of this Agreement shall the Borrowers (i) close on a fiscal-year basis more than
eight (8) retail/restaurant locations in addition to those locations set forth
on Schedule 8.12, or (ii) open on a fiscal-year basis more than three (3) new
Borrower or Guarantor-owned locations.
8.13. Memorabilia and Inventory. The Borrowers shall maintain,
hold for safe-keeping and preserve the Memorabilia and Inventory, including,
without limitation, the Eligible Memorabilia and the Eligible Inventory, at all
locations including those originally located at closed stores in a manner
consistent with maintaining its maximum value. Subject to Section 8.14, the
Memorabilia and Inventory shall not be moved to any location outside the United
States of America or to any other location other than those locations listed on
Schedule 8.13 without the prior written consent of the Agent; provided, however,
that no such consent shall be required for Memorabilia moved outside the United
States to franchisees pursuant to contractual obligations with such franchisees
so long as advance written notification of same is provided to the Agent
adequately describing the Memorabilia so transferred and the Book Value
attributable to same so that the Agent may deduct such amount from the Borrowing
Base.
8.14. Change in Collateral; Collateral Records. Give the Agent
(a) not less than twenty (20) days' prior written notice of any change in the
location of any Collateral, other than to locations, that as of the date hereof,
are known to the Agent and at which the Agent has filed financing statements and
otherwise fully perfected its Liens thereon, and (b) prompt notice of any other
change in the location of any Collateral. Notwithstanding the foregoing, no
Memorabilia can be moved outside the United States or to franchisee locations
(unless the aggregate amount of Memorabilia moved from the date hereof to the
date of determination is $300,000 or less (based on Book Value), with exchanges
of Memorabilia being permitted within such limit) without (x) prior written
consent of the Agent (such consent not to be unreasonably withheld), and (y) a
dollar-for-dollar reduction of the Borrowing Base, based on Book Value
(multiplied by eighty percent (80%) (or the then advance rate of the Eligible
Memorabilia)), provided, however, that if, after such Memorabilia is so moved,
the Book Value of the remaining Eligible Memorabilia (multiplied by eighty
percent (80%) (or the then advance rate of the Eligible Memorabilia)) exceeds
the Memorabilia Sublimit (as determined in the sole discretion of the Agent),
the Borrowing Base shall not be so reduced. The Borrowers shall also advise the
Agent promptly, in sufficient detail, of any material adverse change relating to
the type, quantity or mix of the Collateral or the security interests granted
therein. The Borrowers agree to execute and deliver to the Agent for the benefit
of the Agent from time to time, the Memorabilia Report and
-73-
<PAGE>
such written statements and schedules as the Agent may reasonably require,
designating, identifying or describing the Collateral. The Memorabilia Report
shall be updated weekly to reflect any sale or other movement of Memorabilia.
The Borrowers' failure, however, to promptly give the Agent such statements or
schedules shall not affect, diminish, modify or otherwise limit the Agent's
security interest in the Collateral.
8.15. Leases. The Borrowers shall, and shall cause each of
their respective Subsidiaries, to (i) comply in all material aspects with all of
their respective obligations under Leases, and (ii) not modify, amend, extend or
otherwise change any of the terms, covenants or conditions of any such Leases if
such modification, amendment, extension or other change could reasonably be
expected to result in a Material Adverse Effect.
8.16. Landlord and Warehouse Waivers. Except to the extent
required to be delivered under Section 6.01 hereof prior to the Closing Date,
the Borrowers shall use their respective best efforts to obtain a landlord
waiver, in form and substance satisfactory to the Agent, to each of the
Borrower's and Guarantor's landlords identified on Schedule 8.16 hereto.
8.17. Authenticity Documents. In addition to the requirement
that Authenticity Documents be delivered to the Memorabilia Agent on the Closing
Date, the Borrowers shall, and shall cause each of their respective U.S.
Subsidiaries to, deliver subsequently acquired Authenticity Documents to the
Agent within ten (10) days of receipt thereof with respect to each item of
Memorabilia whether now owned or hereafter acquired. Planet Hollywood shall be
solely responsible for identifying such Authenticity Documents in a manner that
will facilitate retrieval by the Memorabilia Agent of Authenticity Documents.
8.18 TSP Agreement.
(a) Compliance with Documents. Hospitality will
perform, observe and comply in all material respects with all of its obligations
under the TSP Agreement, and will use its best efforts to cause each other party
to the TSP Agreement to perform, observe and comply in all material respects
with all of such other party's obligations under the TSP Agreement, and also
with all mortgages and all other agreements with respect to the ownership, use
and operation of the Membership Interest.
(b) No Modifications, Waivers or Extensions. No
Borrower or any of its Subsidiaries shall (i) amend, modify, terminate or waive
any provision of the TSP Agreement or vote to permit the amendment,
modification, termination or waiver of the TSP Agreement or any provision of any
such document, (ii) fail to exercise promptly and diligently each and every
material right which it may have under the TSP Agreement (other than any right
of termination or "put" right or other right the exercise of which would be
adverse to the interests of the Borrower or any of its Subsidiaries or the Agent
hereunder, which rights it shall not exercise without the Agent's prior written
consent) or (iii) fail to deliver the Agent a copy of each demand, notice or
document received or given by its relating in any way to the TSP Agreement or
the Membership Interest. In no event shall Hospitality withdraw from or cause or
consent to the dissolution of TSP.
-74-
<PAGE>
ARTICLE IX
NEGATIVE COVENANTS
------------------
So long as any principal of or interest on the Loans or the
Reimbursement Obligations or any Obligations (whether or not due) shall remain
unpaid or any Lender shall have any Revolving Credit Commitment hereunder, the
Borrowers will not, without the prior written consent of the Majority Lenders:
9.01. Liens, Etc. Create or suffer to exist, or permit any of
their respective Subsidiaries to create or suffer to exist, any Lien upon or
with respect to any of their properties, rights or other assets, whether now
owned or hereafter acquired, or assign or otherwise transfer, or permit any of
their respective Subsidiaries to assign or otherwise transfer, any right to
receive income, other than the following (the "Permitted Liens"):
(a) Liens created pursuant to the Loan Documents;
(b) Liens existing on the Closing Date and extensions
and renewals thereof provided that such extensions and renewals do not change
the principal, interest, or other financial terms or obligations thereof, as set
forth in Part A of Schedule 9.01 hereof;
(c) Liens in connection with any taxes, assessments,
governmental charges, levies, or claims that are not yet due and payable or
which any Borrower is contesting in good faith and by appropriate proceedings
diligently conducted so long as reserves or other appropriate provisions as may
be required by GAAP have been made therefor and so long as the failure to pay
the same would not result in and could not reasonably be expected to result in a
Material Adverse Effect;
(d) Liens created by operation of Law other than
Environmental Liens, such as materialmen's liens, mechanics' liens (not to
exceed $50,000 in the aggregate) and other similar Liens, arising in the
ordinary course of business which secure amounts not overdue for a period of
more than sixty (60) days or which are being contested in good faith by
appropriate proceedings and which have been bonded or with respect to which a
stay of enforcement is in effect;
(e) deposits (including utility security deposits),
pledges or Liens (other than Liens arising under ERISA), securing (1)
obligations incurred in respect of workers' compensation, unemployment insurance
or other forms of governmental insurance or benefits, (2) the performance of
bids, tenders, leases, contracts (other than for the payment of money) and
statutory obligations, or (3) obligations on surety or appeal bonds, but only to
the extent such deposits, pledges or Liens are incurred or otherwise arise in
the ordinary course of business and secure obligations which are not past due;
(f) Liens in favor of the Note Holders and the PIK
Trustee, subject to the Intercreditor Agreement;
-75-
<PAGE>
(g) purchase money Liens solely on the asset being
acquired by the Borrowers, provided that each such Lien does not exceed
$3,000,000;
(h) [Intentionally Omitted];
(i) judgment Liens that do not constitute an Event of
Default;
(j) existing Liens on assets acquired after the
Closing Date;
(k) involuntary Liens in the case of the Inactive
Guarantors;
(l) precautionary UCC filings in connection with
property not constituting Collateral hereunder (e.g., leases of telecopier
machines); and
(m) an encumbrance of a landlord with respect to the
interest of the Borrowers or Guarantors as a lessee or sublessee under a Lease
but not including any liens or encumbrances arising out of any default
thereunder.
9.02. Indebtedness. Create, incur or suffer to exist, or
permit any of their respective U.S. Subsidiaries to create, incur or suffer to
exist, any Indebtedness, other than:
(a) Indebtedness created hereunder or under the Notes
or any Letter of Credit;
(b) Indebtedness existing on the date hereof, as set
forth in Schedule 9.02 hereto, or related to the Inactive Guarantors (to the
extent in existence on the date hereof) (including subsequent refinancings so
long as all such refinancings do not increase the principal amount thereof);
(c) Indebtedness in connection with Capitalized
Leases permitted by Section 9.07 of this Agreement (including subsequent
refinancings so long as all such refinancings do not increase the principal
amount thereof);
(d) Indebtedness secured by Liens or security
interests permitted by Section 9.01(f) (including subsequent refinancings so
long as all such refinancings do not increase the principal amount thereof);
(e) Indebtedness created under the PIK Indenture in
the original principal amount not to exceed $95,000,000 (including subsequent
refinancings so long as all such refinancings do not increase the original
principal amount thereof, and the indebtedness and liens created under the PIK
Indenture thereunder are subject to the Intercreditor Agreement);
(f) Indebtedness under the Note Purchase Agreement in
the original principal amount not to exceed $10,000,000 (plus all interest and
fees payable under the Note Purchase Agreement) (including subsequent
refinancings to the extent such refinancings are in an amount not more than the
greater of the then principal amount $10,000,000, and the lenders thereunder are
subject to the Intercreditor Agreement and the term thereof is no shorter than
the
-76-
<PAGE>
maturity date of the obligations under the Note Purchase Agreement as (and to
the extent) extended as provided in Section 9.20); and
(g) Indebtedness incurred pursuant to, and in
accordance with the requisites of, subsections 9.06(e) and (f) hereof.
9.03. Guarantees, Etc. Become liable, or permit any of their
respective Subsidiaries to become liable, under any guarantee in connection with
any Indebtedness of any other Person, other than:
(a) guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business;
(b) guaranties existing on the date hereof, as set
forth in Schedule 9.03 hereto, but not any renewal or other modification
thereof;
(c) guaranties of Indebtedness permitted by Section
9.02; and
(d) guaranties of Indebtedness of non-wholly owned
Subsidiaries or joint ventures so long as such guaranties are unsecured and
expressly subordinated to the prior payment in full of the Obligations in form
and substance reasonably satisfactory to the Lenders (such subordination to be
satisfactory if such subordination has the same level of subordination as
applicable to the PIK Holders under the Intercreditor Agreement).
9.04. Merger, Consolidation, Sale of Assets, Etc.
(a) Merge or consolidate with any Person, or permit
any of their respective Subsidiaries to merge or consolidate with any Person;
provided, however, that any Borrower may merge with any other Borrower, and
Guarantors may merge with any Borrower or any Subsidiary so long as there is no
material impact on any Borrower or on the Collateral (as reasonably determined
by the Agent upon advance notice thereof); or
(b) Sell, assign, lease or otherwise transfer or
dispose of, or permit any of their respective Subsidiaries (other than Inactive
Guarantors) to sell, assign, lease, or otherwise transfer or dispose of, whether
in one transaction or in a series of related transactions, any of their
respective properties, rights or other assets, whether now owned or hereafter
acquired to any Person; provided, however, that (i) the Borrowers and their
respective Subsidiaries may sell Inventory in the ordinary course of business,
(ii) the Borrowers and their respective Subsidiaries may dispose of obsolete or
worn-out property (other than Inventory or Memorabilia) in the ordinary course
of business for fair market value, if the proceeds are used to promptly replace
such assets, (iii) so long as no Event of Default has occurred and is
continuing, the Borrowers may sell Memorabilia, upon delivery to the Agent of a
request by the Borrowers to release the Authenticity Documents relating to such
Memorabilia and certification by a Designated Financial Officer that such
Memorabilia is to be sold at a price such that the Net Proceeds are equal to not
less than eighty percent (80%) of the current Book Value of such Memorabilia and
so long as the Net Proceeds of such sale are applied to the Loans (and the
Borrowing Base is reduced on a dollar-for-dollar basis, based on Book Value
(multiplied by eighty percent (80%) or the advance
-77-
<PAGE>
rate of the Eligible Memorabilia then in effect), provided, however, that if (A)
after such Memorabilia is sold the Book Value (multiplied by eighty percent
(80%) (or the advance rate of the Eligible Memorabilia then in effect) is in
excess of the Memorabilia Sublimit (and there is no overadvance at such time),
then the Borrowing Base shall not be reduced as aforesaid, or, if there are no
Loans, to be used before any borrowings are made hereunder or (B) such Net
Proceeds were paid in part in cash and in part on a non-cash basis, such
non-cash portion shall only be permitted to the extent that the aggregate of
such non-cash proceeds do not exceed $500,000 (when added together with any
other non-cash proceeds under this Section 9.04(b)) at any time outstanding;
(iv) so long as no Potential Default or Event of Default has occurred and is
continuing, sales or other dispositions of loans, advances and investments
permitted by Section 9.06 (other than 9.06(d)) hereof in each case for cash at
fair market value so long as the Net Proceeds of such sale are applied to the
Loans (and the Borrowing Base is reduced on a dollar for dollar basis to the
extent any such sales include assets included in the Borrowing Base) and the
Commitment is reduced in accordance with Section 2.04(a) hereof (to the extent
Net Proceeds are paid in part in cash and in part on a non-cash basis, such
non-cash portion shall only be permitted to the extent that the aggregate of
such non-cash proceeds do not exceed (when added together with any other
non-cash proceeds under this Section 9.04(b)) $500,000; (v) so long as no
Potential Default or Event of Default has occurred and is continuing, Asset
Sales among the Borrowers so long as such sales or other transfers are made in
exchange for adequate and fair consideration under applicable law; and (vi)
Asset Sales among the Guarantors or from any Guarantor to any Borrower so long
as such sales or other transfers are made in exchange for adequate and fair
consideration under applicable law (no such sales or other transfers shall be
permitted from any Borrower to any Guarantor) and all Liens created under the
Loan Documents are perfected and continue to be perfected (to the extent Net
Proceeds are paid in part in cash and in part on a non-cash basis, such non-cash
portion shall only be permitted to the extent that the aggregate of such
non-cash proceeds do not exceed (when added together with any other non-cash
proceeds under this Section 9.04(b)) $500,000; and provided, further, that so
long as no Potential Default or Event of Default has occurred and is continuing,
Asset Sales of Assets not otherwise described in this Section 9.04(b) may be
sold or otherwise disposed of so long as the proceeds of such sales are applied
as a Commitment reduction in accordance with Section 2.04(a) hereof and a
mandatory prepayment under Section 2.04(b)(ii) (the foregoing in no way limiting
the grant by the Borrowers and the Guarantors of a first priority perfected
security interest on all Collateral which attaches to proceeds thereof) (to the
extent Net Proceeds are paid in part in cash and in part on a non-cash basis,
such non-cash portion shall only be permitted to the extent that the aggregate
of such non-cash proceeds do not exceed (when added together with any other
non-cash proceeds under this Section 9.04(b)) $500,000.
9.05. Change in Nature of Business. Make, or permit any of
their respective Subsidiaries (other than Inactive Guarantors) to make, any
change in the nature of their business as carried on at the date hereof.
9.06. Loans, Advances and Investments, Etc. Make, or permit
any of their respective Subsidiaries to make, any loan or advance to any Person
or purchase or otherwise acquire, or permit any of their respective Subsidiaries
to purchase or otherwise acquire, any capital stock, properties, assets or
obligations of, or any interest in, any Person, other than:
-78-
<PAGE>
(a) Permitted Investments;
(b) receivables for goods sold owing to any of the
Borrowers or any of their respective Subsidiaries if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with the
customary trade terms of such Borrower or its respective Subsidiaries, as the
case may be (but not covered by subsections (e) or (f) of this Section 9.06);
(c) loans and advances to employees in the ordinary
course of business in an aggregate principal amount not to exceed $150,000
(inclusive of relocation expenses) at any time outstanding;
(d) investments existing on the date hereof, as set
forth in Schedule 9.06 hereto;
(e) loans and advances made (x) from any Borrower to
any other Borrower in an unlimited amount or (y) from any Borrower to any Active
Guarantors or any Foreign Entities in an aggregate amount not to exceed
$4,000,000 (minus all amounts set forth in subsection 9.06(f) below) so long as
(i) the Agent has been granted a first priority lien in the ownership interest
held by any such Borrower or Active Guarantor (limited in the case of the stock
of a Foreign Entity to sixty six and two thirds percent (66.67%) of the voting
shares and other voting interests) in the jurisdiction governing perfection and
such lien is perfected (and evidence of same has been delivered to the Agent in
form and substance reasonably satisfactory to it), (if the interest pledged is
of an entity formed outside of the United States the Agent shall determine
whether such perfection has occurred based on advice of counsel), and (ii) all
such loans and advances are evidenced by a note or other ownership interest,
pledged (and delivered) to the Agent hereunder and subordinated to the prior
payment in full of the Loans; or
(f) Loans and advances made by the Borrower or any
Active Guarantor to (or investments made with respect to) any joint venture
created after the date hereof in which a Borrower or Active Guarantor has an
interest in an aggregate amount not to exceed $4,000,000 (minus all amounts set
forth in subsection 9.06(e) above); provided, however, that no such amount shall
be permitted to be loaned or advanced or invested by Borrowers or Active
Guarantors in such joint ventures unless prior to such loan or advance, such
loans and advances are evidenced by a note or other ownership interest, pledged
and delivered to the Agent hereunder and subordinated to the prior payment in
full of the Loans.
9.07. Lease Obligations. Create, incur or suffer to exist, or
permit any of their respective Subsidiaries to create, incur or suffer to exist,
any obligations as lessee for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction without the prior
written consent of the Agent.
9.08. Dividends, Prepayments, Etc. Declare or pay any
dividends, purchase or otherwise acquire, or purchase or otherwise acquire, for
value any of their respective capital stock now or hereafter outstanding, return
any capital to their respective stockholders as such, or make any other payment
or distribution of assets to their respective stockholders as such, or permit
any of their respective Subsidiaries to do any of the foregoing or to purchase
or otherwise
-79-
<PAGE>
acquire for value any stock of the Borrowers or make any payment or prepayment
of principal or, premium, if any, or interest on, or redeem, defease or
otherwise retire, any other Indebtedness of the Borrowers other than (i)
dividends or other distributions by any Guarantor to any Borrower or by any
Borrower to any other Borrower, (ii) so long as no Potential Default or Event of
Default has occurred or is continuing, the Borrowers may make the Permitted BH
Note Payments and the Permitted PIK Note Payments, (iii) dividends or
distributions payable in capital stock or other equity interests, warrants to
purchase capital stock or other equity interests, or split-ups or
reclassifications of its capital stock or other equity interests into additional
shares of its capital stock or other equity interests, (iv) prepayments of
Indebtedness not in excess of $500,000 in the aggregate, (v) payments to the
Note Holders but only at the times and in the amounts permitted to be paid under
the Intercreditor Agreement, and (vi) payments with respect to Indebtedness
permitted under Section 9.02 hereof.
9.09. Transactions with Affiliates. Except as set forth in
Schedule 9.09 annexed hereto, (i) enter into or be a party to, or permit any of
their respective Subsidiaries to enter into or be a party to, any transaction
with any Affiliate of the Borrowers except as otherwise provided herein or in
the ordinary course of business in a manner and to an extent consistent with
past practice and necessary or desirable for the prudent operation of its
business for fair consideration and on terms no less favorable to the Borrowers
or their Subsidiaries as are available from unaffiliated third parties, or (ii)
subject to Section 9.06 hereof, engage in any loan or capital investment (or any
transaction which is the substantive equivalent thereof) with Affiliates of any
of the Borrowers.
9.10. Sale Policies. Engage in policies or procedures with
respect to the selling price of Inventory, which policies and procedures are
inconsistent in any material respect with the past practices of the Borrowers or
good retail practice absent the prior written consent of the Agent.
9.11. Environmental. Permit the use, handling, generation,
storage, treatment, Release or disposal of any Hazardous Material at property
owned or leased by any of the Borrowers except in compliance with Environmental
Laws and so long as such use, handling, generation, storage, treatment, Release
or disposal of Hazardous Materials would not result in Environmental Liabilities
and Costs in excess of $500,000 in the aggregate together with such other
Environmental Liabilities and Costs.
9.12. ERISA.
(a) Engage in any prohibited transaction described in
Section 406 of ERISA or 4975 of the Code for which a statutory or class
exemption is not available or a private exemption has not previously been
obtained from the Department of Labor;
(b) permit, or permit any ERISA Affiliate to permit,
any Lien from arising under ERISA or Section 412(n) of the Code;
(c) amend or permit any ERISA Affiliate to amend any
Plan in a manner that would require security under Section 307 of ERISA; or
-80-
<PAGE>
(d) request or permit any ERISA Affiliate to request
a waiver of the minimum funding requirements under Section 412 of the Code in
respect of any Plan.
9.13. Subsidiaries. Create or acquire any Subsidiaries not
existing on the Closing Date; provided, however, that the Borrowers may create
or acquire (i) one (1) or more U.S. Subsidiaries after the Closing Date with the
consent of the Agent, provided that each such U.S. Subsidiary promptly, and in
no event later than ten (10) Business Days after creation or acquisition, as the
case may be, becomes a Guarantor and has entered into a Guarantor Security
Agreement including, without limitation, execution of all other necessary
documentation related thereto, pursuant to which all security interests granted
thereunder may be perfected by the Agent, or (ii) one or more Foreign Entities
so long as no assets currently owned by a U.S. Subsidiary (other than
Memorabilia transferred or moved in accordance with Sections 8.13 and 8.14
hereof) are transferred to any Foreign Entity and substantially all of such
Foreign Entity's assets are located outside of the United States.
9.14. Capital Expenditures. Make or be committed to make, or
permit any of its Subsidiaries to make or be committed to make, any expenditure
(by purchase or capitalized lease) for fixed or capital assets other than
expenditures (including obligations under Capitalized Leases) which would cause
the aggregate amount of all such expenditures to exceed $6,000,000 per annum (on
a cumulative basis such that amounts not used in any one (1) year may be used in
subsequent years); provided, however, that amounts permitted to be expended
pursuant to Sections 8.07 and 9.06 shall not be deemed to be capital
expenditures hereunder.
9.15. Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose which
violates or is inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System 8.11.
9.16. Limitation on Plan of Reorganization Payments. Permit
payments to fund the Plan of Reorganization or pay any creditor on account of a
prepetition claim on the Closing Date in excess of $66,000,000.
9.17. Inactive Guarantors. Permit any Inactive Guarantor to
engage in business or other activity of any kind, other than that which is
directly related to the maintenance of its organizational existence.
9.18. Negative Pledge. Permit the mortgage, encumbrance,
pledge or hypothecation by any Borrower or any Guarantor (other than pursuant to
the Loan Documents) of any (i) Leases or other real property interests, (ii)
shares of or interest in any Guarantors or any Foreign Entity not pledged to the
Agent hereunder, (iii) any interest of any Borrower or any Guarantor in any
foreign or domestic joint venture, (iv) any assets in any Foreign Entity or any
joint venture; or (v) any interest in TSP; provided, however, that the interests
or assets described in (iii) and (iv) may be subject to a pledge in favor of a
third party if such joint venture or Foreign Entity is not, and will not be, the
recipient of any loans or advances under subsections 9.06(e) or 9.06(f) hereof.
If, notwithstanding the previous sentence, the Borrower or any of its
Subsidiaries grants a security interest in the capital stock of Hospitality, or
Hospitality grants a security
-81-
<PAGE>
interest in the Membership Interest or any other interest in TSP, in violation
of the same, Planet Hollywood shall automatically and without the requirement of
notice to or action by any Person be deemed to have granted to the Agent a prior
and superior security interest therein and shall take all action reasonably
requested by the Agent to effect the same.
9.19. Foreign Entities. No Foreign Entity, now existing or
hereafter formed, shall own (by acquisition or transfer from any Borrower or
Guarantor) or otherwise take possession of any assets that are located within
the United States of America (other than assets having an aggregate value of not
more than $50,000 at any time); provided, however, that, notwithstanding
anything in this Section 9.19, the Borrowers and the Active Guarantors shall be
entitled to transfer or move Inventory and Memorabilia in accordance with the
terms of Sections 8.13 and 8.14 hereof.
9.20. Note Maturity Date. At least one (1) month prior to the
Maturity Date, the maturity date with respect to the BH Notes shall not be
earlier than six months after the Maturity Date unless the Agent agrees to a
shorter extension. The Borrowers hereby agree that the Agent may pay any fees
(and charge the loan account therefor) required under the Note Purchase
Agreement to be paid by the Borrowers and if it determines to do so, cause the
Borrower to pay, or pay on the Borrower's behalf as aforesaid, fees sufficient
for a five month, 28 day extension under such Note Purchase Agreement.
ARTICLE X
DEFAULTS
--------
10.01. Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of law):
(a) Any Borrower or any Guarantor shall (i) fail to
make any payment of principal under this Agreement on any Loan or any
Reimbursement Obligation when due, or (ii) except as set forth in clause (iii),
fail to pay when due any other amount payable under this Agreement or any other
Related Document (including but not limited to the making of deposits in the
Depository Accounts, the Blocked Account, the Cash Concentration Account or the
Letter of Credit Cash Collateral Account) or (iii) fail to pay fees, expenses
and any other de minimus amounts required hereunder and such failure shall have
continued unremedied for a period of two (2) days;
(b) Any representation or warranty made by any
Borrower or any Guarantor under this Agreement or any other Related Document or
any statement made by any Borrower in any financial statement, certificate,
report or document furnished to the Agent or the Lenders pursuant to or in
connection with this Agreement or any other Related Document (other than those
related to an Inactive Guarantor except with respect to its inactivity), shall
prove to have been false or misleading in any material respect as of the time
when made (including by omission of material information necessary to make such
representation, warranty or statement, in light of the circumstances under which
it was made, not misleading); or
-82-
<PAGE>
(c) Any Borrower defaults in the performance or
observance of any covenant contained in Section 5.03 or Article VIII hereof
(subject to the grace periods applicable under this Agreement to the covenants
contained in Article VIII, including such grace periods contained in subsection
10.01(d) hereof) or Article IX hereof; or
(d) Any Borrower defaults in the performance or
observance of (i) the covenants contained in Section 8.01 (other than paragraphs
(e) and (f) thereof) and such default shall have continued unremedied for a
period of five (5) days, (ii) the covenants contained in paragraphs (e) and (f)
of Section 8.01 and such default shall have continued unremedied for a period of
three (3) days, and (iii) any other covenant, agreement or duty under this
Agreement or any other Related Document (to the extent not otherwise set forth
in this Section 10.01) and such default shall have continued unremedied for a
period of thirty (30) days; or
(e) There shall be an "event of default" under the
Note Purchase Agreement or the PIK Indenture respectively (after the expiration
of applicable grace periods); or
(f) Any Borrower or any of its Subsidiaries (other
than Inactive Guarantors so long as no Borrower, Active Guarantor or Foreign
Entity is or may be liable thereon) shall have entered into any consent or
settlement decree or agreement or similar arrangement with a Governmental
Authority or any judgment, order, decree or similar action shall have been
entered against any such Person, in each case based on or arising from the
violation of or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Hazardous Material and, in
connection with any of the foregoing, any such Person shall incur Environmental
Liabilities and Costs which are unstayed, due and owing in an amount in excess
of $500,000 in the aggregate together with other such Environmental Liabilities
and Costs; or
(g) Any material provision of any Loan Document shall
at any time for any reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by any Borrower or any Guarantor, or a
proceeding shall be commenced by any Borrower or any Guarantor, or by any
Governmental Authority or other regulatory body having jurisdiction over any
Borrower, seeking to establish the invalidity or unenforceability thereof, or
any Borrower or any Guarantor shall deny in writing that any Borrower or any
Guarantor has any liability or obligation purported to be created under any Loan
Document; or
(h) Any Borrower or any of its ERISA Affiliates shall
have made a complete or partial withdrawal from a Multiemployer Plan, and, as a
result of such complete or partial withdrawal, such Borrower or such ERISA
Affiliate incurs a withdrawal liability in an annual amount exceeding $200,000;
or a Multiemployer Plan enters reorganization status under Section 4241 of
ERISA, and, as a result thereof, such Borrower's or such ERISA Affiliate's
annual contribution requirement with respect to such Multiemployer Plan
increases in an annual amount exceeding $500,000; or
(i) (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan shall have had
-83-
<PAGE>
or is likely to have a trustee appointed to administer such Plan, any Plan is,
shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made to a Plan has not been timely
made, any Borrower or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(1), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code, or such Borrower or any U.S. Subsidiary has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA); and (ii) there shall result from any such event or events the imposition
of a Lien or the granting of a security interest, or there shall result from any
such event or events a liability or a material risk of incurring a liability
which would result in a Material Adverse Effect; or
(j) Robert Earl shall cease to be Chairman of the
Board of Directors or Chief Executive Officer of Planet Hollywood or (ii) breach
or be in default of any obligations under the Agreement Regarding Leases after
the expiration of any applicable grace periods therein if any; or
(k) Any Borrower shall use any Loan, advance,
acceptance or Letter of Credit issued under this Agreement in a manner
inconsistent with Sections 2.09 and 7.17 hereto; or
(l) Except as set forth in subsection 10.01(e)
hereof, any Borrower or any U.S. Subsidiary shall fail to pay any principal or
interest on any of its Indebtedness (excluding Indebtedness evidenced by the
Notes) in excess of $200,000 or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness, or
any other default under any agreement or instrument relating to any such
Indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness in
excess of such amount shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof; or
(m) Any Borrower or any U.S. Subsidiary (other than
Inactive Guarantors) (i) shall institute any proceeding or voluntary case
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for any Borrower or any U.S. Subsidiary or for any substantial
part of its property, (ii) shall be generally not paying its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
(iii) shall make a general assignment for the benefit of creditors, or (iv)
shall take any action to authorize or effect any of the actions set forth above
in this subsection (m); or
-84-
<PAGE>
(n) Any proceeding shall be instituted against any
Borrower or any U.S. Subsidiary (other than Inactive Guarantors) seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any Borrower or any
U.S. Subsidiary or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of forty-five (45)
days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against it or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur; or
(o) The Security Agreement or any other Security
Document, after delivery thereof pursuant hereto, shall for any reason fail or
cease to create a valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien on or security interest in any
Collateral purported to be covered thereby; or
(p) One or more judgments or orders (other than a
judgment described in subsections 10.01(f) or (g) hereof) for the payment of
money exceeding any applicable insurance or bond coverage by more than
$1,000,000 in the aggregate shall be rendered against any Borrower or any U.S.
Subsidiary (other than Inactive Guarantors, so long as no Borrower, Active
Guarantor or Foreign Entity is or may be liable thereon) and either (i)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment or order, or (ii) there shall be any period of twenty (20) consecutive
days during which a stay of enforcement of any such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect.
10.02. Consequences of an Event of Default. If an Event of
Default shall occur and be continuing or shall exist the Agent may, and upon the
direction of the Majority Lenders shall, by notice to Planet Hollywood:
(a) declare the Revolving Credit Commitment of each
Lender and the Current Commitment terminated, whereupon the Revolving Credit
Commitment of each Lender and the Current Commitment will terminate immediately,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived, and an action therefor shall immediately accrue;
and/or
(b) declare the unpaid principal amount of the Notes,
interest accrued thereon, the total amount of the Letter of Credit Exposure that
is not cash collateralized in accordance with this Agreement, any fees due
hereunder and all other amounts owing by the Borrowers hereunder or under the
Notes to be immediately due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived, and an
action therefor shall immediately accrue; and/or
(c) give notice to the Borrowers of the occurrence
and continuance of an Event of Default; and/or
-85-
<PAGE>
(d) at any time when there are no Loans outstanding,
maintain cash collateral (to the extent the Borrowers have or receive cash)
equal to one hundred and five percent (105%) of all outstanding Letters of
Credit; and/or
(e) apply all funds deposited in the Letter of Credit
Cash Collateral Account to the payment, in whole or in part, of the Obligations;
and/or
(f) set-off amounts in the Letter of Credit Cash
Collateral Account or any other accounts under the dominion and control of the
Agent and apply such amounts to the Obligations of the Borrowers hereunder and
under the Related Documents;
provided, however, that upon the occurrence of any Event of Default described in
subsections (n) or (o) of Section 10.01, the Loans and all Reimbursement
Obligations, all interest thereon, all fees hereunder and all other amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by the
Borrowers.
10.03. Deposit for Letters of Credit. Upon the occurrence of
an Event of Default, the Letter of Credit Issuer may make payment of all or any
part of the Stated Amount of any Letter of Credit to the beneficiary thereof, or
to the Letter of Credit Cash Collateral Account, in which event such payment
shall be treated in all respects as a drawing under the Letter of Credit in full
compliance therewith (notwithstanding that the beneficiary shall have failed to
present all or any of the documents or satisfied all or any of the requirements
for a drawing thereunder) and shall result in an Unreimbursed Draw. In addition,
upon demand by the Letter of Credit Issuer after the occurrence of any Event of
Default, the Borrowers shall deposit with the Agent for the benefit of the
Letter of Credit Issuer with respect to each Letter of Credit then outstanding
cash in an amount equal to the greatest amount for which such Letter of Credit
may be drawn. Such deposits shall be held by the Agent for the benefit of the
Letter of Credit Issuer in the Letter of Credit Cash Collateral Account as
security for, and to provide for the payment of, the Letter of Credit Exposure.
10.04. Certain Remedies. If an Event of Default occurs, each
of the Agent and the Lenders may exercise all rights and remedies which it may
have hereunder or under any other Related Document or at law or in equity or
otherwise. All such remedies shall be cumulative and not exclusive.
ARTICLE XI
MISCELLANEOUS
-------------
11.01. Holidays. Except as otherwise provided herein, whenever
any payment or action to be made or taken hereunder or under the Notes shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.
-86-
<PAGE>
11.02. Records. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount, the duration of such applicability, the Current
Commitment, the Stated Amount of each Letter of Credit, the principal amount of
all Reimbursement Obligations, the Letter of Credit Exposure, and the accrued
and unpaid Agent's fees, Unused Line Fee and Letter of Credit Fees shall at all
times be ascertained from the records of the Agent, which shall be conclusive
and binding absent manifest error.
11.03. Amendments and Waivers. No amendment or modification of
any provision of this Agreement or of any of the Notes or of any other Related
Document shall be effective without the written agreement of the Majority
Lenders and the Borrowers and no termination or waiver of any provision of this
Agreement or of any of the Notes, or consent to any departure by the Borrowers
therefrom, shall in any event be effective without the written concurrence of
the Majority Lenders, which Majority Lenders shall have the right to grant or
withhold at their sole discretion; except that any amendment, modification, or
waiver (i) of any provision of Article II or III which amendment, modification
or waiver increases the Revolving Credit Commitment of any Lender, reduces the
principal of, or interest on, the Loans or the Reimbursement Obligations payable
to any Lender, reduces the amount of any fee payable for the account of any
Lender, or postpones or extends any date fixed for any payment of principal of,
or interest or fees on, the Loans or Letter of Credit Exposure payable to any
Lender, (ii) that increases the aggregate amount of the Revolving Credit
Commitments of the Lenders, (iii) of the definitions of "Maturity Date",
"Termination Date", "Majority Lenders", "Eligible Memorabilia", or "Pro Rata
Shares", (iv) of the definitions of "Eligible Inventory" or "Borrowing Base" if
the effect of such amendment, modification or waiver is to increase the
Availability of the Borrowers, or (v) the provisions contained in this Section
11.03, shall be effective only if evidenced by a writing signed by or on behalf
of (A) any Lender affected thereby in the case of the amendments, modifications
or waivers described in clause (i) above, or (B) all Lenders in the case of the
amendments, modifications or waivers described in clauses (ii) through (vi)
above. No amendment, modification, termination, or waiver of any provision of
Article XII or any other provision referring to the Agent shall be effective
without the written concurrence of the Agent. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrowers in any case shall entitle
the Borrowers to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent effected in
accordance with this Section 11.03 shall be binding on each Lender, each future
Lender, and, if signed by the Borrowers, on the Borrowers.
11.04. No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of the Lenders or the Agent in exercising any
right, power or privilege under this Agreement, the Notes or any other Related
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the
Lenders or the Agent under this Agreement, the Notes and the other Related
Documents are cumulative and not exclusive of any rights or remedies which the
Lenders or the Agent have thereunder or at law or in equity or otherwise.
-87-
<PAGE>
The Lenders or the Agent may exercise their rights and remedies against the
Borrowers and the Collateral as the Lenders and the Agent may elect, and
regardless of the existence or adequacy of any other right or remedy.
11.05. Notices.
(a) All notices, requests, demands, directions and
other communications (collectively, the "Notices") under the provisions of this
Agreement or the Notes shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied, or delivered by
hand or overnight courier (Federal Express, United Parcel Service, Airborne
Express, etc.) and shall be effective (i) if mailed, three (3) days after being
deposited in the mails, (ii) if telecopied, when sent, confirmation received,
and (iii) if delivered by hand or overnight courier, upon delivery. All notices
shall be sent to the applicable party at the address stated on the signature
page hereof together with, in the case of a letter of credit request and Letter
of Credit Application sent pursuant to subsection 3.01(a), a copy to the Agent
at the address for the Agent provided on the signature page hereof, or in
accordance with the last unrevoked written direction from such party to the
other parties hereto.
(b) The Lenders and the Agent may rely, and shall be
fully protected in relying, on any notice purportedly made by or on behalf of
the Borrowers and the Lenders and the Agent shall have no duty to verify the
identity or authority of any Person giving such notice. The preceding sentence
shall apply to all notices whether or not made in a manner authorized or
required by this Agreement or any other Related Document.
11.06. Expenses; Taxes; Attorneys' Fees; Indemnification. The
Borrowers jointly and severally agree to pay or cause to be paid, on demand, and
to save the Agent and the Lenders harmless against liability for the payment of,
all reasonable out-of-pocket expenses, regardless of whether the transactions
contemplated hereby are consummated, including but not limited to reasonable
fees and expenses of counsel for the Agent and the Lenders, accounting, due
diligence, periodic field audits, appraisals, investigations, monitoring of
assets, syndication, miscellaneous disbursements, examination, travel, lodging
and meals, incurred by the Agent (and, in the case of clauses (c) through (m)
below, the Lenders) from time to time arising from or relating to: (a) the
negotiation, preparation, execution, delivery, performance and administration of
this Agreement, the Intercreditor Agreement, the Inter-Lender Agreement and the
Related Documents, (b) any requested amendments, waivers or consents to this
Agreement, the Intercreditor Agreement, the Inter-Lender Agreement or the
Related Documents whether or not such documents become effective or are given,
(c) the preservation and protection of any of the Agent's and the Lenders'
rights under this Agreement, the Intercreditor Agreement, the Inter-Lender
Agreement or the Related Documents, (d) the defense of any claim or action
asserted or brought against the Agent or the Lenders by any Person that arises
from or relates to this Agreement, the Intercreditor Agreement, the Inter-Lender
Agreement, any Related Document, the Agent's or the Lenders' claims against any
Borrower, or any and all matters in connection therewith, (e) the commencement
or defense of, or intervention in, any court proceeding arising from or related
to this Agreement, the Intercreditor Agreement, the Inter-Lender Agreement or
any Related Document, (f) the filing of any petition, complaint, answer, motion
or other pleading by the Agent or the Lenders, or the taking of any action in
respect of the Collateral or other
-88-
<PAGE>
security, in connection with this Agreement, the Intercreditor Agreement, the
Inter-Lender Agreement or any Related Document, (g) the protection, collection,
lease, sale, taking possession of or liquidation of, any Collateral or other
security in connection with this Agreement, the Intercreditor Agreement, the
Inter-Lender Agreement or any Related Document, (h) any attempt to enforce any
Lien in any Collateral or other security in connection with this Agreement, the
Intercreditor Agreement, the Inter-Lender Agreement or any Related Document, (i)
any attempt to collect from any Borrower, (j) the receipt of any advice with
respect to any of the foregoing; provided, however, that this clause (j) shall
apply to all Lenders only with respect to the matters described in clauses (c)
through (i) and clauses (k) through (m) of this Section 11.06, (k) all
Environmental Liabilities and Costs arising from or in connection with the past,
present or future operations of any Borrower or any of its Subsidiaries
involving any damage to real or personal property or natural resources or harm
or injury alleged to have resulted from any Release of Hazardous Materials on,
upon or into such property, (l) any costs or liabilities incurred in connection
with the investigation, removal, cleanup and/or remediation of any Hazardous
Materials present or arising out of the operations of any facility of any
Borrower or any Subsidiary, or (m) any costs or liabilities incurred in
connection with any Environmental Lien. Notwithstanding the foregoing, the
Borrowers jointly and severally agree to cause to be paid the legal fees and
expenses of WLR in connection with the negotiation, preparation, execution,
delivery and enforcement of the Inter-Lender Agreement (which has included a
review of the Loan Documents and comments thereon as well as other work related
to the court order specified in subsection 6.01(p) hereof) promptly following
the receipt of a reasonably detailed invoice. Without limitation of the
foregoing or any other provision of any Related Document: (x) the Borrowers
agree to pay jointly and severally all stamp, document, transfer, recording or
filing taxes or fees (including, without limitation, mortgage recording taxes)
and similar impositions now or hereafter determined by the Agent or any of the
Lenders to be payable in connection with this Agreement or any other Related
Document, and the Borrowers agree to save the Agent and the Lenders harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions, and (y) if the Borrowers fail to perform any
covenant or agreement contained herein or in any other Related Document, upon an
Event of Default, the Agent may itself perform or cause performance of such
covenant or agreement, and the expenses of the Agent incurred in connection
therewith shall be reimbursed on demand by the Borrowers; provided, however, if
the Agent has notice of a failure to pay insurance premiums Agent may make such
payment and be reimbursed hereunder whether or not an Event of Default has
occurred. The Borrowers jointly and severally agree to indemnify and defend the
Agent and the Lenders and their directors, officers, agents, employees and
affiliates (collectively, the "Indemnified Parties") from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages, costs or
expenses of any nature whatsoever (including reasonable attorneys' fees and
amounts paid in settlement) incurred by, imposed upon, or asserted against any
of them arising out of or by reason of any investigation, litigation or other
proceeding or claim brought or threatened relating to, or otherwise arising out
of or relating to, the execution of this Agreement or any other Related
Document, the transactions contemplated hereby or thereby or any Loan or
proposed Loan or Letter of Credit or proposed Letter of Credit hereunder
(including, but without limitation, any use made or proposed to be made by the
Borrowers of the proceeds of any thereof, or the delivery or use or transfer of
or the payment or failure to pay under any Loan or Letter of Credit) but
-89-
<PAGE>
excluding any such losses, liabilities, claims, damages, costs or expenses to
the extent finally judicially determined to have resulted from the gross
negligence or willful misconduct of the Indemnified Party. So long as no Event
of Default shall be in existence, the Agent agrees to advise the Borrowers of
its intention to retain third parties (other than legal counsel) at any time
after the Closing Date of the Facility and to consult with the Borrowers
regarding same.
11.07. Application. Except to the extent, if any, expressly
set forth in this Agreement, the Intercreditor Agreement, the Inter-Lender
Agreement, or in the Related Documents, the Agent and the Lenders shall have the
right to apply any payment received or applied by it in connection with the
Obligations to such of the Obligations then due and payable as it may elect.
11.08. Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
11.09. Governing Law. This Agreement and the Notes shall be
deemed to be contracts under the laws of the State of New York, without regard
to choice of law principles, and for all purposes shall be governed by and
construed and enforced in accordance with the laws of said State.
11.10. Prior Understandings. This Agreement supersedes all
prior understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein.
11.11. Duration; Survival. All representations and warranties
of the Borrowers contained herein or made in connection herewith shall survive
the making of the Loans and the issuance of any Letter of Credit and shall not
be waived by the execution and delivery of this Agreement, the Notes or any
other Related Document, any investigation by or knowledge of the Agent or the
Lenders, the making of any Loan or the issuance of any Letter of Credit
hereunder, or any other event whatsoever. All covenants and agreements of the
Borrowers contained herein shall continue in full force and effect from and
after the date hereof so long as the Borrowers may borrow hereunder and until
the Obligations have been paid in full and no Letters of Credit remain
outstanding. Without limitation, it is understood that all obligations of the
Borrowers to make payments to or indemnify the Agent and the Lenders (including,
without limitation, obligations arising under Section 11.06 hereof) shall
survive the payment in full of the Notes and all Reimbursement Obligations and
of all other obligations of the Borrowers thereunder and hereunder, termination
of this Agreement and all other events whatsoever and whether or not any Loans
are made or Letters of Credit issued hereunder.
11.12. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so
-90-
<PAGE>
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
11.13. Assignments; Participations.
(a) Each Lender may with the written consent of the
Agent and Planet Hollywood, which such consents shall not be unreasonably
delayed or withheld, assign to one or more commercial banks or other financial
institutions a portion of its rights and obligations under this agreement
(including, without limitation, a portion of its Revolving Credit Commitment,
the Loans owing to it and its rights and obligations as a Lender with respect to
Letters of Credit) and the other Related Documents; provided, however, that no
consent of the Agent or Planet Hollywood is required for a transfer by a Lender
to another Lender (including a transfer by CIT to WLR pursuant to the
Inter-Lender Agreement) or a transfer by a Lender to an Affiliate of a Lender;
and provided, further, that (i) each such assignment shall be in a principal
amount of not less than $2,500,000 and in multiples of $1,000,000 in excess
thereof (or the remainder of such Lender's Revolving Credit Commitment), (ii)
the parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register (as hereinafter defined), an
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder, shall be a party hereto and to the
other Related Documents and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations (including, without limitation, the obligation to
participate in Letters of Credit) of a Lender hereunder and thereunder and (B)
the assigning Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement. In the
event that WLR at any time purchases CIT's interest in the Obligations, all
indemnity obligations of the Borrowers and Guarantors contained in any Loan
Document shall survive such purchase by WLR and continue to run in favor of CIT
as if it were a Lender hereunder.
(b) By executing and delivering an Assignment and
Acceptance, the assignor and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, the assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Related Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Related
Document furnished pursuant hereto; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any of the Borrowers or any of their respective
Subsidiaries or the performance or observance by the Borrowers of any of their
respective obligations under this Agreement, the Intercreditor Agreement, the
Inter-Lender Agreement, or any other Related Document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement, the
Intercreditor Agreement, the Inter-Lender Agreement, and the other Related
Documents, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the assigning Lender, the Agent or
-91-
<PAGE>
any Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, the Intercreditor Agreement, the
Inter-Lender Agreement, and the other Related Documents; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement, the Intercreditor Agreement, the
Inter-Lender Agreement, and the other Related Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement and the other Related Documents are required to be performed by it as
a Lender.
(c) The Agent shall maintain at its address referred
to on the signature page hereto, a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Revolving Credit Commitment of, and
principal amount of the Loans owing to and the participation interest in the
Letters of Credit of, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
any Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender, an assignee Lender, together with the Note
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit I hereto, (i)
accept such Assignment and Acceptance, (ii) give prompt notice thereof to Planet
Hollywood and (iii) record the information contained therein in the Register.
Within five (5) Business Days after its receipt of such notice, the Borrowers,
at their own expense, shall execute and deliver to the Agent in exchange for the
surrendered Note a new Note to the order of such assignee Lender in an aggregate
principal amount equal to the Revolving Credit Commitment assumed by it pursuant
to such Assignment and Acceptance, and a new Note to the order of the assigning
Lender in an aggregate principal amount equal to the Revolving Credit Commitment
retained by it hereunder, in each case prepared by the Agent. Such new Note
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note, shall be dated the date of the Agent's
acceptance of such assignment and acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement and the other Related Documents (including,
without limitation, all or a portion of its Revolving Credit Commitment and the
Loans owing to it and its participation in Letters of Credit); provided,
however, that (i) such Lender's obligations under this Agreement (including,
without limitation, its Revolving Credit Commitment hereunder) and the other
Related Documents shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and the Borrowers, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
-92-
<PAGE>
obligations under this Agreement and the other Related Documents; and (iii) a
participant shall not be entitled to require such Lender to take or omit to take
any action hereunder except (A) action directly effecting an extension of the
maturity dates or decrease in the principal amount of the Loans or Reimbursement
Obligations, or (B) action directly effecting an extension of the due dates of
or a decrease in the rate of interest payable on the Loans or the fees payable
under this Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral (except as set forth in Section 12.08 of
this Agreement or any Related Document).
11.14. Successors and Assigns. This Agreement and the other
Related Documents shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns except that any of the
Borrowers may individually or jointly assign or transfer any of their rights
hereunder or thereunder without the prior written consent of all of the Lenders.
11.15. Confidentiality. Upon delivering to any Lender or the
Agent, or permitting any Lender or the Agent to inspect, any written information
pursuant to this Agreement or the other Related Documents, each Lender and the
Agent shall treat such information as confidential. Each Lender and the Agent
agrees to hold such information in confidence from the date of disclosure
thereof. Subject to the other provisions of this Section 11.15, each Lender and
the Agent may disclose confidential information to its officers, directors,
employees, attorneys, accountants or other professionals engaged by any Lender
or the Agent only after determining that such third party has been instructed to
hold such information in confidence to the same extent as if it were a Lender.
Notwithstanding the foregoing, the provisions of this Section 11.15 shall not
apply to information within any one of the following categories or any
combination thereof: (i) information the substance of which, at the time of
disclosure by any Lender or the Agent, has become publicly available or has been
disclosed to or is known to any creditor (other than information as to which
such creditor is then under an obligation of nondisclosure), or any Person other
than (A) a director, officer, employee or agent of any Borrower or a
professional engaged by any Borrower, or (B) a Person who is then under an
obligation of nondisclosure (otherwise than as a consequence of a wrongful act
of any Lender or the Agent), (ii) non-confidential information which any Lender
or the Agent had in its possession prior to receipt thereof from the disclosing
party other than the Borrowers, or (iii) information received by any Lender or
the Agent from a third party having no obligations of nondisclosure with respect
thereto. Nothing contained in this Section 11.15 shall prevent any disclosure:
(x) believed in good faith by any Lender or the Agent to be required by any law
or guideline or interpretation or application thereof by any Governmental
Authority, arbitrator or grand jury charged with the interpretation or
administration thereof or compliance with any request or directive of any
Governmental Authority, arbitrator or grand jury (whether or not having the
force of law), (y) determined by counsel for any Lender or the Agent to be
necessary or advisable in connection with enforcement or preservation of rights
under or in connection with this Agreement or any other Related Document, or (z)
of any information which has been made public by a Person other than any Lender
or the Agent who, to the Agent's or such Lender's actual knowledge, was then
under an obligation of nondisclosure. The Lenders and the Agent shall have the
right to disclose any confidential information described in this Section 11.15
to the Letter of Credit Issuer and to an assignee or prospective assignee or to
a participant or prospective participant in Loans and Letter of Credit Exposure
hereunder; provided, however, that the assigning or selling Lender
-93-
<PAGE>
shall have obtained from such assignee or prospective assignee or participant or
prospective participant an agreement to hold such information in confidence to
the same extent as if it were a Lender.
11.16. Waiver of Jury Trial. BY ITS EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE AGENT, EACH LENDER AND EACH BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY OTHER RELATED DOCUMENT, ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS, OR ANY BORROWER IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO THIS
AGREEMENT.
11.17. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized to, at any
time from time to time, without notice to any Borrower or Guarantor (any such
notice being expressly waived by such Borrower and Guarantor) and to the fullest
extent permitted by law, set off and apply any and all deposits (general or
special, time or demand, provision or final) at any time held and other
indebtedness at any time owing by such Lender, the Agent or the Letter of Credit
Issuer to or for the credit or the account of the Borrowers or Guarantor against
any and all Obligations of the Borrowers now or hereafter existing under the
Loan Documents, irrespective of whether or not any Lender, the Agent and the
Letter of Credit Issuer shall have made any demand hereunder or thereunder and
although such Obligations may be contingent or unmatured. Each Lender, the Agent
and the Letter of Credit Issuer agrees promptly to notify Planet Hollywood after
any such setoff and application made by such Lender, the Agent or the Letter of
Credit Issuer; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender,
the Agent and the Letter of Credit Issuer under this Section 11.16 are in
addition to the other rights and remedies (including, without limitation, other
rights of setoff under applicable law or otherwise) which such Lender, the Agent
or the Letter of Credit Issuer may have.
11.18. Headings. Section headings herein are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
11.19. Forum Selection and Consent to Jurisdiction. Any
litigation based hereon, or arising out of, under or in connection with, this
Agreement or any other Loan Document, or any course of conduct, course of
dealing, statement (whether verbal or written) or action of the Agent, any
Lender, the Letter of Credit Issuer, or the Borrowers may be brought and
maintained exclusively in the courts of the State of New York located in the
borough of Manhattan or the United States District Court for the Southern
District of New York; provided, however, that any suit seeking enforcement
against any Collateral or other property may be brought, at the Agent's option,
in the courts of any jurisdiction where such Collateral or other property may be
found. Each of the Borrowers hereby expressly and irrevocably submits to the
jurisdiction of the courts
-94-
<PAGE>
of the State of New York located in the borough of Manhattan and of the United
States District Court for the Southern District of New York for the purpose of
any such litigation and irrevocably agrees to be bound by any judgment rendered
thereby in connection with such litigation. Each of the Borrowers further
irrevocably consents to the service of process (i) by registered or certified
mail, postage prepaid, to the Borrowers at its address for notices contained in
Section 10.05 hereof, such service to become effective five (5) days after such
mailing, or (ii) by personal service within or without the State of New York.
Nothing herein shall affect the right of the Agent, any Lender or the Letter of
Credit Issuer to service of process in any other manner permitted by law. Each
of the Borrowers hereby expressly and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such litigation brought in any such court referred to above and
any claim that any such litigation has been brought in an inconvenient forum. To
the extent that any Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, such Borrower hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and the other Loan Documents.
ARTICLE XII
THE AGENT
---------
12.01. Appointment. Each Lender (and each subsequent holder of
any Note by its acceptance thereof) hereby irrevocably appoints and authorizes
CIT, in its capacity as Agent (i) to receive on behalf of each Lender any
payment of principal of or interest on the Notes outstanding hereunder and all
other amounts accrued hereunder for the account of the Lenders and paid to the
Agent, and, subject to Section 2.03 of this Agreement, to distribute promptly to
each Lender its Pro Rata Share of all payments so received (as between CIT and
WLR, at the time and in the manner specified in the Inter-Lender Agreement),
(ii) to distribute to each Lender copies of all material notices and agreements
received by the Agent and not required to be delivered to each Lender pursuant
to the terms of this Agreement; provided, however, that the Agent shall not have
any liability to the Lenders for the Agent's inadvertent failure to distribute
any such notice or agreements to the Lenders, and (iii) subject to Section 11.03
of this Agreement, to take such action as Agent deems appropriate on its behalf
to administer the Loans, Letters of Credit and the Loan Documents and to
exercise such other powers delegated to the Agent by the terms hereof or the
Loan Documents (including, without limitation, the power to give or to refuse to
give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations) together with such
powers as are reasonably incidental thereto to carry out the purposes hereof and
thereof. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including, without limitation, enforcement or collection
of the Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders, and such instructions of the Majority
Lenders shall be binding upon all Lenders and all holders of Notes; provided,
however, that the Letter of Credit Issuer shall not be required to refuse to
honor a drawing under any Letter of Credit and the Agent shall not be required
to take any action which,
-95-
<PAGE>
in the reasonable opinion of the Agent, exposes the Agent to liability or which
is contrary to this Agreement or any Loan Document or applicable law.
12.02. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Related Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any Related Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Related Documents, express or implied,
is intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any of the Related Documents except as expressly
set forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrowers in
connection with the making and the continuance of the Loans hereunder and with
the issuance of the Letters of Credit and shall make its own appraisal of the
creditworthiness of each of the Borrowers and the value of the Collateral, and
the Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the initial
Credit Extension hereunder or at any time or times thereafter; provided,
however, that, upon the reasonable request of a Lender, the Agent shall provide
to such Lender any documents or reports delivered to the Agent by the Borrowers
pursuant to the terms of this Agreement or any Related Document. If the Agent
seeks the consent or approval of the Majority Lenders to the taking or
refraining from taking any action hereunder, the Agent shall send notice thereof
to each Lender. The Agent shall promptly notify each Lender any time that the
Majority Lenders have instructed the Agent to act or refrain from acting
pursuant hereto.
12.03. Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of any Note as the holder thereof until the Agent receives
written notice of the assignment or transfer thereof, pursuant to Section 11.13
hereof, signed by such payee and in form satisfactory to the Agent; (ii) may
consult with legal counsel (including, without limitation, counsel to the Agent
or counsel to the Borrowers), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Potential Default or Event of
Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectibility of the Collateral, the existence,
priority or
-96-
<PAGE>
perfection of the Agent's Lien thereon, or the Borrowing Base or any certificate
prepared by the Borrowers in connection therewith, nor shall the Agent be
responsible or liable to the Lenders for any failure to monitor or maintain the
Borrowing Base or any portion of the Collateral. The Agent shall not be liable
for any apportionment or distribution of payments made by it in good faith
pursuant to Section 2.08(c), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount which they are determined to be
entitled. The Agent may at any time request instructions from the Lenders with
respect to any actions or approvals which by the terms of this Agreement or of
any of the Related Documents the Agent is permitted or required to take or to
grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Related Documents until it shall have received such
instructions from the Majority Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement, the Notes,
or any of the other Related Documents in accordance with the instructions of the
Majority Lenders.
12.04. Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Related Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
12.05. Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the Related Documents or any action taken or omitted
by the Agent under this Agreement or any of the Related Documents, in proportion
to each Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 12.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from the Agent's gross negligence or willful misconduct. The
obligations of the Lenders under this Section 12.05 shall survive the payment in
full of the Loans and Reimbursement Obligations and the termination of this
Agreement.
12.06. Lenders Individually. With respect to its Pro Rata
Share of the Revolving Credit Commitments hereunder, the Loans made by it and
the Note issued to or held by it, CIT shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or holder
of a Note. The terms "Lenders" or "Majority Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include CIT in its individual
capacity as a Lender or one of the Majority Lenders. CIT, WLR and their
respective Affiliates may lend money to, and generally engage in any kind of
banking, trust or other business with the Borrowers or any of their
-97-
<PAGE>
respective Subsidiaries without any duty to account to the Lenders, and CIT may
do so as if it were not acting as Agent pursuant hereto.
12.07. Successor Agent.
(a) The Agent may resign from the performance of all
its functions and duties hereunder and under the other Related Documents at any
time by giving at least thirty (30) Business Days' prior written notice to
Planet Hollywood and each Lender. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Majority
Lenders shall appoint a successor Agent who shall be reasonably satisfactory to
Planet Hollywood. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Related Documents. After any Agent's resignation
hereunder as the Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Related Documents.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent, with
the consent of Planet Hollywood, shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as the Majority Lenders, with the
consent of Planet Hollywood, appoint a successor Agent as provided above.
12.08. Collateral Matters.
(a) The Agent may from time to time, during the
occurrence and continuance of an Event of Default, make such disbursements and
advances ("Agent Advances") which the Agent, in its sole discretion, deems
necessary or desirable to preserve or protect the Collateral or any portion
thereof, to enhance the likelihood or maximize the amount of repayment by the
Borrowers of the Loans and other Obligations or to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 11.06. The
Agent Advances shall be repayable on demand and be secured by the Collateral.
The Agent Advances shall not constitute Loans but shall otherwise constitute
Obligations hereunder. The Agent shall notify each Lender and Planet Hollywood
in writing of each such Agent Advance, which notice shall include a description
of the purpose of such Agent Advance. Without limitation to its obligations
pursuant to Section 12.05, each Lender agrees that it shall make available to
the Agent, upon the Agent's demand, in Dollars in immediately available funds,
the amount equal to such Lender's Pro Rata Share of each such Agent Advance. If
such funds are not made available to the Agent by such Lender the Agent shall be
entitled to recover such funds, on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Agent, at the customary rate set by the Agent for the
correction of errors among banks for three (3) Business Days and thereafter at
the Regular Rate.
-98-
<PAGE>
(b) The Lenders hereby irrevocably authorize the
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Agent upon any Collateral upon termination of the Revolving Credit
Commitments and payment and satisfaction of all Loans, Reimbursement
Obligations, other Letter of Credit Exposure (whether or not due) and all other
Obligations which have matured and which the Agent has been notified in writing
are then due and payable; or constituting property being sold or disposed of if
Planet Hollywood certifies to the Agent that the sale or disposition is made in
compliance with Section 9.04 (b) hereof (and the Agent may rely conclusively on
any such certificate, without further inquiry); or constituting property in
which no Borrower owned any interest at the time the Lien was granted or at any
time thereafter; or if approved, authorized or ratified in writing by the
Majority Lenders. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 12.08(b).
(c) Without in any manner limiting the Agent's
authority to act without any specific or further authorization or consent by the
Majority Lenders (as set forth in Section 12.08(b)), each Lender agrees to
confirm in writing, upon request by the Agent, the authority to release
Collateral conferred upon the Agent under Section 12.08(b). So long as no Event
of Default is then continuing, upon receipt by the Agent of confirmation from
the Majority Lenders of its authority to release any particular item or types of
Collateral, and upon prior written request by Planet Hollywood, the Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Liens granted to the Agent
for the benefit of the Lenders upon such Collateral; provided, however, that (i)
the Agent shall not be required to execute any such document on terms which, in
the Agent's opinion, would expose the Agent to liability or create any
obligations or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Lien upon (or obligations of
the Borrowers in respect of) all interests in the Collateral retained by the
Borrowers.
(d) The Agent shall have no obligation whatsoever to
any Lenders to assure that the Collateral exists or is owned by any Borrower or
is cared for, protected or insured or has been encumbered or that the Lien
granted to the Agent pursuant to the Security Documents has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent in this Section 12.08 or in any of the Related Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's own interest in the Collateral as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender.
-99-
<PAGE>
ARTICLE XIII
OTHER MATTERS
-------------
13.01. Members and TSP Membership Interest. Schedule 13.01
hereto sets forth or attaches a true and complete list setting forth (i) each
member of TSP, (ii) the percentage membership interest in TSP currently owned by
each such Person, (iii) the current balance of such Person's capital account in
TSP, (iv) a copy of each Schedule K-1 received by a Borrower or a Guarantor with
respect to the TSP Membership Interest and each tax return filed by TSP, and (v)
a description, including the principal amount, interest, term and lender, of all
debt of TSP.
13.02. Affirmative Covenant. So long as any principal of or
interest on the Loans or the Reimbursement Obligations or any other Obligations
(whether or not due) shall remain unpaid or the Lenders shall have any Revolving
Credit Commitment hereunder, Hospitality will, unless the Majority Lenders shall
otherwise consent in writing, perform, observe and comply in all material
respects with all of its obligations under each pledge, assignment and each
other agreement with respect to the TSP Membership Interest, and will use its
best efforts to cause each other party to each such pledge, assignment or other
agreement to perform, observe and comply in all material respects with all of
such other party's obligations under each such pledge, assignment or other
agreement.
13.03. Negative Covenant. So long as any principal of or
interest on the Loans or the Reimbursement Obligations or any other Obligations
(whether or not due) shall remain unpaid or the Lenders shall have any Revolving
Credit Commitment hereunder, neither the Borrowers nor the Guarantors will,
without the prior written consent of the Majority Lenders (which consent shall
not be unreasonably withheld), (i) amend, modify, terminate or waive any
provision of the TSP Agreement, (ii) fail to exercise promptly and diligently
each and every right which it may have under the TSP Agreement, or (iii) fail to
deliver to the Agent a copy of each demand, notice or other document received or
given by it relating in any way to the TSP Membership Interest. In no event
shall any Borrower or Guarantor withdraw from or cause or consent to the
dissolution of TSP without the prior written consent of the Majority Lenders
(which consent shall not be unreasonably withheld).
-100-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
BORROWERS:
PLANET HOLLYWOOD
INTERNATIONAL, INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD MEMORABILIA, INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
ALL STAR CAFE INTERNATIONAL, INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
ALL STAR CAFE (NEW YORK), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
COOL PLANET, INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-101-
<PAGE>
COOL PLANET II, INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD
(ATLANTIC CITY), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (HONOLULU), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (LP), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD
(NEW YORK CITY), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-102-
<PAGE>
PLANET HOLLYWOOD NEW YORK, LTD.
By: PLANET HOLLYWOOD
INTERNATIONAL, INC., its
General Partner
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (ORLANDO), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (REGION II), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (REGION III), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-103-
<PAGE>
PLANET HOLLYWOOD (REGION IV), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (REGION V), INC.
By: ______________________________________
Name: Thomas Avallone
Title:
PLANET HOLLYWOOD (REGION VI), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (REGION VII), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOLLYWOOD (TEXAS), LTD.
By: PLANET HOLLYWOOD
(REGION V), INC., its General
Partner
By: ______________________________________
Name: Thomas Avallone
Title:
PLANET HOLLYWOOD (WAREHOUSE), INC.
By: ______________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-104-
<PAGE>
Address for Notices:
-------------------
Planet Hollywood International, Inc. Corporate
Office
8669 Commodity Circle
Orlando, Florida 32819
Attention: Chief Financial Officer
Telephone: (407) 352-6886
Telecopier: (407) 352-7310
AGENT AND LENDER:
CIT GROUP/BUSINESS CREDIT, INC.
By: ______________________________________
Name: Mitchell Drucker
Title: Senior Vice President
Address for Notices:
-------------------
The CIT Group/Business
Credit, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attention: Robert Smith
Telephone: (212) 536-1269
Telecopier: (212) 536-1295
with a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Frederic L. Ragucci, Esq.
Telephone: (212) 756-2000
Telecopier: (212) 593-5955
-105-
<PAGE>
LENDER:
WLR RECOVERY FUND L.P.
By: WLR RECOVERY ASSOCIATES LLC,
as its General Partner
By: ____________________________________
Name: Wilbur Ross
Title: Managing Member
Address for Notices:
-------------------
WLR Recovery Fund L.P.
1251 Avenue of the Americas, 51st Floor
New York, New York 10020
Attention: Wilbur Ross
Telephone: (212) 403-3581
Telecopier: (212) 403-3578
with a copy to:
Weil Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Corinne Ball, Esq.
Telephone: (212) 310-8000
Telecopier: (212) 310-8007
-106-
<PAGE>
ACKNOWLEDGED AND AGREED:
- -----------------------
PLANET HOLLYWOOD (REGION III), INC.
By: __________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
PLANET HOSPITALITY HOLDINGS, INC.
By: __________________________________
Name: Thomas Avallone
Title: Chief Financial Officer
-107-
<PAGE>
ANNEX I
-------
PLANET HOLLYWOOD MEMORABILIA, INC.
ALL STAR CAFE INTERNATIONAL, INC.
ALL STAR CAFE (NEW YORK), INC.
COOL PLANET, INC.
COOL PLANET II, INC.
PLANET HOLLYWOOD (ATLANTIC CITY), INC.
PLANET HOLLYWOOD (HONOLULU), INC.
PLANET HOLLYWOOD (LP), INC.
PLANET HOLLYWOOD (NEW YORK CITY), INC.
PLANET HOLLYWOOD NEW YORK, LTD.
PLANET HOLLYWOOD (ORLANDO), INC.
PLANET HOLLYWOOD (REGION II), INC.
PLANET HOLLYWOOD (REGION III), INC.
PLANET HOLLYWOOD (REGION IV), INC.
PLANET HOLLYWOOD (REGION V), INC.
PLANET HOLLYWOOD (REGION VI), INC.
PLANET HOLLYWOOD (REGION VII), INC.
PLANET HOLLYWOOD (TEXAS), LTD.
PLANET HOLLYWOOD (WAREHOUSE), INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 1st day of January, 2000,
by and between PLANET HOLLYWOOD INTERNATIONAL, INC., a Delaware corporation,
hereinafter referred to as the "Company," and ROBERT I. EARL, hereinafter
referred to as the "Executive."
WHEREAS, Employee and the Company previously entered into an Employment
Agreement dated August 8, 1995 (the "Old Agreement"), which unless sooner
terminated as provided therein, terminates on December 31, 2001; and
WHEREAS, Employee and the Company desire to terminate the Old Agreement
and enter into this Agreement, with this Agreement governing the employment
relationship between Employee and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the monies to be paid hereunder, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Termination of Old Agreement. Upon valid execution of this
Agreement, the Old Agreement shall be mutually terminated by the parties and
shall be of no further force and effect. This Agreement shall supersede the Old
Agreement and shall control the employment relationship between Employee and the
Company.
2. Term of Employment. The Company hereby employs Executive and
Executive hereby accepts employment with the Company for a period of five (5)
years commencing on the date hereof; provided, however, that this Agreement may
be terminated earlier as hereinafter set forth.
3. Duties of Executive.
-------------------
(a) Executive is hereby hired and employed by the Company to
perform the duties and accept the responsibilities as herein set forth. During
the term hereof, Executive (i) shall be Chief Executive Officer of the Company
and each of its significant subsidiaries and (ii) shall serve as President and
such other executive officer positions of the Company and each of its
significant subsidiaries as requested by the Company's Board of Directors (the
"Board") in the event such offices are not otherwise filled by Executive or the
Board. In such capacities, Executive shall be the principal officer of the
Company and each of its significant subsidiaries, and shall have full power to
conduct the business of the Company and its subsidiaries and affiliates, and
have responsibility for the active management, control and supervision of the
business and affairs of such entities, subject only to the supervision and
control of the Board. Executive shall report only to the Board and Executive's
powers and authority shall be superior to those of any officer or employee of
the Company or of any subsidiary thereof. Executive shall not be required
without his consent to
Page 1 of 11
<PAGE>
undertake responsibilities not commensurate with his position. The Company
agrees to nominate Executive for election to the Board at each annual meeting of
stockholders during his employment hereunder. Executive agrees to serve on the
Board if elected.
(b) Executive agrees to devote as much time as may be required
to fulfill Executive's duties and obligations to the Company and its affiliates
under the terms of this Agreement. Executive shall be permitted to undertake or
continue to conduct other business, civic, or charitable activities during the
term hereof if such activities do not in the aggregate materially interfere with
the duties of Executive hereunder. The Company agrees that Executive may, at
Executive's option (i) hold outside directorships during the term of this
Agreement, and Executive may retain all compensation from such board service,
and (ii) invest or otherwise participate in other ventures, including restaurant
ventures other than Hollywood themed restaurant ventures.
(c) Executive shall be not be deemed to be engaged in or
concerned with a duty or pursuit which is contrary to the best interests of the
Company unless he has received written notice to such effect, setting forth with
reasonable specificity the basis of such claim, from the Company and has not,
within sixty (60) days from the date of his receipt of any such written notice,
initiated steps to eliminate his engagement in or concern with such duties or
pursuits as are specified in such notice as being contrary to the provisions of
this Section 3.
4. Compensation.
------------
(a) Base Salary. As compensation for services rendered under
this Agreement, Executive shall be entitled to receive from the Company a base
salary ("Base Salary") of Two Hundred Thousand Dollars ($200,000.00) per year,
payable in accordance with the normal payroll practices of the Company or in
such other installments as are agreed upon between the Executive and the
Company. Executive's compensation shall be reviewed not less than annually by
the Board.
(b) Incentive Bonuses. In addition to his Base Salary, the
Company shall pay Executive an annual incentive cash bonus ("Cash Bonus") based
upon the Company's performance, in such amount as may be deemed appropriate by
the Board. In addition to his Base Salary and any Cash Bonus and in accordance
with a separate stock option agreement, the Company hereby grants to Executive
options to purchase two million (2,000,000) shares of the Company's Class A
common stock (the "Bonus Options") at an exercise price equal to $4.2857 per
share. Except as otherwise expressly described herein, the Bonus Options shall
"vest" to Employee, and therefore become non-forfeitable, in accordance with the
terms and provisions of the separate stock option agreement; provided that the
Company's standard vesting schedule (and other terms) shall be modified as
follows:
(i) On the date which immediately follows the third
consecutive business day for which the average "Fair Market Value" (as defined
herein) per share of the Company's Class A common stock equals or exceeds Forty
Dollars ($40.00) per share, Executive shall vest in all of the Bonus Options;
Page 2 of 11
<PAGE>
(ii) Such Bonus Options shall be exercisable for a
period of five (5) years;
(iii) Upon Executive's exercise of all, but not less
than all, of the Bonus Options, and upon Executive's written request, the
Company shall use its best efforts to file with the Securities and Exchange
Commission, at the Company's expense, a registration statement on an appropriate
form (the "Registration Statement"), covering the resale of Executive's shares
of Class A common stock received upon exercise of the Bonus Options. The Company
shall use its best efforts to have the Registration Statement declared effective
as promptly as practicable after such filing and to keep the Registration
Statement continuously effective for a period of two (2) years; and
(iv) For the purposes of this Section 4(b), "Fair
Market Value" of a share of the Company's Class A common stock on any date shall
mean (A) the closing price of such stock on such date as officially reported on
the principal national securities exchange on which such Stock is then listed or
admitted to trading, or (B) if such stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the National Association of Securities Dealers, Inc.,
the closing price of the stock on such date, or (C) if there shall have been no
trading on the previous business day or if the stock is not so designated, the
average of the closing bid and asked prices of the stock on such previous
business day as shown by the NASD automated quotation system, or (D) if such
stock is not then listed or admitted to trading on any national exchange or
quoted in the over-the-counter market, the value determined by the Board.
(c) Stock Option Plan. Executive shall be entitled to
participate in the Company's stock option plan for its employees and executive
officers, and, at the time this Agreement is executed, shall be granted certain
options pursuant to a separate stock option agreement. Such options shall be
exclusive of any Bonus Options and, except as otherwise expressly described
herein, shall "vest" to Executive, and therefore become non-forfeitable, in
accordance with the terms and provisions of the separate stock option agreement.
5. Executive Benefits. Executive shall be entitled to receive all
benefits generally made available to the senior executives of the Company. By
way of example, and not limitation, such benefits may include pension,
profit-sharing, other retirement plans or programs, medical, dental, life, and
disability insurance. In addition, Executive shall be entitled to participate in
all fringe benefits and perquisites available to senior executives of the
Company and shall receive such additional fringe benefits and perquisites as the
Company may, in its discretion, from time-to-time provide.
6. Vacation. Executive shall be entitled to annual vacation at full pay
in accordance with the Company's vacation and leave policies for its senior
executives in effect from time to time. Subject to such policies, the time and
duration for such vacation shall be selected by Executive at his discretion.
7. Reimbursement of Executive Expenses. Executive shall be expected to
incur various business expenses customarily incurred by persons holding like
positions, including, but
Page 3 of 11
<PAGE>
not limited to, traveling, entertainment and similar expenses, all of which are
to be incurred by Executive for the benefit of the Company. Subject to the
Company's policy regarding the reimbursement of such expenses, the Company shall
promptly reimburse Executive for such expenses at Executive's request, and
Executive shall account to Company for such expenses.
8. Restrictive Covenants.
---------------------
(a) Executive will not at any time, in any fashion, form or
manner, either directly or indirectly, divulge, disclose, or communicate to any
person, firm, or corporation, or other entity or utilize for his own benefit, in
any manner whatsoever, any trade secrets or any confidential information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company and its affiliates or their manner of operation, or
their confidential plans, processes or other data of any kind, nature or
description.
(b) All tangible confidential information and other
confidential documentation, either directly or indirectly coming into the
possession of Executive in the course of his employment, including all copies
thereof or reproductions or drawings made therefrom, shall remain the property
of the Company and shall be returned immediately upon the expiration or
termination of the term of Executive's employment. Thereafter, Executive shall
not reduce to writing or otherwise record any of the proprietary or confidential
information disclosed to him during his employment.
(c) Executive shall not purposefully interfere with the
Company's suppliers, customers or other business relations by using the
Company's internal data in a damaging or derogatory manner that would damage the
Company's relationships with such parties.
(d) The Company and Executive hereby stipulate that, as
between them, the foregoing matters are important, material, and confidential,
and gravely affect the effectiveness and successful conduct of the business of
the Company, and its goodwill, and that any breach of the terms of this Section
is a material breach of this Agreement.
(e) The obligations of Executive pursuant to this Section
shall survive any termination of Executive's employment with the Company and
shall remain in effect for one (1) year following the date of termination.
9. Injunctive Relief. It is acknowledged and agreed that, in the event
the provisions of Section 8 of this Agreement are breached by Executive, the
extent of actual damages sustained by the Company or its assignee will be
difficult of ascertainment, though great and irreparable, for which any remedy
at law would be inadequate. Therefore, the parties hereto expressly agree that
the Company shall have a right to seek injunctive relief for breach of any of
the terms of Section 8, plus damages for such breach to the maximum extent
permitted by law.
Page 4 of 11
<PAGE>
10. Death / Disability of Executive.
-------------------------------
(a) The Company shall have the right to terminate this
Agreement (i) upon the death of Executive or (ii) upon notice from the Company
to Executive in the event of an illness or other disability which has
incapacitated Executive and prevented him from performing his duties for six (6)
consecutive months as determined in good faith by the Board.
(b) If this Agreement is terminated pursuant to Section 10(a)
above, Executive's rights and the Company's obligations hereunder shall
forthwith terminate except that Executive or his estate shall: (i) be paid a
lump-sum cash payment equal to Executive's Base Salary hereunder for the
remainder of the term hereof, payable within thirty (30) days of the date of
such termination; (ii) receive all Incentive Bonuses earned by or granted to
Executive pursuant to Section 4(b) above; and (iii) become fully "vested" under
the terms of any stock option agreements executed and delivered prior to, along
with, or after this Agreement, with all such stock options becoming immediately
exercisable.
(c) The Company may purchase insurance to cover all or any
part of its obligations set forth in this Section 10, and Executive agrees to
take a physical examination to facilitate the obtaining of such insurance.
However, such death and disability benefits are not conditioned upon the
Executive's insurability or the Company's obtaining such insurance.
(d) Whenever compensation is payable to Executive under the
terms of this Agreement during a time when Executive is partially or totally
disabled and such disability (except for the provisions hereof) would entitle
him to disability income or to salary continuation payments from the Company
according to the terms of any plan now or hereafter provided by the Company or
according to any Company policy in effect at the time of such disability, the
compensation payable to him hereunder shall be inclusive of any such disability
income or salary continuation and shall not be in addition thereto. If
disability income is payable directly to Executive by an insurance company under
an insurance policy paid for by the Company, the amounts paid to him by said
insurance company shall be considered to be part of the payments to be made by
Company to Executive pursuant to this Section, and shall not be in addition
thereto.
11. Termination by the Company for Cause. The Company may, at its
option, without prejudice to any other remedy to which the Company may be
entitled either at law or in equity under this Agreement, terminate this
Agreement in the event that:
(a) Executive is convicted of, pleads guilty to, or pleads
nolo contendre to a felony crime involving moral turpitude;
(b) Executive is found guilty of or pleads no contest to
fraud, conversion, embezzlement, falsifying records or reports, or a
substantially similar crime involving the Company's property; or
(c) Executive willfully breaches this Agreement.
Page 5 of 11
<PAGE>
In the event Executive's termination shall be effective under this
Section 11, Executive shall not be entitled to receive any further compensation
or benefits under the terms hereof.
12. Termination by the Company Without Cause. If the Company terminates
Executive "without cause," which shall mean for any reason other than as set
forth in Section 10 or Section 11 hereof, Executive shall: (i) be paid, in a
lump-sum cash payment within thirty (30) days of such termination, an amount
equal to his base salary in effect at the time of termination for the following
twelve (12) month period, or the remainder of the term of this Agreement,
whichever is longer; (ii) receive all Incentive Bonuses earned by or granted to
Executive pursuant to Section 4(b) above; and (iii) become fully "vested" under
the terms of any stock option agreements executed and delivered prior to, along
with, or after this Agreement, with all such stock options becoming immediately
exercisable.
13. Termination by Executive.
------------------------
(a) Executive may, at his option, after complying with this
Section, terminate this Agreement:
(i) upon thirty (30) days' notice to Company given within
sixty (60) days following the occurrence of any of the following events:
(A) Executive is not elected or retained as Chief
Executive Officer and a director of the Company;
(B) The Company materially reduces Executive's duties
and responsibilities hereunder. Executive's duties and responsibilities shall
not be deemed materially reduced for purposes hereof solely by virtue of the
fact that the Company is (or substantially all of its assets are) sold to, or is
combined with, another entity provided that (I) Executive shall continue to have
the same duties and responsibilities with respect to the Company's restaurant
business, and (II) Executive shall report directly to the board of directors of
the entity that acquires the Company or its assets.
(ii) in the event of a material breach of the terms of
this Agreement by the Company; provided, that Executive shall be required to
give written notice to the Company setting forth the nature of the material
breach. The Company shall have thirty (30) days following its receipt of
Executive's written notice in which to cure its breach before Executive's
termination of this Agreement shall be effective.
(b) In the event Executive's termination shall be effective
under Section 13(a), Executive shall: (i) be paid, in a lump-sum cash payment
within thirty (30) days of such termination, an amount equal to his base salary
in effect at the time of termination for the following twelve (12) month period,
or the remainder of the term of this Agreement, whichever is longer; (ii)
receive all Incentive Bonuses earned by or granted to Executive pursuant to
Section 4(b) above; and (iii) become fully "vested" under the terms of any stock
option agreements
Page 6 of 11
<PAGE>
executed and delivered prior to, along with, or after this Agreement, with all
such stock options becoming immediately exercisable.
(c) Executive may, at his option, voluntarily resign as an
employee of the Company without the prior written consent of the Company;
provided, that upon any such resignation (which is not also in accordance with a
termination pursuant to Section 13(a) hereof), Executive shall not be entitled
to receive any further compensation or benefits under the terms hereof, except
as otherwise specifically provided herein.
14. Payments upon Termination.
---------------------------
(a) The Company recognizes that because of Executive's special
talents, stature and opportunities in the restaurant industry, and because of
the special creative nature of and compensation practices of said industry and
the material impact that individual projects can have on the operations of a
company such as the Company, in the event of termination of this Agreement by
the Company hereunder (except under Section 11), or in the event of termination
by Executive under Section 13(a), before the end of the agreed term, the Company
acknowledges and agrees that the provisions of this Agreement regarding further
payments of Base Salary, Incentive Bonuses and the exercisability of stock
options constitute fair and reasonable provisions for the consequences of such
termination, do not constitute a penalty, and such payments and benefits shall
not be limited or reduced by amounts Executive might earn or be able to earn
from any other employment or ventures during the remainder of the agreed term of
this Agreement.
(b) If any benefit received by Executive upon the termination
of this Agreement is determined by the Internal Revenue Service to be subject to
tax under Section 4999 of the Internal Revenue Code of 1986, as amended (as an
"excess parachute payment"), the Company shall, as soon as reasonably
practicable, pay Executive an additional cash amount sufficient to ensure that
Executive receives the same net after-tax benefit (taking into account all
federal, state and local income and other taxes) that Executive would have
received had no tax under Section 4999 (or any similar or comparable federal,
state or local tax) been imposed. The amount of any such additional cash payment
shall promptly be determined by the Company's independent accounting firm and
written notice thereof, along with a schedule detailing such accounting firm's
calculations, shall be furnished to Executive within ten (10) days of such
determination. If Executive objects to such determination within ten (10) days
of his receipt of same, then Executive and the Company shall promptly agree on a
secondary accounting firm to make a final determination of the amount of such
additional cash payment, with the costs of such accounting firm to be paid by
the non-prevailing party.
15. Indemnification of Executive.
----------------------------
(a) Subject to any limitations imposed by state or federal
law, and in addition to any rights of Executive under the organizational
documents of the Company, any applicable state law, or any other agreement, the
Company hereby agrees to hold harmless and indemnify Executive:
Page 7 of 11
<PAGE>
(i) Against any and all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Executive in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company) to which
Executive is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Executive is, was or at any time becomes a
director, officer, employee, consultant, or agent of Company, or is or was
serving or at any times serves at the request of the Company, as a director,
officer, employee, consultant, partner, trustee or agent (regardless of his
title) of another corporation, partnership, joint venture, trust or other
enterprise;
(ii) Otherwise to the fullest extent permitted by law
and as permitted, or authorized, by the certificate of incorporation, bylaws,
other organizational documents, or Board resolutions of the Company or its
subsidiaries; and
(iii) From any and all income and excise taxes (and
interest and penalties relating thereto) imposed on Executive with reference to
any payment under this Section (including without limitation payments in
indemnity for such taxes).
(b) All agreements and obligations of the Company contained
herein shall continue during the period Executive is a director, officer,
employee, consultant or agent of the Company (or is or was serving at the
request of the Company as a director, officer, employee, partner, consultant or
agent of another corporation, partnership, joint venture, trust or other
enterprise) and shall continue thereafter so long as Executive shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Executive was an officer or director of the Company or serving in any other
capacity referred to herein. The Company agrees to keep in place during all such
time periods, a directors and officers' liability insurance policy (or policies)
providing comprehensive coverage to Executive at least to the extent that such
coverage is then provided by the Company for any other present or former
executive or director of the Company.
(c) The Company shall not be liable to indemnify Executive
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action or
claim in any matter which would impose any penalty or limitation on Executive
without Executive's written consent. Neither the Company or Executive will
unreasonably withhold consent to any proposed settlement.
(d) The Company will pay all expenses promptly upon the
presentment of bills for such expenses. Executive agrees that Executive will
reimburse the Company for all reasonable expenses paid by the Company in
defending any civil or criminal action, suit or proceeding against Executive in
the event and only to the extent that it shall be ultimately determined that
Executive is not entitled to be indemnified by the Company for such expenses
under the provisions of the applicable state statute, the organizational
documents of the Company, this Agreement or otherwise. This Agreement shall not
affect any rights of Executive against the Company, any insurer, or any other
person to seek indemnification or contribution.
Page 8 of 11
<PAGE>
(e) If the Company fails to pay any expenses (including,
without limiting the generality of the foregoing, legal fees and expenses
incurred in defending any action, suit or proceeding), Executive shall be
entitled to institute suit against the Company to compel such payment and the
Company shall pay Executive all costs and legal fees incurred in successfully
enforcing such right to prompt payment.
(f) To the fullest extent permitted by law, the burden of
proof with respect to any proceeding or determination with respect to
Executive's entitlement to indemnification under this Agreement shall be on the
Company.
(g) Neither the failure of the Company, the Board, independent
legal counsel, nor its stockholders to have made a determination that
indemnification of the Executive is proper in the circumstances because he has
met the applicable standard of conduct set forth in the applicable state
statute, nor an actual determination by the Company, its Board of Directors,
independent legal counsel, or its shareholders that Executive has not met such
applicable standard of conduct, shall be a defense to any action on the part of
Executive to recover indemnification under this Agreement or create a
presumption that Executive has not met the applicable standard of conduct.
16. Governing Law and Arbitration. This Agreement shall be subject to
and governed by the laws of the State of Florida. In the event a dispute
directly or indirectly related to this Agreement and/or Executive's recruitment,
employment or termination of employment (collectively, "Covered Claims") arises
between Executive and the Company which cannot be resolved, such dispute shall
be submitted to binding confidential arbitration in accordance with the rules of
the American Arbitration Association then in effect and this Section 16. All
such arbitration shall take place at the office of the American Arbitration
Association located in Orlando, Florida. The award or decision rendered by the
arbitrator(s) (including an allocation of the costs of arbitration) shall be
final, binding and conclusive and judgment may be entered upon such award by any
court having jurisdiction over such matter. The arbitration provisions of this
Agreement shall not prevent any party from obtaining injunctive relief from a
court of competent jurisdiction to enforce the obligations of the other party
hereunder for which such party may require provisional relief pending a decision
on the merits by the arbitrator(s). The Company agrees to advance, promptly upon
written request accompanied by reasonable documentation, fifty percent (50%) of
any costs and expenses, including without limitation attorneys' fees, incurred
by Executive or his beneficiaries, successors, assigns or other transferees in
connection with resolving any such Covered Claim, provided that any amounts so
advanced shall be promptly repaid to the extent that the recipient is ultimately
determined not to be entitled to be indemnified with respect to such amounts
pursuant to the following sentence. Upon the final resolution of any Covered
Claim, the Company shall be required to indemnify Executive (and his
beneficiaries, successors, assigns or other transferees) for all reasonable
costs and expenses, including without limitation reasonable attorneys' fees,
incurred in resolving such Covered Claim, but only to the extent that the
indemnified party has prevailed on such Covered Claim. Pending the resolution of
any Covered Claim, Executive (and his beneficiaries, successors, assigns or
other transferees) shall continue to receive all undisputed payments and
benefits due under this Agreement, except to the extent that the arbitrator(s)
otherwise provide.
Page 9 of 11
<PAGE>
17. Time of Essence. Time is of the essence of this Agreement and each
covenant and condition contained herein.
18. Notices and Demands. Any notice or demand which, by any provision
of this Agreement or any agreement, document, or instrument executed pursuant
hereto, except as otherwise provided therein, is required or provided to be
given shall be deemed to have been sufficiently given or served for all purposes
if sent by certified or registered mail, postage and charges prepaid, to the
following addresses: if to the Company, 8669 Commodity Circle, Orlando, Florida
32819, Attention: General Counsel, with a copy to Byrd F. Marshall, Jr.,
Esquire, Gray, Harris & Robinson, 201 E. Pine Street, Suite 1200, Orlando,
Florida 32801, or at any other address designated by the Company to Executive in
writing, and if to Executive, 9754 Chestnut Ridge Drive, Windermere, Florida
34786, or at any other address designated by Executive to the Company in
writing.
19. Severability. In case any covenant, condition, term or provision
contained in this Agreement shall be held to be invalid, illegal, or
unenforceable in any respect, in whole or in part, by judgment, order or decree
of any court or other judicial tribunal of competent jurisdiction, from which
judgment, order or decree no further appeal or petition for review is available,
the validity of the remaining covenants, conditions, terms and provisions
contained in this Agreement, and the validity of the remaining part of any term
or provision held to be partially invalid, illegal or unenforceable, shall in no
way be affected, prejudiced, or disturbed thereby.
20. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration or litigation between the
parties arising out of or affecting this Agreement, or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provisions of this Section may not be waived
except as herein set forth.
21. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter (including the Old Agreement).
22. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their heirs, personal representatives,
successors and assigns.
23. Section and Paragraph Headings. Section and paragraph headings used
throughout this Agreement are for reference and convenience and in no way
define, limit or describe the scope or intent of this Agreement or affect its
provisions.
Page 10 of 11
<PAGE>
24. Multiple Copies or Counterparts of Agreement. The original and one
or more copies of this Agreement may be executed by one or more of the parties
hereto. In such event, all of such executed copies shall have the same force and
effect as the executed original and all of such counterparts taken together
shall have the effect of a fully executed original.
25. Number and Gender. Whenever used herein, singular numbers shall
include the plural, the plural the singular, and the use of any gender shall
include all genders.
26. Further Assurances. Each of the parties hereto agree that they
shall sign such additional and supplemental documents as may be necessary to
implement the transactions contemplated pursuant to this Agreement when
requested to do so by any party to this Agreement.
Signed as of the day first written above with the intent to be legally
bound.
COMPANY:
PLANET HOLLYWOOD INTERNATIONAL, INC.,
a Delaware corporation
By:____________________________________
Name:_________________________________
Its:____________________________________
EXECUTIVE:
_______________________________________
Robert I. Earl
Page 11 of 11
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT (the "Agreement") is made as of the 1st day
of January, 2000, by and between PLANET HOLLYWOOD INTERNATIONAL, INC., a
Delaware corporation, hereinafter referred to as the "Company" and OCS
CONSULTANTS, INC., a Florida corporation, hereinafter referred to as the
"Consultant."
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and the monies to be paid hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Term of Engagement. The Company hereby engages Consultant and
Consultant hereby accepts the engagement with the Company for a period of five
(5) years commencing on the date hereof. Notwithstanding the foregoing, this
Agreement may be terminated earlier as hereinafter set forth.
2. Duties of Consultant. During the term of this Agreement, Consultant
shall render non-exclusive consulting and advisory services to the Company on
matters with respect to its overall corporate activities, including, but not
limited to, strategic planning, business operations and development and sales
and marketing activities. Consultant shall make itself available to the Company
at such times during business hours as the Company may reasonably request, and
shall devote as much time as may be required to fulfill its duties and
obligations to the Company under the terms of this Agreement.
3. Compensation. As compensation for consulting services rendered under
this Agreement, Consultant shall be entitled to receive from the Company
consulting fees in the amount of Four Hundred Thousand Dollars (U.S.
$400,000.00) per year, to be paid in twelve equal monthly installments, payable
by no later than the fifteenth (15th) day of each calendar month.
4. Reimbursement of Consultant Expenses. Consultant shall be expected
to incur various business expenses in performing its duties hereunder,
including, but not limited to, traveling, entertainment and similar expenses,
all of which are to be reasonably incurred by Consultant for the benefit of the
Company. Subject to the Company's policy regarding the reimbursement of such
expenses, the Company shall reimburse Consultant for such expenses from time to
time, at Consultant's request, and Consultant shall account to Company for such
expenses.
5. Independent Contractor. Consultant's relationship to the Company is
that of an independent contractor, and neither this Agreement nor the services
to be rendered hereunder shall be construed as creating an employer-employee
relationship. Accordingly, Consultant shall have sole responsibility for the
payment of necessary income taxes and other similar taxes, and all employment
and disability insurance.
Page 1 of 6
<PAGE>
6. Restrictive Covenants.
---------------------
(a) Consultant will not at any time, in any fashion, form or
manner, either directly or indirectly, divulge, disclose, or communicate to any
person, firm, or corporation, or other entity or utilize for its own benefit, in
any manner whatsoever, any trade secrets or any confidential information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company and its affiliates or their manner of operation, or
their confidential plans, processes or other data of any kind, nature or
description.
(b) All tangible confidential information and other
confidential documentation, either directly or indirectly coming into the
possession of Consultant in the course of its engagement by the Company,
including all copies thereof or reproductions or drawings made therefrom, shall
remain the property of the Company and shall be returned immediately upon the
expiration or termination of the term of Consultant's engagement. Thereafter,
Consultant shall not reduce to writing or otherwise record any of the
proprietary or confidential information disclosed to it during its engagement.
(c) Consultant shall not purposefully interfere with the
Company's suppliers, customers or other business relations by using the
Company's internal data in a damaging or derogatory manner that would damage the
Company's relationships with such parties.
(d) The Company and Consultant hereby stipulate that, as
between them, the foregoing matters are important, material, and confidential,
and gravely affect the effectiveness and successful conduct of the business of
the Company, and its goodwill, and that any breach of the terms of this Section
is a material breach of this Agreement.
(e) The obligations of Consultant pursuant to this Section
shall survive any termination of Consultant's engagement by the Company and
shall remain in effect for one (1) year following the date of termination.
(f) It is acknowledged and agreed that, in the event the
provisions of this Section are breached by Consultant, the extent of actual
damages sustained by the Company or its assignee will be difficult of
ascertainment, though great and irreparable, for which any remedy at law would
be inadequate. Therefore, the parties hereto expressly agree that the Company
shall have a right to seek injunctive relief for breach of any of the terms of
this Section, plus damages for such breach to the maximum extent permitted by
law.
7. Termination by the Company for Cause. The Company may, at its
option, terminate this Agreement by giving written notice of termination to
Consultant without prejudice to any other remedy to which the Company may be
entitled, either at law or in equity, under this Agreement, in the event that:
Page 2 of 6
<PAGE>
(a) Consultant (or a principal agent of Consultant) is
convicted of, pleads guilty to, or pleads nolo contendre to a felony crime
involving moral turpitude;
(b) Consultant (or an agent of Consultant) is found guilty of
or pleads no contest to fraud, conversion, embezzlement, falsifying records or
reports, or a similar crime involving the Company's property;
(c) Consultant willfully breaches any material provision of
this Agreement; or
(d) the employee of Consultant who is principally providing
services to the Company on behalf of the Consultant (who is also an employee of
the Company) (i) is terminated as an employee of the Company "for cause" (as
defined in said employee's contract of employment with the Company) or (ii)
voluntarily resigns as an employee of the Company.
In the event Consultant's termination shall be effective under this
Section, Consultant shall not be entitled to receive any further compensation or
benefits under the terms hereof.
8. Termination by the Company Without Cause. If the Company terminates
Consultant "without cause," which shall mean for any reason other than as set
forth in Section 7, Consultant shall be paid a lump-sum cash amount equal to
Consultant's compensation in effect at the time of termination for the following
twelve (12) month period, or the remainder of the term of this Agreement,
whichever is longer.
9. Termination by Consultant.
-------------------------
(a) Consultant may, at its option, after complying with this
Section, terminate this Agreement in the event of a material breach of the terms
of this Agreement by the Company. Consultant shall be required to give written
notice to the Company setting forth with particularity the nature of the
material breach. The Company shall have thirty (30) days following its receipt
of Consultant's written notice in which to cure its breach before Consultant's
termination of this Agreement shall be effective. In the event Consultant's
termination shall be effective under this Section 9(a), Consultant shall be paid
a lump-sum cash amount equal to Consultant's compensation in effect at the time
of termination for the following twelve (12) month period, or the remainder of
the term of this Agreement, whichever is longer.
(b) If Consultant terminates this Agreement for any reason
other than a material breach by the Company, it shall not be entitled to receive
any further compensation or benefits under the terms hereof.
10. Governing Law and Arbitration. This Agreement shall be subject to
and governed by the laws of the State of Florida. In the event a dispute
directly or indirectly related to this Agreement and/or Consultant's
recruitment, engagement or termination of engagement (collectively,
Page 3 of 6
<PAGE>
"Covered Claims") arises between Consultant and the Company which cannot be
resolved, such dispute shall be submitted to binding confidential arbitration in
accordance with the rules of the American Arbitration Association then in effect
and this Section 10. All such arbitration shall take place at the office of the
American Arbitration Association located in Orlando, Florida. The award or
decision rendered by the arbitrator(s) (including an allocation of the costs of
arbitration) shall be final, binding and conclusive and judgment may be entered
upon such award by any court having jurisdiction over such matter. The
arbitration provisions of this Agreement shall not prevent any party from
obtaining injunctive relief from a court of competent jurisdiction to enforce
the obligations of the other party hereunder for which such party may require
provisional relief pending a decision on the merits by the arbitrator(s). The
Company agrees to advance, promptly upon written request accompanied by
reasonable documentation, fifty percent (50%) of any costs and expenses,
including without limitation attorneys' fees, incurred by Consultant or its
representatives, successors, assigns or other transferees in connection with
resolving any such Covered Claim, provided that any amounts so advanced shall be
promptly repaid to the extent that the recipient is ultimately determined not to
be entitled to be indemnified with respect to such amounts pursuant to the
following sentence. Upon the final resolution of any Covered Claim, the Company
shall be required to indemnify Consultant (and its representatives, successors,
assigns or other transferees) for all reasonable costs and expenses, including
without limitation reasonable attorneys' fees, incurred in resolving such
Covered Claim, but only to the extent that the indemnified party has prevailed
on such Covered Claim. Pending the resolution of any Covered Claim, Consultant
(and its representatives, successors, assigns or other transferees) shall
continue to receive all undisputed payments and benefits due under this
Agreement, except to the extent that the arbitrator(s) otherwise provide.
11. Time of Essence. Time is of the essence of this Agreement and each
covenant and condition contained herein.
12. Notices and Demands. Any notice or demand which, by any provision
of this Agreement or any agreement, document, or instrument executed pursuant
hereto, except as otherwise provided therein, is required or provided to be
given shall be deemed to have been sufficiently given or served for all purposes
if sent by certified or registered mail, postage and charges prepaid, to the
following addresses: if to the Company, 8669 Commodity Circle, Orlando, Florida
32819, Attention: General Counsel, with a copy to Byrd F. Marshall, Jr.,
Esquire, Gray, Harris & Robinson, 201 E. Pine Street, Suite 1200, Orlando,
Florida 32801, or at any other address designated by the Company to Consultant
in writing; and if to Consultant, c/o 7685 Debeaubien Drive, Orlando, Florida
32835, Attn: President, or at any other address designated by Consultant to the
Company in writing.
13. Severability. In case any covenant, condition, term or provision
contained in this Agreement shall be held to be invalid, illegal, or
unenforceable in any respect, in whole or in part, by judgment, order or decree
of any court or other judicial tribunal of competent jurisdiction, from which
judgment, order or decree no further appeal or petition for review is available,
the validity of the remaining covenants, conditions, terms and provisions
contained in this Agreement, and the
Page 4 of 6
<PAGE>
validity of the remaining part of any term or provision held to be partially
invalid, illegal or unenforceable, shall in no way be affected, prejudiced, or
disturbed thereby.
14. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration or litigation between the
parties arising out of or affecting this Agreement, or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provisions of this Section may not be waived
except as herein set forth.
15. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
16. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their heirs, personal representatives,
successors and assigns.
17. Section Headings. Section headings used throughout this Agreement
are for reference and convenience and in no way define, limit or describe the
scope or intent of this Agreement or affect its provisions.
18. Multiple Copies or Counterparts of Agreement. The original and one
or more copies of this Agreement may be executed by one or more of the parties
hereto. In such event, all of such executed copies shall have the same force and
effect as the executed original and all of such counterparts taken together
shall have the effect of a fully executed original.
19. Number and Gender. Whenever used herein, singular numbers shall
include the plural, the plural the singular, and the use of any gender shall
include all genders.
[remainder of page intentionally left blank]
Page 5 of 6
<PAGE>
Signed as of the day first written above with the intent to be legally
bound.
COMPANY:
PLANET HOLLYWOOD INTERNATIONAL, INC.,
a Delaware corporation
By:___________________________________
Name:_________________________________
Its:__________________________________
CONSULTANT:
OCS CONSULTANTS, INC.
a Florida corporation
By:___________________________________
Name:_________________________________
Its:__________________________________
Page 6 of 6
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of _____________, 2000, by and between PLANET HOLLYWOOD INTERNATIONAL, INC., a
corporation organized under the laws of the State of Delaware (the "Company"),
the parties listed on Annex A hereto (the "New Money Holders") and the parties
listed on Annex B hereto (the "Note Holders").
WHEREAS, this Agreement is being entered into pursuant to (i) Section
6.6(c) of the First Amended Joint Plan of Reorganization of the Company under
Chapter 11 of the Bankruptcy Code dated December 13, 1999, as the same may have
been amended or supplemented from time to time prior to the date hereof and has
been approved by the United States Bankruptcy Court for the District of Delaware
(the "Plan of Reorganization") and (ii) the Note Purchase Agreement dated on or
about the date of this Agreement among the Company, the Note Holders and
Wilmington Trust Company (the "Note Purchase Agreement") which itself is entered
into pursuant to the BayHarbour Agreement (as defined in the Plan of
Reorganization). The Plan of Reorganization provides for the issuance of New
Common Stock, New Warrants, New Secured PIK Notes and New Senior Secured Notes
(each as hereinafter defined), including, without limitation, the issuance of
(i) 350,000 shares of New Class A Common Stock pro rata among the Note Holders
as part of a fee payable to the Note Holders, (ii) certain of the New Warrants
relating to the purchase of 200,000 shares of New Class A Common Stock by the
Note Holders in accordance with the terms of the Note Purchase Agreement and
(iii) the shares of New Class A Common Stock issuable upon conversion of the
obligations of the Company outstanding under the Note Purchase Agreement in
accordance with Section 3.8 of the Note Purchase Agreement.
WHEREAS, the parties hereto desire to provide certain registration
rights to the New Money Holders and the Note Holders with respect to the
Registerable Securities (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. RECITALS. The parties hereby agree that the aforementioned
recitals are true and correct and, together with the definitions set forth
therein and in the preamble to this Agreement, are hereby incorporated into this
Agreement by this reference.
2. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Blackout Period" shall mean a period, during the Shelf Registration
Period, commencing on the date on which the Company provides notice that: (i)
the effectiveness of the Shelf Registration (as herein defined) has been
suspended; (ii) the then current prospectus with respect to the offer and sale
of the Registerable Securities no longer complies with the requirements therefor
prescribed by Section 10(a) of the Securities Act; or (iii) subject to Section
3.1(b), there is a Material Disclosure Event and the Board of Directors of the
Company has elected (in its good faith reasonable judgment) to require the
suspension of the sale of Registerable Securities pursuant to the Shelf
Registration, and ending on the date when the Holders either receive copies of
the
Page 1 of 20
<PAGE>
supplemented or amended prospectus contemplated by Section 3.3(g) or such
earlier time that the Holders are otherwise advised in writing by the Company
that use of the prospectus may be resumed.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"Holder" means a registered holder of Registerable Securities.
"Material Disclosure Event" means any pending or imminent event
relating to the Company which, based on the good faith, reasonable opinion of
the Board of Directors of the Company and the advice of competent outside
counsel to the Board of Directors of the Company, (i) requires disclosure of
material, non-public information relating to such event in the Shelf
Registration Statement so that such registration statement would not be
materially misleading, (ii) is otherwise not required to be publicly disclosed
at the time (e.g., on a Form 8-K or Form 10- Q) under applicable federal or
state securities laws, and (iii) if publicly disclosed at the time of such
event, would have a material adverse effect on the business and/or financial
condition of the Company.
"New Class A Common Stock" means the Class A shares of common stock,
par value $.01 per share, of the Company authorized to be issued under the
Company's Amended and Restated Certificate of Incorporation.
"New Class B Common Stock" means the Class B shares of common stock,
par value $.01 per share, of the Company authorized to be issued under the
Company's Amended and Restated Certificate of Incorporation.
"New Common Stock" means, collectively, the New Class A Common Stock,
the New Class B Common Stock, and any other common stock of the Company
authorized to be issued under the Company's Amended and Restated Certificate of
Incorporation, including any and all securities of the Company which may be
issued on or after the date hereof in respect of, or in exchange for, shares of
New Common Stock pursuant to a merger, consolidation, stock split, conversion,
stock dividend, recapitalization of the Company or otherwise.
"New Money Holders" has the meaning assigned to it in the preamble
hereof and includes permitted transferees of such New Money Holders.
"New Secured PIK Notes" means the 10% secured Deferrable Interest Notes
due 2005 to be issued by the Company pursuant to the Plan of Reorganization
under the New Secured PIK Notes Indenture dated on or about the date of this
Agreement among the Company, the subsidiary guarantors named therein and United
States Trust Company of New York, as Trustee, such Indenture being substantially
in the form filed as Exhibit 7 to the Plan of Reorganization.
"New Warrants" means (i) the warrants issued pursuant to the Plan of
Reorganization under the New Warrant Agreement between the Company and the New
Warrant Agent, such Warrant Agreement being substantially in the form filed as
Exhibit 10 to the Plan of Reorganization, and (ii)
Page 2 of 20
<PAGE>
the warrants for the purchase of 200,000 shares of New Class A Common Stock
issued to the Note Holders pursuant to the Note Purchase Agreement in the form
of Exhibit D to the Note Purchase Agreement.
"Note Holders" has the meaning assigned to it in the preamble hereof
and includes permitted transferees of such Note Holders.
"Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.
"Registerable Securities" means (i) the shares of New Class A Common
Stock issuable upon conversion of the New Class B Common Stock issued by the
Company to the New Money Holders pursuant to the Plan of Reorganization; (ii)
the shares of New Class A Common Stock issued or issuable to the Note Holders
pursuant to the Note Purchase Agreement; (iii) the shares of New Class A Common
Stock issuable to the Note Holders upon conversion of the obligations of the
Company and its affiliates outstanding under the Note Purchase Agreement in
accordance with Section 3.8 of the Note Purchase Agreement; (iv) any securities
issued with respect to (or issuable upon the conversion, exercise or exchange of
any option, warrant, right or other security which is issued with respect to)
the securities referred to in clauses (i), (ii), (iii) or (iv) hereof by way of
a stock dividend or distribution, stock split, conversion or reverse stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or otherwise, in each case held at any time during the Shelf
Registration Period by the Holders; (v) the shares of New Class A Common Stock
issuable upon exercise of the New Warrants issued by the Company to a New Money
Holder or a Note Holder pursuant to the Plan of Reorganization and/or the Note
Purchase Agreement; or (vi) the New Secured PIK Notes issued by the Company to a
New Money Holder pursuant to the Plan of Reorganization. As to any particular
Registerable Securities, such securities shall cease to be Registerable
Securities when (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public pursuant to Rule
144 (or any successor or similar provision) under the Securities Act, (iii) they
shall have been otherwise transferred, with new certificates for them not
bearing a legend restricting further transfer having been delivered by the
Company and subsequent disposition of them shall not require registration under
the Securities Act, or (iv) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to the registration
and disposition of the Registerable Securities pursuant to Section 3 hereof,
including, without limitation, all registration, filing and applicable national
securities exchange fees; all fees and expenses of complying with state
securities or "blue sky" laws (including fees and disbursements of counsel to
the underwriters or the Holders in connection with blue sky qualification of the
Registerable Securities and determination of their eligibility for investment
under the laws of the various jurisdictions); all duplicating and printing
expenses; all messenger and delivery expenses; the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of "cold comfort" letters or, in connection with a registration
pursuant to Section 3.2 hereof only, any special audits required by, or incident
to, such registration; all fees and disbursements of underwriters; all transfer
taxes; and the reasonable fees and expenses of one counsel to the New Money
Holders and one counsel to the Note Holders; provided, however, that
Registration Expenses shall exclude, and (i) in the case of an underwritten
offering, the Holders shall pay all
Page 3 of 20
<PAGE>
underwriting discounts and underwriting commissions in respect of the
Registerable Securities being registered on a pro rata basis in accordance with
the number of Registerable Securities that such Holder included and sold in such
offering, and (ii) in the case of an offering not underwritten, each Holder
shall be responsible for the payment of any fees or commissions charged by such
Holder's broker.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"Shelf Registration Period" means as to each Holder, as applicable,
that period of time beginning on the effective date of the Shelf Registration
and ending:
(a) in the case of the Registerable Securities referred to in
clauses (i), (ii), (v) and (vi) of the definition of "Registerable Securities"
(and any securities issued with respect thereto pursuant to clause (iv) of such
definition), the first day on which such Registerable Securities are eligible
for resale by the Holder thereof pursuant to the provisions of paragraph (k) of
Rule 144 promulgated under the Securities Act (or any successor provision), and
(b) in the case of the Registerable Securities referred to in
clause (iii) of the definition of "Registerable Securities" (and any securities
issued with respect thereto pursuant to clause (iv) of such definition), on the
later to occur of: (i) the last day that loans can be borrowed under the Note
Purchase Agreement, if no loans are borrowed thereunder; (ii) the last day on
which any obligations under the Note Purchase Agreement are convertible into
Registerable Securities; and (iii) the earlier to occur of (x) one year
following the last day on which shares of New Class A Common Stock are issued
upon a conversion of obligations under the Note Purchase Agreement, or (y) the
first day on which such Registerable Securities are eligible for resale by the
Holder thereof pursuant to the provisions of paragraph (k) of Rule 144
promulgated under the Securities Act (or any successor provision).
3. SHELF REGISTRATION; INCIDENTAL REGISTRATION.
3.1 Shelf Registration.
(a) Within ninety (90) days of the "Effective Date"
of the Plan of Reorganization (as that term is defined in the Plan of
Reorganization),or such longer time as may be required to prepare the necessary
financial statements (but in no event more than one hundred eighty (180) days
after the Effective Date of the Plan of Reorganization), the Company will file
with the Commission, at the Company's expense, a "shelf" registration statement
(or statements) on an appropriate form pursuant to Rule 415 under the Securities
Act covering all Registerable Securities (the "Shelf Registration"). The Company
shall use its best efforts to have the Shelf Registration declared effective as
promptly as practicable after such filing and to keep the Shelf Registration
continuously effective for the Shelf Registration Period. The Company shall, to
the extent necessary, supplement or amend the Shelf Registration (in each case,
at the Company's expense) to keep the Shelf Registration effective during the
Shelf Registration Period. The Company further agrees to supplement or amend any
Shelf Registration, as required by the registration form utilized by the
Company, by the instructions applicable to such registration form or by the
Securities Act or the rules and regulations thereunder or as reasonably
requested by any Holder. The Company shall
Page 4 of 20
<PAGE>
furnish to the Holders copies, in substantially the form proposed to be used
and/or filed, of any such supplement or amendment at least fifteen (15) days
prior to its being used and/or filed with the Commission. The Company hereby
consents to the use (in compliance with applicable law) of the prospectus or any
amendment or supplement thereto by each of the selling Holders of Registerable
Securities in connection with the offering and sale of the Registerable
Securities covered by the prospectus or any amendment or supplement thereto. The
Company shall pay all Registration Expenses incurred in connection with the
Shelf Registration, whether or not it becomes effective. In no event shall the
Shelf Registration include securities other than Registerable Securities, unless
the Holders of all Registerable Securities consent to such inclusion.
(b) Each Holder agrees that it will not sell any Registerable
Securities pursuant to the Shelf Registration during any Blackout Period. The
Company agrees to use its best efforts (i) to ensure that there is not more than
one Blackout Period in any 12-month period, (ii) to cause each Blackout Period
to end as soon as reasonably practicable and (iii) to ensure that no Blackout
Period exceeds thirty (30) consecutive days. The Company further agrees that no
other holder of any shares of the Company's capital stock will be permitted to
sell any such shares of the Company's capital stock pursuant to a registration
statement during a Blackout Period. If one or more Blackout Periods occur, the
Shelf Registration Period shall be extended by such number of days coincident
with the aggregate number of days included in all Blackout Periods. Subject to
compliance with applicable laws, the Company shall use its best efforts to
provide the Holders with reasonable notice of an anticipated Blackout Period
prior to that Blackout Period commencing.
3.2 Incidental Registration.
(a) Right to Include Registerable Securities. If the
Company at any time prior to the expiration of the Shelf Registration Period
proposes to register, in an underwritten public offering (or if the Shelf
Registration is not effective, any other non-underwritten public offering), any
of its securities for sale under the Securities Act (except registrations solely
for registration of securities in connection with an employee stock option,
stock purchase, stock bonus or similar plan, pursuant to a dividend reinvestment
plan, or pursuant to a merger, exchange offer or transaction of the type
specified in Rule 145(a) under the Securities Act), whether or not for sale for
its own account, it will each such time give written notice to the Holders of
its intention to do so and of the Holders' rights under this Section 3.2 at
least thirty (30) days prior to the filing of a registration statement in
connection therewith and the Holders shall be entitled to include, subject to
the provisions of this Agreement, Registerable Securities on the same terms and
conditions (if any) as apply to other comparable securities of the Company sold
in connection with such registration. Upon the written request of any Holder (a
"Requesting Holder"), specifying the maximum number of Registerable Securities
intended to be disposed of by such Requesting Holder (the "Piggyback
Securities"), made as promptly as practicable and in any event within fifteen
(15) days after the receipt of any such notice, the Company shall, subject to
the terms of this Agreement, effect the registration under the Securities Act of
the Piggyback Securities and shall use its best efforts to have such
registration become and remain effective under the Securities Act. The Company
will pay all Registration Expenses in connection with any registration of the
Piggyback Securities requested pursuant to this Section 3.2. If the registration
pursuant to this Section 3.2 is to cover, in whole or in part, any underwritten
distribution, the Company shall use its best efforts to cause all Piggyback
Securities to be included in the registration on the same terms and conditions
as the comparable securities (other than the Piggyback Securities) being sold
through the underwriters.
Page 5 of 20
<PAGE>
(b) Right to Withdraw. Any Requesting Holder shall
have the right to withdraw its request for inclusion of Piggyback Securities in
any registration statement pursuant to this Section 3.2 at any time by giving
written notice to the Company of its request to withdraw.
(c) Priority in Incidental Registrations. If the
managing underwriter of any underwritten offering shall inform the Company by
letter of its opinion that the number or type of Registerable Securities when
added to the number and type of other securities to be offered in such
registration, would materially adversely affect such offering, then the Company
shall include in such registration that number and type of Registerable
Securities which the Company is so advised by the managing underwriter can be
sold in such offering without materially adversely affecting such offering (the
"Section 3.2 Registerable Securities Sale Amount") in the following order of
priority: (i) all of the securities proposed by the Company to be sold for its
own account (if any); (ii) thereafter, to the extent the Section 3.2
Registerable Securities Sale Amount is not exceeded in clause (i), the
Registerable Securities requested by the Requesting Holders to be included in
such registration pursuant to Section 3.2(a) pro rata among the Requesting
Holders on the basis of the percentage of Registerable Securities of such
Requesting Holders requested to be included in such registration; and (iii)
thereafter, to the extent the Section 3.2 Registerable Securities Sale Amount is
not exceeded, any other securities of the Company requested to be included in
such registration.
(d) Plan of Distribution. In an underwritten public
offering, any participation by the Holders in a registration by the Company
pursuant to this Section 3.2 shall be in accordance with the terms and
conditions of the Company's plan of distribution.
3.3 Registration Procedures.
If and whenever the Company is required to effect
registration, or to use its best efforts to effect the registration, of any
Registerable Securities, as provided in Sections 3.1 and 3.2 hereof, the Company
shall as expeditiously as possible:
(a) prepare and file with the Commission the
requisite registration statement to effect such registration, including all
amendments and supplements thereto (and shall include all financial statements
required by the Commission to be filed therewith) and thereafter use its best
efforts to cause such registration statement to become effective; provided,
however, that before filing such registration statement (including all exhibits)
or any amendment or supplement thereto or comparable statements under securities
or blue sky laws of any jurisdiction, the Company shall furnish such documents
to each Holder selling Registerable Securities covered by such registration
statement and each underwriter, if any, participating in the offering of the
Registerable Securities and their respective counsel, which documents will be
subject to the review and comments of each such Holder, each underwriter and
their respective counsel; and provided further, that the Company may discontinue
any registration of its securities which are not Registerable Securities and, as
to registration pursuant to Section 3.2 hereof, the Company may discontinue any
registration of securities covered thereby, in each case, at any time prior to
the effective date of the registration statement relating thereto;
(b) notify each Holder selling Registerable
Securities covered by such registration statement of the Commission's requests
for amending or supplementing the registration statement and the prospectus, and
prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply with the
provisions of the
Page 6 of 20
<PAGE>
Securities Act with respect to the disposition of all Registerable Securities
covered by such registration statement in each case for such period as shall be
required for the disposition of all of such Registerable Securities in
accordance with the intended method of distribution thereof; provided that such
period need not extend beyond the Shelf Registration Period;
(c) furnish, without charge, to each Holder selling
Registerable Securities covered by such registration statement and each
underwriter such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities Act, and such other
documents, as any Holder and such underwriters may reasonably request;
(d) use its best efforts (i) to register or qualify
all Registerable Securities and other securities covered by such registration
statement under such securities or blue sky laws of such States of the United
States of America where an exemption is not available and as any Holder or
Holders selling Registerable Securities covered by such registration statement
or any managing underwriter shall reasonably request, (ii) to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and (iii) to take any other action which may be
reasonably necessary or advisable to enable the Holders to consummate the
disposition in such jurisdictions of the securities to be sold by such Holder or
Holders; provided, however, that the Company shall not for any purpose be
required to execute a general consent to service of process, or to qualify to do
business as a foreign corporation, in any jurisdiction where it is not so
qualified;
(e) use its best efforts to cause all Registerable
Securities covered by such registration statement to be registered with or
approved by such other Federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to any
Holder or Holders selling Registerable Securities covered by such registration
statement to consummate the disposition of such Registerable Securities;
(f) furnish to each Holder selling Registerable
Securities covered by such registration statement and each underwriter, if any,
participating in the offering of the securities covered by such registration
statement, a signed counterpart of (i) an opinion of counsel for the Company,
and (ii) a "comfort" letter signed by the independent public accountants who
have certified the Company's financial statements included or incorporated by
reference in such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered (at the time of such registration) in opinions of issuer's counsel and
in accountants' comfort letters delivered to the underwriters in underwritten
public offerings of securities (and dated the dates such opinions and comfort
letters are customarily dated) and, in the case of the legal opinion, such other
legal matters, and, in the case of the accountants' comfort letter, such other
financial matters, as such Holder or Holders, or the underwriters, may
reasonably request;
(g) immediately notify the Holders selling
Registerable Securities covered by such registration statement and each managing
underwriter, if any, participating in the offering of the securities covered by
such registration statement (i) when such registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement related
thereto or
Page 7 of 20
<PAGE>
post-effective amendment to such registration statement has been filed, and,
with respect to such registration statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission for
amendments or supplements to such registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or the initiation or threatening of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Registerable Securities for sale
under the securities or blue sky laws of any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and (v) at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
or, in the case of the Shelf Registration, at any time during the Shelf
Registration Period, upon discovery that, or upon the happening of any event as
a result of which, the registration statement or the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this clause (v), at
the request of any Holder or Holders selling Registerable Securities covered by
such registration statement promptly prepare and furnish to such Holder or
Holders and each managing underwriter, if any, participating in the offering of
the Registerable Securities, a reasonable number of copies of a supplement to or
an amendment of such registration statement or prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
(h) otherwise comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve months beginning with the first full calendar month after the
effective date of such registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and promptly furnish to the Holders a copy of any
amendment or supplement to such registration statement or prospectus;
(i) cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for the Registerable
Securities from and after the date of such registration;
(j) use all reasonable efforts to cause all
Registerable Securities covered by such registration statement to be quoted on
the National Market System ("National Market System") of the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
within the meaning of Rule 11Aa2-1 of the Commission if the quoting of such
Registerable Securities is then permitted under NASDAQ rules; or if no similar
securities of the Company are then so quoted, use all reasonable efforts to (x)
secure designation of all such Registerable Securities as a NASDAQ National
Market System security or (y) failing that, cause all such Registerable
Securities to be listed on a national securities exchange or (z) failing that,
to secure NASDAQ authorization for such Registerable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registerable Securities with the
National Association of Securities Dealers, Inc.;
Page 8 of 20
<PAGE>
(k) deliver promptly to counsel to the Holders
selling Registerable Securities covered by such registration statement and each
underwriter, if any, participating in the offering of the Registerable
Securities, upon request, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to such registration
statement;
(l) use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement;
(m) make available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses) in their marketing of Registerable
Securities;
(n) in the case of a Shelf Registration, upon the
occurrence of any event or the discovery of any facts, each as contemplated by
Section 3.3(g)(v) hereof, use its best efforts to prepare a supplement or
post-effective amendment to the registration statement or the related prospectus
or any document incorporated therein by reference or file any other required
documents so that, thereafter, such prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
(o) enter into customary agreements (including an
underwriting agreement in customary form) and take all such other action, if
any, as the Holders participating in such offering or the underwriters shall
reasonably request in order to expedite or facilitate the disposition of the
Registerable Securities pursuant to this Agreement.
The Company may require the Holders selling Registerable Securities covered by
such registration statement to furnish the Company such information regarding
the Holders and the distribution of the Registerable Securities as the Company
may from time to time reasonably request in writing. In the event of a
registration effected pursuant to Section 3.1 or 3.2 hereof, if a Holder fails
to provide such information and the failure by such Holder to furnish such
information would prevent or unreasonably delay the registration statement
relating to such registration from being declared effective by the Commission,
the Company may exclude such Holder's Registerable Securities from such
registration, which right of the Company shall, in the case of a registration
effected pursuant to Section 3.1 hereof, be subject (i) in the case of a New
Money Holder, to the consent of the New Money Holders of not less than a
majority of the Registerable Securities to be included in such registration by
the New Money Holders (other than such New Money Holder's Registerable
Securities), and (ii) in the case of a Note Holder, to the consent of the Note
Holders who hold a majority of the Registerable Securities to be included in
such registration by the Note Holders (other than such Note Holder's
Registerable Securities).
The Holders agree that upon receipt of any notice from the Company of
the happening of any event of the kind described in paragraph (g)(iii) or (v) of
this Section 3.3, each of the Holders will discontinue its disposition of
Registerable Securities pursuant to the registration statement relating to such
Registerable Securities until, in the case of paragraph (g)(iii) of this Section
3.3, its receipt of notice that the stop order has been lifted or the
proceedings have been dropped or, in the case of paragraph (g)(v) of this
Section 3.3, its receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (g)(v) of this Section 3.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent
Page 9 of 20
<PAGE>
file copies, then in its possession, of the prospectus relating to such
Registerable Securities current at the time of receipt of any such notice. If
the disposition by the Holders of their securities is discontinued pursuant to
the immediately preceding sentence, the Company shall extend the period of
effectiveness of the registration statement by the number of days during the
period from and including the date of the giving of notice to the Holders and
including the date when the Holders shall have received notice that the stop
order has been lifted or the proceedings have been dropped, or copies of the
supplemented or amended prospectus contemplated by paragraph (g)(v) of this
Section 3.3, as applicable.
3.4 Incidental Underwritten Offerings.
In the case of a registration pursuant to Section 3.2 hereof,
if the Company shall have determined to enter into any underwriting agreements
in connection therewith, all of the Requesting Holders' Registerable Securities
to be included in such registration shall be subject to such underwriting
agreements. The Requesting Holders may, at their option, require that any or all
of the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be made
to and for the benefit of the Requesting Holders and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the
Requesting Holders. No Requesting Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Requesting Holder, its ownership of and title to the Registerable Securities,
and its intended method of distribution; and any liability of any Requesting
Holder to any underwriter or other Person under such underwriting agreement
shall be limited to liability arising from misstatements in or omissions from
its representations and warranties and shall be limited to an amount equal to
the net proceeds that it derives from such registration.
3.5 Preparation; Reasonable Investigation.
In connection with the preparation and filing of each
registration statement under the Securities Act pursuant to this Agreement, the
Company will give the participating Holders, their underwriters, if any, and
their respective counsel, accountants and other representatives and agents the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and, to the
extent practicable, each amendment thereof or supplement thereto, and give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and employees and the independent
public accountants who have certified its financial statements, and supply all
other information reasonably requested by each of them, as shall be necessary or
appropriate, in the opinion of the participating Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
3.6 Indemnification.
(a) Indemnification by the Company. The Company
agrees that in connection with the registration of securities of the Company
pursuant to this Agreement, the Company shall, and hereby does to the fullest
extent permitted by law, indemnify and hold harmless each Holder, its respective
directors, officers, partners, members, agents and affiliates and each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Holder or any such
underwriter within the meaning of the Securities Act,
Page 10 of 20
<PAGE>
against any losses, claims, damages, or liabilities, joint or several, to which
such Holder or any such director, officer, partner, member, agent or affiliate
or underwriter or controlling Person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities, joint or
several (or actions or proceedings, whether commenced or threatened, in respect
thereof), arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto (including, in each case, all
exhibits and documents incorporated by reference), (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, or (iii) any violation by the Company of any
Federal, state or common law rule or regulation applicable to the Company or
relating to action required of or inaction by the Company in connection with any
such registration, and the Company shall reimburse such Holder and each such
director, officer, partner, member, agent or affiliate, underwriter and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement (including, in
each case, all exhibits and documents incorporated by reference) in reliance
upon and in conformity with written information furnished to the Company through
an instrument duly executed by or on behalf of the Holders or underwriter, as
the case may be, specifically stating that it is for use in the preparation
thereof; and provided, further, that the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of
Registerable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registerable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
regardless of any investigation made by or on behalf of either Holder or any
such director, officer, partner, agent or affiliate or controlling Person and
shall survive the transfer of such securities by such Holder.
(b) Indemnification by the Holders. As a condition to
including any Registerable Securities in any registration statement, each Holder
including any Registerable Securities in such registration statement agrees to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in paragraph (a) of this Section 3.6) the Company, and each director and
officer of the Company and each other Person, if any, who controls the Company
within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto (including, in each
case, all exhibits and documents incorporated by reference), but only to the
extent such statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by such Holder specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
Page 11 of 20
<PAGE>
supplement (including, in each case, all exhibits and documents incorporated by
reference). In addition, as a condition to including any Registerable Securities
in any registration statement relating to an underwritten offering, each Holder
including any Registerable Securities in such registration statement agrees to
enter into an agreement to indemnify any Person who participates as an
underwriter in the offering and sale of such securities, and each other Person
who controls any such underwriter within the meaning of the Securities Act, on
reasonable and customary terms that are no more burdensome on such Holder than
the terms of indemnification by the Company or any other selling security
holders participating in such underwritten offering. Notwithstanding the
foregoing, and for the avoidance of doubt, (i) each Holder shall only be liable
under this Section 3.6(b) with respect to a statement or omission made by such
Holder and (ii) the liability of such indemnifying party under this Section
3.6(b) shall not exceed an amount equal to the net proceeds received by such
indemnifying party from the sale of the Registerable Securities sold by such
party in the offering giving rise to such liability. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and shall
survive the transfer of such securities by such Holder.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subsections of this Section 3.6,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 3.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 3.6. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are different from or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties and the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such separate counsel or counsels. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation (unless the proviso in the
preceding sentence shall be applicable). No indemnifying party shall be liable
for any settlement of any action or proceeding effected without its written
consent which shall not be unreasonably withheld. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.
Page 12 of 20
<PAGE>
(d) Contribution. If the indemnification provided for
in this Section 3.6 is unavailable to an indemnified party under subsection (a)
or (b) hereof in respect of any loss, claim, damage or liability, or any action
in respect thereof, then, in lieu of the amount paid or payable under subsection
(a) or (b) hereof, the indemnified party and the indemnifying party under
subsection (a) or (b) hereof shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating the same), (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand, and the indemnified party on the other, which resulted in such loss,
claim, damage or liability, or action in respect thereof, with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the allocation provided in this clause (ii)
provides a greater amount to the indemnified party than clause (i) above, in
such proportion as shall be appropriate to reflect not only the relative fault
but also the relative benefits received by the indemnifying party and the
indemnified party from the offering of the securities covered by such
registration statement as well as any other relevant equitable considerations.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 3.6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding sentence
of this Section 3.6(d). No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
subsection (d) are several and not joint and shall be in proportion to the
relative value of their respective Registerable Securities covered by such
registration statement. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's prior written consent, which consent shall not be
unreasonably withheld. Notwithstanding anything in this subsection (d) to the
contrary, no indemnifying party (other than the Company) shall be required to
contribute any amount in excess of the amount equal to the net proceeds received
by such party from the sale of the Registerable Securities in the offering to
which the losses, claims, damages or liabilities of the indemnified parties
relate.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 3.6 (with appropriate modifications) shall be given by the Company and
the Holders with respect to any required registration or other qualification of
securities under any Federal, state or blue sky law or regulation of any
governmental authority other than the Securities Act. The indemnification
agreements contained in this Section 3.6 shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract and shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the transfer of any of the Registerable Securities by
any of the Holders.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 3.6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred;
provided, however, that such periodic payments shall only be made upon delivery
to the indemnifying party of an agreement by the indemnified party to repay the
amounts advanced to the extent it is ultimately determined that the indemnified
party is not entitled to indemnification pursuant to this Section 3.6 or
otherwise. The parties hereto agree that for each of them such agreement shall
be deemed to be contained herein.
Page 13 of 20
<PAGE>
3.7 Limitation on Sale of Securities.
If any registration of Registerable Securities shall be in
connection with an underwritten public offering, the Company (and each Holder
holding more than three percent (3%) of the issued and outstanding securities of
the Company who does not include its Registerable Securities therein) agrees (x)
not to effect any public sale or distribution of any issue of the same class or
series as the Registerable Securities being registered in an underwritten public
offering (other than pursuant to an employee stock option, stock purchase or
similar plan, pursuant to a dividend reinvestment plan, pursuant to a merger,
exchange offer or a transaction of the type specified in Rule 145(a) under the
Securities Act), any securities of the Company similar to any such issue or any
securities of the Company or of any security convertible into or exchangeable or
exercisable for any such issue of the Company during the 15 days prior to, and
during the 45-day period (or such longer period, not in excess of 90 days, as
may be reasonably requested by the underwriter of such offering) beginning on
the effective date of such registration statement (except as part of such
registration) and (y) that any agreement entered into after the date of this
Agreement pursuant to which the Company issues or agrees to issue any privately
placed securities shall contain a provision under which holders of such
securities agree not to effect any public sale or distribution of any such
securities during the period referred to in the foregoing clause (x), except as
part of such registration, if permitted. Notwithstanding any of the foregoing, a
Note Holder shall not be limited in any way in its sale or distribution of any
securities of the Company before, during or after any such underwritten
offering, except to the extent of the Registerable Securities held by the Note
Holder.
3.8 No Required Sale.
Nothing in this Agreement shall be deemed to create an
independent obligation on the part of any of the Holders to sell any
Registerable Securities pursuant to any effective registration statement.
4. RULE 144.
---------
The Company shall take all reasonable actions necessary to
enable holders of Registerable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, or (b) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of any Holder, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.
5. AMENDMENTS AND WAIVERS.
-----------------------
This Agreement may not be modified or amended, or any of the
provisions hereof waived, temporarily or permanently, except (i) pursuant to the
written consent of the New Money Holders who hold a majority of the Registerable
Securities held by the Money Holders, and (ii) pursuant to the written consent
of the Note Holders who hold a majority of the Registerable Securities held by
the Note Holders.
Page 14 of 20
<PAGE>
6. ADJUSTMENTS.
------------
In the event of any change in the capitalization of the
Company as a result of any stock split, stock dividend, reverse split,
combination, recapitalization, merger, consolidation, or otherwise, the
provisions of this Agreement shall be appropriately adjusted.
7. NOTICES.
--------
All notices given under this Agreement shall be in writing and
shall be personally served or delivered by a private courier service of
international standing and recognition with charges prepaid, or transmitted by
facsimile, addressed as set forth below, or such other address as such party
shall have specified most recently by written notice:
If to Company: Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, Florida 32819
Attn: General Counsel
Fax: 407-345-1115
with a copy to: Gray, Harris & Robinson, P.A.
(which shall not 201 East Pine Street
constitute notice) Suite 1200
Orlando, Florida 32801
Attn: Byrd F. Marshall, Jr.
Fax: 407-244-5690
If to a Holder: the address set forth on Annex A and
Annex B, as applicable Notice shall be deemed given or delivered on the date of
service or transmission if personally served or transmitted by facsimile. Notice
otherwise sent as provided herein shall be deemed given or delivered on the
third business day following delivery of such notice to a reputable overnight
courier service.
8. SUCCESSORS AND ASSIGNS.
-----------------------
The rights and obligations set forth in this Agreement shall
bind and inure to the benefit of the respective successors and permitted assigns
of the parties hereto. The rights and obligations set forth in this Agreement
shall not be assignable by the Company without the express written consent of
(i) the New Money Holders who hold a majority of the Registerable Securities
held by the New Money Holders and (ii) the Note Holders who hold a majority of
the Registerable Securities held by the Note Holders, (each voting as a separate
group), such consent not to be unreasonably withheld. Upon prior written notice
to the Company, any Holder may assign, in its sole discretion, any or all of its
rights, interests and obligations under this Agreement to any of its
"Affiliates" or to any direct transferee of at least twenty-five percent (25%)
of the Registerable Securities originally held (as of the date of this
Agreement) by such Holder; provided that such transferee agrees to become bound
by the terms of this Agreement. For purposes of this Section
Page 15 of 20
<PAGE>
8, "Affiliate", shall mean, with respect to any party, any Person which
controls, is controlled by, or is under common control with, the subject party.
9. REMEDIES.
---------
The parties hereto agree that money damages or other remedy at
law would not be sufficient or adequate remedy for any breach or violation of,
or a default under, this Agreement by them and that, in addition to all other
remedies available to them, each of them shall be entitled to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including without limitation specific
performance, without bond or other security being required. In any action or
proceeding brought to enforce any provision of this Agreement (including the
indemnification provisions thereof), the successful party shall be entitled to
recover reasonable attorneys' fees in addition to its costs and expenses and any
other available remedy.
10. NO INCONSISTENT AGREEMENTS.
---------------------------
The Company will not, on or after the date of this Agreement,
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof, other than any customary lock-up agreement with the
underwriters in connection with any registration and offering by the Company of
its securities to the public (an "Offering") effected hereunder, pursuant to
which the Company shall agree not to register for sale, and the Company shall
agree not to sell or otherwise dispose of New Common Stock or any securities
convertible into or exercisable or exchangeable for New Common Stock, as
applicable, for a specified period following such Offering. The Company hereby
represents and warrants that the rights granted to the Holders hereunder do not
in any way conflict with and are not inconsistent with any other agreements to
which the Company is a party or by which it is bound.
11. HEADINGS.
---------
Headings of the sections and paragraphs of this Agreement are
for convenience only and shall be given no substantive or interpretive effect
whatsoever.
12. GOVERNING LAW; ARBITRATION.
---------------------------
(a) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
(b) Any and all claims arising under or relating to this
Agreement and its subject matter shall be finally resolved only by arbitration
under the Commercial Arbitration Rules of the American Arbitration Association
then in effect. Arbitration shall take place in Orlando, Florida and shall be
conducted in the English language. Any arbitration award or judgment shall be
final, binding and conclusive and judgement may be entered upon such award by
any forum worldwide with jurisdiction over the party against whom the
arbitration award or judgment is to be enforced. The parties intend that in any
such arbitration proceeding that the arbitrators grant broad discovery relevant
to the claims to be arbitrated and that the arbitrators shall have authority to
award any
Page 16 of 20
<PAGE>
remedy or relief that a court could grant in conformity with applicable law. The
losing party in the arbitration (as determined by the arbitral tribunal) shall
pay all costs (including reasonable legal fees and disbursements) incurred by
the prevailing party in connection therewith. Each party hereby waives any and
all rights to, and hereby covenants not to bring, any lawsuit, arbitration or
other proceeding in any jurisdiction, judicial body or forum arising under or
relating to this Agreement or its subject matter (other than an arbitration
proceeding described above or a legal proceeding solely to enforce the award or
judgment of such arbitration proceeding).
13. COUNTERPARTS AND FACSIMILES.
----------------------------
This Agreement may be executed in one or more counterparts by
the parties hereto. All counterparts shall be construed together and shall
constitute one agreement. Each counterpart shall be deemed an original hereof
notwithstanding less than all of the parties may have executed it. All facsimile
executions shall be treated as originals for all purposes.
14. INVALIDITY OF PROVISION.
------------------------
The invalidity or unenforceability of any provision of this
Agreement in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. If any restriction or provision of this Agreement is held
unreasonable, unlawful or unenforceable in any respect, such restriction or
provision shall be interpreted, revised or applied in a manner that renders it
lawful and enforceable to the fullest extent possible under law.
15. FURTHER ASSURANCES.
-------------------
Each party hereto shall do and perform or cause to be done and
performed all further acts and things and shall execute and deliver all other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
16. ENTIRE AGREEMENT.
-----------------
This Agreement and the other writings referred to herein or
delivered in connection herewith contain the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
[remainder of page intentionally left blank]
Page 17 of 20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first written above.
PLANET HOLLYWOOD INTERNATIONAL, INC.
By:____________________________
Name:_________________________
Its:____________________________
Page 18 of 20
<PAGE>
ANNEX A
-------
NEW MONEY HOLDERS
_____________________________ ______________________________
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Its:_________________________ Its:__________________________
_____________________________ ______________________________
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Its:_________________________ Its:__________________________
_____________________________ ______________________________
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Its:_________________________ Its:__________________________
_____________________________ ______________________________
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Its:_________________________ Its:__________________________
Page 19 of 20
<PAGE>
ANNEX B
-------
NOTE HOLDERS
____________________________ ______________________________
By:_________________________ By:___________________________
Name:_______________________ Name:_________________________
Its:________________________ Its:__________________________
____________________________ ______________________________
Page 20 of 20
PLANET HOLLYWOOD INTERNATIONAL, INC.
2000 STOCK AWARD
AND INCENTIVE PLAN
0. Background.
----------
Pursuant to Section 6.2.5 of the First Amended Joint Plan of
Reorganization of the Company under Chapter 11 of the Bankruptcy Code dated
December 13, 1999, as the same may have been amended or supplemented from time
to time prior to the date hereof and has been approved by the United States
Bankruptcy Court for the District of Delaware (the "Plan of Reorganization"),
the Company is obligated to implement the Plan (as defined herein).
1. Purpose.
-------
The purpose of the Planet Hollywood International, Inc. 2000 Stock
Award and Incentive Plan (the "Plan") is to (i) attract and retain persons
eligible to participate in the Plan; (ii) motivate Participants, by means of
appropriate incentives, to achieve long-range goals; (iii) provide incentive
compensation opportunities that are competitive with those of other similar
companies; and (iv) further identify Participants' interests with those of the
Company's other stockholders through compensation that is based on the Company's
common stock; and thereby promote the long-term financial interest of the
Company, its Subsidiaries and Affiliates, including the growth in value of the
Company's equity and enhancement of long-term stockholder return.
2. Definitions.
-----------
The following terms, as used herein, shall have the following meanings:
(a) "Affiliate" shall mean (i) any limited partnership the
general partner of which is either Planet Hollywood or a Subsidiary; (ii) any
limited liability company in which either Planet Hollywood or a Subsidiary owns
at least fifty percent (50%) of the economic interests of such company; (iii)
any general partnership or joint venture in which either Planet Hollywood or a
Subsidiary owns at least fifty percent (50%) of the partnership interests or
venture interests, respectively; and (iv) any foreign entity in which Planet
Hollywood or a Subsidiary owns at least fifty percent (50%) of the shares or
other interests of such company and controls at least fifty percent (50%) of the
Board of Directors or similar governing body of such company.
(b) "Award" shall mean any Option, SAR, Restricted Stock,
Restricted Stock Unit, Dividend Equivalent or Other Stock-Based Award or Other
Cash-Based Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement,
contract, or other instrument or document between the Company and a Participant
or a Grantee
Page 1 of 17
<PAGE>
evidencing an Award.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Change in Control" shall mean the occurrence of an event
described in Section 12(f) hereof.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(g) "Committee" shall mean the Committee as appointed by the
Board and as described in Section 3 hereof.
(h) "Company" shall mean, collectively, Planet Hollywood and
all of its Subsidiaries and Affiliates now held or hereafter formed, organized,
or acquired.
(i) "Consolidated Net Earnings" shall mean the net earnings of
the Company for each fiscal year in a Performance Period determined in
accordance with generally accepted accounting principles and reported upon by
the Company's independent accountants, but before any provision for amounts paid
or accrued with respect to Awards in respect of such Performance Period.
(j) "Disability" shall mean a disability which would qualify
as a "permanent and total disability" under Section 22(e)(3) of the Code or any
successor provision.
(k) "Dividend Equivalent" shall mean a right, granted to a
Participant under Section 10, to receive cash, Stock, or other property equal in
value to dividends paid with respect to a specified number of shares of Stock.
Dividend Equivalents may be awarded on a freestanding basis or in connection
with another Award, and may be paid currently or on a deferred basis.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(m) "Fair Market Value" of a share of Stock on any date shall
mean (1) the opening price of such Stock on such date as officially reported on
the principal national securities exchange on which such Stock is then listed or
admitted to trading, or (2) if such Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the National Association of Securities Dealers, Inc.,
the opening price of the Stock on such date, or (3) if there shall have been no
trading on the previous business day or if the Stock is not so designated, the
average of the closing bid and asked prices of the Stock on such previous
business day as shown by the NASD automated quotation system, or (4) if such
Stock is not then listed or admitted to trading on any national exchange or
quoted in the over-the-counter market, the value determined by the Committee.
Page 2 of 17
<PAGE>
(n) "Grantee" shall mean an officer, director or other
employee of the Group who is, pursuant to Section 4 of the Plan, selected to
participate herein with respect to the grant of an Incentive Stock Option.
(o) "Group" shall mean, collectively, Planet Hollywood and all
of its Subsidiaries now held or hereafter formed, organized, or acquired.
(p) "Incentive Stock Option" shall mean an Option that meets
the requirements of Section 422 of the Code, or any successor provision, and
that is designated by the Committee as an Incentive Stock Option.
(q) "Nonqualified Stock Option" shall mean an Option other
than an Incentive Stock Option.
(r) "Operating Earnings Per Share" shall mean the per share
net earnings of the Company for each fiscal year in a Performance Period
determined in accordance with generally accepted accounting principles and
reported in the Company's audited financial statements for such fiscal year.
(s) "Option" shall mean the right, granted pursuant to this
Plan, of a holder to purchase shares of Stock at a price and upon the terms to
be specified by the Committee.
(t) "Other Cash-Based Award" shall mean cash awarded under
Section 11, including cash awarded as a bonus or upon the attainment of
specified performance criteria or otherwise as permitted under the Plan.
(u) "Other Stock-Based Award" shall mean a right or other
interest granted to a Participant under Section 11 that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Stock, including, but not limited to (1) unrestricted Stock
awarded as a bonus or upon the attainment of specified Performance Goals or
otherwise as permitted under the Plan, and (2) a right granted to a Participant
to acquire Stock from the Company for cash and/or a promissory note containing
terms and conditions prescribed by the Committee.
(v) "Participant" shall mean (i) an officer or director of the
Company, whether or not an employee, (ii) an employee of the Company who is not
an officer or director, or (iii) a person or service company that performs
services in the capacity of an independent contractor on behalf of the Company,
who (or which) is, pursuant to Section 4 of the Plan selected to participate
herein; provided, however, any Participant who (or which) is not also a Grantee
hereunder shall not be eligible to participate in the grant of an Incentive
Stock Option hereunder.
(w) "Performance Goal" shall mean the criteria and objectives,
determined by the Committee, which must be met during the applicable Performance
Period as a condition of the Participant's receipt of payment with respect to an
Award. Performance
Page 3 of 17
<PAGE>
Goals may include any or all of the following: (i) attainment of an amount of
cumulative Consolidated Net Earnings during a Performance Period: (ii)
attainment of a percentage of Return on Equity for a Performance Period; (iii)
attainment of amounts of Operating Earnings Per Share of the Company; (iv)
increases in the market price of Stock or levels of total return to stockholders
during the Performance Period; (v) attainment of goals established based on the
financial performance of individual subsidiaries or business segments of the
Company relating to increases in total revenues, operating expenses or pre-tax
operating earnings; (vi) such other personal performance goals as the Committee
shall, from time to time, establish.
(x) "Performance Period" shall mean a period of three
consecutive years or such other period (which in no case may be less than one
year) as may be determined by the Committee.
(y) "Plan" shall mean the Planet Hollywood International, Inc.
2000 Stock Award and Incentive Plan.
(z) "Plan Year" shall mean the Company's fiscal year.
(aa) "Planet Hollywood" shall mean Planet Hollywood
International, Inc., a Delaware corporation.
(bb) "Relationship" shall mean, solely with respect to an
independent contractor, such individual's or service company's capacity of
performing services as an independent contractor for the Company, and solely
with respect to a director that is not an employee of the Company, the
termination of such individual's position as a director of the Company.
(cc) "Restricted Stock" shall mean an Award of shares of Stock
to a Participant under Section 8 that may be subject to certain restrictions and
to a risk of forfeiture.
(dd) "Restricted Stock Unit" shall mean a right granted to a
Participant under Section 9 to receive Stock or cash at the end of a specified
deferral period, which right may be conditioned on the satisfaction of
Performance Goals or other criteria as may be determined by the Committee.
(ee) "Retirement" shall mean retirement of a Participant (who
is not an independent contractor) or a Grantee from the employ of the Company in
accordance with the terms of an applicable qualified retirement plan or, if such
Participant or Grantee is not covered by such a plan, on or after such
Participant's or Grantee's 65th birthday.
(ff) "Return on Equity" shall mean, for each fiscal year, the
quotient obtained by dividing (i) Consolidated Net Earnings for a fiscal year by
(ii) the average of common stockholders' equity of the Company as of the
beginning and the end of such fiscal year.
Page 4 of 17
<PAGE>
(gg) "Rule 16b-3" shall mean Rule 16b-3 under the Exchange
Act.
(hh) "Stock" shall mean shares of voting Class A Common Stock,
par value $.01 per share, of Planet Hollywood.
(ii) "SAR" shall mean a tandem or freestanding stock
appreciation right, granted to a Participant under Section 7, to be paid in an
amount measured by the appreciation in the Fair Market Value of Stock from the
date of grant to the date of exercise of the right.
(jj) "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
an Award, each of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
(kk) "Ten Percent Stockholder" shall mean a Grantee who, at
the time an Incentive Stock Option is to be granted to such Grantee, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
Planet Hollywood (or any Subsidiary) within the meaning of Section 424(d) of the
Code.
(ll) "Unvested Portion" shall mean that portion of an Option
or an SAR granted to a Participant or Grantee hereunder which is not a Vested
Portion. In the event a Participant or a Grantee is granted more than one Option
or SAR, the "Unvested Portion" shall refer to all of such Unvested Portions.
(mm) "Vested Portion" shall mean, as of a particular date,
that portion of an Option or an SAR granted to a Participant or Grantee
hereunder which is exercisable, and with respect to which a Participant or a
Grantee is vested, pursuant to the terms of such Participant's or Grantee's
Award Agreement. In the event a Participant or a Grantee is granted more than
one Option or SAR, the "Vested Portion" shall refer to all of such Participant's
or Grantee's Vested Portions.
3. Administration.
--------------
The Plan shall be administered by the Committee. The Committee shall
have the authority in its sole discretion, subject to and not inconsistent with
the express provisions of the Plan, to administer the Plan and to exercise all
the powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Stock to which an Award
may relate and the terms, conditions, restrictions and Performance Goals
relating to any Award; to accelerate or defer the vesting of any Award; to
determine whether, to
Page 5 of 17
<PAGE>
what extent, and under what circumstances an Award may be settled, canceled,
forfeited, transferred, exchanged, or surrendered; to make adjustments in the
Performance Goals in recognition of unusual or non-recurring events affecting
the Company or the financial statements of the Company, or in response to
changes in applicable laws, regulations, or accounting principles; to construe
and interpret the Plan and any Award; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of Award
Agreements; and to make all other determinations deemed necessary or advisable
for the administration of the Plan.
The Committee shall be selected by the Board, and shall consist of two
or more members of the Board. The Committee may appoint a chairperson and a
secretary and may make such rules and regulations for the conduct of its
business as it shall deem advisable, and shall keep minutes of its meetings. All
determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at a meeting
or by written consent. The Committee may delegate to one or more of its members
or to one or more agents such administrative duties as it may deem advisable,
and the Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all persons, including the Company, the Participant, the Grantee (or any
person claiming any rights under the Plan from or through any Participant or
Grantee) and any stockholder.
No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Award
granted hereunder.
4. Eligibility.
-----------
Awards may be granted to (i) officers, directors and other employees of
the Company, (ii) directors who are not employees of the Company, and (iii)
persons and service companies providing services in their capacities as
independent contractors for the Company, in the sole discretion of the
Committee. In determining the persons or service companies to whom Awards shall
be granted and the type of Award, the Committee shall take into account such
factors as the Committee shall deem relevant in connection with accomplishing
the purposes of the Plan.
5. Stock Subject to the Plan; Limitation on Grants. The maximum number
of shares of Stock reserved for issuance pursuant to the Plan shall be Five
Hundred Thousand (500,000) shares, subject to the adjustment as provided herein;
provided, however, in the event the Board approves and effects a stock split,
then the maximum number of shares of Stock reserved for issuance pursuant to the
Plan shall, without any further action by the Board or the Committee and without
amendment to this Plan, be correspondingly increased (in accordance with the
terms of such split), subject to adjustment as provided herein.
In the event that the Committee shall determine that any dividend or
other
Page 6 of 17
<PAGE>
distribution (whether in the form of cash, Stock, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems necessary or appropriate to any or
all of (i) the number and kind of shares of Stock which may thereafter be issued
in connection with Awards, (ii) the number and kind of shares of Stock issued or
issuable in respect of outstanding Awards, and (iii) the exercise price, grant
price, or purchase price relating to any Award; provided, that, with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424 of the Code.
If any Award granted under this Plan is terminated, canceled or
otherwise expires for any reason whatsoever, in whole or in part, the shares (or
remaining shares) of Stock subject to that particular Award shall again be
available for grant under this Plan.
6. Stock Options. The Committee shall have authority to grant
Nonqualified Stock Options to Participants and Incentive Stock Options to
Grantees on the following terms and conditions:
(a) Number of Shares. Each Award Agreement shall state the
number of shares of Stock to which the Option relates.
(b) Type of Option. Each Award Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option.
(c) Option Price. Each Award Agreement shall state the Option
price. The Option price per share of Stock purchasable under an Option shall be
determined by the Committee; provided, that, in the case of an Incentive Stock
Option, such exercise price shall be not less than the Fair Market Value of a
share on the date of grant of such Option. The date as of which the Committee
adopts a resolution expressly granting an Option shall be considered the day on
which such Option is granted.
(d) Method and Time of Payment. The Option price shall be paid
in full, at the time of exercise, in cash or in shares of Stock having a Fair
Market Value equal to such Option price or in a combination of cash and Stock
or, in the sole discretion of the Committee, through a cashless exercise
procedure.
(e) Term and Exercisability of Options. Options shall be
exercisable over the exercise period (which, with respect to Incentive Stock
Options, shall not exceed (10) years from the date of grant), at such times and
upon such conditions as the Committee may determine, as reflected in the Award
Agreement; provided, that, the Committee shall have the authority to accelerate
the exercisability or vesting of any outstanding Option (including, without
limitation, the exercisability or vesting of any outstanding Option after the
occurrence of an event described in Section 6(i) below), or extend the exercise
period, at such times and under such circumstances as it, in its sole
discretion, deems appropriate;
Page 7 of 17
<PAGE>
provided, however, with respect to Incentive Stock Options, the Committee shall
not be permitted to extend the exercise period beyond that date which is ten
(10) years from the date of grant. An Option may be exercised, as to any or all
full shares of Stock as to which the Option has become exercisable, by written
notice delivered in person or by mail to the Secretary of Planet Hollywood,
specifying the number of shares of Stock with respect to which the Option is
being exercised. For purposes of the preceding sentence, the date of exercise
will be deemed to be the date upon which the Secretary of Planet Hollywood
receives such notification, provided that payment for such shares is received by
Planet Hollywood upon such date.
(f) Delivery of Purchased Stock. On the exercise date
specified in the Participant's or Grantee's notice or as soon thereafter as is
practicable, Planet Hollywood shall deliver to the exercising Participant or
Grantee, a certificate or certificates for the shares of Stock then being
purchased (out of theretofore unissued Stock or reacquired Stock, as Planet
Hollywood may elect) upon full payment for such shares. The obligation of Planet
Hollywood to deliver Stock shall, however, be subject to the condition that if
at any time the Board shall determine in its discretion that the listing,
registration or qualification of the Option or such shares upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board.
(g) Failure to Pay or Accept Delivery. If an exercising
Participant or Grantee fails to pay for any Stock specified in such notice or
fails to accept delivery thereof, such Participant's or Grantee's right to
purchase such Stock may be terminated by the Committee or Planet Hollywood.
(h) No Rights of Stockholders. Neither any Participant nor
Grantee nor any personal representative (or beneficiary) shall be, or shall have
any rights and privileges of, a stockholder of Planet Hollywood with respect to
any shares of Stock purchasable or issuable upon the exercise of any Option
granted hereunder, in whole or in part, prior to the date of exercise of such
Option.
(i) Termination. If a Participant's or Grantee's employment
by, or Relationship with, the Company terminates, Options granted to such
Participant or Grantee prior to such termination shall remain exercisable
following the effective date of such termination as follows:
(i) Cause. If the Relationship of a Participant or
the employment of a Participant or Grantee by the Company is terminated for
cause, all Options granted to such Participant or Grantee shall be canceled as
of the effective date of such termination;
(ii) Retirement or Disability. Upon a Participant's
or Grantee's
Page 8 of 17
<PAGE>
termination of employment by reason of Retirement or Disability, or
a Participant's Relationship by reason of Disability, such Participant's or
Grantee's Vested Portion as of the effective date of such Retirement or
Disability shall remain exercisable for a period of one (1) year following such
effective date (or for such longer period as may be prescribed by the Committee,
but in no event beyond the expiration date of such Option) and such
Participant's or Grantee's Unvested Portion as of the effective date of such
Retirement or Disability shall be canceled;
(iii) Other Terminations of the Relationship or
Employment. If a Participant's Relationship or a Participant's or Grantee's
employment by the Company is terminated for any reason other than those
described in subsection (i) or (ii) above, the Vested Portion as of the
effective date of such termination of the Relationship or employment shall
remain exercisable for a period of three (3) months from the effective date of
such termination of the Relationship or employment (or for such longer period as
may be prescribed by the Committee, but in no event beyond the expiration date
of such Option) and the Unvested Portion as of the effective date of such
Participant's or Grantee's termination of the Relationship or employment shall
be canceled;
(iv) Death. If a Participant dies during the
Relationship or a Participant or Grantee dies while employed by the Company or
during the applicable Option exercise period following the effective date of
such Participant's or Grantee's Retirement, Disability or other termination of
the Relationship or employment, as described in subsections (ii) or (iii) above,
such Participant's or Grantee's executors, administrators, legatees or
distributees shall have a period expiring on the date one (1) year from the date
of such Participant's or Grantee's death (or for such longer period as may be
prescribed by the Committee, but in no event beyond the expiration date of such
Option) within which to exercise such Participant's or Grantee's exercisable
Options and the Unvested Portion as of the date of such Participant's or
Grantee's death shall become fully vested as of such date (except with respect
to the death of a Participant or Grantee occurring after the effective date of
such Participant's or Grantee's Retirement, Disability or other termination of
the Relationship or employment, in which case, such Unvested Portion as of the
effective date of such Participant's or Grantee's death shall be canceled).
A transfer of a Participant's or Grantee's Relationship
between Planet Hollywood and any Subsidiary or Affiliate, or between any
Subsidiaries or Affiliates, shall not be deemed to be a termination of such
Participant's or Grantee's Relationship. Further, the conversion of a
Participant from an independent contractor to an employee, or vice versa, shall
not be considered a termination of such Participant's Relationship or
employment.
(j) Other Provisions. Options may be subject to such other
conditions (which conditions shall lapse; provided, the Committee shall
prescribe in its discretion the duration of such lapsing conditions) including,
but not limited to, restrictions on transferability of the shares acquired upon
exercise of such Options, as the Committee may prescribe in its discretion.
Page 9 of 17
<PAGE>
(k) Incentive Stock Options. Options granted as Incentive
Stock Options shall be subject to the following special terms and conditions, in
addition to the general terms and conditions specified in this Section 6.
(i) Value of Shares. The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the shares
of Stock with respect to which Incentive Stock Options granted under this Plan
and all other plans of the Group become exercisable for the first time by each
Grantee during any calendar year shall not exceed $100,000.
(ii) Ten Percent Stockholder. In the case of an
Incentive Stock Option granted to a Ten Percent Stockholder, (x) the Option
Price shall not be less than one hundred ten percent (110%) of the Fair Market
Value of the shares of Stock on the date of grant of such Incentive Stock
Option, and (y) the exercise period shall not exceed five (5) years from the
date of grant of such Incentive Stock Option.
(iii) Issuance to Grantees. Incentive Stock Options
shall be awarded solely to those eligible persons that are Grantees hereunder.
(iv) Timing of Grant. Incentive Stock Options shall
be granted hereunder only within the ten (10) year period commencing with the
Effective Date of the Plan.
7. Stock Appreciation Rights. The Committee is authorized to grant
freestanding SARs and SARs granted in tandem with an Option to Participants on
the following terms and conditions:
(a) In General. Unless the Committee determines otherwise, an
SAR (1) granted in tandem with a Nonqualified Stock Option may be granted at the
time of grant of the related Nonqualified Stock Option or at any time thereafter
or (2) granted in tandem with an Incentive Stock Option may only be granted at
the time of grant of the related Incentive Stock Option. An SAR granted in
tandem with an Option shall be exercisable only to the extent the underlying
Option is exercisable.
(b) SARs. An SAR shall confer on the Participant a right to
receive with respect to each share subject thereto, upon exercise thereof, the
excess of (1) the Fair Market Value of one share of Stock on the date of
exercise over (2) the grant price of the SAR (which in the case of an SAR
granted in tandem with an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other SAR shall be such price as
the Committee may determine).
(c) Treatment of Related Options and Tandem SARs Upon
Exercise. Upon the exercise of a tandem SAR, the related Option shall be
canceled to the extent of the number of shares of Stock as to which the tandem
SAR is exercised and upon the exercise of an Option granted in connection with a
tandem SAR, the tandem SAR shall be canceled to the extent of the number of
shares of Stock as to which the Option is
Page 10 of 17
<PAGE>
exercised.
(d) Method of Exercise. SARs shall be exercised by a
Participant only by a written notice delivered in person or by mail to the
Secretary of Planet Hollywood, specifying the number of shares of Stock with
respect to which the SAR is being exercised. If requested by the Committee, the
Participant shall deliver the Award Agreement evidencing the SAR and the related
Option (if applicable) to the Secretary of Planet Hollywood, who shall endorse
thereon a notation of such exercise and return such Award Agreement to the
Participant. For purposes of this subsection (d), the date of exercise will be
deemed to be the date upon which the Secretary of Planet Hollywood receives such
notification.
(e) Form of Payment. Payment of the amount determined under
subsection (d) above may be made in whole shares of Stock in a number determined
based upon their Fair Market Value on the date of exercise of the SAR or,
alternatively, at the sole discretion of the Committee, solely in cash, or in a
combination of cash and shares of Stock as the Committee deems advisable. If the
Committee decides to make full payment in shares of Stock, and the amount
payable results in a fractional share, payment for the fractional share will be
made in cash. Notwithstanding the foregoing, to the extent required by Rule
16b-3, no payment in the form of cash may be made upon the exercise of a SAR to
a Participant who is subject to the reporting requirements of Section 16(a) of
the Exchange Act, unless the exercise of such SAR is made during the period
beginning on the third business day and ending on the twelfth business day
following the date of release for publication of the Company's quarterly or
annual statements of earnings or is otherwise made under circumstances which
comply with said Rule 16b-3.
(f) Term and Exercisability of Freestanding SARs. Each
applicable Award Agreement shall provide the exercise schedule for the
freestanding SAR as determined by the Committee; provided, that, the Committee
shall have the authority to accelerate the exercisability of any freestanding
SAR at such time and under such circumstances as it, in its sole discretion,
deems appropriate. The exercise period shall be ten (10) years from the date of
the grant of the freestanding SAR or such shorter period as is determined by the
Committee. The exercise period shall be subject to earlier termination as
provided in Section 7(g) hereof.
(g) Termination. The terms and conditions set forth in Section
6(i) hereof, relating to exercisability of Options in the event of termination
of the Relationship or employment with the Company shall apply equally with
respect to the exercisability of freestanding SARs following termination of the
Relationship or employment.
8. Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(a) Issuance and Restrictions. Each applicable Award Agreement
shall set forth thenumber of shares of Restricted Stock granted pursuant to the
Award Agreement. Restricted Stock shall be subject to such restrictions on
transferability and other restrictions, if any, as the Committee may impose at
the date of grant or thereafter,
Page 11 of 17
<PAGE>
which restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee may
determine. Such conditions may lapse in whole or in part based upon achievement
of such Performance Goals for the Performance Period as have been set by the
Committee.
(b) Restrictions. Prior to vesting, shares of Restricted Stock
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution, or, if then
permitted under Rule 16b-3, pursuant to a qualified domestic relations order as
defined in Title I of the Employee Retirement Income Security Act of 1974, as
amended. Certificates for shares of Stock issued pursuant to awards of
Restricted Stock shall bear an appropriate legend referring to such
restrictions, and any attempt to dispose of any such shares of Stock in
contravention of such restrictions shall be null and void and without effect.
Prior to vesting, such certificates shall be held in escrow by an escrow agent
appointed by the Committee.
(c) Forfeiture. Subject to such exceptions as may be
determined by the Committee, if the Participant's continuous Relationship or
employment with the Company shall terminate for any reason prior to vesting of
the Restricted Stock, or to the extent any Performance Goals for the Performance
Period are not met, any shares remaining subject to restrictions shall thereupon
be forfeited by the Participant and transferred to, and reacquired by, the
Company at no cost to the Company; provided, that, the Committee may provide, by
rule or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Stock
will be waived in whole or in part.
(d) Rights as a Stockholder. Except to the extent restricted
under the Award Agreement, a Participant shall have all of the rights of a
Stockholder including, without limitation, the right to vote Restricted Stock
and the right to receive dividends thereon. Dividends paid on Restricted Stock
shall be either paid at the dividend payment date, or deferred for payment to
such date as determined by the Committee, in cash or in shares of unrestricted
Stock having a Fair Market Value equal to the amount of such dividends. Stock
distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Stock or other property has been distributed.
(e) Other Provisions. The Restricted Stock Agreements
authorized under the Plan shall contain such other provisions not inconsistent
with this Plan, including, without limitation, the imposition of restrictions
upon the transferability of Restricted Stock and conditions on vesting of
Restricted Stock as the Committee shall deem advisable.
9. Restricted Stock Units. The Committee is authorized to grant
Restricted Stock Units to Participants, subject to the following terms and
conditions:
(a) Award and Restrictions. Delivery of Stock or cash, as
determined by the Committee, will occur upon expiration of the deferral period
specified for Restricted Stock Units by the Committee. In addition, Restricted
Page 12 of 17
<PAGE>
Stock Units shall be subject to such restrictions as the Committee may impose,
at the date of grant or thereafter, which restrictions may lapse at the
expiration of the deferral period or at earlier or later specified times,
separately or in combination, in installments or otherwise, as the Committee may
determine. Such restrictions may lapse in whole or in part based upon
achievement of such Performance Goals for the Performance Period as have been
set by the Committee.
(b) Forfeiture. Upon termination of the Relationship or
employment during the applicable deferral period or portion thereof to which
forfeiture conditions apply, or upon failure to satisfy any other conditions
precedent to the delivery of Stock or cash to which such Restricted Stock Units
relate (or to the extent any Performance Goals for the Performance Period are
not met), all Restricted Stock Units that are then subject to deferral or
restriction shall be forfeited; provided, that, the Committee may provide, by
rule or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Stock
Units will be waived in whole or in part.
10. Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Participants. The Committee may provide, at the date of grant or
thereafter, that Dividend Equivalents shall be paid or distributed when accrued
or shall be deemed to have been reinvested in additional Stock, or other
investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents) shall be subject to
all conditions and restrictions of the underlying Awards to which they relate.
11. Other Stock-or Cash-Based Awards. The Committee is authorized to
grant to Participants Other Stock-Based Awards or Other Cash-Based Awards as an
element of or supplement to any other Award under the Plan, as deemed by the
Committee to be consistent with the purposes of the Plan. Such Awards may be
granted with value and payment contingent upon achievement of Performance Goals
or any other factors designated by the Committee. The Committee shall determine
the terms and conditions of such Awards at the date of grant or thereafter.
12. General Provisions.
------------------
(a) Compliance with Legal Requirements. The Plan and the
granting and exercising of Awards, and the other obligations of the Company
under the Plan and any Award Agreement or other agreement shall be subject to
all applicable federal and state laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Stock under
any Award as the Company may consider appropriate, and may require any
Participant or Grantee to make such representations and furnish such information
as it may consider appropriate in connection with the issuance or delivery of
Stock in compliance with applicable laws, rules and regulations. Furthermore,
notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other
distributions of benefits
Page 13 of 17
<PAGE>
under the Plan unless such delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act of 1933, as amended), and the applicable requirements of any
securities exchange or similar entity.
(b) Transferability. Unless otherwise permitted by the
Committee in writing, Awards shall not be transferable by a Participant or
Grantee except by will or the laws of descent and distribution or by operation
of law.
(c) No Right To Continued Employment or Relationship. Nothing
in the Plan or in any Award granted or any Award Agreement or other agreement
entered into pursuant hereto shall confer upon any Participant or Grantee the
right to continue in the employ of the Company or in their Relationship, or to
be entitled to any remuneration or benefits not set forth in the Plan or such
Award Agreement or other agreement or to interfere with or limit in any way the
right of the Company to terminate such Participant's or Grantee's employment or
Relationship.
(d) Withholding Taxes. Where a Participant or Grantee or other
person is entitled to receive shares of Stock pursuant to the exercise of an
Option or is otherwise entitled to receive shares of Stock or cash pursuant to
an Award hereunder, the Company shall have the right to require the Participant
or Grantee or such other person to pay to the Company the amount of any taxes
which the Company may be required to withhold before delivery to such
Participant or Grantee or other person of cash or a certificate or certificates
representing such shares.
Unless otherwise prohibited by the Committee or by applicable law, a
Participant or Grantee may satisfy any such withholding tax obligation by any of
the following methods, or by a combination of such methods: (a) tendering a cash
payment; (b) authorizing the Company to withhold from the shares of Stock or
cash otherwise payable to such Participant or Grantee (1) one or more of such
shares having an aggregate Fair Market Value, determined as of the date the
withholding tax obligation arises, less than or equal to the amount of the total
withholding tax obligation or (2) cash in an amount less than or equal to the
amount of the total withholding tax obligation; or (c) delivering to the Company
previously acquired shares of Stock (none of which shares may be subject to any
claim, lien, security interest, community property right or other right of
spouses or present or former family members, pledge, option, voting agreement or
other restriction or encumbrance of any nature whatsoever) having an aggregate
Fair Market Value, determined as of the date the withholding tax obligation
arises, less than or equal to the amount of the total withholding tax
obligation. A Participant's or Grantee's election to pay his or her withholding
tax obligation (in whole or in part) by the method described in (b)(1) above is
irrevocable with respect to such exercise once it is made, may be disapproved by
the Committee and, if made by any person who is subject to Section 16(b) of the
Exchange Act, must be made (x) only during the period beginning on the third
business day following the date of release of the Company's quarterly or annual
summary statement of sales and earnings and ending on the twelfth business day
following the date of such release or (y) not less than six months prior to the
date such Participant's or Grantee's withholding tax obligation arises.
Page 14 of 17
<PAGE>
(e) Amendment and Termination of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided, that, no amendment which
requires stockholder approval under applicable law or in order for the Plan to
continue to comply with the Exchange Act shall be effective unless the same
shall be approved by the requisite vote of the stockholders of the Company.
Notwithstanding the foregoing, no amendment shall affect adversely any of the
rights of any Participant or Grantee, without such Participant's or Grantee's
consent, under any Award theretofore granted under the Plan; provided, however,
the Plan may be amended by either the Board or the Committee at any time without
the consent of any Participant or Grantee or the approval of Planet Hollywood's
stockholders if either the Board or the Committee determines, each in its sole
discretion, that amendment is necessary or advisable in the light of any
addition to or change in the Code or in the regulations issued thereunder, or
any federal or state securities law or other law or regulation. If the Plan is
terminated, any unexercised Award shall continue to be exercisable in accordance
with its terms and the terms of the Plan in effect immediately prior to such
termination.
(f) Change in Control. Notwithstanding any other provision of
the Plan to the contrary, if, while any Awards remain outstanding under the
Plan, a "Change in Control" of Planet Hollywood (as defined in this Section
12(f)) shall occur, (1) all Options and freestanding SARs granted under the Plan
that are outstanding at the time of such Change in Control shall become
immediately exercisable in full; (2) with respect to Awards granted with respect
to Performance Goals, all Performance Periods outstanding at the time of such
Change in Control shall be deemed to have been completed, the maximum level of
performance set forth under the respective Performance Goals shall be deemed to
have been attained and a pro rata portion (based on the number of full and
partial months which have elapsed with respect to each Performance Period) of
each such outstanding Award granted to each Participant or Grantee for all
outstanding Performance Periods shall become payable in cash to each Participant
or Grantee, with the remainder of each such outstanding award being canceled for
no value; and (3) all restrictions with respect to shares of Restricted Stock or
any other Awards not described in (1) and (2) above shall lapse, and such shares
or other Awards shall be fully vested and nonforfeitable. For purposes of this
Section 12(f), with respect to determining the cash equivalent value of a
Restricted Stock Unit, the Fair Market Value of a share of Stock shall be deemed
to equal the greater of (i) the Fair Market Value of a share of Stock as of the
date on which a Change in Control occurs, or (ii) the price of a share of Stock
which is paid or offered to be paid, by any person or entity, in connection with
any transaction which constitutes a Change in Control pursuant to this Section
12(f).
For purposes of this Section 12(f), a Change in Control of Planet
Hollywood shall occur upon the happening of the earliest to occur of the
following:
(i) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than (1) Planet Hollywood, (2) any
trustee or other fiduciary holding securities under an employee benefit plan of
Planet Hollywood, or (3) any corporation owned, directly or indirectly, by the
stockholders of Planet Hollywood in
Page 15 of 17
<PAGE>
substantially the same proportions as their ownership of Stock (each an
"excluded person")), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of Planet
Hollywood (not including in the securities beneficially owned by such person any
securities acquired directly from Planet Hollywood or its affiliates)
representing 50% or more of the combined voting power of Planet Hollywood's then
outstanding voting securities;
(ii) during any period of not more than two
consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a person
who has entered into an agreement with Planet Hollywood to effect a transaction
described in clause (i), (iii) or (iv) of this subsection (f)) whose election by
the Board or nomination for election by Planet Hollywood's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved (other than
approval given in connection with an actual or threatened proxy or election
contest), cease for any reason to constitute at least a 70% majority of the
Board;
(iii) the stockholders of Planet Hollywood approve a
merger or consolidation of Planet Hollywood with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of Planet Hollywood outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) 80% or more of the combined voting
power of the voting securities of Planet Hollywood or such surviving or parent
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of Planet
Hollywood (or similar transaction) in which no "person" (as hereinabove defined)
acquired 50% or more of the combined voting power of Planet Hollywood's then
outstanding securities; or
(iv) the stockholders of Planet Hollywood approve a
plan of complete liquidation of Planet Hollywood or an agreement for the sale or
disposition by Planet Hollywood of all or substantially all of Planet
Hollywood's assets (or any transaction having a similar effect).
(g) Participant or Grantee Rights. No Participant or Grantee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment for Participants or Grantees. Except as
provided specifically herein, a Participant or Grantee or a transferee of an
Award shall have no rights as a stockholder with respect to any shares covered
by any Award until the date of the issuance of a Stock certificate to him for
such shares.
(h) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or Grantee pursuant to an
Award, nothing contained in the Plan or any Award shall give any such
Participant or Grantee any rights that are greater than those of a general
creditor of the Company.
Page 16 of 17
<PAGE>
(i) No Fractional Shares. No fractional shares of Stock shall
be issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
(j) Governing Law. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State of
Delaware without giving effect to the conflict or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.
(k) Effective Date. The Plan shall take effect upon the
"Effective Date" of the Plan of Reorganization (as such term is defined
therein).
(l) Beneficiary. A Participant or Grantee may file with the
Committee a written designation of a beneficiary on such form as may be
prescribed by the Committee and may, from time to time, amend or revoke such
designation. If no designated beneficiary survives the Participant or Grantee,
the executor or administrator of the Participant's or Grantee's estate shall be
deemed to be such Participant's or Grantee's beneficiary.
(m) Interpretation. The Plan is designed and intended to
comply with Rule 16b-3 and all provisions hereof shall be construed in a manner
to so comply.
Page 17 of 17
PLANET HOLLYWOOD INTERNATIONAL, INC.
2000 CELEBRITY STOCK
AWARD AND INCENTIVE PLAN
0. Background. Pursuant to Section 6.2.5 of the First Amended Joint
Plan of Reorganization of the Company under Chapter 11 of the Bankruptcy Code
dated December 13, 1999, as the same may have been amended or supplemented from
time to time prior to the date hereof and has been approved by the United States
Bankruptcy Court for the District of Delaware (the "Plan of Reorganization"),
the Company is obligated to implement the Plan (as defined herein).
1. Purpose. The purpose of the Planet Hollywood International, Inc.
2000 Celebrity Stock Award and Incentive Plan (the "Plan") is to afford an
incentive to selected celebrities and others (including certain producers,
agents and business advisors) in their capacities as independent contractors of
Planet Hollywood International, Inc. or any Subsidiaries which now exist or
hereafter are organized or acquired (collectively, the "Company"), to (i)
acquire a proprietary interest in the Company, (ii) continue as independent
contractors, (iii) increase their efforts on behalf of the Company and (iv)
promote the success of the Company's business, thereby promoting the long-term
financial interest of the Company, including the growth in value of the
Company's equity and enhancement of long-term stockholder return.
2. Definitions. The following terms, as used herein, shall have the
following meanings:
(a) "Award" shall mean any Option, SAR, Restricted Stock,
Restricted Stock Unit, Dividend Equivalent or Other Stock-Based Award or Other
Cash-Based Award granted under the Plan.
(b) "Award Agreement" shall mean any written agreement,
contract, or other instrument or document between the Company and a Participant
evidencing an Award.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change in Control" shall mean the occurrence of an event
described in Section 12(f) hereof.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Committee" shall mean the Committee of the Board as
described in Section 3 hereof.
<PAGE>
(g) "Company" shall mean, collectively, Planet Hollywood and
all of its subsidiaries now held or hereafter acquired.
(i) "Disability" shall mean a disability which would qualify
as a "permanent and total disability" under Section 22(e)(3) of the Code or any
successor provision.
(h) "Dividend Equivalent" shall mean a right, granted to a
Participant under Section 10, to receive cash, Stock, or other property equal in
value to dividends paid with respect to a specified number of shares of Stock.
Dividend Equivalents may be awarded on a freestanding basis or in connection
with another Award, and may be paid currently or on a deferred basis.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Fair Market Value" of a share of Stock on any date shall
mean (1) the opening price of such Stock on such date as officially reported on
the principal national securities exchange on which such Stock is then listed or
admitted to trading, or (2) if such Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a national
market system security by the National Association of Securities Dealers, Inc.,
the opening price of the Stock on such date, or (3) if there shall have been no
trading on the previous business day or if the Stock is not so designated, the
average of the closing bid and asked prices of the Stock on such previous
business day as shown by the NASD automated quotation system, or (4) if such
Stock is not then listed or admitted to trading on any national exchange or
quoted in the over-the-counter market, the value determined by the Committee.
(k) "Option" shall mean the right, granted pursuant to this
Plan, of a holder to purchase shares of Stock at a price and upon the terms to
be specified by the Committee.
(l) "Other Cash-Based Award" shall mean cash awarded under
Section 11, including cash awarded as a bonus or otherwise as permitted under
the Plan.
(m) "Other Stock-Based Award" shall mean a right or other
interest granted to a Participant under Section 11 that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on,
or related to, Stock, including, but not limited to (1) unrestricted Stock
awarded as a bonus or otherwise as permitted under the Plan, and (2) a right
granted to a Participant to acquire Stock from the Company for cash and/or a
promissory note containing terms and conditions prescribed by the Committee.
(n) "Participant" shall mean an independent contractor of the
Company who is, pursuant to Section 4 of the Plan, selected to participate
herein.
Page 2 of 12
<PAGE>
(o) "Plan" shall mean the Planet Hollywood International, Inc.
2000 Celebrity Stock Award and Incentive Plan.
(p) "Plan Year" shall mean the Company's fiscal year.
(q) "Planet Hollywood" shall mean Planet Hollywood
International, Inc., a Delaware corporation.
(r) "Restricted Stock" shall mean an Award of shares of Stock
to a Participant under Section 8 that may be subject to certain restrictions and
to a risk of forfeiture.
(s) "Restricted Stock Unit" shall mean a right granted to a
Participant under Section 9 to receive Stock or cash at the end of a specified
deferral period, which right may be conditioned on the satisfaction of criteria
determined by the Committee.
(t) "Stock" shall mean shares of voting Class A common stock,
par value $.01 per share, of Planet Hollywood.
(u) "SAR" shall mean a tandem or freestanding stock
appreciation right, granted to a Participant under Section 7, to be paid an
amount measured by the appreciation in the Fair Market Value of Stock from the
date of grant to the date of exercise of the right.
(v) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of granting of an Award,
each of the corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
3. Administration. The Plan shall be administered by the Committee. The
Committee shall have the authority in its sole discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan and
to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Awards; to determine the
persons to whom and the time or times at which Awards shall be granted; to
determine the type and number of Awards to be granted, the number of shares of
Stock to which an Award may relate and the terms, conditions, restrictions
relating to any Award; to accelerate or defer the vesting of any Award; to
determine whether, to what extent, and under what circumstances an Award may be
settled, canceled, forfeited, transferred, exchanged, or surrendered; to
construe and interpret the Plan and any Award; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of Award Agreements; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
Page 3 of 12
<PAGE>
The Committee shall consist of two or more persons selected by the
Board. The Committee may appoint a chairperson and a secretary and may make such
rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Committee shall be made by a majority of its members either present in person or
participating by conference telephone at a meeting or by written consent. The
Committee may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons,
including the Company, the Participant (or any person claiming any rights under
the Plan from or through any Participant) and any stockholder.
No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Award
granted hereunder.
4. Eligibility. Awards may be granted to independent contractors of the
Company in the sole discretion of the Committee. In determining the persons to
whom Awards shall be granted and the type of Award, the Committee shall take
into account such factors as the Committee shall deem relevant in connection
with accomplishing the purposes of the Plan.
5. Stock Subject to the Plan; Limitation on Grants. The maximum number
of shares of Stock reserved for issuance pursuant to the Plan shall be Five
Hundred Thousand (500,000) shares, subject to adjustment as provided herein;
provided, however, in the event the Board approves and effects a stock split,
then the maximum number of shares of Stock reserved for issuance pursuant to the
Plan shall, without any further action by the Board or the Committee and without
amendment to this Plan, be correspondingly increased (in accordance with the
terms of such split), subject to adjustment as provided herein.
In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Stock, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems necessary or appropriate to any or
all of (i) the number and kind of shares of Stock which may thereafter be issued
in connection with Awards, (ii) the number and kind of shares of Stock issued or
issuable in respect of outstanding Awards, and (iii) the exercise price, grant
price, or purchase price relating to any Award.
Page 4 of 12
<PAGE>
If any Award granted under this Plan is terminated, canceled or
otherwise expires for any reason whatsoever, in whole or in part, the shares (or
remaining shares) of Stock subject to that particular Award shall again be
available for grant under this Plan.
6. Stock Options. The Committee shall have authority to grant Stock
Options to Participants on the following terms and conditions:
(a) Number of Shares. Each Award Agreement shall state the
number of shares of Stock to which the Option relates.
(b) Type of Option. Only nonqualified stock options may be
granted under the Plan.
(c) Option Price. Each Award Agreement shall state the Option
price. The Option price per share of Stock purchasable under an Option shall be
determined by the Committee. The date as of which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such Option is granted.
(d) Method and Time of Payment. The Option price shall be paid
in full, at the time of exercise, in cash or in shares of Stock having a Fair
Market Value equal to such Option price or in a combination of cash and Stock
or, in the sole discretion of the Committee, through a cashless exercise
procedure. If an exercising Participant fails to pay for any Stock at the time
of exercise or fails to accept delivery thereof, such Participant's right to
purchase stock may be terminated by the Committee or Planet Hollywood.
(e) Term and Exercisability of Options. Options shall be
exercisable over the exercise period and at such times and upon such conditions
as the Committee may determine, as reflected in the Award Agreement; provided
that, the Committee shall have the authority to accelerate or extend the
exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. An Option may be
exercised, as to any or all full shares of Stock as to which the Option has
become exercisable, by written notice delivered in person or by mail to the
Secretary of Planet Hollywood, specifying the number of shares of Stock with
respect to which the Option is being exercised. For purposes of the preceding
sentence, the date of exercise will be deemed to be the date upon which the
Secretary of Planet Hollywood receives such notification.
(f) Termination. Subject to such exceptions as may be
determined by the Committee, if a Participant's independent contractor
relationship with the Company terminates, Options granted to such Participant
prior to such termination shall remain exercisable following the effective date
of such termination as follows:
(i) Disability. Upon the termination of a
Participant's independent contractor relationship with the Company by reason of
Disability, all
Page 5 of 12
<PAGE>
Options that are immediately exercisable on the effective date of such
Participant's Disability shall remain exercisable for a period of one (1) year
following such effective date (or for such longer period as may be prescribed by
the Committee, but in no event beyond the expiration date of such Option);
(ii) Death. If a Participant dies while an independent
contractor of the Company or during the applicable Option exercise period
following the effective date of his disability or other termination of the
independent contractor relationship, as described in subsections (i) or (iii),
his executors, administrators, legatees or distributees shall have a period
expiring on the date one (1) year from the date of his death (or for such longer
period as may be prescribed by the Committee, but in no event beyond the
expiration date of such Option) within which to exercise his exercisable
Options;
(iii) Other Terminations of Independent Contractor
Relationship. If a Participant's independent contractor relationship with the
Company is terminated for any reason other than those described in subsections
(i) or (ii) above, all Options that are immediately exercisable on the effective
date of such termination of the independent contractor relationship shall remain
exercisable for a period of three (3) months from the effective date of such
termination of employment (or for such longer period as may be prescribed by the
Committee, but in no event beyond the expiration date of such Option).
(g) Other Provisions. Options may be subject to such other
conditions including, but not limited to, restrictions on transferability of the
shares acquired upon exercise of such Options, as the Committee may prescribe in
its discretion.
7. Stock Appreciation Rights. The Committee is authorized to grant
freestanding SARs and SARs granted in tandem with an Option to Participants on
the following terms and conditions:
(a) In General. Unless the Committee determines otherwise, an
SAR granted in tandem with an Option may be granted at the time of grant of the
related Option or at any time thereafter. An SAR granted in tandem with an
Option shall be exercisable only to the extent the underlying Option is
exercisable.
(b) SARs. An SAR shall confer on the Participant a right to
receive with respect to each share subject thereto, upon exercise thereof, the
excess of (1) the Fair Market Value of one share of Stock on the date of
exercise over (2) the grant price of the SAR (which in the case of an SAR
granted in tandem with an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other SAR shall be such price as
the Committee may determine).
(c) Treatment of Related Options and Tandem SARs Upon
Exercise. Upon the exercise of a tandem SAR, the related Option shall be
canceled to the extent of the number of shares of Stock as to which the tandem
SAR is exercised and upon
Page 6 of 12
<PAGE>
the exercise of an Option granted in connection with a tandem SAR, the tandem
SAR shall be canceled to the extent of the number of shares of Stock as to which
the Option is exercised.
(d) Method of Exercise. SARs shall be exercised by a
Participant only by a written notice delivered in person or by mail to the
Secretary of Planet Hollywood, specifying the number of shares of Stock with
respect to which the SAR is being exercised. If requested by the Committee, the
Participant shall deliver the Award Agreement evidencing the SAR and the related
Option (if applicable) to the Secretary of Planet Hollywood, who shall endorse
thereon a notation of such exercise and return such Award Agreement to the
Participant. For purposes of this paragraph (d), the date of exercise will be
deemed to be the date upon which the Secretary of Planet Hollywood receives such
notification.
(e) Form of Payment. Payment of the amount determined under
paragraph (d) above may be made in whole shares of Stock in a number determined
based upon their Fair Market Value on the date of exercise of the SAR or,
alternatively, at the sole discretion of the Committee, solely in cash, or in a
combination of cash and shares of Stock as the Committee deems advisable. If the
Committee decides to make full payment in shares of Stock, and the amount
payable results in a fractional share, payment for the fractional share will be
made in cash.
(f) Term and Exercisability of Freestanding SARs. Each Award
Agreement shall provide the exercise schedule for the freestanding SAR as
determined by the Committee, provided, that, the Committee shall have the
authority to accelerate the exercisability of any freestanding SAR at such time
and under such circumstances as it, in its sole discretion, deems appropriate.
The exercise period shall be ten (10) years from the date of the grant of the
freestanding SAR or such shorter period as is determined by the Committee. The
exercise period shall be subject to earlier termination as provided in Section
7(g) hereof.
(g) Termination. The terms and conditions set forth in Section
6(f) hereof, relating to exercisability of Options in the event of termination
of the independent contractor relationship with the Company, shall apply equally
with respect to the exercisability of freestanding SARs following termination of
the independent contractor relationship.
8. Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(a) Issuance and Restrictions. The Award Agreement shall set
forth the number of shares of Restricted Stock granted pursuant to the Award
Agreement. Restricted Stock shall be subject to such restrictions on
transferability and other restrictions, if any, as the Committee may impose at
the date of grant or thereafter, which restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments, or
otherwise, as the Committee may determine.
Page 7 of 12
<PAGE>
(b) Restrictions. Prior to vesting, shares of Restricted Stock
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution.
Certificates for shares of Stock issued pursuant to awards of Restricted Stock
shall bear an appropriate legend referring to such restrictions, and any attempt
to dispose of any such shares of Stock in contravention of such restrictions
shall be null and void and without effect. Prior to vesting, such certificates
shall be held in escrow by an escrow agent appointed by the Committee.
(c) Forfeiture. Subject to such exceptions as may be
determined by the Committee, if the Participant's independent contractor
relationship with the Company shall terminate for any reason prior to vesting of
the Restricted Stock, any shares remaining subject to restrictions shall
thereupon be forfeited by the Participant and transferred to, and reacquired by,
the Company at no cost to the Company; provided that, the Committee may provide,
by rule or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part.
(d) Rights as a Stockholder. Except to the extent restricted
under the Award Agreement, a Participant shall have all of the rights of a
Stockholder including, without limitation, the right to vote Restricted Stock
and the right to receive dividends thereon. Dividends paid on Restricted Stock
shall be either paid at the dividend payment date, or deferred for payment to
such date as determined by the Committee, in cash or in shares of unrestricted
Stock having a Fair Market Value equal to the amount of such dividends. Stock
distributed in connection with a stock split or stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Stock or other property has been distributed.
(e) Other Provisions. The Restricted Stock Agreements
authorized under the Plan shall contain such other provisions not inconsistent
with this Plan, including, without limitation, the imposition of restrictions
upon the transferability of Restricted Stock and conditions on vesting of
Restricted Stock as the Committee shall deem advisable.
9. Restricted Stock Units. The Committee is authorized to grant
Restricted Stock Units to Participants, subject to the following terms and
conditions:
(a) Award and Restrictions. Delivery of Stock or cash, as
determined by the Committee, will occur upon expiration of the deferral period
specified for Restricted Stock Units by the Committee. In addition, Restricted
Stock Units shall be subject to such restrictions as the Committee may impose,
at the date of grant or thereafter, which restrictions may lapse at the
expiration of the deferral period or at earlier or later specified times,
separately or in combination, in installments or otherwise, as the Committee may
determine.
Page 8 of 12
<PAGE>
(b) Forfeiture. Upon termination of the independent contractor
relationship during the applicable deferral period or portion thereof to which
forfeiture conditions apply, or upon failure to satisfy any other conditions
precedent to the delivery of Stock or cash to which such Restricted Stock Units
relate, all Restricted Stock Units that are then subject to deferral or
restriction shall be forfeited; provided that, the Committee may provide, by
rule or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Stock
Units will be waived in whole or in part.
10. Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Participants. The Committee may provide, at the date of grant or
thereafter, that Dividend Equivalents shall be paid or distributed when accrued
or shall be deemed to have been reinvested in additional Stock, or other
investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents) shall be subject to
all conditions and restrictions of the underlying Awards to which they relate.
11. Other Stock- or Cash-Based Awards. The Committee is authorized to
grant to Participants Other Stock-Based Awards or Other Cash-Based Awards as an
element of or supplement to any other Award under the Plan, as deemed by the
Committee to be consistent with the purposes of the Plan. Such Awards may be
granted with value and payment contingent upon any factors designated by the
Committee. The Committee shall determine the terms and conditions of such Awards
at the date of grant or thereafter.
12. General Provisions.
-------------------
(a) Compliance with Legal Requirements. The Plan and the
granting and exercising of Awards, and the other obligations of the Company
under the Plan and any Award Agreement or other agreement shall be subject to
all applicable federal and state laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Stock under
any Award as the Company may consider appropriate, and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules and regulations. Furthermore,
notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other
distributions of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933, as amended), and the applicable
requirements of any securities exchange or similar entity.
Page 9 of 12
<PAGE>
(b) Transferability. Unless otherwise permitted by the
Committee in writing, Awards shall not be transferable by a Participant except
by will or the laws of descent and distribution, or by operation of law.
(c) No Right To Continuation of Relationship. Nothing in the
Plan or in any Award granted or any Award Agreement or other agreement entered
into pursuant hereto shall confer upon any Participant the right to continue as
an independent contractor of the Company or to be entitled to any remuneration
or benefits not set forth in the Plan or such Award Agreement or other agreement
or to interfere with or limit in any way the right of the Company to terminate
such Participant's independent contractor relationship.
(d) Withholding Taxes. Where a Participant or other person is
entitled to receive shares of Stock pursuant to the exercise of an Option or is
otherwise entitled to receive shares of Stock or cash pursuant to an Award
hereunder, the Company shall have the right to require the Participant or such
other person to pay to the Company the amount of any taxes which the Company may
be required to withhold before delivery to such Participant or other person of
cash or a certificate or certificates representing such shares.
Unless otherwise prohibited by the Committee or by applicable law, a
Participant may satisfy any such withholding tax obligation by any of the
following methods, or by a combination of such methods: (a) tendering a cash
payment; (b) authorizing the Company to withhold from the shares of Stock or
cash otherwise payable to such Participant (1) one or more of such shares having
an aggregate Fair Market Value, determined as of the date the withholding tax
obligation arises, less than or equal to the amount of the total withholding tax
obligation or (2) cash in an amount less than or equal to the amount of the
total withholding tax obligation; or (c) delivering to the Company previously
acquired shares of Stock (none of which shares may be subject to any claim,
lien, security interest, community property right or other right of spouses or
present or former family members, pledge, option, voting agreement or other
restriction or encumbrance of any nature whatsoever) having an aggregate Fair
Market Value, determined as of the date the withholding tax obligation arises,
less than or equal to the amount of the total withholding tax obligation. A
Participant's election to pay his or her withholding tax obligation (in whole or
in part) by the method described in (b)(1) above is irrevocable once it is made,
may be disapproved by the Committee.
(e) Amendment and Termination of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part. Notwithstanding the foregoing, no
amendment shall affect adversely any of the rights of any Participant, without
such Participant's consent, under any Award theretofore granted under the Plan.
If the Plan is terminated by the Board or the Committee, any unexercised Award
shall continue to be exercisable in accordance with its terms and the terms of
the Plan in effect immediately prior to such termination.
Page 10 of 12
<PAGE>
(f) Change in Control. Notwithstanding any other provision of
the Plan to the contrary, if, while any Awards remain outstanding under the
Plan, a "Change in Control" of Planet Hollywood (as defined in this Section
10(f)) shall occur, (1) all Options and freestanding SARs granted under the Plan
that are outstanding at the time of such Change in Control shall become
immediately exercisable in full and (2) all restrictions with respect to shares
of Restricted Stock or any other Awards not described in (1) above shall lapse,
and such shares or other Awards shall be fully vested and nonforfeitable. For
purposes of this Section 12(f), with respect to determining the cash equivalent
value of a Restricted Stock Unit, the Fair Market Value of a share of Stock
shall be deemed to equal the greater of (i) the Fair Market Value of a share of
Stock as of the date on which a Change in Control occurs and (ii) the price of a
share of Stock which is paid or offered to be paid, by any person or entity, in
connection with any transaction which constitutes a Change in Control pursuant
to this Section 12(f).
For purposes of this paragraph 12(f), a Change in Control of Planet
Hollywood shall occur upon the happening of the earliest to occur of the
following:
(i) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than (1) Planet Hollywood, (2) any
trustee or other fiduciary holding securities under an employee benefit plan of
Planet Hollywood, or (3) any corporation owned, directly or indirectly, by the
stockholders of Planet Hollywood in substantially the same proportions as their
ownership of Stock (each an "excluded person")), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Planet Hollywood (not including in the securities
beneficially owned by such person any securities acquired directly from Planet
Hollywood or its affiliates) representing 50% or more of the combined voting
power of Planet Hollywood's then outstanding voting securities;
(ii) during any period of not more than two
consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated by a person
who has entered into an agreement with Planet Hollywood to effect a transaction
described in clause (i), (iii) or (iv) of this paragraph (f)) whose election by
the Board or nomination for election by Planet Hollywood's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved (other than
approval given in connection with an actual or threatened proxy or election
contest), cease for any reason to constitute at least a 70% majority of the
Board;
(iii) the stockholders of Planet Hollywood approve a
merger or consolidation of Planet Hollywood with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of Planet Hollywood outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) 80% or more of the combined voting
power of the voting securities of Planet Hollywood or such surviving or parent
entity outstanding immediately after such merger or
Page 11 of 12
<PAGE>
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of Planet Hollywood (or similar transaction) in which no
"person" (as hereinabove defined) acquired 50% or more of the combined voting
power of Planet Hollywood's then outstanding securities; or
(iv) the stockholders of Planet Hollywood approve a
plan of complete liquidation of Planet Hollywood or an agreement for the sale or
disposition by Planet Hollywood of all or substantially all of Planet
Hollywood's assets (or any transaction having a similar effect).
(g) Participant Rights. No Participant shall have any claim to
be granted any Award under the Plan, and there is no obligation for uniformity
of treatment for Participants. Except as provided specifically herein, a
Participant or a transferee of an Award shall have no rights as a stockholder
with respect to any shares covered by any Award until the date of the issuance
of a Stock certificate to him for such shares.
(h) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company.
(i) No Fractional Shares. No fractional shares of Stock shall
be issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
(j) Governing Law. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State of
Delaware without giving effect to the conflict or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.
(k) Effective Date. The Plan shall take effect upon the
"Effective Date" of the Plan of Reorganization (as such term is defined
therein).
(l) Beneficiary. A Participant may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation. If no
designated beneficiary survives the Participant, the executor or administrator
of the Participant's estate shall be deemed to be the grantee's beneficiary.
Page 12 of 12
[GRAPHIC APPEARS HERE]
FINANCIAL
NEWS RELEASE
FOR IMMEDIATE RELEASE
PLANET HOLLYWOOD SUCCESSFULLY
EMERGES FROM CHAPTER 11 REORGANIZATION
(Orlando, FL, May 9, 2000)...Planet Hollywood announced that it has successfully
reorganized and is now positioned to move forward with plans to revitalize the
brand.
The Company's plan of reorganization under Chapter 11 of the US Bankruptcy Code
became effective today when all documents and actions contemplated by the plan
were finalized. The Company recently sold its Times Square retail unit for $30
million cash, eliminating the need for bridge loan financing; however, the
timing of the sale caused the Company to delay its emergence from bankruptcy. As
previously described, as a result of the reorganization, all existing common
stock of the Company has been cancelled in exchange for 200,000 warrants to
purchase new common stock in the reorganized Company. A group of investors,
organized by Robert Earl, the Company's Chairman and CEO, invested $30 million
into the Company for the right to direct ownership of 7 million shares of new
common stock (70%). The balance of the outstanding shares (3 million), together
with $47.5 million in cash and $60 million in PIK Notes were distributed to the
former bondholders in exchange for the cancellation of approximately $282
million in debt.
A portion of the new common stock distributed to the bondholders is exempt from
registration and is freely tradable. The new common stock will be trading on the
over-the-counter market on the NASDAQ Bulletin Board until such time as the
Company receives notification that its shares have been accepted for listing on
a stock exchange, which is expected to be within 60 days.
Mr. Earl is looking forward to placing Planet Hollywood back in the spotlight.
"The reorganization has provided $30 million in new investment, $25 million in
new credit facilities and has significantly reduced the outstanding debt and
onerous obligations that were a financial burden on the Company," said Mr. Earl.
"With the reorganization and store closings behind us, Planet Hollywood is now
positioned to move ahead with its plans to rapidly revitalize the Company."
"In addition, Planet Hollywood is planning on making several exciting
announcements in the coming weeks concerning senior management, celebrities, new
restaurant locations and its website launch. My management team is now able to
completely focus on our significant portfolio of 34 company-owned restaurants
and 32 franchised units and returning Planet Hollywood to its former glory and
preeminent position in the themed restaurant arena, and to help restore
confidence in the eatertainment sector."
<PAGE>
Planet Hollywood is the creator and worldwide developer of a consumer brand that
will capitalize on the universal appeal of movies, TV, sports and other
leisure-time activities. The Company's worldwide operations offer products and
services in the restaurant, retail, leisure and entertainment sectors.
For Further Information Contact:
Robert Earl, Chairman, Chief Executive Officer 407-351-4511
Patty Caruso/Amy Sadowsky, Public Relations 407-363-7827
Certain statements contained herein are forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are within the meaning of
that term in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. Forward-looking statements
involve known and unknown risks and uncertainties that may cause the Company's
actual results in future periods to differ materially from what is currently
anticipated. Those risks include, among others, risks associated with any other
required approvals or confirmations of the Plan; the ability of the Company to
consummate asset dispositions and/or to obtain financing as necessary in order
to carry out the terms of the Plan and the terms and conditions of any such
dispositions and financing; difficulties or delays in the Company's
implementation of initiatives and strategies, including the introduction of a
new menu and new merchandising and marketing strategies; actions taken by
competitors, including business combinations, new product offerings and
marketing and promotions successes; difficulties or delays in realizing improved
results from operating consolidations or the sale of certain facilities or
assets held for sale or franchise; the success of the Company's franchisees and
licensees and the manner in which they promote, operate or develop the Company's
brands; the availability of sufficient capital to service the Company's debt
obligations and to finance the Company's business plans on terms satisfactory to
the Company; and the success of the Company's marketing of certain assets and
pursuit of financing alternatives. The words "believe", "estimate", "expect",
"intent", "anticipate" and similar expressions and variations thereof identify
certain of such forward-looking statements, which speak only as of the dates on
which they were made. Planet Hollywood International, Inc. undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. Readers are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and, therefore, readers should
not place undue reliance on these forward-looking statements
