EXHIBIT 4.2
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REVOLVING CREDIT AND GUARANTY AGREEMENT
by and among
BLACK ENTERTAINMENT TELEVISION, INC.,
as Borrower,
BET HOLDINGS, INC.,
as Guarantor,
THE LENDERS PARTY HERETO,
AND
THE BANK OF NEW YORK, AS AGENT
________________
$75,000,000
________________
Dated as of December 13, 1995
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INDEX
1. Revolving Credit and Guaranty Agreement, dated as of December 13, 1995, by
and among Black Entertainment Television, Inc. (the "Borrower"), BET
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Holdings, Inc. (the "Guarantor"), the Lenders party thereto and The Bank of
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New York, as Agents (the "Agent").
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2. Notes, each dated December 13, 1995, made by the Borrower to:
(i) The Bank of New York Company, Inc.;
(ii) The ▇▇▇▇▇ National Bank of Washington, D.C.;
(iii) Crestar Bank;
(iv) Industrial Bank N.A.; and
(v) Nationsbank of Texas, N.A.
3. Secretary's Certificate of the Borrower, dated as of December 13, 1995,
certifying as to the incumbency of certain officers and setting forth
signature specimens of the same and attaching:
(a) Articles of Incorporation;
(b) By-Laws;
(c) Resolutions of the Board of Directors;
(d) Good standing certificate issued by the Department of Consumer and
Regulatory Affairs of the District of Columbia; and
(e) Note Agreement, dated as of January 30, 1990, between the Borrower
and the purchasers named therein, as amended by the Guaranty,
Consent and Amendment, dated as September 5, 1991.
4. Secretary's Certificate of the Guarantor, dated as of December 13, 1995,
certifying as to the incumbency of certain officers and setting forth
signature specimens of the same and attaching:
(a) Amended and Restated Certificate of Incorporation;
(b) By-Laws;
(c) Resolutions of the Board of Directors;
(d) Good standing certificate issued by the Secretary of State of the
State Delaware;
(e) Stock Purchase Agreement between the Guarantor and Time Warner
Entertainment Company, L.P., dated as of November 1, 1995; and
(f) Noncompetition Agreement by and between the Guarantor Time Warner
Inc., dated as of November 1, 1995.
5. Certificate of the Executive Vice President and General Counsel of the
Borrower and the Guarantor, dated as of December 13, 1995, certifying (i)
as to the absence of litigation and (ii) that all approvals and consents
have been obtained, all required notices have been given and all required
waiting periods have expired.
6. Certificate of the Executive Vice-President, Finance, Chief Financial
Officer and Treasurer of the Borrower and the Guarantor, dated as of
December 13, 1995, certifying (i) the Leverage Ratio is 1.68:1.00, (ii) the
ratio of EBITDA to Pro-Forma Debt Service is 5.23:100, (iii) the ratio of
EBITDA to Interest Expense is 13.62:1.00, (iv) there exists no Default or
Event of Default and (v) the representations and warranties contained in
the Loan Documents are true and correct in all material respects.
7. Borrowing Request, dated December 13, 1995, made by the Borrower and the
Guarantor to the Agent.
8. Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel to the
Borrower and the Guarantor, dated December 13, 1995.
9. Opinion of ▇▇▇▇▇ ▇. ▇▇▇, Executive Vice President and General Counsel of
the Borrower and the Guarantor, dated December 13, 1995.
10. Opinion of Weil, Gotshal & ▇▇▇▇▇▇, special counsel to the Borrower, dated
December 12, 1995.
11. Opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, Special Counsel to the Agent, dated
December 13, 1995.
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TABLE OF CONTENTS
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.............................. 1
1.1. Definitions....................................................... 1
1.2. Principles of Construction........................................ 14
2. AMOUNT AND TERMS OF LOANS............................................... 15
2.1. Loans............................................................. 15
2.2. Notes............................................................. 15
2.3. Procedure for Borrowing........................................... 15
2.4. Termination or Reduction of Aggregate Commitments................. 17
2.5. Prepayments of the Loans.......................................... 17
2.6. Conversions and Continuations..................................... 17
2.7. Interest Rate and Payment Dates................................... 19
2.8. Substituted Interest Rate......................................... 20
2.9. Taxes............................................................. 21
2.10. Illegality........................................................ 22
2.11. Increased Costs................................................... 22
2.12. Indemnification for Loss.......................................... 23
2.13. Survival of Certain Obligations................................... 24
2.14. Use of Proceeds................................................... 24
2.15. Capital Adequacy.................................................. 25
2.16. Agent's Records................................................... 25
3. FEES; PAYMENTS.......................................................... 25
3.1. Commitment Fee.................................................... 25
3.2. Agent's Fees...................................................... 26
3.3. Pro Rata Treatment and Application of Principal Payments.......... 26
4. REPRESENTATIONS AND WARRANTIES.......................................... 26
4.1. Subsidiaries; Capitalization...................................... 26
4.2. Existence and Power............................................... 27
4.3. Authority......................................................... 27
4.4. Binding Agreement................................................. 27
4.5. Litigation........................................................ 27
4.6. Required Consents................................................. 27
4.7. No Conflicting Agreements......................................... 28
4.8. Compliance with Applicable Laws................................... 28
4.9. Taxes............................................................. 28
4.10. Governmental Regulations.......................................... 28
4.11. Federal Reserve Regulations; Use of Loans Proceeds................ 29
4.12. Plans............................................................. 29
4.13. Financial Statements.............................................. 29
4.14. Property.......................................................... 30
4.15. Franchises, Intellectual Property, Etc............................ 30
4.16. Environmental Matters............................................. 30
4.17. Labor Relations................................................. 31
4.18. Solvency........................................................ 31
4.19. Absence of Certain Restrictions................................. 31
4.20. Burdensome Obligations.......................................... 32
4.21. FCC and Copyright Matters....................................... 32
5. CONDITIONS TO FIRST LOANS.............................................. 32
5.1. Evidence of Action.............................................. 32
5.2. This Agreement.................................................. 33
5.3. Notes........................................................... 33
5.4. Litigation...................................................... 33
5.5. Certain Documents............................................... 33
5.6. Approvals....................................................... 33
5.7. Opinion of Counsel to the Borrower and the Guarantor............ 34
5.8. Opinion of Special Counsel...................................... 34
5.9. Fees............................................................ 34
5.10. Fees and Expenses of Special Counsel............................ 34
5.11. Cancellation of Stock of Guarantor.............................. 34
5.12. Compliance Certificate.......................................... 34
6. CONDITIONS TO LENDING - ALL LOANS...................................... 34
6.1. Compliance...................................................... 35
6.2. Borrowing Request............................................... 35
6.3. Federal Reserve Forms FR U-1.................................... 35
6.4. Legal Matters and Other Documents............................... 35
7. AFFIRMATIVE COVENANTS.................................................. 35
7.1. Financial Statements............................................ 35
7.1. Certificates; Other Information................................. 36
7.3. Legal Existence................................................. 38
7.4. Taxes........................................................... 39
7.5. Insurance....................................................... 39
7.6. Payment of Indebtedness and Performance of Obligations.......... 39
7.7 Condition of Property........................................... 39
7.8. Observance of Legal Requirements................................ 40
7.9. Inspection of Property; Books and Records; Discussions.......... 40
7.10. Licenses, Intellectual Property................................. 40
7.11. FCC Licenses, Etc............................................... 40
7.12. Leverage Ratio.................................................. 40
7.13. EBITDA to Pro-Forma Debt Service................................ 40
7.14. EBITDA to Interest Expense...................................... 41
7.15. Margin Stock of Guarantor....................................... 41
8. NEGATIVE COVENANTS..................................................... 41
8.1. Indebtedness.................................................... 41
8.2. Liens........................................................... 41
8.3. Merger, Consolidation or Sale of Assets, Etc.................... 42
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8.4. Restricted Payments............................................ 43
8.5. Investments, Acquisitions, Loans, Etc. ........................ 43
8.6. Business and Name Changes ..................................... 44
8.7. Subsidiaries................................................... 44
8.8. Certificate of Incorporation and By-Laws....................... 44
8.9. ERISA.......................................................... 44
8.10. Sale and Leaseback............................................. 44
8.11. Fiscal Year.................................................... 44
8.12. Amendments, Etc. of Certain Agreements......................... 44
8.13. Transactions with Affiliates................................... 44
8.14. Limitation on Certain Restriction on Subsidiaries.............. 45
8.15. Limitation on Negative Pledge Clauses.......................... 45
8.16. Investments in Margin Stock.................................... 45
9. DEFAULT............................................................... 45
9.1. Events of Default.............................................. 45
10. THE AGENT............................................................. 48
10.1. Appointment.................................................... 48
10.2. Delegation of Duties........................................... 48
10.3. Exculpatory Provisions......................................... 48
10.4. Reliance by Agent.............................................. 49
10.5. Notice of Default.............................................. 49
10.6. Non-Reliance on Agent and Other Lenders........................ 50
10.7. Indemnification................................................ 50
10.8. Agent in Its Individual Capacity............................... 51
10.9. Successor Agent................................................ 51
11. OTHER PROVISIONS...................................................... 51
11.1. Amendments and Waivers......................................... 51
11.2. Notices........................................................ 52
11.3. No Waiver; Cumulative Remedies................................. 53
11.4. Survival of Representations and Warranties..................... 54
11.5. Payment of Expenses and Taxes.................................. 54
11.6. Lending Offices................................................ 54
11.7. Assignments and Participants................................... 55
11.8. Counterparts................................................... 56
11.9. Adjustments; Set-off........................................... 57
11.10. Construction.................................................. 57
11.11. Indemnity..................................................... 58
11.12. Governing Law................................................. 58
11.13. Headings Descriptive.......................................... 58
11.14. Severability.................................................. 58
11.15. Integration................................................... 59
11.16. Consent to Jurisdiction....................................... 59
11.17. Service of Process............................................ 59
11.18. No Limitation on Service or Suit.............................. 59
11.19. WAIVER OF TRIAL BY JURY....................................... 59
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12. GUARANTY............................................................... 60
12.1. Guaranty......................................................... 60
12.2. Absolute Obligation.............................................. 60
12.3. Guaranty of Payment.............................................. 61
12.4. Repayment in Bankruptcy.......................................... 61
12.5. Waiver of Subrogation............................................ 61
12.6. Other Provisions in Guaranty..................................... 62
EXHIBITS
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Exhibit A List of Commitments
Exhibit B Form of Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance Agreement
Exhibit F Form of Opinion of Counsel to the Borrower and the Guarantor
Exhibit G Form of Opinion of Special Counsel
Exhibit H Form of Notice of Conversion/Continuation
SCHEDULES
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Schedule 1.1 List of Domestic Lending Offices
Schedule 4.1 List of Subsidiaries; Capitalization
Schedule 4.5 List of Litigation
Schedule 4.12 List of Existing Pension Plans
Schedule 4.14 List of FCC Investigations, Violations, Etc.
Schedule 8.1 List of Existing Indebtedness
Schedule 8.2 List of Existing Liens
Schedule 8.5 List of Existing Investments
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REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of December 13, 1995, by
and among BLACK ENTERTAINMENT TELEVISION, INC., a District of Columbia
corporation, as borrower (the "Borrower"), BET HOLDINGS, INC., a Delaware
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corporation, as guarantor (the "Guarantor"), the lenders party hereto (together
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with their respective assigns, the "Lenders", each a "Lender") and THE BANK OF
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NEW YORK, as agent for the Lenders (in such capacity, the "Agent").
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1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
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1.1. Definitions
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As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following meanings:
"ABR Advances": the Loans (or any portions thereof) at such time as
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they (or such portions) are made and/or being maintained at a rate of interest
based upon the Alternate Base Rate.
"Accountants": Price Waterhouse LLP (or any successor thereto), or
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such other firm of certified public accountants of recognized national standing
selected by the Guarantor and reasonably satisfactory to the Agent.
"Accumulated Funding Deficiency": as defined in Section 302 of
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ERISA.
"Advance": an ABR Advance or a Eurodollar Advance, as the case may
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be.
"Affected Advance": as defined in Section 2.8.
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"Affiliate": as to any Person, any other Person which, directly or
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indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean
the power, direct or indirect, (i) to vote 5% or more of the securities or other
interests having ordinary voting power for the election of directors or other
managing Persons thereof or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Aggregate Commitments": on any date, the sum of all Commitments on
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such date.
"Agreement": this Revolving Credit and Guaranty Agreement, as the
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same may be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum
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equal to the higher of (i) the Federal Funds Rate in effect on such date plus
1/2 of 1% or (ii) the BNY Rate in effect on such date.
"Applicable Lending Office": in respect of any Lender, (i) in the
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case of such Lender's ABR Advances, its Domestic Lending Office and (ii) in the
case of such Lend er's Eurodollar Advances, its Eurodollar Lending Office.
"Applicable Margin": at all times during the applicable periods set
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forth below: (i) with respect to the unpaid principal amount of ABR Advances,
the applicable percentage set forth below next to the words "Alternate Base
Rate" and (ii) with respect to the unpaid principal amount of Eurodollar
Advances, the applicable percentage set forth below next to the words
"Eurodollar Rate":
Applicable
Period Rate Margin
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when the Leverage Alternate Base Rate 0.0%
Ratio is greater Eurodollar Rate 0.750%
than or equal to
2.50:1.00
when the Leverage Alternate Base Rate 0.0%
Ratio is equal to Eurodollar Rate 0.625%
or greater than
2.00:1.00 but less
than 2.50:1.00
when the Leverage Alternate Base Rate 0.0%
Ratio is equal to Eurodollar Rate 0.500%
or greater than
1.50:1.00 but less
than 2.00:1.00
when the Leverage Alternate Base Rate 0.0%
Ratio is less than Eurodollar Rate 0.375%
1.50:1.00
Changes in the Applicable Margin resulting from a change in the Leverage
Ratio, as set forth in a Compliance Certificate delivered pursuant to Section
7.1(c) evidencing such a change, shall become effective upon the third day
following the delivery by the Borrower to the Agent of a new Compliance
Certificate pursuant to Section 7.1(c) evidencing a change in the Leverage
Ratio. If the Borrower shall fail to deliver a Compliance Certificate within 55
days after the end of each of the first three fiscal quarters (or 100 days after
the end of the last fiscal quarter) as required by Section 7.1(c), the
Applicable Margin from and including the 56th day (the 101st day in the case of
the last quarter) after the end of such fiscal quarter to the third day
following the delivery by the Borrower to the Agent of a Compliance Certificate
shall be 0.0% with respect to ABR Advances and 0.750% with respect to Eurodollar
Advances, in each case subject to Section 2.7(b).
"Approved Bank": any bank whose short-term commercial paper rating
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from (i) S&P is at least A-1 or the equivalent thereof or (ii) ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof.
"Assignment and Acceptance Agreement": an assignment and acceptance
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agreement executed by an assignor and an assignee pursuant to which the assignor
assigns
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to the assignee all or any portion of such assignor's Note and Commitment,
substantially in the form of Exhibit E.
"Assignment Fee": as defined in Section 11.7(b).
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"Authorized Signatory": as to (i) any Person which is a corporation,
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the chairman of the board, the president, any vice president, the chief
financial officer or any other duly authorized officer (acceptable to the Agent)
of such Person and (ii) any Person which is not a corporation, the general
partner or other managing Person thereof.
"Benefited Lender": as defined in Section 11.9.
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"BNY": The Bank of New York.
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"BNY Rate": a rate of interest per annum equal to the rate of
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interest publicly announced in New York City by BNY from time to time as its
prime commercial lending rate, such rate to be adjusted automatically (without
notice) on the effective date of any change in such publicly announced rate.
"Borrowing Date": any Business Day specified in (i) a Borrowing
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Request as a date on which the Borrower requests the Lenders to make Loans.
"Borrowing Request": a request for Loans in the
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form of Exhibit C.
"Business Day": any day other than a Saturday, a Sunday or a day on
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which commercial banks located in New York City are authorized or required by
law or other governmental action to close.
"Capital Lease Obligations": with respect to any Person, obligations
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of such Person with respect to leases which, in accordance with GAAP, are
required to be capitalized on the financial statements of such Person.
"Cash Equivalents": (i) securities issued or directly and fully
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guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than six months from the date
of acquisition, (ii) Dollar denominated time deposits, certificates of deposit
and bankers acceptances of (x) any Lender or (y) any Approved Bank, in each case
with maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial or financial company with a long term
unsecured debt rating of at least A or A-2, or the equivalent of each thereof,
by S&P or Moody's, as the case may be, and in each case maturing within six
months after the date of acquisition, (iv) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
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money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control": (i) any person or group as such terms are
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defined in the Securities Exchange Act of 1934 as amended (other than ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or Tele-Communications, Inc.) shall become the beneficial owner,
directly or indirectly, of 25% or more on a fully diluted basis, of the voting
or economic interests of the Guarantor, (ii) a majority of the members of the
board of directors of the Guarantor shall not consist of members of the board of
directors of the Guarantor as of the Effective Date and any additions thereto
and replacements thereof who have been nominated by a majority of the then
existing board of directors, or (iii) the Guarantor ceases to own 100% of the
Borrower.
"Code": the Internal Revenue Code of 1986, as the same may be amended
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from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"Commitment": in respect of any Lender, such Lender's under taking
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during the Commitment Period to make Loans, subject to the terms and conditions
hereof, in an aggregate outstanding principal amount not exceeding the amount
set forth next to the name of such Lender in Exhibit A under the heading
"Commitments", as the same may be reduced pursuant to Section 2.4.
"Commitment Fee": as defined in Section 3.1.
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"Commitment Period": the period from the Effective Date until the
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Maturity Date.
"Commitment Percentage": as to any Lender, the percentage set forth
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opposite the name of such Lender in Exhibit A under the heading "Commitment
Percentage", as such percentage may be adjusted pursuant to Section 11.7(b).
"Communications Act": the Communications Act of 1934, as amended,
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and the rules and regulations issued thereunder, as from time to time in effect.
"Compensatory Interest Payment": as defined in Section 2.7(c).
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"Compliance Certificate": a certificate substantially in the form of
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Exhibit D.
"Consolidated": the Guarantor and its Subsidiaries which are
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consolidated for financial reporting purposes.
"Consolidating": the Guarantor and each of its Subsidiaries taken
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separately.
"Contingent Obligation": as to any Person (the "secondary obligor"),
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any obligation of such secondary obligor (i) guaranteeing or in effect
guaranteeing any return on any investment made by another Person, or (ii)
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation ("primary obligation") of any other Person (the "primary
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obligor") in any manner, whether directly or indirectly, including,
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without limitation, any obligation of such secondary obligor, whether
contingent, (A) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (B) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
Property, securities or services primarily for the purpose of assuring the
beneficiary of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, (D) otherwise to assure or hold
harmless the beneficiary of such primary obligation against loss in respect
thereof, and (E) in respect of the liabilities of any partnership in which such
secondary obligor is a general partner, except to the extent that such
liabilities of such partnership are nonrecourse to such secondary obligor and
its separate Property, provided, however, that the term "Contingent Obligation"
shall not include the indorsement of instruments for deposit or collection in
the ordinary course of business. The amount of any Contingent Obligation of a
Person shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Control Person": as defined in Section 2.15.
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"Conversion/Continuation Date": the date on which (i) a Eurodollar
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Advance is converted to an ABR Advance, (ii) the date on which an ABR Advance is
converted to a Eurodollar Advance or (iii) the date on which a Eurodollar
Advance is continued as a new Eurodollar Advance.
"Copyright Act": Title 17 of the United States Code, as amended, and
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the rules and regulations issued thereunder, as from time to time in effect.
"Credit Party": each of the Borrower and the Guarantor
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"Default": any event or condition which, with the giving of notice,
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the lapse of time, or both, would, unless cured or waived, become an Event of
Default.
"Dollars" and "$": lawful currency of the United States of America.
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"Domestic Lending Office": in respect of any Lender, initially, the
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office or offices of such Lender designated as such on Schedule 1.1; thereafter,
such other office of such Lender through which it shall be making or maintaining
ABR Advances, as reported by such Lender to the Agent and the Borrower.
"EBITDA": at any time, the income (or loss) from operations of the
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Guarantor and its Subsidiaries on a Consolidated basis, determined in accordance
with GAAP and in a manner consistent with the audited annual Consolidated
Statement of Income as of July, 31, 1995 constituting a part of the Financial
Statements, for the immediately preceding four fiscal quarters plus
----
depreciation and amortization of intangibles (but excluding amortization of
programming rights) for such four fiscal quarters. EBITDA shall be adjusted on
a consistent basis to reflect the acquisition, sale, exchange and disposition of
Property. Notwithstanding the foregoing, if at any time EBITDA (Wholly-Owned)
constitutes less than 95% of EBITDA at such time, then EBITDA shall be reduced
by an
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amount, with respect to each Subsidiary of the Guarantor which is not, directly
or indirectly, wholly-owned by the Guarantor, equal to the amount of EBITDA
attributable to such non-wholly owned Subsidiary multiplied by the percentage
ownership interest in such non-wholly owned Subsidiary not owned, directly or
indirectly, by the Guarantor.
"EBITDA (Wholly-Owned)": at any time, the income (or loss) from
----------------------
operations of the Guarantor and its wholly-owned Subsidiaries on a consolidated
basis, determined in accordance with GAAP and in a manner consistent with the
audited annual Consolidated Statement of Income as of July 31, 1995 constituting
a part of the Financial Statements, for the immediately preceding four fiscal
quarters plus depreciation and amortization of intangibles (but excluding
----
amortization of programming rights) for such four fiscal quarters. EBITDA
(Wholly-Owned) shall be adjusted on a consistent basis to reflect the
acquisition, sale, exchange and disposition of Property.
"Effective Date": December 13, 1995.
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"Employee Benefit Plan": an employee benefit plan within the meaning
---------------------
of Section 3(3) of ERISA maintained, sponsored or contributed to by the
Guarantor, any of its Subsidiaries or any ERISA Affiliate.
"Environmental Laws": any and all federal, state and local laws
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relating to the environment, the use, storage, transporting, manufacturing,
handling, discharge, disposal or recycling of hazardous substances, materials or
pollutants or industrial hygiene, and including, without limitation, (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA (S)9601 et seq.; (ii) the Resource Conservation and Recovery
-- ---
Act of 1976, as amended, 42 ▇▇▇▇ (▇)▇▇▇▇ et seq.; (iii) the Toxic Substance
-- ---
Control Act, as amended, 15 USCA (S)2601 et seq.; (iv) the Water Pollution
-- ---
Control Act, as amended, 33 USCA (S)1251 et seq.; (v) the Clean Air Act, as
-- ---
amended, 42 ▇▇▇▇ (▇)▇▇▇▇ et seq.; (vi) the Hazardous Materials Transportation
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Authorization Act of 1994, as amended, 49 USCA (S)5101 et seq. and (viii) all
-- ---
rules and regulations thereunder and any analogous state law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit
---------------
Plan, ERISA, the PBGC or a provision of the Code pertaining to employee benefit
plans, any Person that is a member of any group of organizations within the
meaning of Sections 414(b), (c), (m) or (o) of the Code of which a Credit Party
or any of its Subsidiaries is a member.
"Eurodollar Advances": collectively, the Loans (or any portions
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thereof) at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Lending Office": in respect of any Lender, in itially,
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the office, branch or affiliate of such Lender designated as such on Schedule
1.1 (or, if no such office branch or affiliate is specified, its Domestic
Lending Office); thereafter, such other
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office, branch or affiliate of such Lender through which it shall be making or
maintaining Eurodollar Advances, as reported by such Lender to the Agent and
the Borrower.
"Eurodollar Rate": with respect to the Interest Period applicable to
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any Eurodollar Advance, a rate of interest per annum, as determined by the
Agent, obtained by dividing (and then rounding to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, then to the next higher 1/16 of 1%):
(a) the rate, as reported by BNY to the Agent, quoted by BNY
to leading banks in the interbank eurodollar market as the rate at which BNY is
offering Dollar deposits in an amount equal approximately to the Eurodollar
Advance of BNY to which such Interest Period shall apply for a period equal to
such Interest Period, as quoted at approximately 11:00 A.M. two Business Days
prior to the first day of such Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the then
stated maximum rates during such Interest Period of all reserve requirements
(including, without limitation, marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States money center banks are subject, in respect of eurocurrency
funding (currently referred to as "Eurocurrency liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System) or in respect of any other
category of liabilities including deposits by reference to which the interest
rate on Eurodollar Advances is determined or any category of extensions of
credit or other assets which includes loans by non-domestic offices of any
Lender to United States residents. Eurodollar Advances shall be deemed to
constitute Eurocurrency li abilities and as such shall be deemed to be subject
to such reserve requirements without benefit of credits for proration,
exceptions or off sets which may be available from time to time to any Lender
under such Regulation D. The Eurodollar Rate shall be adjusted automatically on
and as of the effective date of any change in any such reserve requirement.
"Event of Default": any of the events specified in Section 9.1,
----------------
provided that any requirement for the giving of notice, the lapse of time, or
any other condition has been satisfied.
"Existing Pension Plans": as defined in Section 4.12.
----------------------
"FCC": the Federal Communications Commission, or any Governmental
---
Authority succeeding to the functions thereof.
"Federal Funds Rate": for any day, a rate per annum (expressed as a
------------------
decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%), equal
to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if the day for which such rate
is to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the
-7-
average of the quotations for such day on such transactions received by BNY as
deter mined by BNY and reported to the Agent.
"Financial Statements": as defined in Section 4.13.
--------------------
"Funded Current Liability Percentage": as defined in Section
-----------------------------------
401(a)(29) of the Code.
"Funded Debt": at any time of determination, all Indebtedness of the
-----------
Guarantor and its Subsidiaries (determined on a Consolidated basis) at such
time. Notwithstanding the foregoing, solely for purposes of calculating the
Leverage Ratio, Funded Debt shall be reduced by an amount equal to the aggregate
amount of cash and Cash Equivalents of the Guarantor and its Subsidiaries
(determined on a Consolidated basis) in excess of $1,000,000 at the time of
determination.
"GAAP": generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, consistently applied. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
this Agreement, the Agent, the Lenders, the Guarantor and the Borrower shall
negotiate in good faith to amend such ratio or requirement to reflect such
change in GAAP (subject to the approval of the Required Lenders), provided that,
until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Guarantor and the
Borrower shall provide to the Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator.
"Guaranteed Obligations": as defined in Section 12.1.
----------------------
"Guaranty": the guaranty of the Guarantor as provided in Section 12
--------
hereof.
"Hazardous Substance": any hazardous or toxic substance, material or
-------------------
waste, including, but not limited to, (i) those substances, materials, and
wastes listed in the United States Department of Transportation Hazardous
Materials Table (49 CFR 172.101) or by the Environmental Protection Agency as
hazardous substances (40 CFR Part 302) and amendments thereto and replacements
therefor and (ii) any substance, pollutant or material defined as, or designated
in, any Environmental Law as a "hazardous substance," "toxic substance,"
"hazardous material," "hazardous waste," "restricted hazardous waste,"
"pollutant," "toxic pollutant" or words of similar import.
-8-
"Highest Lawful Rate": as to any Lender, the maximum rate of
-------------------
interest, if any, that at any time or from time to time may be contracted for,
taken, charged or received by such Lender on the Note held thereby, as the case
may be, or which may be owing to such Lender pursuant to this Agreement and the
other Loan Documents under the laws applicable to such Lender and this
transaction.
"Indebtedness": as to any Person, at a particular time, all items
------------
which constitute, without duplication, (i) indebtedness for borrowed money or
the deferred purchase price of Property (other than trade payables (including,
without limitation, programming liabilities) incurred in the ordinary course of
business), (ii) indebtedness evidenced by notes, bonds, debentures or similar
instruments, (iii) obligations with respect to any conditional sale or title
retention agreement, (iv) indebtedness arising under acceptance facilities and
the amount available to be drawn under all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder to
the extent such Person shall not have reimbursed the issuer in respect of the
issuer's payment of such drafts, (v) all liabilities secured by any Lien on any
Property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like non-consensual statutory
Liens arising in the ordinary course of business), (vi) Capital Lease
Obligations and (vii) Contingent Obligations.
"Indemnified Person": as defined in Section 11.11.
------------------
"Intellectual Property": all copyrights, trademarks, servicemarks,
---------------------
patents, trade names and service names.
"Interest Expense": the sum of all interest (adjusted to give effect
----------------
to all Interest Rate Protection Agreements and fees and expenses paid in
connection with same, all as determined in accordance with GAAP) on Funded Debt
for the immediately preceding four fiscal quarters of the Guarantor.
"Interest Payment Date": (i) as to any ABR Advance, the last day of
---------------------
each March, June, September and December commencing on the first of such days to
occur after such ABR Advance is made or any Eurodollar Advance is converted to
an ABR Advance, (ii) as to any Eurodollar Advance in respect of which the
Borrower has selected an Interest Period of one, two or three months, the last
day of such Interest Period, and (iii) as to any Eurodollar Advance in respect
of which the Borrower has selected an Interest Period of six months, the day
which is three months after the first day of such Interest Period and the last
day of such Interest Period.
"Interest Period": with respect to any Eurodollar Advance requested
---------------
by the Borrower, the period commencing on, as the case may be, the Borrowing
Date or Conversion/Continuation Date with respect to such Eurodollar Advance and
ending one, two, three or six months thereafter, as selected by the Borrower in
its irrevocable Borrowing Request or its irrevocable Notice of
Conversion/Continuation, provided, however, that (i) if any Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day, (ii) any Interest Period that begins on the last Business Day of a calendar
month
-9-
(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 a calendar month and (iii) the Borrower shall select Interest
Periods so as not to have more than five different Interest Periods outstanding
at any one time for all Loans.
"Interest Rate Protection Agreements": collectively, all interest
-----------------------------------
rate swap, cap, ceiling, hedge or other interest rate protection agreements
designed to hedge against fluctuations in interest rates entered into by the
Borrower or the Guarantor with any financial institution.
"Investments": as defined in Section 8.5.
-----------
"Leverage Ratio": the ratio of Funded Debt to EBITDA.
--------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit or
----
preferential arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
"Loan Documents": collectively, this Agreement and the Notes.
--------------
"Loan" and "Loans": as defined in Section 2.1.
---- -----
"Margin Stock": any "margin stock", as defined in Regulation U of
------------
the Board of Governors of the Federal Reserve System, as the same may be amended
or supplemented from time to time.
"Material Adverse Change": a material adverse change in (i) the
-----------------------
financial condition, operations, business, prospects or Property of (A) the
Guarantor, (B) the Borrower and its Subsidiaries taken as a whole or (C) any
Material Subsidiary, or (ii) the ability of the Guarantor or the Borrower to
perform its obligations under the Loan Documents to which it is a party or
(iii) the ability of the Agent and the Lenders to enforce any of the Loan
Documents.
"Material Adverse Effect": a material adverse effect on (i) the
-----------------------
financial condition, operations, business, prospects or Property of (A) the
Guarantor, (B) the Borrower and its Subsidiaries taken as a whole or (C) or any
Material Subsidiary, or (ii) the ability of the Borrower or the Guarantor to
perform its obligations under the Loan Documents to which it is a party or
(iii) the ability of the Agent and the Lenders to enforce any of the Loan
Documents.
"Material Subsidiary": the Borrower, BET Satellite Services, Inc., a
-------------------
Delaware corporation, BET Acquisitions Corporation, a Delaware corporation, and
any other wholly-owned Subsidiary of the Guarantor which represents greater than
5% of EBITDA.
"Maturity Date": December 31, 2000, or such earlier date on which
-------------
the Notes shall become due and payable, whether by acceleration or otherwise.
-10-
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
-------
thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer plan
------------------
as defined in Section 4001(a)(3) of ERISA.
"Noncompetition Agreement": the Noncompetition Agreement, dated
------------------------
November 1, 1995, between the Guarantor and Time Warner Inc., as the same may be
amended or otherwise modified from time to time in accordance with Section 8.12.
"Note" and "Notes": as defined in Section 2.2.
---- -----
"Note Agreement": the Note Agreement, dated January 30, 1990,
--------------
between the Borrower and the purchasers named therein, as amended by Guaranty,
Consent and Amendment, dated September 5, 1991, and as the same may be further
amended or otherwise modified from time to time in accordance with Section 8.12.
"Notice of Conversion/Continuation": a notice substantially in the
---------------------------------
form of Exhibit H.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Authority
succeeding to the functions thereof.
"Pension Plan": at any date of determination, any Employee Benefit
------------
Plan (including a Multiemployer Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within the
six years immediately preceding such date, were in whole or in part, the
responsibility of a Credit Party, any of its Subsidiaries or any ERISA
Affiliate.
"Permitted Liens": Liens permitted to exist under Section 8.2.
---------------
"Person": any individual, firm, partnership, joint venture,
------
corporation, association, business enterprise, limited liability company, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity,
and for the purpose of the definition of "ERISA Affiliate", a trade or business.
"Pro-Forma Debt Service": the sum of all scheduled payments of
----------------------
principal and interest (adjusted to give effect to all Interest Rate Protection
Agreements and fees and expenses paid in connection with same, all as determined
in accordance with GAAP) on Funded Debt, required to be made during the four
fiscal quarters of the Guarantor immediately succeeding any determination
thereof. Where any item of interest on Funded Debt varies or depends upon a
variable rate of interest (or other rate of interest which is not fixed for such
entire four fiscal quarters), such rate, for purposes of calculating Pro-Forma
Debt Service, shall be assumed to equal the applicable interest rate on such
Funded Debt in effect on the date of such calculation. Also, for purposes of
calculating Pro-Forma Debt Service, the principal amount outstanding under any
revolving or line of credit facility on the date of any calculation of Pro-Forma
Debt Service shall be assumed to be outstanding during the entire four fiscal
quarters immediately succeeding such date, subject to any mandatory payments of
principal required to be made during such period.
-11-
"Prohibited Transaction": a transaction that is prohibited under
----------------------
Section 4975 of the Code of Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"Property": all types of real, personal, tangible, intangible or
--------
mixed property.
"Real Property": all real property owned or leased by a Credit Party
-------------
or any of its Subsidiaries.
"Reportable Event": with respect to any Pension Plan, (i) any event
----------------
set forth in Sections 4043(b) (other than a Reportable Event as to which the 30
day notice requirement is waived by the PBGC under applicable regulations),
4062(c) or 4063(a) or ERISA or the regulations thereunder, (ii) an event
requiring a Credit Party, any of its Subsidiaries or any ERISA Affiliate to
provide security to a Pension Plan under Section 401(a)(29) of the Code, or
(iii) any failure to make any payment required by Section 412(m) of the Code.
"Required Lenders": at any time when no Loans are outstanding,
----------------
Lenders having Commitments (or if no Commitments then exist, Lenders having
Commitments on the last day on which Commitments did exist) equal to at least
51% of the aggregate Commitments of all the Lenders, and at any time when Loans
are outstanding, Lenders holding Notes having an unpaid principal balance equal
to at least 51% of the aggregate Loans outstanding.
"Responsible Party": as to any Credit Party, the chairman of the
-----------------
board or any officer of such Credit Party.
"Restricted Payment": as to any Person (i) any dividend or other
------------------
distribution, direct or indirect, on account of any shares of any class of Stock
or other equity interest in such Person now or hereafter outstanding (other than
a dividend payable solely in shares of such Stock to the holders of such shares)
and (ii) any redemption, retirement, sinking fund or similar payment, purchase
or other acquisition, direct or indirect, of any shares of any class of Stock or
other equity interest in such Person now or hereafter outstanding.
"S&P": Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
---
Inc., or any successor thereto.
"SEC": the Securities and Exchange Commission or any Governmental
---
Authority succeeding to the functions thereof.
"Solvent": with respect to any Person on a particular date, the
-------
condition that on such date, (i) the fair value of the Property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) 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 debts as they become absolute
and matured, (iii) 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 (iv) such Person is not engaged in business or
a transaction, and is
-12-
not about to engage in business or a transaction, for which such Person's
Property would constitute an unreasonably small amount of capital.
"Special Counsel": ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, special counsel to
---------------
the Agent.
"Stock": any and all shares, rights, interests, participations,
-----
warrants or other equivalents (however designated) of corporate stock.
"Stock Purchase Agreement": the Stock Purchase Agreement, dated
------------------------
November 1, 1995, between the Guarantor and Time Warner Entertainment Company,
L.P., as the same may be amended or otherwise modified from time to time in
accordance with Section 8.12.
"Subsidiary": as to any Person, any corporation, association,
----------
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture or
other business entity, is entitled to share in more than 50% of the profits and
losses, however determined.
"Tax": any present or future tax, levy, impost, duty, charge, fee,
---
deduction or withholding of any nature and whatever called, by a Governmental
Authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.
"Tax on the Overall Net Income": as to any Person, a Tax imposed by
-----------------------------
the jurisdiction in which that Person's principal office (and/or, in the case of
a Lender, its Domestic Lending Office) is located or by any political
subdivision or taxing authority thereof or in which that Person is deemed to be
doing business on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise).
"Termination Event": with respect to any Pension Plan, (i) a
-----------------
Reportable Event, (ii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, (iii) the institution of
proceedings to terminate a Pension Plan under Section 4042 of ERISA, or (iv) the
appointment of a trustee to administer any Pension Plan under Section 4042 of
ERISA.
"Unfunded Pension Liabilities": with respect to any Pension Plan, at
----------------------------
any date of determination, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, "Employers' Accounting for Pensions", over the fair market
value of Pension Plan assets.
"United States": the United States of America (including the States
-------------
thereof and the District of Columbia).
-13-
"Unqualified Amount": as defined in Section 2.7(c).
------------------
"Unrecognized Retiree Welfare Liability": with respect to any
--------------------------------------
Employee Benefit Plan that provides postretirement benefits other than pension
benefits, the amount of the transition obligation, as determined in accordance
with Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," as of the most recent
valuation date, that has not been recognized as an expense in an income
statement of the Guarantor and its Subsidiaries, provided that (i) prior to the
date such Statement is applicable to the Guarantor, such amount shall be based
on an estimate made in good faith of such transition obligation, and (ii) for
purposes of determining the aggregate amount of the Unrecognized Retiree Welfare
Liability, Plans maintained by a Subsidiary that is not otherwise an ERISA
Affiliate shall be included.
1.2. Principles of Construction
--------------------------
(a) All terms defined in a Loan Document shall have the meanings
given such terms therein when used in the other Loan Documents or any
certificate, opinion or other document made or delivered pursuant thereto,
unless otherwise defined therein.
(b) As used in the Loan Documents and in any certificate,
opinion or other document made or delivered pursuant thereto, accounting terms
not defined in Section 1.1, and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) The phrase "may not" is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the singular
number include the plural, and words in the plural include the singular.
(f) Unless specifically provided in a Loan Document to the
contrary, references to a time shall refer to New York City time.
(g) Unless specifically provided in a Loan Document to the
contrary, in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall
refer to that fiscal period of the Guarantor.
-14-
2. AMOUNT AND TERMS OF LOANS
-------------------------
2.1. Loans
-----
Subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans (each a "Loan" and, as the context may
----
require, collectively with all other Loans of such Lender and with the Loans of
all other Lenders, the "Loans") to the Borrower from time to time during the
-----
Commitment Period, provided, however, that immediately after giving effect
thereto (i) the outstanding principal balance of such Lender's Loans would not
exceed such Lender's Commitment, and (ii) the outstanding principal balance of
all Lenders' Loans would not exceed the Aggregate Commitments. During the
Commitment Period, the Borrower may borrow, prepay in whole or in part and
reborrow under the Aggregate Commitments, all in accordance with the terms and
conditions of this Agreement. Neither the Agent nor any Lender shall be
responsible for the obligations or Commitment of any other Lender hereunder.
2.2. Notes
-----
The Loans made by a Lender shall be evidenced by a promissory note of
the Borrower, substantially in the form of Exhibit B, with appropriate
insertions therein as to date and principal amount (each, as indorsed or
modified from time to time, a "Note" and, collectively with the Notes of all
----
other Lenders, the "Notes"), payable to the order of such Lender for the account
-----
of its Applicable Lending Office and representing the obligation of the
Borrower to pay the lesser of (i) the original amount of the Commitment of such
Lender and (ii) the aggregate unpaid principal balance of all Loans made by such
Lender, with interest thereon as prescribed in Section 2.7. Each Note shall
(iii) be dated the first Borrowing Date, (iv) be stated to mature on the
Maturity Date and (v) bear interest from the date thereof on the unpaid
principal balance thereof at the applicable interest rate or rates per annum
determined as provided in Section 2.7. Interest on each Note shall be payable as
specified in Section 2.7.
2.3. Procedure for Borrowing
-----------------------
(a) The Borrower may borrow under the Aggregate Commitments on any
Business Day during the Commitment Period, provided, however, that the Borrower
shall notify the Agent (by telephone or fax) no later than: 11:00 A.M., three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Advances and no later than 11:00 A.M. on the requested Borrowing Date, in the
case of ABR Advances, specifying (i) the aggregate principal amount to be
borrowed under the Aggregate Commitments, (ii) the requested Borrowing Date,
(iii) whether such borrowing is to consist of one or more Eurodollar Advances,
ABR Advances, or a combination thereof and (iv) if the borrowing is to consist
of one or more Eurodollar Advances, the length of the Interest Period for each
such Eurodollar Advance, provided, however, that no Interest Period selected in
respect of any Loan shall end after the Maturity Date. If the Borrower fails to
give timely notice in connection with a request for a Eurodollar Advance, the
Borrower shall be deemed to have elected that such Advance shall be made as an
ABR Advance. Each such notice shall be irrevocable and confirmed immediately
by delivery to the Agent of a Borrowing Request. Each ABR Advance shall be in
an aggregate principal amount equal to $500,000 or such amount plus a whole
multiple of $100,000 in excess thereof,
-15-
or, if less, the unused amount of the Aggregate Commitments and each Eurodollar
Advance shall be in an aggregate principal amount equal to $2,000,000 or such
amount plus a whole multiple of $500,000 in excess thereof.
(b) Upon receipt of each notice of borrowing from the Borrower, the
Agent shall promptly notify each Lender thereof. Subject to its receipt of the
notice referred to in the preceding sentence, each Lender will make the amount
of its Commitment Percentage of each borrowing available to the Agent for the
account of the Borrower at the office of the Agent set forth in Section 11.2
not later than 12:00 Noon (2:00 P.M. with respect to ABR Loans for which the
Borrower gave notice to borrow on the requested Borrowing Date) on the relevant
Borrowing Date requested by the Borrower, in funds immediately available to the
Agent at such office. The amounts so made available to the Agent on such
Borrowing Date will then, subject to the satisfaction of the terms and
conditions of this Agreement, as determined by the Agent, be made available on
such date to the Borrower by the Agent at the office of the Agent specified in
Section 11.2 by crediting the account of the Borrower on the books of such
office with the aggregate of said amounts received by the Agent.
(c) Unless the Agent shall have received prior notice from a Lender
(by telephone or otherwise, such notice to be promptly confirmed by fax or other
writing) that such Lender will not make available to the Agent such Lender's
Commitment Percentage of the Loans requested by the Borrower, the Agent may
assume that such Lender has made such share available to the Agent on the
Borrowing Date in accordance with this Section, provided that such Lender
received notice of the proposed borrowing from the Agent, and the Agent may, in
reliance upon such assumption, make available to the Borrower on the Borrowing
Date a corresponding amount. If and to the extent such Lender shall not have so
made its Commitment Percentage of such Loans available to the Agent, such Lender
and the Borrower severally agree to pay to the Agent forthwith on demand such
corresponding amount (to the extent not previously paid by the other), together
with interest thereon for each day from the date such amount is made available
to the Borrower to the date such amount is paid to the Agent, at a rate per
annum equal to, in the case of the Borrower, the applicable interest rate set
forth in Section 2.7 for ABR Advances, and, in the case of such Lender, the
Federal Funds Rate in effect on each such day (as determined by the Agent). If
such Lender shall pay to the Agent such corresponding amount, such amount so
paid shall constitute such Lender's Loan as part of the Loans for purposes of
this Agreement, which Loan shall be deemed to have been made by such Lender on
the Borrowing Date applicable to such Loans. Notwithstanding any of the
foregoing, nothing in this Section shall be deemed to relieve any Lender from
its obligation to fulfill its commitments hereunder or prejudice any rights
which the Borrower may have against any Lender as a result of any default by
such Lender hereunder.
(d) If a Lender makes a new Loan on a Borrowing Date on which the
Borrower is to repay a Loan from such Lender, such Lender shall apply the
proceeds of such new Loan to make such repayment, and only the excess of the
proceeds of such new Loan over the Loan being repaid need be made available to
the Agent.
(e) Notwithstanding the provisions of Section 2.3(a), the Agent may
act without liability upon the basis of telephonic notice of borrowing believed
by the Agent in good faith to be from an authorized officer of the Borrower
prior to receipt of written notice and confirmation by facsimile or otherwise.
In each such case, the Agent's record
-16-
of the terms of such telephone notice of such borrowing shall be conclusive,
absent manifest error.
2.4. Termination or Reduction of Aggregate Commitments
-------------------------------------------------
(a) Voluntary Reductions. The Borrower shall have the right, upon at
--------------------
least three Business Days' prior written notice to the Agent, at any time to
terminate the Aggregate Commitments or from time to time to permanently reduce
the Aggregate Commitments, provided, however, that any such reduction shall be
in the amount of $5,000,000 or such amount plus a whole multiple of $1,000,000
in excess thereof.
(b) In General. Reductions of the Aggregate Commitments shall be
----------
applied pro rata according to the Commitment of each Lender. Simultaneously
with each reduction of the Aggregate Commitments under this Section, the
Borrower shall pay the Commitment Fee accrued on the amount by which the
Aggregate Commitments have been reduced and prepay the Loans as required by
Section 2.5(b).
2.5. Prepayments of the Loans
------------------------
(a) Voluntary Prepayments. The Borrower may, at its option, prepay
---------------------
the Loans without premium or penalty, in full at any time or in part from time
to time by notifying the Agent in writing at least one Business Day prior to the
proposed prepayment date, in the case of Loans consisting of ABR Advances and at
least three Business Days prior to the proposed prepayment date, in the case of
Loans consisting of Eurodollar Advances, specifying whether the Loans to be
prepaid consist of ABR Advances, Eurodollar Advances, or a combination thereof,
the amount to be prepaid and the date of prepayment. Such notice shall be
irrevocable and the amount specified in such notice shall be due and payable on
the date specified, together with accrued interest to the date of such payment
on the amount prepaid. Upon receipt of such notice, the Agent shall promptly
notify each Lender thereof. Each partial prepayment of the Loans pursuant to
this subsection shall be in an aggregate principal amount of $500,000 or such
amount plus a whole multiple of $500,000 in excess thereof, or, if less, the
outstanding principal balance of the Loans. After giving effect to any partial
prepayment with respect to Eurodollar Advances which were made (whether as the
result of a borrowing or a conversion) on the same date and which had the same
Interest Period, the outstanding principal amount of such Eurodollar Advances
shall exceed (subject to Section 2.6) $2,000,000 or such amount plus a whole
multiple of $500,000 in excess thereof.
(b) Mandatory Prepayments of Loans Relating to Reductions of the
------------------------------------------------------------
Aggregate Commitments. Simultaneously with each reduction of the Aggregate
---------------------
Commitments under Section 2.4, the Borrower shall prepay the Loans by the
amount, if any, by which the aggregate unpaid principal balance of the Loans
exceeds the amount of the Aggregate Commitments as so reduced.
(c) In General. If any prepayment is made in respect of any Eurodollar
----------
Advance, in whole or in part, prior to the last day of the applicable Interest
Period, the Borrower agrees to indemnify the Lenders in accordance with Section
2.12.
-17-
2.6. Conversions and Continuations
-----------------------------
(a) The Borrower may elect from time to time to convert Eurodollar
Advances to ABR Advances by giving the Agent at least one Business Day's prior
irrevocable notice of such election (confirmed by the delivery of a Notice of
Conversion/Continuation), specifying the amount to be so converted, provided,
that any such conversion of Eurodollar Advances shall only be made on the last
day of the Interest Period applicable thereto. In addition, the Borrower may
elect from time to time to (i) convert ABR Advances to Eurodollar Advances and
(ii) to continue Eurodollar Advances by selecting a new Interest Period
therefor, in each case by giving the Agent at least three Business Days' prior
irrevocable notice of such election (confirmed by the delivery of a Notice of
Conversion/Continuation), in the case of a conversion to, or continuation of,
Eurodollar Advances, specifying the amount to be so converted and the initial
Interest Period relating thereto, provided that any such conversion of ABR
Advances to Eurodollar Advances shall only be made on a Business Day and any
such continuation of Eurodollar Advances shall only be made on the last day of
the Interest Period applicable to the Eurodollar Advances which are to be
continued as such new Eurodollar Advances. The Agent shall promptly provide the
Lenders with a copy of each such Notice of Conversion/Continuation. ABR Advances
and Eurodollar Advances may be converted or continued pursuant to this Section
in whole or in part, provided that conversions of ABR Advances to Eurodollar
Advances, or continuations of Eurodollar Advances shall be in an aggregate
principal amount of $2,000,000 or such amount plus a whole multiple of $500,000
in excess thereof.
(b) Notwithstanding anything in this Section to the contrary, no ABR
Advance may be converted to a Eurodollar Advance and no Eurodollar Advance may
continued, if a Responsible Party of the Borrower or the Agent has knowledge
that a Default or Event of Default has occurred and is continuing either (i) at
the time the Borrower shall notify the Agent of its election to convert or
continue or (ii) on the requested Conversion/Continuation Date. In such event,
such ABR Advance shall be automatically continued as an ABR Advance, or such
Eurodollar Advance shall be automatically converted to an ABR Advance on the
last day of the Interest Period applicable to such Eurodollar Advance. If an
Event of Default shall have occurred and be continuing, the Agent shall, at the
request of the Required Lenders, notify the Borrower (by telephone or
otherwise) that all, or such lesser amount as the Required Lenders shall
designate, of the outstanding Eurodollar Advances shall be automatically
converted to ABR Advances, in which event such Eurodollar Advances shall be
automatically converted to ABR Advances on the date such notice is given.
(c) No Interest Period selected in respect of conversion or
continuation of any Eurodollar Advance shall end after the Maturity Date.
(d) Each conversion or continuation shall be effected by each Lender
by applying the proceeds of its new ABR Advance or Eurodollar Advance, as the
case may be, to its Advances (or portion thereof) being converted (it being
understood that such conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).
(e) Notwithstanding the provisions of Section 2.6(a), the Agent may
act without liability upon the basis of telephonic notice of such conversion or
continuation believed by the Agent in good faith to be from an authorized
officer of the Borrower prior to
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receipt of written notice and confirmation, by facsimile or otherwise. In each
such case, the Agent's record of the terms of such telephone notice of such
conversion or continuation shall be conclusive, absent manifest error.
2.7. Interest Rate and Payment Dates
-------------------------------
(a) Prior to Maturity. Except as otherwise provided in Section 2.7(b),
-----------------
prior to the Maturity Date, the Loans shall bear interest on the outstanding
principal balance thereof at the applicable interest rate or rates per annum set
forth below:
ADVANCES RATE
-------- ----
Each ABR Advance Alternate Base Rate plus the Ap plicable
Margin applicable to ABR Advances.
Each Eurodollar Advance Eurodollar Rate for the applicable Interest
Period plus the Applicable Margin
applicable to Eurodollar Advances.
(b) Event of Default. After the occurrence and during the continuance
----------------
of an Event of Default under Section 9.1(a) or (b), the outstanding principal
balance of the Loans and, to the extent permitted by applicable law, overdue
interest thereon, shall bear interest at a rate per annum equal to 2% plus the
rate which would otherwise be applicable under Section 2.7(a), and any other
amount payable under the Loan Documents shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin plus 2%. All such
interest shall be payable on demand.
(c) In General. Interest on (i) ABR Advances to the extent based on
----------
the BNY Rate shall be calculated on the basis of a 365 or 366-day year (as the
case may be), and (ii) ABR Advances to the extent based on the Federal Funds
Rate and on Eurodollar Advances shall be calculated on the basis of a 360-day
year, in each case, for the actual number of days elapsed, including the first
day but excluding the last. Except as otherwise provided in Section 2.7(b),
interest shall be payable in arrears on each Interest Payment Date and upon each
payment (including prepayment) of the Loans. Any change in the interest rate on
the Loans resulting from a change in the Alternate Base Rate or reserve
requirements shall become effective as of the opening of business on the day on
which such change shall become effective. The Agent shall, as soon as
practicable, notify the Borrower and the Lenders of the effective date and the
amount of each such change in the BNY Rate, but any failure to so notify shall
not in any manner affect the obligation of the Borrower to pay interest on the
Loans in the amounts and on the dates required. Each determination of the
Alternate Base Rate or a Eurodollar Rate by the Agent pursuant to this Agreement
shall be conclusive and binding on all parties hereto absent manifest error. At
no time shall the interest rate payable on the Loans, together with the
Commitment Fee and all other amounts payable under the Loan Documents, to the
extent the same are construed to constitute interest, exceed the Highest Lawful
Rate. If in respect of any period during the term of this Agreement, any amount
paid hereunder, to the extent the same shall (but for the provisions of this
Section) constitute or be deemed to constitute interest, would exceed the
maximum amount of interest permitted by the Highest Lawful Rate during such
period (such amount being hereinafter referred to as an "Unqualified Amount"),
------------------
then (i) such Unqualified Amount shall be applied or shall be deemed to have
-19-
been applied as a prepayment of the Loans, and (ii) if in any subsequent period
during the term of this Agreement, all amounts payable hereunder in respect of
such period which constitute or shall be deemed to constitute interest shall be
less than the maximum amount of interest permitted by the Highest Lawful Rate
during such period, then the Borrower shall pay to the Lender in respect of such
period an amount (each a "Compensatory Interest Payment") equal to the lesser of
-----------------------------
(x) a sum which, when added to all such amounts, would equal the maximum amount
of interest permitted by the Highest Lawful Rate during such period, and (y) an
amount equal to the Unqualified Amount less all other Compen satory Interest
Payments made in respect thereof. The Borrower acknowledges that to the extent
interest payable on ABR Advances is based on the BNY Rate, such Rate is only one
of the bases for computing interest on loans made by the Lenders, and by basing
interest payable on ABR Advances on the BNY Rate, the Lenders have not committed
to charge, and the Borrower has not in any way bargained for, interest based on
a lower or the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
2.8. Substituted Interest Rate
-------------------------
(a) In the event that (i) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that by reason
of circumstances affecting the interbank eurodollar market either adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate applicable
pursuant to Section 2.7 or (ii) the Required Lenders shall have notified the
Agent that they have determined (which determination shall be conclusive and
binding on the Borrower) that the applicable Eurodollar Rate will not adequately
and fairly reflect the cost to such Lenders of maintaining or funding loans
bearing interest based on such Eurodollar Rate, with respect to any portion of
the Loans that the Borrower has requested be made as Eurodollar Advances or
Eurodollar Advances that will result from the requested conversion or
continuation of any portion of the Advances into or of Eurodollar Advances
(each, an "Affected Advance"), the Agent shall promptly notify the Borrower and
----------------
the Lenders (by telephone or otherwise, to be promptly confirmed in writing) of
such determination, on or, to the extent practicable, prior to the requested
Borrowing Date or Conversion/Continuation Date for such Affected Advances. If
the Agent shall give such notice, subject to Section 2.8(b), (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to have been converted to or continued as Affected Advances
shall be converted to or continued as ABR Advances and (c) any outstanding
Affected Advances shall be converted, on the last day of the then current
Interest Period with respect thereto, to ABR Advances. Until any notice under
clauses (a)(i) or (a)(ii), as the case may be, of this Section has been
withdrawn by the Agent (by notice to the Borrower promptly upon either (x) the
Agent having determined that such circumstances affecting the interbank
eurodollar market no longer exist and that adequate and reasonable means do
exist for determining the Eurodollar Rate pursuant to Section 2.7 or (y) the
Agent having been notified by such Required Lenders that circumstances no longer
render the Advances (or any portion thereof) Affected Advances, subject to
Section 2.8(b), no further Eurodollar Advances shall be required to be made by
the Lenders, nor shall the Borrower have the right to convert or continue all or
any portion of the Loans to Eurodollar Advances.
(b) In the case of any notice to the Borrower with respect to Affected
Advances under Section 2.8(a)(ii), the Borrower may, at its option, request the
Lenders to continue to make Eurodollar Advances to the Borrower, provided that
the Borrower shall pay to such Lenders, upon such Lenders' delivery of a written
demand therefor to the
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Borrower (with a copy to the Agent), such additional amounts (in the form of an
increased rate of interest, or a different method of calculating interest, or
otherwise, as such Lenders shall reasonably determine) as shall be required to
compensate such Lenders for such increased costs or reduction in amounts
received or receivable hereunder. A statement setting forth the calculations of
any additional amounts payable pursuant to this subsection (b) submitted by a
Lender to the Borrower shall be conclusive absent manifest error.
2.9. Taxes
-----
(a) Payments to Be Free and Clear. Provided that all documentation,
-----------------------------
if any, then required to be delivered by any Lender or the Agent pursuant to
subsection (c) has been delivered, all sums payable by the Borrower under the
Loan Documents shall be paid free and clear of and (except to the extent
required by law) without any deduction or withholding on account of any Tax
(other than a Tax on the Overall Net Income of any Lender (for which payment
need not be free and clear but no deduction or withholding shall be made unless
then required by applicable law)) imposed, levied, collected, withheld or
assessed by or within the United States or any political subdivision in or of
the United States or any other jurisdiction from or to which a payment is made
by or on be half of the Borrower or by any federation or organization of which
the United States or any such jurisdiction is a member at the time of payment.
(b) Grossing-up of Payments. If the Borrower or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by the Borrower to the Agent or any Lender under
any of the Loan Documents:
(i) the Borrower shall notify the Agent and such Lender of any
such requirement or any change in any such requirement as soon as the Borrower
becomes aware of it;
(ii) the Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on the Borrower) for its own account or (if that liability is imposed on
the Agent or such Lender, as the case may be) on behalf of and in the name of
the Agent or such Lender;
(iii) the sum payable by the Borrower to the Agent or a Lender in
respect of which the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, the Agent or such Lender, as the case
may be, receives on the due date therefor a net sum equal to what it would have
received had no such deduction, withholding or payment been required or made;
and
(iv) within 30 days after paying any sum from which it is required
by law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to pay, the
Borrower shall deliver to the Agent and the applicable Lender evidence
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant Governmental Authority;
-21-
provided that no such additional amount shall be required to be paid to any
Lender under clause (iii) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment and Acceptance Agreement pursuant to which such
Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of such
Assignment and Acceptance, as the case may be, in respect of payments to such
Lender.
(c) U.S. Tax Certificates. Each Lender that is organized under the
---------------------
laws of any jurisdiction other than the United States shall deliver to the Agent
for transmission to the Borrower, on or prior to the Effective Date (in the case
of each Lender listed on the signature pages hereof) or on the effective date of
the Assignment and Acceptance Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be necessary
in the determination of the Borrower or the Agent (each in the reasonable
exercise of its discretion), such certificates, documents or other evidence,
properly completed and duly executed by such Lender (including, without
limitation, Internal Revenue Service Form 1001 or Form 4224 or any other
certificate or statement of exemption required by Treasury Regulations Section
1.1441-4(a) or Section 1.1441-6(c) or any successor thereto) to establish that
such Lender is not subject to de duction or withholding of United States federal
income tax under Section 1441 or 1442 of the Code or otherwise (or under any
comparable provisions of any successor statute) with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under any of
the Loan Documents. The Borrower shall not be required to pay any additional
amount to any such Lender under subsection (b)(iii) above if such Lender shall
have failed to satisfy the requirements of the immediately preceding sentence;
provided that if such Lender shall have satisfied such requirements on the
Effective Date (in the case of each Lender listed on the signature pages hereof)
or on the effective date of the Assignment and Acceptance Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing in this
subsection shall relieve the Borrower of its obligation to pay any additional
amounts pursuant to subsection (b)(iii) in the event that, as a result of any
change in applicable law, such Lender is no longer properly entitled to deliver
certificates, documents or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in the
immediately preceding sentence.
2.10. Illegality
----------
Notwithstanding any other provisions herein, if any law, regulation,
treaty or directive, or any change therein or in the interpretation or
application thereof, shall make it unlawful for any Lender to make or maintain
its Eurodollar Advances as contemplated by this Agreement, (i) the commitment of
such Lender hereunder to make Eurodollar Advances or convert ABR Advances to
Eurodollar Advances shall forthwith be suspended and (ii) such Lender's Loans
then out standing as Eurodollar Advances affected hereby, if any, shall be con-
verted automatically to ABR Advances on the last day of the then current
Interest Period applicable thereto or within such earlier period as required by
law. If the commitment of any Lender with respect to Eurodollar Advances is
suspended pursuant to this Section and such Lender shall notify the Agent and
the Borrower that it is once again legal for such Lender to make or maintain
Eurodollar Advances, such Lender's commitment to make or maintain Eurodollar
Advances shall be reinstated.
-22-
2.11. Increased Costs
---------------
In the event that any law, regulation, treaty or directive hereafter
enacted, promulgated, approved or issued or any change in any presently existing
law, regulation, treaty or directive therein or in the interpretation or
application thereof by any Governmental Authority charged with the
administration thereof or compliance by any Lender (or any corporation directly
or indirectly owning or controlling such Lender) with any request or directive
from any Governmental Authority:
(a) does or shall subject any Lender to any Taxes of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under this
Agreement to make Eurodollar Advances, or change the basis of taxation of
payments to any Lender of principal, interest or any other amount payable
hereunder in respect of its Eurodollar Advances, including any Taxes required to
be withheld from any amounts payable under the Loan Documents (except for
imposition of, or change in the rate of, Tax on the Overall Net Income of such
Lender or its Applicable Lending Office for any of such Advances by the
jurisdiction in which such Lender is incorporated or has its principal office or
such Applicable Lending Office, including, in the case of Lenders incorporated
in any State of the United States, such tax imposed by the United States); or
(b) does or shall impose, modify or make applicable any reserve,
special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances which is not otherwise
included in the determination of a Eurodollar Rate;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing, converting, continuing or maintaining its Eurodollar Advances
or its commitment to make such Eurodollar Advances, or to reduce any amount
receivable hereunder in respect of its Eurodollar Advances, then, in any such
case, the Borrower shall pay such Lender, upon written demand therefor to the
Borrower (with a copy to the Agent), any additional amounts necessary to
compensate such Lender for such additional cost or reduction in such amount
receivable which such Lender deems to be material as determined by such Lender;
provided, however, that nothing in this Section shall require the Borrower to
indemnify the Lenders with respect to withholding Taxes for which the Borrower
has no obligation under Section 2.9. No failure by any Lender to demand
compensation for any increased cost during any Interest Period shall constitute
a waiver of such Lender's right to demand such compensation at any time. A
statement setting forth the calculations of any additional amounts payable
pursuant to the foregoing sentence submitted by a Lender to the Borrower shall
be conclusive absent manifest error.
2.12. Indemnification for Loss
------------------------
Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail for any reason to borrow, convert or continue an Advance
after it shall have given notice to do so in which it shall have requested a
Eurodollar Advance, or if a Eurodollar Advance shall be terminated for any
reason prior to the last day of the Interest Period applicable thereto, or if
any repayment or prepayment of the principal amount of a Eurodollar Advance is
made by the Borrower for any reason on a date which is prior to the last day of
the Interest Period applicable thereto, the Borrower agrees to indemnify
-23-
each Lender against, and to pay on demand directly to such Lender the amount
equal to any loss (excluding loss of anticipated profits) or expense suffered
by such Lender as a result of such failure to borrow, convert or continue, or
such termination, repayment or prepayment, including any loss (excluding loss of
anticipated profits), cost or expense suffered by such Lender in liquidating or
employing deposits acquired to fund or maintain the funding of such Eurodollar
Advance, or redeploying funds prepaid or repaid, in amounts which correspond to
such Eurodollar Advance, and any internal processing charge customarily charged
by such Lender in connection therewith. Each determination by the Agent or a
Lender pursuant to this Section shall be conclusive and binding on the Borrower
absent manifest error. Each Lender has indicated that, if the Borrower elects
to borrow or convert to or continue Eurodollar Advances, such Lender may wish
to purchase one or more deposits in order to fund or maintain its funding of its
Eurodollar Advances during the Interest Period in question; it being understood
that the provisions of this Agreement relating to such funding are included only
for the purpose of determining the rate of interest to be paid on such
Eurodollar Advances and for purposes of determining amounts owing under Sections
2.11, 2.12 and 2.15. Each Lender shall be entitled to fund and maintain its
funding of all or any part of each Eurodollar Advance made by it in any manner
it sees fit, but all such determinations shall be made as if such Lender had
actually funded and maintained its funding of such Eurodollar Advance during the
applicable Interest Period through the purchase of deposits in an amount equal
to such Eurodollar Advance and having a maturity corresponding to such Interest
Period. Calculations of all amounts payable under this Section shall be made on
the assumption that each Lender has funded each of its relevant Eurodollar
Advances through the purchase of deposits bearing interest at the applicable
Eurodollar Rate and in an amount equal to the amount of such Eurodollar Advances
and with a maturity equivalent to the Interest Periods applicable to such
Eurodollar Advances.
2.13. Survival of Certain Obligations
-------------------------------
The obligations of the Borrower under Sections 2.8, 2.9, 2.10, 2.11,
2.12 and 2.15 shall survive the termination of the Aggregate Commitments, the
payment of the Loans, and all other amounts payable under the Loan Documents.
2.14. Use of Proceeds
---------------
(a) The Loans on the First Borrowing Date. The proceeds of the Loans
-------------------------------------
made on the first Borrowing Date shall be used solely, directly or indirectly,
to (i) pay a dividend to the Guarantor to enable the Guarantor to purchase
1,518,300 shares of its class A common stock and 1,518,300 shares of its class B
common stock for an aggregate purchase price of $59,000,000 pursuant to the
Stock Purchase Agreement, (ii) pay all of the fees due hereunder, (iii) pay the
reasonable out-of-pocket fees and expenses incurred by the Borrower in
connection with the Loan Documents and (iv) as permitted under subsection (b)
below.
(b) Subsequent Loans. Except as provided in subsection (a), the
----------------
proceeds of all Loans shall be used solely for the Borrower's general corporate
purposes not inconsistent with the provisions hereof.
(c) All Loans. Notwithstanding anything to the contrary contained in
---------
any Loan Document, the Borrower agrees that no part of the proceeds of any Loan
will be
-24-
used, directly or indirectly, for a purpose which violates any law, including,
without limitation, the provisions of Regulations G, U or X of the Board of
Governors of the Federal Reserve System, as amended.
2.15. Capital Adequacy
----------------
If the amount of capital required or expected to be maintained by
any Lender or any Person directly or indirectly owning or controlling such
Lender (each a "Control Person") as a consequence of the Loan Documents or such
--------------
Lender's commitments or obligations hereunder, shall be affected by (i) the
introduction or phasing in of any law, rule or regulation after the Effective
Date, (ii) any change after the Effective Date in the interpretation of any
existing law, rule or regulation by any Governmental Authority charged with the
administration thereof, or (iii) compliance by such Lender or such Control
Person with any directive, guideline or request from any Governmental Authority
(whether or not having the force of law) promulgated or made after the Effective
Date, and such Lender shall have determined that such introduction, phasing in,
change or compliance shall have had or will thereafter have the effect of
reducing (A) the rate of return on such Lender's or such Control Person's
capital, or (B) the asset value to such Lender or such Control Person of the
Loans made or maintained by such Lender, in either case to a level below that
which such Lender or such Control Person could have achieved or would thereafter
be able to achieve but for such introduction, phasing in, change or compliance
(after taking into account such Lender's or such Control Person's policies
regarding capital adequacy) by an amount deemed by such Lender to be material to
such Lender or Control Person, then, within ten days after written demand by
such Lender to the Borrower (with a copy to the Agent), the Borrower shall pay
to such Lender or such Control Person such additional amount or amounts as shall
be sufficient to compensate such Lender or such Control Person, as the case may
be, for such reduction.
2.16. Agent's Records
---------------
The Agent's records regarding the amount of each Loan, each payment
by the Borrower of principal and interest on the Loans and other information
relating to the Loans shall be presumptively correct absent manifest error.
3. FEES; PAYMENTS
--------------
3.1. Commitment Fee
--------------
The Borrower agrees to pay to the Agent, for the account of the
Lenders in accordance with each Lender's Commitment Percentage, a fee (the
"Commitment Fee"), during the Commitment Period, equal to (i) 0.30% per annum at
--------------
all times when the Leverage Ratio is equal to or greater than 2.00:1.00 and (ii)
0.1875% per annum at all times when the Leverage Ratio is less than 2.00:1.00,
in each case on the excess of the Aggregate Commitments over the average daily
sum of the outstanding principal balance of the Loans. The Commitment Fee shall
be payable quarterly in arrears on the last day of each March, June, September
and December of each year, commencing on the first such day following the
Effective Date, and ending on the date that the Aggregate Commitments shall
expire or otherwise terminate. The Commitment Fee shall be calculated on the
basis of a 360-day year for the actual number of days elapsed.
-25-
3.2. Agent's Fees
------------
The Borrower agrees to pay to the Agent, for its own account, such
fees as have been agreed to in writing by the Borrower and the Agent.
3.3. Pro Rata Treatment and Application of Principal Payments
--------------------------------------------------------
Each payment, including each prepayment, of principal and interest on
the Loans and of the Commitment Fee shall be made by the Borrower to the Agent
at its office set forth in Section 11.2 in funds immediately available to the
Agent at such office by 12:00 Noon on the due date for such payment, and,
promptly upon receipt thereof by the Agent, shall be remitted by the Agent in
like funds as received, to the Lenders according to the Commitment Percentage of
each Lender, in the case of the Commitment Fee, and pro rata according to the
aggregate outstanding principal balance of the Loans, in the case of principal
and interest due thereon. The failure of the Borrower to make any such payment
by such time shall not constitute a default hereunder, provided that such
payment is made on such due date, but any such payment made after 12:00 Noon on
such due date shall be deemed to have been made on the next Business Day for the
purpose of calculating interest on amounts outstanding on the Loans. If any
payment hereunder or under the Notes shall be due and payable on a day which is
not a Business Day, the due date thereof (except as otherwise provided in the
definition of Interest Period) shall be extended to the next Business Day and
(except with respect to payments in respect of the Commitment Fee) interest
shall be payable at the applicable rate specified herein during such extension.
If any payment is made with respect to any Eurodollar Advance prior to the last
day of the applicable Interest Period, the Borrower shall indemnify each Lender
in accordance with Section 2.12.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans, each of the Borrower and the Guarantor (in each case,
with respect to itself and its Subsidiaries) makes the following representations
and warranties to the Agent and each Lender:
4.1. Subsidiaries; Capitalization
----------------------------
The Guarantor has only the Subsidiaries set forth on Schedule 4.1.
The shares of each corporate Subsidiary are duly authorized, validly issued,
fully paid and nonassessable and are owned free and clear of any Liens, except
for Permitted Liens. The interest of the Guarantor in each non-corporate
Subsidiary is owned free and clear of any Liens. The outstanding capital Stock
of each corporate Subsidiary and the ownership interest in each non-corporate
Subsidiary are as set forth on Schedule 4.1. The owner of each issue of capital
Stock listed on Schedule 4.1 is the registered and beneficial owner thereof. No
Subsidiary has issued any securities convertible into Stock (or other equity
interest) of such Subsidiary and there are no outstanding options or warrants to
purchase Stock of such Subsidiary of any class or kind, and there are no
agreements, voting trusts or understandings with respect thereto or affecting in
any manner the sale, pledge, assignment or other disposition thereof, including,
without limitation, any right of first refusal,
-26-
option, redemption, call or other rights with respect thereto, whether similar
or dissimilar to any of the foregoing.
4.2. Existence and Power
-------------------
Each Credit Party and its Subsidiaries is duly organized or formed
and validly existing in good standing under the laws of the jurisdiction of its
incorporation or formation, has all requisite power and authority to own its
Property and to carry on its business as now conducted, and is in good standing
and authorized to do business as a foreign corporation in each jurisdiction in
which the nature of the business conducted therein or the Property owned therein
makes such qualification necessary, except where such failure to qualify could
not reasonably be expected to have a Material Adverse Effect.
4.3. Authority
---------
Each Credit Party has full legal power and authority to enter into,
execute, deliver and perform the terms of the Loan Documents to which it is a
party, and in the case of the Borrower, to make the borrowings contemplated
hereby and by the Notes, to execute, deliver and carry out the terms of the
Notes and to incur the obligations provided for herein and therein, all of which
have been duly authorized by all proper and necessary corporate or other
applicable action and are in full compliance with its Certificate of
Incorporation or By-Laws or its other organization documents.
4.4. Binding Agreement
-----------------
The Loan Documents (other than the Notes) constitute, and the Notes,
when issued and delivered pursuant hereto for value received, will constitute,
the valid and legally binding obligations of the Credit Parties in each case, to
the extent it is a party thereto, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally.
4.5. Litigation
----------
Except as set forth on Schedule 4.5, there are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority
(whether purportedly on behalf of a Credit Party or any of its Subsidiaries)
pending or, to the knowledge of a Credit Party, threatened against a Credit
Party or any of its Subsidiaries or any of their respective Properties or
rights, which (i) if adversely determined, could reasonably be expected to have
a Material Adverse Effect, (ii) call into question the validity or
enforceability of any of the Loan Documents, or (iii) could reasonably be
expected to result in the rescission, termination or cancellation of any
material franchise, right, license, permit or similar authorization held by a
Credit Party or any of its Subsidiaries.
4.6. Required Consents
-----------------
No consent, authorization or approval of, filing with, notice to, or
exemption by, stockholders, any Governmental Authority or any other Person is
required to authorize, or is required in connection with the execution, delivery
and performance of the
-27-
Loan Documents to which a Credit Party is a party or is required as a condition
to the validity or enforceability of the Loan Documents to which a Credit Party
is a party.
4.7. No Conflicting Agreements
-------------------------
Neither Credit Party nor any of its Subsidiaries is in default
under any mortgage, indenture, contract or agreement to which it is a party or
by which it or any of its Property is bound, the effect of which default could
reasonably be expected to have a Material Adverse Effect. The execution,
delivery or carrying out of the terms of the Loan Documents will not constitute
a default under, or result in the creation or imposition of, or obligation to
create, any Lien upon any Property of a Credit Party or any of its Subsidiaries
or result in a breach of or require the mandatory repayment of or other
acceleration of payment under or pursuant to the terms of any such mortgage,
indenture, contract or agreement.
4.8. Compliance with Applicable Laws
-------------------------------
Neither Credit Party nor any of its Subsidiaries is in default with
respect to any judgment, order, writ, injunction, decree or decision of any
Governmental Authority which default could reasonably be expected to have a
Material Adverse Effect. Each Credit Party and each of its Subsidiaries is
complying in all material respects with all statutes, regulations, rules and
orders applicable to it of all Governmental Authorities, including, without
limitation, Environmental Laws and ERISA, a violation of which could reasonably
be expected to have a Material Adverse Effect.
4.9. Taxes
-----
Each Credit Party and its Subsidiaries has filed or caused to be
filed all tax returns required to be filed and has paid, or has made adequate
provision for the payment of, all taxes shown to be due and payable on said
returns or in any assessments made against it (other than those being contested
as required under Section 7.4) which would be material to it and no tax Liens
have been filed with respect thereto. The charges, accruals and reserves on the
books of each Credit Party and its Subsidiaries with respect to all federal,
state, local and other taxes are, to the best knowledge of each Credit Party,
adequate for the payment of all such taxes, and each Credit Party knows of no
unpaid as sessment which is due and payable against it or any of its
Subsidiaries or any claims being asserted which could reasonably be expected to
have a Material Adverse Effect, except such thereof as are being contested as
required under Section 7.4, and for which adequate reserves have been set aside
in accordance with GAAP. The Federal income tax returns of each Credit Party and
each of its Subsidiaries consolidated in such returns have been examined by and
settled with the Internal Revenue Service, or, the statute of limitations with
respect thereto have run, for all years through April 15, 1995.
4.10. Governmental Regulations
------------------------
Neither Credit Party nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
Federal Power Act or the Investment Company Act of 1940, as amended, and neither
Credit Party nor any of its Subsidiaries is subject to any statute or regulation
which prohibits or restricts the incurrence of Indebtedness under the Loan
Documents, including, without limitation,
-28-
statutes or regulations relative to common or contract carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.
4.11. Federal Reserve Regulations; Use of Loan Proceeds
-------------------------------------------------
Neither Credit Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans will be used, directly or indirectly, for a purpose
which violates any law, rule or regulation of any Governmental Authority,
including, without limitation, the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System, as amended.
4.12. Plans
-----
The only Pension Plans in effect as of the Effective Date (the
"Existing Pension Plans") are listed on Schedule 4.12. Each Employee Benefit
-----------------------
Plan is in compliance with ERISA and the Code, where applicable, in all material
respects. Each Credit Party and each of its Subsidiaries and ERISA Affiliates
has complied with the requirements of Section 515 of ERISA with respect to each
Pension Plan which is a Multiemployer Plan. As of the Effective Date (i) the
amount of all Unfunded Pension Liabilities under the Pension Plans, excluding
any plan which is a Multiemployer Plan, (ii) the amount of the aggregate
Unrecognized Retiree Welfare Liability under all applicable Employee Benefit
Plans, and (iii) the aggregate potential annual withdrawal liability payments,
as determined in accordance with Title IV of ERISA, of the Guarantor and its
Subsidiaries and ERISA Affiliates with respect to all Pension Plans which are
Multiemployer Plans does not exceed $500,000 in the aggregate. Each Credit
Party and its Subsidiaries and/or ERISA Affiliates has, as of the Effective
Date, made all contributions or payments to or under each such Pension Plan
required by law or the terms of such Pension Plan or any contract or agreement
with respect thereto. No material liability to the PBGC has been, or is
expected by any Credit Party or any of its Subsidiaries or ERISA Affiliates to
be, incurred by it. Liability, as referred to in this Section includes any
joint and several liability. Each Employee Benefit Plan which is a group health
plan within the meaning of Section 5000(b)(1) of the Code is in material
compliance with the continuation of health care coverage requirements of Section
4980B of the Code.
4.13. Financial Statements
--------------------
The Guarantor has heretofore delivered to the Agent and the Lenders
copies of the Guarantor's Form 10-K for the fiscal year ending July 31, 1995,
containing the audited Consolidated Balance Sheets of the Guarantor and its
Subsidiaries as of July 31, 1995 and the related Consolidated Statements of
Income, Stockholder's Equity and Cash Flows for the periods then ended (with the
applicable related notes and schedules, collectively the "Financial
Statements"). The Financial Statements fairly present the Consolidated
financial condition and results of the operations of the Guarantor and its
Subsidiaries as of the dates and for the periods indicated therein and have been
prepared in conformity with GAAP. Except as reflected in the Financial
Statements or in the footnotes thereto, neither the Guarantor nor any of its
Subsidiaries has any obligation or liability of any kind (whether fixed,
accrued, contingent, unmatured or otherwise) which, in accordance with GAAP,
should have been shown in the Financial Statements and was not. Since July 31,
1995, the Guarantor and each of its Subsidiaries has conducted its business
-29-
only in the ordinary course (except for the consummation of the transactions
contemplated by the Stock Purchase Agreement) and there has been no Material
Adverse Change.
4.14. Property
--------
Each Credit Party and each of its Subsidiaries has good and, except
with respect to FCC licenses which cannot be transferred without the written
consent of the applicable Governmental Authority, marketable title to all of its
material Property, subject to no Liens, except Permitted Liens. Each Credit
Party and each of its Subsidiaries is the registered holder of all licenses
(including, without limitation, all uplink and microwave facility licenses
issued by the FCC) necessary for the operation of the business of each Credit
Party and each of its Subsidiaries, and such licenses are validly issued and in
full force and effect, unimpaired by any act or omission by such Credit Party or
such Subsidiary. Except as set forth in Schedule 4.14, to the best of each
Credit Party's knowledge, neither Credit Party nor any of its Subsidiaries is a
party to any investigation, notice of violation, order or complaint issued by or
before the FCC. There are no proceedings by or before the FCC, which could in
any manner materially threaten or adversely affect the validity of any of such
licenses. Except as set forth in Schedule 4.14, neither Credit Party nor any of
its Subsidiaries has knowledge of a threat of any investigation, notice of
violation, order, complaint or proceeding before the FCC, and has no reason to
believe that any of such licenses will not be renewed in the ordinary course.
Each Credit Party and each of its Subsidiaries has filed or caused to be filed
with the FCC all reports, applications, documents, instruments and information
required to be filed pursuant to all FCC rules, regulations and requests the
failure to file of which could reasonably be expected to have a Material Adverse
Effect.
4.15. Franchises, Intellectual Property, Etc.
---------------------------------------
Each Credit Party and its Subsidiaries possesses or has the right to
use all franchises, Intellectual Property, licenses and other rights as are
material and necessary for the conduct of its business, and with respect to
which it is in compliance, with no known conflict with the valid rights of
others which could reasonably be expected to have a Material Adverse Effect. No
event has occurred which permits or, to the best knowledge of the Credit
Parties, after notice or the lapse of time or both, or any other condition,
could reasonably be expected to permit, the revocation or termination of any
such franchise, Intellectual Property, license or other right which revocation
or termination could reasonably be expected to have a Material Adverse Effect.
4.16. Environmental Matters
---------------------
(a) To the best of each Credit Party's knowledge, (i) no Hazardous
Substances have been generated or manufactured on, transported to or from,
treated at, stored at or discharged by any Credit Party or any of its
Subsidiaries from any Real Property in violation of any Environmental Laws;
(ii) no Hazardous Substances have been discharged into subsurface waters by any
Credit Party or any of its Subsidiaries under any Real Property in violation of
any Environmental Laws except for such discharge that could not reasonably be
expected to have a Material Adverse Effect; and (iii) no Hazardous Substances
have been discharged by any Credit Party or any of its Subsidiaries from any
Real Property on or into Property or waters (including subsurface waters)
adjacent to any Real
-30-
Property in violation of any Environmental Laws except for such discharge that
could not reasonably be expected to have a Material Adverse Effect.
(b) Neither Credit Party nor any of its Subsidiaries (i) has
received notice of any claim, demand, suit, action, proceeding, event,
condition, report, directive, Lien, violation, non-compliance or investigation
indicating or concerning any potential or actual liability (including, without
limitation, potential liability for enforcement, investigatory costs, cleanup
costs, government response costs, removal costs, remedial costs, natural
resources damages, Property damages, personal injuries or penalties) that could
reasonably be expected to have a Material Adverse Effect arising in connection
with: (x) any non-compliance with or violation of the requirements of any
applicable Environmental Laws, or (y) the presence of any Hazardous Substance on
any Real Property (or any Real Property previously owned by any Credit Party or
any of its Subsidiaries) or the release or threatened release of any Hazardous
Substance into the environment, (ii) has, to the best of its knowledge, any
threatened or actual liability that could reasonably be expected to have a
Material Adverse Effect in connection with the presence of any Hazardous
Substance on any Real Property (or any Real Property previously owned by any
Credit Party or any of its Subsidiaries) or the release or threatened release of
any Hazardous Substance into the environment, (iii) has received notice of any
federal or state investigation evaluating whether any remedial action is needed
to respond to the presence of any Hazardous Substance on any Real Property (or
any Real Property previously owned by any Credit Party or any of its
Subsidiaries) or a release or threatened release of any Hazardous Substance into
the environment for which any Credit Party or any of its Subsidiaries is or may
be liable, except for such remedial actions as could not reasonably be expected
to have a Material Adverse Effect, or (iv) has received notice that any Credit
Party or any of its Subsidiaries is or may be liable to any Person under any
Environmental Law, except for such liability as could not reasonably be expected
to have a Material Adverse Effect.
(c) No Real Property is located in an area identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards.
4.17. Labor Relations
---------------
There are no material controversies pending between any Credit Party
or any of its Subsidiaries and any of their respective employees, which could
reasonably be expected to have a Material Adverse Effect.
4.18. Solvency
--------
Each Credit Party and each of its Subsidiaries is, and after giving
effect to the incurrence of all Indebtedness under the Loan Documents will be,
Solvent.
4.19. Absence of Certain Restrictions
-------------------------------
No indenture, certificate of designation for preferred Stock,
agreement or instrument to which any Credit Party or any of its Subsidiaries is
a party, prohibits or restrains, directly or indirectly, the payment of
dividends or other payments to the Borrower or any of its Subsidiaries.
-31-
4.20. Burdensome Obligations
----------------------
Neither Credit Party nor any of its Subsidiaries is a party to or
bound by any franchise, agreement, deed, lease or other instrument, or subject
to any restriction which, in the opinion of its management is so unusual or
burdensome, in the context of its business, as in the foreseeable future might
materially and adversely affect or impair its revenue or cash flow or its
ability to perform its obligations under the Loan Documents to which it is a
party. Each Credit Party does not presently anticipate that future expenditures
by it or any of its Subsidiaries needed to meet the provisions of federal or
state statutes, orders, rules or regulations will be so burdensome as to result
in a Material Adverse Effect or Material Adverse Change.
4.21. FCC and Copyright Matters.
-------------------------
Each Credit Party and each of its Subsidiaries (i) have duly and
timely filed all filings which are required to be filed by it under the
Communications Act, the failure to file of which could reasonably be expected to
have a Material Adverse Effect, and (ii) are in all material respects in
compliance with the Communications Act, including, without limitation, the rules
and regulations of the FCC. Each Credit Party and each of its Subsidiaries has
recorded or deposited with and paid to the United States Copyright Office, the
Register of Copyrights and the Copyright Royalty Tribunal all notices,
statements of account, royalty fees and other documents and instruments required
under the Copyright Act, and, to the best knowledge of the Credit Parties,
neither Credit Party nor any of its Subsidiaries is liable to any Person for
copyright infringement under the Copyright Act as a result of its business
operations which could reasonably be expected to have a Material Adverse
Effect.
5. CONDITIONS TO FIRST LOANS
-------------------------
In addition to the conditions precedent set forth in Section 6, the
obligation of each Lender to make its first Loan shall be subject to the
fulfillment of the following conditions precedent:
5.1. Evidence of Action
------------------
(a) The Borrower. The Agent shall have received a certificate,
------------
dated the first Borrowing Date, of the Secretary or Assistant Secretary of the
Borrower (i) attaching a true and complete copy of the resolutions of its Board
of Directors and of all documents evidencing other necessary corporate action
(in form and substance reasonably satisfactory to the Agent) taken by it to
authorize the Loan Documents to which it is a party and the transactions
contemplated thereby, (ii) attaching a true and complete copy of its Certificate
of Incorporation and By-Laws, (iii) setting forth the incumbency of its officer
or officers who may sign such Loan Documents, including therein a signature
specimen of such officer or officers and (iv) attaching a certificate of good
standing of the Secretary of State of the jurisdiction of its incorporation and
of each other jurisdiction in which it is qualified to do business.
(b) The Guarantor. The Agent shall have received a certificate,
-------------
dated the first Borrowing Date, of the Secretary or Assistant Secretary of the
Guarantor (i)
-32-
attaching a true and complete copy of the resolutions of its Board of Directors
and of all documents evidencing other necessary corporate action (in form and
substance reasonably satisfactory to the Agent) taken by it to authorize the
Loan Documents to which it is a party and the transactions contemplated thereby,
(ii) attaching a true and complete copy of its Certificate of Incorporation and
By-Laws, (iii) setting forth the incumbency of its officer or officers who may
sign such Loan Documents, including therein a signature specimen of such officer
or officers and (iv) attaching a certificate of good standing of the Secretary
of State of the jurisdiction of its incorporation and of each other jurisdiction
in which it is qualified to do business.
5.2. This Agreement
--------------
The Agent shall have received counterparts of this Agreement signed
by each of the parties hereto (or receipt by the Agent from a party hereto of a
fax signature page signed by such party which shall have agreed to promptly
provide the Agent with originally executed counterparts hereof).
5.3. Notes
-----
The Agent shall have received the Notes, duly executed by an
Authorized Signatory of the Borrower.
5.4. Litigation
----------
There shall be no injunction, writ, preliminary restraining order or
other order of any nature issued by any Governmental Authority in any respect
affecting the transactions provided for herein and no action or proceeding by or
before any Governmental Authority shall have been commenced and be pending or,
to the knowledge of each Credit Party threatened, seeking to prevent or delay
the transactions contemplated by the Loan Documents or challenging any other
terms and provisions hereof or thereof or seeking any damages in connection
therewith, and the Agent shall have received a certificate of an Authorized
Signatory of each Credit Party to the foregoing effects.
5.5. Certain Documents
-----------------
The Agent shall have received a copy of the Stock Purchase
Agreement, the Noncompetition Agreement and the Note Agreement, in each case
certified to be a true and complete copy thereof by an Authorized Signatory of
each Credit Party.
5.6. Approvals
---------
The Agent shall have received a certificate of an Authorized
Signatory of each Credit Party to the effect that all approvals and consents
(including any consent required under the Note Agreement) of all Persons
required to be obtained in connection with the consummation of the transactions
contemplated by the Loan Documents have been duly obtained and are in full force
and effect, and that all required notices have been given and all required
waiting periods have expired.
-33-
5.7. Opinion of Counsel to the Borrower and the Guarantor
----------------------------------------------------
The Agent shall have received opinions of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Borrower and the Guarantor, ▇▇▇▇▇ ▇. ▇▇▇, General
Counsel to the Borrower and the Guarantor, and Weil, Gotshal & ▇▇▇▇▇▇, special
counsel to the Borrower and the Guarantor, addressed to the Agent and the
Lenders and dated the first Borrowing Date, substantially in the form of Exhibit
F, and covering such additional matters as the Required Lenders may reasonably
request. It is understood that such opinions are being delivered to the Agent
and the Lenders upon the direction of the Borrower and the Guarantor and that
the Agent and the Lenders may and will rely upon such opinions.
5.8. Opinion of Special Counsel
--------------------------
The Agent shall have received an opinion of Special Counsel,
addressed to the Agent and the Lenders and dated the first Borrowing Date
substantially in the form of Exhibit G.
5.9. Fees
----
All fees payable to the Agent and the Lenders on the first Borrowing
Date shall have been paid.
5.10. Fees and Expenses of Special Counsel
------------------------------------
The fees and expenses of Special Counsel in connection with the
preparation, negotiation and closing of the Loan Documents shall have been paid.
5.11. Cancellation of Stock of Guarantor
----------------------------------
Upon the acquisition by the Guarantor of any shares of its Stock
described in Section 2.14(a), the Guarantor shall immediately upon such
acquisition (i) by resolution of its board of directors, take such action under
(S)243 of the Delaware General Corporation Law as may be required to retire such
shares and (ii) make such adjustments in accordance with (S)244 of the Delaware
General Corporation Law to the stated capital of the Guarantor as may be
appropriate.
5.12. Compliance Certificate.
----------------------
The Agent shall have received a duly executed Compliance Certificate
prepared after giving effect to the making of the first Loans and the
application of the proceeds thereof in the manner contemplated by Section 2.14.
6. CONDITIONS TO LENDING - ALL LOANS
---------------------------------
The obligation of each Lender to make any Loan is subject to the
satisfaction of the following conditions precedent as of the date of such Loan:
-34-
6.1. Compliance
----------
On each Borrowing Date and after giving effect to the Loans to be
made thereon, (i) each Credit Party shall be in compliance with all of the
terms, covenants, including without limitation Section 7.15, if applicable, and
conditions hereof, (ii) there shall exist no Default or Event of Default, (iii)
the representations and warranties contained in the Loan Documents (other than
those representations and warranties which expressly speak only as of a
different date) shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date and (iv) the
aggregate outstanding principal balance of the Loans will not exceed the
Aggregate Commitments. Each borrowing by the Borrower shall constitute a
certification by each Credit Party as of such Borrowing Date that each of the
foregoing matters is true and correct in all respects.
6.2. Borrowing Request
-----------------
The Agent shall have received a Borrowing Request duly executed by
an Authorized Signatory of the Borrower.
6.3. Federal Reserve Forms FR U-1
-----------------------------
If the proceeds of the Loans are to be used, directly or indirectly,
to purchase or carry any Margin Stock, the Agent and each Lender shall have
received Federal Reserve Forms FR U-1 , duly executed by an Authorized Signatory
of the Borrower and the Guarantor and in all respects reasonably satisfactory to
the Agent and each applicable Lender.
6.4. Legal Matters and Other Documents
---------------------------------
All legal matters in connection with the making of each Loan shall
be reasonably satisfactory to the Agent and the Agent shall have received such
other documents as the Agent or the Lenders shall reasonably request.
7. AFFIRMATIVE COVENANTS
---------------------
Each Credit Party agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any Loan
Document to any Lender or the Agent, each Credit Party shall:
7.1. Financial Statements
--------------------
Furnish or cause to be furnished to the Agent and each Lender:
(a) As soon as available, but in any event within 100 days after
the end of each fiscal year, a copy of the Consolidated and Consolidating
Balance Sheets of the Guarantor as at the end of such fiscal year, together with
the related Consolidated and Consolidating Statements of Income, Stockholders'
Equity and Cash Flows as of and through the end of such fiscal year, setting
forth in each case in comparative form the
-35-
figures for the preceding fiscal year. The Consolidated Balance Sheets and
Consolidated Statements of Income, Stockholders' Equity and Cash Flows shall be
audited and certified without qualification by the Accountants, which
certification shall (i) state that the examination by such Accountants in
connection with such Consolidated financial statements has been made in
accordance with generally accepted auditing standards and, accordingly, included
such tests of the accounting records and such other auditing procedures as were
considered necessary in the circumstances, and (ii) include the opinion of such
Accountants that such Consolidated financial statements have been prepared in
accordance with GAAP in a manner consistent with prior fiscal periods, except as
otherwise specified in such opinion. Notwithstanding the foregoing, the Credit
Parties may satisfy their obligation to furnish such Consolidated Balance Sheets
and Consolidated Statements of Income, Stockholders' Equity and Cash Flows by
furnishing copies of the Guarantor's annual report on Form 10-K in respect of
such fiscal year, together with the financial statements required to be attached
thereto, provided the Guarantor is required to file such annual report on Form
10-K with the SEC and such filing is actually made.
(b) As soon as available, but in any event within 55 days after
the end of each fiscal quarter, a copy of the Consolidated and Consolidating
Balance Sheets of the Guarantor as at the end of each such quarterly period,
together with the related Consolidated and Consolidating Statements of Income
for such period and for the elapsed portion of the fiscal year through such date
and the related Consolidated and Consolidating Statements of Cash Flows for the
elapsed portion of the fiscal year through such date, setting forth in each case
in comparative form the figures for the corresponding periods of the preceding
fiscal year, certified by the chief financial officer of the Guarantor (or such
other officer acceptable to the Agent), as presenting fairly the Consolidated
and Consolidating financial condition and the Consolidated and Consolidating
results of operations of the Guarantor. Notwithstanding the foregoing, the
Credit Parties may satisfy their obligation to furnish such quarterly
Consolidated Balance Sheets and Consolidated Statements of Income and Cash Flows
by furnishing copies of the Guarantor's quarterly report on Form 10-Q in
respect of such fiscal quarter, together with the financial statements required
to be attached thereto, provided the Guarantor is required to file such
quarterly report on Form 10-Q with the SEC and such filing is actually made.
(c) Within 55 days after the end of each of the first three
fiscal quarters (100 days after the end of the last fiscal quarter), a
Compliance Certificate, certified by the chief financial officer of the
Guarantor (or such other officer as shall be reasonably acceptable to the
Agent).
(d) Such other information as the Agent or any Lender may
reasonably request from time to time.
7.2. Certificates; Other Information
-------------------------------
Furnish to the Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness, individually
or in the aggregate in excess of $500,000, of any Credit Party or any of its
Subsidiaries is declared or shall become due and payable prior to its stated
maturity, or is called and not paid when due, (ii) a default shall have occurred
under any notes (other than the Notes), individually or in the aggregate in
excess of $500,000, or the holder of any such note, or
-36-
other evidence of Indebtedness, individually or in the aggregate in excess of
$500,000, certificate or security evidencing any such Indebtedness or any
obligee with respect to any such Indebtedness of any Credit Party or any of its
Subsidiaries has the right to declare any such Indebtedness due and payable
prior to its stated maturity, or (iii) there shall occur and be continuing a
Default or an Event of Default;
(b) Prompt written notice of: (i) any citation, summons,
subpoena, order to show cause or other document naming any Credit Party or any
of its Subsidiaries a party to any proceeding before any Governmental Authority
which could reasonably be expected to have a Material Adverse Effect or which
calls into question the validity or enforceability of any of the Loan Documents,
and include with such notice a copy of such citation, summons, subpoena, order
to show cause or other document, (ii) any lapse or other termination of any
material Intellectual Property, license, permit, franchise or other
authorization issued to any Credit Party or any of its Subsidiaries by any
Person or Governmental Authority, and (iii) any refusal by any Person or
Governmental Authority to renew or extend any such material Intellectual
Property, license, permit, franchise or other authorization, which lapse,
termination, refusal or dispute could reasonably be expected to have a Material
Adverse Effect;
(c) Promptly upon becoming available, copies of all (i) regular,
periodic or special reports, schedules and other material which any Credit Party
or any of its Subsidiaries may now or hereafter be required to file with or
deliver to any securities exchange or the SEC, or any other Governmental
Authority succeeding to the functions thereof and (ii) material news releases
and annual reports relating to any Credit Party or any of its Subsidiaries;
(d) Prompt written notice in the event that any Credit Party,
any of its Subsidiaries or any ERISA Affiliate knows that (i) any Termination
Event with respect to a Pension Plan has occurred or will occur, (ii) any
condition exists with respect to a Pension Plan which presents a material risk
of termination of the Pension Plan, imposition of an excise tax, requirement to
provide security to the Pension Plan or other liability on any Credit Party, any
of its Subsidiaries or any ERISA Affiliate, (iii) any Credit Party, any of its
Subsidiaries or any ERISA Affiliate has applied for a waiver of the minimum
funding standard under Section 412 of the Code with respect to a Pension Plan,
(iv) the aggregate amount of the Unfunded Pension Liabilities under all Pension
Plans is in excess of $100,000, (v) the aggregate amount of Unrecognized Retiree
Welfare Liability under all applicable Employee Benefit Plans is in excess of
$100,000, (vi) any Credit Party, any of its Subsidiaries or any ERISA Affiliate
has engaged in a Prohibited Transaction with respect to an Employee Benefit
Plan, (vii) any tax has been imposed under Section 4980B(a) of the Code or
(viii) any civil penalty has been assessed under Section 502(c) of ERISA,
together with a certificate of an Authorized Signatory of the Guarantor setting
forth the details of such event and the action which the Guarantor, such
Subsidiary or such ERISA Affiliate proposes to take with respect thereto,
together with a copy of all notices and filings with respect thereto.
(e) Prompt written notice in the event that any Credit Party,
any of its Subsidiaries or any ERISA Affiliate shall receive a demand letter
from the PBGC notifying any Credit Party, such Subsidiary or such ERISA
Affiliate of any final decision finding liability and the date by which such
liability must be paid, together with a copy of such letter and a certificate of
an Authorized Signatory of the Guarantor setting forth the
-37-
action which the Guarantor, such Subsidiary or such ERISA Affiliate proposes to
take with respect thereto.
(f) Promptly upon the same becoming available, and in any event
by the date such amendment is adopted, a copy of any Pension Plan amendment that
any Credit Party, any of its Subsidiaries or any ERISA Affiliate proposes to
adopt which would require the posting of security under Section 401(a)(29) of
the Code, together with a certificate of an Authorized Signatory of the
Guarantor setting forth the reasons for the adoption of such amendment and the
action which the Guarantor, such Subsidiary or such ERISA Affiliate proposes to
take with respect thereto.
(g) As soon as possible and in any event by the tenth day after
any required installment or other payment under Section 412 of the Code owed to
a Pension Plan shall have become due and owing and remain unpaid a copy of the
notice of failure to make required contributions provided to the PBGC by any
Credit Party, any of its Subsidiaries or any ERISA Affiliate under Section
412(n) of the Code, together with a certificate of an Authorized Signatory
setting forth the action which the Guarantor, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto.
(h) If the termination of any Pension Plan would result in the
imposition of any tax under Section 4980 of the Code, then as soon as possible,
but in no event less than 60 days before the due date of the tax, a certificate
of an Authorized Signatory of the Guarantor setting forth the estimated amount
of such tax, any reversion, and the proposed use of such reversion. This
subsection shall apply to a transaction notwithstanding a reduction or complete
elimination of a tax because of the operation of either Sections 4980(d) or
420(a)(3)(A) of the Code.
(i) Prompt written notice of any order, notice, claim or
proceeding received by, or brought against, any Credit Party or any of its
Subsidiaries, or with respect to any of the Real Property, under any
Environmental Law which could reasonably be expected to have a Material Adverse
Effect.
(j) Promptly after the same are received by any Credit Party or
any of its Subsidiaries, copies of all management letters and similar reports
provided to any Credit Party or any of its Subsidiaries by its independent
certified public accountants.
(k) Such other information as the Agent or any Lender shall
reasonably request from time to time.
7.3. Legal Existence
---------------
Maintain, and cause each of its Subsidiaries to maintain, its legal
existence in good standing in the jurisdiction of its incorporation or
formation and in each other jurisdiction in which the failure so to do could
reasonably be expected to have a Material Adverse Effect.
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7.4. Taxes
-----
Pay and discharge when due, and cause each of its Subsidiaries so to
do, all Taxes, assessments and governmental charges, license fees and levies
upon, or with respect to it and all Taxes upon its income, profits and Property
which if unpaid, could reasonably be expected to have a Material Adverse Effect
or become a Lien on its Property (other than a Lien described in Section
8.2(i)), unless and to the extent only that such Taxes, assessments, charges,
license fees and levies shall be contested in good faith and by appropriate
proceedings diligently conducted by it and provided that any such contested Tax,
assessment, charge, license fee or levy shall not constitute, or create, a Lien
on any of its Property senior to the Liens, if any, granted to the Agent and the
Lenders on such Property, and, provided further, that the Credit Parties shall
give the Agent prompt notice of such contest and that such reserve or other
appropriate provision as shall be required by the Accountants in accordance with
GAAP shall have been made therefor.
7.5. Insurance
---------
Maintain, and cause each of its Subsidiaries to maintain, insurance
with financially sound insurance carriers on such of its Property, against at
least such risks, and in at least such amounts, as are usually insured against
by similar businesses and which, in the case of property insurance, shall be in
amounts sufficient to prevent either Credit Party from becoming a co-insurer,
including, without limitation, public liability (bodily injury and property
damage), fidelity, and workers' compensation, and file with the Agent within
ten days after request therefor a detailed list of such insurance then in
effect, stating the names of the carriers thereof, the policy numbers, the
insureds thereunder, the amounts of insurance, dates of expiration thereof, and
the Property and risks covered thereby, together with a certificate of the chief
financial officer (or such other officer as shall be acceptable to the Agent) of
the Credit Parties certifying that in the opinion of such officer such insurance
is adequate in nature and amount, complies with the obligations of the Credit
Parties under this Section, and is in full force and effect.
7.6. Payment of Indebtedness and Performance of Obligations
------------------------------------------------------
Pay and discharge when due, and cause each of its Subsidiaries to
pay and discharge, all lawful Indebtedness, obligations and claims for labor,
materials and supplies or otherwise which, if unpaid, might (i) have a Material
Adverse Effect, or (ii) become a Lien upon Property of any Credit Party or any
of its Subsidiaries other than a Permitted Lien, unless and to the extent only
that the validity of such Indebtedness, obligation or claim shall be contested
in good faith and by appropriate proceedings diligently conducted by it, and
further provided that the Credit Parties shall give the Agent prompt notice of
any such contest and that such reserve or other appropriate provision as shall
be required by the Accountants in accordance with GAAP shall have been made
therefor.
7.7. Condition of Property
---------------------
At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all Property necessary to the operation of each Credit
Party's or such Subsidiary's business.
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7.8. Observance of Legal Requirements
--------------------------------
Observe and comply in all respects, and cause each of its
Subsidiaries so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time hereafter
may be applicable to it, including, without limitation, ERISA and all
Environmental Laws, a violation of which could reasonably be expected to have a
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by it, provided that the
Credit Parties shall give the Agent prompt notice of such contest and that such
reserve or other appropriate provision as shall be required by the Accountants
in accordance with GAAP shall have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions
------------------------------------------------------
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and activities
and permit, upon reasonable notice, representatives of the Agent and any Lender,
from time to time, to visit its offices, to inspect any of its Property and
examine and make copies or abstracts from any of its books and records during
regular business hours, and to discuss the business, operations, prospects,
licenses, Property and financial condition of each Credit Party and its
Subsidiaries with the officers thereof and the Accountants.
7.10. Licenses, Intellectual Property
-------------------------------
Maintain, and cause each of its Subsidiaries to maintain, in full
force and effect, all material licenses, franchises, Intellectual Property,
permits, licenses, authorizations and other rights as are necessary for the
conduct of its business.
7.11. FCC Licenses, Etc.
-----------------
Maintain and cause each of its Subsidiaries to maintain, in full
force and effect all uplink and microwave facility licenses issued by the FCC
which are necessary for the operation of its business. Each Credit Party shall
also maintain and cause each of its Subsidiaries to maintain, in full force and
effect, all other material licenses, copyrights, patents, including all
licenses, permits, applications, reports, authorizations and other rights as are
necessary for the conduct of its business, except to the extent that such
ownership or right to use shall terminate as a matter of law or expire as a
matter of contractual right through no action or default by any Credit Party or
any of its Subsidiaries.
7.12. Leverage Ratio.
--------------
Maintain at all times a Leverage Ratio of not more than 3.00:1.00:
7.13. EBITDA to Pro-Forma Debt Service.
--------------------------------
Maintain at all times a ratio of EBITDA to Pro-Forma Debt Service of
not less than 2.00:1.00.
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7.14. EBITDA to Interest Expense.
--------------------------
Maintain at all times a ratio of EBITDA to Interest Expense of not
less than 2.25:1.00.
7.15. Margin Stock of Guarantor.
--------------------------
In the event any Margin Stock of the Guarantor is to be acquired by
the Guarantor and if and to the extent that such acquisition would result in a
violation of Section 8.16, the Guarantor shall immediately upon such acquisition
(i) by resolution of its board of directors, take such action under (S)243 of
the Delaware General Corporation law (or such other applicable law) as may be
required to retire at least a number of such shares such that, after giving
effect thereto, no violation of Section 8.16 shall exist and (ii) make such
adjustments in accordance with (S)244 of the Delaware Corporation Law (or such
other applicable law) to the stated capital of the Guarantor as may be
appropriate.
8. NEGATIVE COVENANTS
------------------
Each Credit Party agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any Loan
Document to any Lender or the Agent, each Credit Party shall not, directly or
indirectly:
8.1. Indebtedness
------------
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of its Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents, (ii) Indebtedness of the Credit
Parties under the Note Agreement, (iii) Indebtedness of each Credit Party or any
of its Subsidiaries existing on the date hereof as set forth on Schedule 8.1,
excluding increases and refinancings thereof, (iv) Indebtedness of the Borrower
constituting purchase money Indebtedness and Capital Lease Obligations incurred
in connection with the purchase or lease of Property in the ordinary course of
business, in an aggregate outstanding principal amount not to exceed $10,000,000
and (v) other unsecured Indebtedness created, incurred or assumed after the date
hereof not enumerated in clauses (i) through (iv) above, provided that the
aggregate outstanding principal amount of such Indebtedness shall not exceed
$5,000,000 at any one time outstanding.
8.2. Liens
-----
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, except (i) Liens for Taxes, assessments or similar
charges incurred in the ordinary course of business which are not delinquent or
which are being contested in accordance with Section 7.4, provided that
enforcement of such Liens is stayed pending such contest, (ii) Liens in
connection with workers' compensation, unemployment insurance or other social
security obligations (but not ERISA), (iii) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business, (iv) zoning ordinances,
easements, rights of way, minor defects, irregularities, and other similar
restrictions affecting real Property which do not adversely affect the
-41-
value of such real Property or the financial condition of each Credit Party or
such Subsidiary or impair its use for the operation of the business of each
Credit Party or such Subsidiary, (v) Liens arising by operation of law such as
mechanics', materialmen's, carriers', warehousemen's liens in curred in the
ordinary course of business which are not delinquent or which are being
contested in accordance with Section 7.6, provided that enforcement of such
Liens is stayed pending such contest, (vi) Liens arising out of judgments or
decrees which are being contested in accordance with Section 7.6, provided that
enforcement of such Liens is stayed pending such contest, (vii) Liens in favor
of the Agent and the Lenders under the Loan Documents, (viii) Liens on Property
of the Borrower acquired or leased after the date hereof to secure Indebtedness
of the Borrower permitted by Section 8.1(iv), incurred in connection with the
acquisition or lease of such Property, provided that each such Lien is limited
to such Property so acquired or leased, (ix) Liens on Property of each Credit
Party and its Subsidiaries existing on the Effective Date as set forth on
Schedule 8.2 as renewed from time to time, but not any increases in the amounts
secured thereby, (x) Liens on Property of the Borrower or any of its
Subsidiaries acquired after the Effective Date provided that such Liens are
limited to the Property so acquired and were not created in contemplation of
such acquisition, and (xi) Liens on Margin Stock.
8.3. Merger, Consolidation or Sale of Assets, Etc.
---------------------------------------------
Consolidate with, be acquired by, or merge into or with any Person,
or convey, sell, lease or otherwise dispose of all or any part of its Property,
or enter into any sale-leaseback transaction, or permit any of its Subsidiaries
so to do, except:
(a) Sales or other dispositions of inventory in the ordinary
course of business;
(b) Sales or other dispositions of equipment and materials in
the ordinary course of business which are obsolete or no longer useful in the
conduct of its business and sales of Investments (excluding sales of
Subsidiaries or Investments in Subsidiaries), in each case as to which the
following conditions have been satisfied:
(i) no Default or Event of Default shall exist
immediately before or after giving effect thereto, and
(ii) 85% of the total consideration received or to be
received therefor by the Credit Parties or any of their Subsidiaries shall be
payable in cash or Cash Equivalents on or before the closing thereof and shall
not be less than the fair market value thereof;
(c) Sales or other dispositions of Margin Stock for fair value;
and
(d) any wholly-owned Subsidiary of the Borrower may merge into,
be acquired by or otherwise dispose of all or any part of its Property to the
Borrower or another wholly-owned Subsidiary of the Borrower.
-42-
8.4. Restricted Payments
-------------------
Declare or pay any Restricted Payments payable in cash or otherwise
or apply any of its Property thereto or set apart any sum therefor, or permit
any of its Subsidiaries so to do, except that: (i) a wholly-owned Subsidiary may
declare and pay Restricted Payments to the Borrower, (ii) provided that no
Default or Event of Default has occurred and is then continuing or would occur
after giving effect thereto, each Credit Party may declare and pay cash
dividends on its Stock and (iii) the Borrower may declare and pay cash
dividends to the Guarantor in amounts and at times sufficient to enable the
Guarantor, as the consolidated taxpayer for itself and the Borrower and its
Subsidiaries, if applicable, to pay taxes when due.
8.5. Investments, Acquisitions, Loans, Etc.
--------------------------------------
At any time, purchase or otherwise acquire, hold or invest in the
Stock or Property of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment, whether by way of capital contribution,
deposit or otherwise, in or with any Person, or permit any of its Subsidiaries
so to do (all of which are sometimes referred to herein as "Investments"),
-----------
except:
(a) Investments in Cash or Cash Equivalents;
(b) Investments existing on the date hereof as set forth on
Schedule 8.5;
(c) normal business banking accounts and short-term certificates
of deposit and time deposits in, or issued by, federally insured institutions in
amounts not exceeding the limits of such insurance;
(d) Investments in wholly owned Subsidiaries owned by the
Guarantor on the Effective Date;
(e) Investments in the form of purchases or other acquisitions
of inventory, materials and equipment in the ordinary course of business;
(f) Investments by the Guarantor in the form of the purchase or
other acquisition of its Stock with the proceeds of the first Loans as
contemplated by Section 2.14 and subject to the terms and conditions hereof;
(g) Investments used to provide "upfront payments" to the FCC in
connection with the auction of C block personal communications services (PCS)
licenses to the extent that such upfront payments (calculated after deduction
for any withdrawal, default, disqualification and/or other penalties imposed by
the FCC) are not to be retained by the FCC and (i) all actions necessary to
obtain the return of such upfront payments and the repayment to the Borrower or
its applicable Subsidiaries of such Investments shall have been taken, (ii)
promptly upon receipt of the return of such upfront payments such Investments
shall be repaid to the Borrower or such applicable Subsidiaries, and (iii) the
Required Lenders shall have consented thereto and received such certificates and
documents in connection therewith as they may request; and
-43-
(h) other Investments (including the purchase or other
acquisition by the Guarantor of its Stock, subject to the term and conditions
hereof, but excluding the purchase or other acquisition by any Subsidiary of the
Guarantor of the Stock of the Guarantor) made after the date hereof not
enumerated in clauses (a) through (g) above, provided that the aggregate amount
of such Investments (net of return of Investments) does not exceed $50,000,000.
8.6. Business and Name Changes
-------------------------
Materially change the nature of the business of any Credit Party or
any of its Subsidiaries as conducted on the Effective Date, or alter or modify
any Credit Party's name, structure or status, or permit any of its Subsidiaries
so to do, except to the extent permitted under Section 8.3.
8.7. Subsidiaries
------------
Create or acquire any other Subsidiary, or permit any of its
Subsidiaries so to do, except as permitted under Section 8.3 or 8.5.
8.8. Certificate of Incorporation and By-laws
----------------------------------------
Amend or otherwise modify its Certificate of Incorporation or By-
Laws in any way which would adversely affect the interests of the Agent and the
Lenders under any of the Loan Documents, or permit any of its Subsidiaries so to
do.
8.9. ERISA
-----
Permit any Pension Plan to have a Funded Current Liability
Percentage of less than 60 percent.
8.10. Sale and Leaseback
------------------
Enter into any arrangement with any Person providing for the leasing
by it of Property which has been or is to be sold or transferred by it to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such Property or its rental obligations, or
permit any of its Subsidiaries so to do, except to the extent permitted under
Section 8.3.
8.11. Fiscal Year
-----------
Change its fiscal year from that in effect on the Effective Date, or
permit any of its Subsidiaries so to do.
8.12. Amendments, Etc. of Certain Agreements
--------------------------------------
Enter into or agree to any amendment, modification or waiver of any
term or condition of the Stock Purchase Agreement, the Noncompetition Agreement
or the Note Agreement without the prior written consent of the Required Lenders.
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8.13. Transactions with Affiliates
----------------------------
Become a party to any transaction with an Affiliate unless the terms
and conditions relating thereto are as favorable to it as those which would be
obtainable at the time in a comparable arms-length transaction with a Person
other than an Affiliate, or permit any of its Subsidiaries so to do.
8.14. Limitation on Certain Restrictions on Subsidiaries
--------------------------------------------------
Directly or indirectly create or otherwise cause or suffer to exist
or become effective, any encumbrance or restriction on the ability of any
Subsidiary of any Credit Party to (i) pay dividends or make any other
distributions on its capital Stock or any other interest or participation in
such Subsidiary's profits owned by the Borrower or any of its Subsidiaries, or
pay any Indebtedness owed to the Borrower or any Subsidiary of the Borrower,
(ii) make loans or advances to the Borrower or any Subsidiary of the Borrower or
(iii) transfer any of its Property to the Borrower, or permit any Subsidiary so
to do, except for (a) the Note Agreement and (b) such encumbrances or
restrictions existing under or by reason of (x) applicable law and (y) the Loan
Documents.
8.15. Limitation on Negative Pledge Clauses.
-------------------------------------
Enter into any agreement, other than (i) this Agreement, (ii) the
Note Agreement and (iii) purchase money mortgages or capital leases permitted by
this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of any Credit Party to create, incur, assume or suffer to exist any Lien
upon any of its Property or revenues, whether now owned or hereafter acquired.
8.16. Investments in Margin Stock.
---------------------------
Acquire or hold any Margin Stock, or permit any of its Subsidiaries
so to do, if more than 25% of the value of the assets of each of the Guarantor
and the Borrower is represented by assets consisting of Margin Stock.
9. DEFAULT
-------
9.1. Events of Default
-----------------
The following shall each constitute an "Event of Default" hereunder:
(a) The failure of the Borrower to pay any principal on any Note
on the date when due and payable; or
(b) The failure of any Credit Party to pay any interest or any
other fees or expenses payable under any Loan Document or otherwise to the Agent
with respect to the loan facilities established hereunder within three Business
Days of the date when due and payable; or
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(c) The failure of any Credit Party to observe or perform any
covenant or agreement contained in Sections 2.14, 7.3, 7.11, 7.12, 7.13, 7.14,
7.15 or Section 8; or
(d) The failure of any Credit Party to observe or perform any
term, covenant, or agreement contained in any Loan Document (except those
described in Section 9.1(a), (b), (c) or (e)) and such failure shall have
continued unremedied for a period of 30 days after any Responsible Party of the
applicable Credit Party shall have obtained knowledge thereof; or
(e) Any representation or warranty made by any Credit Party in
any Loan Document or in any certificate, report or other document delivered or
to be delivered pursuant thereto, shall prove to have been incorrect or
misleading in any material respect when made; or
(f) Any obligation of any Credit Party (other than its
obligations under the Loan Documents) or any of its Subsidiaries, whether as
principal, guarantor, surety or other obligor, for the payment of any
Indebtedness or operating leases, in an aggregate amount in excess of $500,000,
(i) shall become or shall be declared to be due and payable prior to the
expressed maturity thereof, or (ii) shall not be paid when due or within any
grace period for the payment thereof, or (iii) in respect of which a Responsible
Party of any Credit Party shall have obtained knowledge that any holder of any
such obligation shall have the right to declare such obligation due and payable
prior to the expressed maturity thereof and the default, event of default or
other circumstances giving rise to such right to declare such obligation due and
payable shall not have been waived or otherwise cured (such that such right
shall no longer exist) within 30 days of such Responsible Party having obtained
such knowledge;
(g) Any Credit Party or any of its Material Subsidiaries shall
suspend or discontinue its business substantially as a whole and such suspension
or discontinuance shall have a Material Adverse Effect;
(h) Any Credit Party or any of its Subsidiaries shall (i) make
an assignment for the benefit of creditors, (ii) generally not be paying its
debts as such debts become due, (iii) admit in writing its inability to pay its
debts as they become due, (iv) file a voluntary petition in bankruptcy, (v)
become insolvent, (vi) file any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, (vii) petition or apply to any tribunal for any
receiver, custodian or any trustee for any substantial part of its Property,
(viii) be the subject of any such proceeding filed against it which remains
undismissed for a period of 45 days, (ix) file any answer admitting or not
contesting the material allegations of any such petition filed against it or any
order, judgment or decree approving such petition in any such proceeding, (x)
seek, approve, consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, sequestrator, custodian, liquidator, or
fiscal agent for it, or any substantial part of its Property, or an order is
entered appointing any such trustee, receiver, custodian, liquidator or fiscal
agent and such order remains in effect for 45 days, or (xi) take any formal
action for the purpose of effecting any of the foregoing or looking to the
liquidation or dissolution of any Credit Party or any of its Subsidiaries; or
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(i) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging any Credit Party or any of its Subsidiaries bankrupt
or insolvent, (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of any Credit Party or any of its Subsidiaries under the United States
bankruptcy laws or any other applicable Federal or state law, (iii) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of any Credit Party or any of its Subsidiaries or of any
substantial part of the Property thereof, or (iv) ordering the winding up or
liquidation of the affairs of any Credit Party or any of its Subsidiaries and
any such decree or order continues unstayed and in effect for a period of 45
days; or
(j) Judgments or decrees against any Credit Party or any of its
Subsidiaries aggregating in excess of $500,000 shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of 30 days; or
(k) Any Loan Document shall cease, for any reason, to be in full
force and effect, or any Credit Party shall so assert in writing or shall
disavow any of its obligations thereunder; or
(l) (i) Any Termination Event shall occur; (ii) any Accumulated
Funding Deficiency, whether waived, shall exist with respect to any Pension
Plan; (iii) any Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan; (iv) the Guarantor, any of its Subsidiaries or any ERISA
Affiliate shall fail to pay when due an amount which is payable by it to the
PBGC or to a Pension Plan under Title IV of ERISA; (v) the imposition of any tax
under Section 4980(B)(a) of the Code; (vi) the assessment of a civil penalty
with respect to any Employee Benefit Plan under Section 502(c) of ERISA; or
(vii) any other event or condition shall occur or exist with respect to an
Employee Benefit Plan which would have a Material Adverse Effect and in the case
of clauses (ii), (iv), (v) and (vi) of this subsection, the aggregate liability
of any Credit Party or any of its Subsidiaries or ERISA Affiliates shall exceed
$500,000; or
(m) If for any reason there shall occur a Change of Control.
Upon the occurrence, or at any time during the occurrence, of an
Event of Default (a) if such event is an Event of Default specified in clause
(h) or (i) above, the Aggregate Commitments shall immediately and automatically
terminate and the Loans, all accrued and unpaid interest thereon and all other
amounts owing under the Loan Documents shall immediately become due and payable,
and the Agent may, and, upon the direction of the Required Lenders shall,
exercise any and all remedies and other rights provided in the Loan Documents,
and (b) if such event is any other Event of Default, any or all of the following
actions may be taken: (i) with the consent of the Required Lenders, the Agent
may, and upon the direction of the Required Lenders shall, by notice to the
Borrower, declare the Aggregate Commitments to be terminated forthwith,
whereupon the Aggregate Commitments shall immediately terminate, and (ii) with
the consent of the Required Lenders, the Agent may, and upon the direction of
the Required Lenders shall, by notice of default to the Borrower, declare the
Loans, all accrued and unpaid interest thereon, and all other amounts owing
under the Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable, and the Agent may, and upon the
direction of the Required Lenders shall, exercise any and all remedies
-47-
and other rights provided pursuant to the Loan Documents. Except as otherwise
provided in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived. Each Credit Party hereby further expressly
waives and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force which might
delay, prevent or otherwise impede the performance or enforcement of any Loan
Document.
In the event that the Aggregate Commitments shall have been
terminated or the Notes shall have been declared due and payable pursuant to the
provisions of this Section, any funds received by the Agent and the Lenders from
or on behalf of the Credit Parties shall be applied by the Agent and the Lenders
in liquidation of the Loans and the obligations of the Borrower under the Loan
Documents in the following manner and order: (i) first, to the payment of
interest on, and then the principal portion of, any Loans which the Agent may
have advanced on behalf of any Lender for which the Agent has not then been
reimbursed by such Lender or the Credit Parties; (ii) second, to the payment of
any fees or expenses due the Agent from the Credit Parties, (iii) third, to
reimburse the Agent and the Lenders for any expenses (to the extent not paid
pursuant to clause (ii) above due from the Credit Parties pursuant to the
provisions of Section 11.5; (iv) fourth, to the payment of accrued Commitment
Fees, and all other fees, expenses and amounts due under the Loan Documents
(other than principal and interest on the Notes); (v) fifth, to the payment of
interest due on the Notes; (vi) sixth, to the payment of principal outstanding
on the Notes; and (vii) seventh, to the payment of any other amounts owing to
the Agent and the Lenders under any Loan Document.
10. THE AGENT
---------
10.1. Appointment
-----------
Each Lender hereby irrevocably designates and appoints BNY as the
Agent of such Lender under the Loan Documents and each such Lender hereby
irrevocably authorizes BNY, as the Agent for such Lender, to take such action on
its behalf under the provisions of the Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
any Loan Document, the Agent shall not have any duties or responsibilities other
than those expressly set forth therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents or otherwise
exist against the Agent.
10.2. Delegation of Duties
--------------------
The Agent may execute any of its duties under the Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to rely upon the
advice of counsel concerning all matters pertaining to such duties.
10.3. Exculpatory Provisions
----------------------
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to
-48-
be taken by it or such Person under or in connection with the Loan Documents
(except the Agent for its own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in the Loan Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent under or
in connection with, the Loan Documents or for the value, validity,
effectiveness, genuineness, perfection, enforceability or sufficiency of any of
the Loan Documents or for any failure of any Credit Party or any other Person to
perform its obligations thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, the Loan Documents, or to
inspect the properties, books or records of any Credit Party. The Agent shall
not be under any liability or responsibility whatsoever, as Agent, to any Credit
Party or any other Person as a consequence of any failure or delay in
performance, or any breach, by any Lender of any of its obligations under any of
the Loan Documents.
10.4. Reliance by Agent
-----------------
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, fax, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to any Credit Party), independent accountants and other experts selected by the
Agent. The Agent may treat each Lender, or the Person designated in the last
notice filed with it under this Section, as the holder of all of the interests
of such Lender in its Loans and in its Note until written notice of transfer,
signed by such Lender (or the Person designated in the last notice filed with
the Agent) and by the Person designated in such written notice of transfer, in
form and substance satisfactory to the Agent, shall have been filed with the
Agent. The Agent shall not be under any duty to examine or pass upon the
validity, effectiveness, enforceability, perfection or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Agent shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be. The Agent shall be fully
justified in failing or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of the requisite
Lenders as it deems appropriate. The Agent shall in all cases be fully protected
in acting, or in refraining from acting, under the Loan Documents in accordance
with a request or direction of the Required Lenders, and such request or
direction and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
10.5. Notice of Default
-----------------
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent has received
written notice thereof from a Lender or the Borrower. In the event that the
Agent receives such a notice, the Agent shall promptly give notice thereof to
the Lenders and the Borrower. The Agent shall take such action with respect to
such Default or Event of Default as shall be directed by the Required Lenders,
provided, however, that unless and until the Agent shall
-49-
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem to be in the best interests of the
Lenders.
10.6. Non-Reliance on Agent and Other Lenders
---------------------------------------
Each Lender expressly acknowledges that neither the Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Agent hereinafter, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own evaluation of and
investigation into the business, operations, Property, financial and other
condition and creditworthiness of the Credit Parties and made its own decision
to enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, evaluations and decisions in taking or
not taking action under any Loan Document, and to make such investigation as it
deems necessary to inform itself as to the business, operations, Property,
financial and other condition and creditworthiness of the Credit Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, Property, financial and other condition or
creditworthiness of the Credit Parties which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7. Indemnification
---------------
Each Lender agrees to indemnify and reimburse the Agent in its
capacity as such (to the extent not promptly reimbursed by the Borrower and
without limiting the obligation of any Credit Party to do so), pro rata
according to the outstanding principal balance of the Loans (or at any time when
no Loans are outstanding, according to its Commitment Percentage), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever including, without limitation, any amounts paid to the Lenders
(through the Agent) by the Borrower pursuant to the terms of the Loan Documents,
that are subsequently rescinded or avoided, or must otherwise be restored or
returned) which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other documents contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be taken by the Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the finally
adjudicated gross negligence or willful misconduct of the Agent. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its pro rata share of any unpaid fees owing to the Agent, and
any costs and expenses (including, without limitation, reasonable fees and
-50-
expenses of counsel) payable by the Borrower under Section 11.5, to the extent
that the Agent has not been paid such fees or has not be reimbursed for such
costs and expenses, by the Borrower or any other Credit Party. The failure of
any Lender to reimburse the Agent promptly upon demand for its pro rata share of
any amount required to be paid by the Lenders to the Agent as provided in this
Section shall not relieve any other Lender of its obligation hereunder to
reimburse the Agent for its pro rata share of such amount, but no Lender shall
be responsible for the failure of any other Lender to reimburse the Agent for
such other Lender's pro rata share of such amount. The agreements in this
Section shall survive the payment of all amounts payable under the Loan
Documents.
10.8. Agent in Its Individual Capacity
--------------------------------
BNY and its respective affiliates may make loans to, accept deposits
from, issue letters of credit for the account of, and generally engage in any
kind of business with, any Credit Party as though BNY were not Agent hereunder.
With respect to the Commitment made or renewed by BNY and the Note issued to
BNY, BNY shall have the same rights and powers under the Loan Documents as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall in each case include BNY.
10.9. Successor Agent
---------------
If at any time the Agent deems it advisable, in its sole discretion,
it may submit to each of the Lenders a written notice of its resignation as
Agent under the Loan Documents, such resignation to be effective upon the
earlier of (i) the written acceptance of the duties of the Agent under the Loan
Documents by a successor Agent and (ii) on the 30th day after the date of such
notice. Upon any such resignation, the Required Lenders shall have the right to
appoint from among the Lenders a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and accepted such appointment in
writing within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which successor Agent shall be a commercial bank organized
under the laws of the United States of America or any State thereof and having a
combined capital, surplus, and undivided profits of at least $100,000,000. 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's rights, powers, privileges and duties as Agent under the Loan Documents
shall be terminated. The Borrower and the Lenders shall execute such documents
as shall be necessary to effect such appointment. After any retiring Agent's
resignation as Agent, the provisions of the Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents. If at any time there shall not be a duly appointed and
acting Agent, the Borrower agrees to make each payment due under the Loan
Documents directly to the Lenders entitled thereto during such time.
-51-
11. OTHER PROVISIONS
----------------
11.1. Amendments and Waivers
----------------------
With the written consent of the Required Lenders, the Agent and the
appropriate Credit Parties may, from time to time, enter into written
amendments, supplements or modifications of the Loan Documents and, with the
consent of the Required Lenders, the Agent on behalf of the Lenders may execute
and deliver to any such parties a written instrument waiving or a consent to a
departure from, on such terms and conditions as the Agent may specify in such
instrument, any of the requirements of the Loan Documents or any Default or
Event of Default and its consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or consent
shall, without the consent of all of the Lenders, (i) increase the Commitments
of any Lender or the Aggregate Commitments, (ii) extend the Maturity Date, (iii)
decrease the rate, or extend the time of payment, of the Commitment Fee or of
interest on any Note, or change or forgive the principal amount of, or change
the pro rata allocation, or extend the time of payment, of payments under, any
Note, (iv) change the provisions of Sections 2.11, 2.13, 2.14, 2.15, 11.1 or
11.7(a), (v) release the Guaranty or (v) change the definition of Required
Lenders; and
(b) without the written consent of the Agent, no such amendment,
supplement, modification or waiver shall amend, modify or waive any provision of
Section 10 or otherwise change any of the rights or obligations of the Agent
hereunder or under the Loan Documents.
Any such amendment, supplement, modification or waiver shall apply
equally to each of the Lenders and shall be binding upon the parties to the
applicable Loan Document, the Lenders, the Agent and all future holders of the
Notes. In the case of any waiver, the parties to the applicable Loan Document,
the Lenders and the Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes and other Loan Documents to the extent
provided for in such waiver, and any Default or Event of Default waived shall
not extend to any subsequent or other Default or Event of Default. The Loan
Documents may not be amended orally or by any course of conduct.
11.2. Notices
-------
All notices, requests and demands to or upon the respective parties
to the Loan Documents to be effective shall be in writing and, unless otherwise
expressly provided therein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, first-class postage prepaid,
or, in the case of notice by fax, when sent, addressed as follows in the case of
the Borrower, the Guarantor or the Agent, at the Domestic Lending Office, in the
case of each Lender, or to such other addresses as to which the Agent may be
hereafter notified by the respective parties thereto or any future holders of
the Notes:
-52-
The Borrower:
Black Entertainment Television, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III,
Executive Vice President, Finance
Chief Financial Officer and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Guarantor:
BET Holdings, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III,
Executive Vice President, Finance
Chief Financial Officer and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
for both the Borrower and the Guarantor,
with a copy to:
Black Entertainment Television, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇,
Executive Vice President,
General Counsel
Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent:
The Bank of ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Agency Function Administration
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366 or 6367
-53-
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
except that any notice, request or demand by the Borrower to or upon the Agent
or the Lenders pursuant to Sections 2.3 or 2.6 shall not be effective until
received. Any party to a Loan Document may rely on signatures of the parties
thereto which are transmitted by fax or other electronic means as fully as if
originally signed.
11.3. No Waiver; Cumulative Remedies
------------------------------
No failure to exercise and no delay in exercising, on the part of
the Agent or any Lender, any right, remedy, power or privilege under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
under the Loan Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties
------------------------------------------
All representations and warranties made under the Loan Documents and
in any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the Loan
Documents.
11.5. Payment of Expenses and Taxes
-----------------------------
The Borrower agrees, promptly upon presentation of a statement or
invoice therefor, and whether any Loan is made (i) to pay or reimburse the Agent
for all its out-of-pocket costs and expenses reasonably incurred in connection
with the development, preparation and execution of, the Loan Documents and any
amendment, supplement or modification thereto (whether or not executed), any
documents prepared in connection therewith and the consummation of the
transactions contemplated thereby, including, without limitation, the reasonable
fees and disbursements of Special Counsel, (ii) to pay or reimburse the Agent
and the Lenders for all of their respective costs and expenses, including,
without limitation, reasonable fees and disbursements of counsel, incurred in
connection with (A) any Default or Event of Default and any enforcement or
collection proceedings resulting therefrom or in connection with the negotiation
of any restructuring or "work-out" (whether consummated or not) of the
obligations of the Credit Parties under any of the Loan Documents and (B) the
enforcement of this Section, (iii) to pay, indemnify, and hold each Lender and
the Agent harmless from and against, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of
-54-
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, the Loan Documents and any
such other documents, and (iv) to pay, indemnify and hold each Lender and the
Agent and each of their respective officers, directors and employees harmless
from and against any and all other liabilities, obligations, claims, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, reasonable
counsel fees and disbursements) with respect to the enforcement of the Loan
Documents and the use of the proceeds of the Loans (all the foregoing,
collectively, the "indemnified liabilities") and, if and to the extent that the
-----------------------
foregoing indemnity may be unenforceable for any reason, the Borrower agrees to
make the maximum payment permitted or not prohibited under applicable law;
provided, however, that the Borrower shall have no obligation hereunder to pay
indemnified liabilities to the Agent or any Lender arising from the finally
adjudicated gross negligence or willful misconduct of the Agent or such Lender
or claims between one indemnified party and another indemnified party. The
agreements in this Section shall survive the termination of the Aggregate
Commitments and the payment of all amounts payable under the Loan Documents.
11.6. Lending Offices
---------------
(a) Each Lender shall have the right at any time and from time to
time to transfer its Loans to a different office, provided that such Lender
shall promptly notify the Agent and the Borrower of any such change of office.
Such office shall thereupon become such Lender's Domestic Lending Office or
Eurodollar Lending Office, as the case may be, provided, however, that no such
Lender shall be entitled to receive any greater amount under Sections 2.9, 2.11
or 2.12 as a result of a transfer of any such Loans to a different office of
such Lender than it would be entitled to immediately prior thereto unless such
claim would have arisen even if such transfer had not occurred.
(b) Each Lender agrees that, upon the occurrence of any event
described in Sections 2.8, 2.9, 2.10, 2.11 or 2.12 with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Loans affected by such event, provided that such designation is
made on such terms that such Lender and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of any such Section. Nothing in this
Section shall affect or postpone any of the obligations of the Borrower or the
right of any Lender provided in any of such Sections.
11.7. Assignments and Participations
------------------------------
(a) The Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future holders of the Notes
and their respective successors and assigns, except that no Credit Party may
assign, delegate or transfer any of its rights or obligations under the Loan
Documents without the prior written consent of the Agent and each Lender.
(b) Each Lender shall have the right at any time, upon written
notice to the Agent of its intent to do so, to sell, assign, transfer or
negotiate all or any part of such Lender's rights under the Loan Documents to
one or more of its affiliates, to one or more
-55-
of the other Lenders (or to affiliates of such other Lenders) or, with the prior
written consent of the Borrower (which consent shall not be unreasonably
withheld), to sell, assign, transfer or negotiate all or any part of such
Lender's rights and obligations under the Loan Documents to any other bank,
insurance company, pension fund, mutual fund or other financial institution,
provided that (i) each such sale, assignment, transfer or negotiation (other
than sales, assignments, transfers or negotiations (x) to affiliates of such
Lender or (y) of a Lender's entire interest) shall be in a minimum amount of
$5,000,000 and (ii) there shall be paid to the Agent by the assigning Lender a
fee (the "Assignment Fee") of $3,000. For each assignment, the parties to such
--------------
assignment shall execute and deliver to the Agent for its acceptance and
recording an Assignment and Acceptance Agreement. Upon such execution, delivery,
acceptance and recording by the Agent, from and after the effective date
specified in such Assignment and Acceptance Agreement, the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance Agreement, the assignor Lender thereunder shall be released from its
obligations under the Loan Documents. The Borrower agrees upon written request
of the Agent and at the Borrower's expense to execute and deliver (1) to such
assignee, a Note, dated the effective date of such Assignment and Acceptance
Agreement, in an aggregate principal amount equal to the Loans assigned to, and
Commitments assumed by, such assignee and (2) to such assignor Lender, a Note,
dated the effective date of such Assignment and Acceptance Agreement, in an
aggregate principal amount equal to the balance of such assignor Lender's Loans
and Commitments, if any, and each as ▇▇▇▇▇▇ Lender shall cancel and return to
the Borrower its existing Note. Upon any such sale, assignment or other
transfer, the Commitments and the Commitment Percentages set forth in Exhibit A
shall be adjusted accordingly by the Agent and a new Exhibit A shall be
distributed by the Agent to the Borrower and each Lender.
(c) Each Lender may grant participations in all or any part of its
Loans, its Note and its Commitment to one or more banks, insurance companies,
financial institutions, pension funds or mutual funds, provided that (i) such
Lender's obligations under the Loan Documents shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties to the Loan
Documents for the performance of such obligations, (iii) the Borrower, the Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents,(iv) no sub-participations shall be permitted and (v) the voting
rights of any holder of any participation shall be limited to decisions that
only do any of the following: (A) subject the participant to any additional
obligation, (B) reduce the principal of, or interest on the Notes or any fees or
other amounts payable hereunder, (C) postpone any date fixed for the payment of
principal of, or interest on the Notes or any fees or other amounts payable
hereunder or (D) release any guarantor under any guarantee. The Borrower
acknowledges and agrees that any such participant shall for purposes of Sections
2.9, 2.11, 2.12 and 2.15 be deemed to be a "Lender"; provided, however, the
Borrower shall not, at any time, be obligated to pay any participant in any
interest of any Lender hereunder any sum in excess of the sum which the Borrower
would have been obligated to pay to such Lender in respect of such interest had
such Lender not sold such participation.
(d) If any (i) assignment made pursuant to subsection (b) above or
(ii) any participation granted pursuant to subsection (c) above, shall be made
to any Person that is not a U.S. Person, such Person shall furnish such
certificates, documents or other evidence to the Borrower and the Agent, in the
case of clause (i) and to the Borrower and
-56-
the Lender which sold such participation in the case of clause (ii), as shall be
required by Section 2.9(c).
(e) No Lender shall, as between and among the Borrower, the Agent
and such Lender, be relieved of any of its obligations under the Loan Documents
as a result of any sale, assignment, transfer or negotiation of, or granting of
participations in, all or any part of its Loans, its Commitment or its Note,
except that a Lender shall be relieved of its obligations to the extent of any
such sale, assignment, transfer, or negotiation of all or any part of its Loans,
its Commitment or its Note pursuant to subsection (b) above.
(f) Notwithstanding anything to the contrary contained in this
Section, any Lender may at any time or from time to time assign all or any
portion of its rights under the Loan Documents to a Federal Reserve Bank,
provided that any such assignment shall not release such assignor from its
obligations thereunder.
11.8. Counterparts
------------
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counter parts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. A counterpart of any Loan Document or to any document evidencing, and
of any an amendment, modification, consent or waiver to or of any Loan Document
transmitted by fax shall be deemed to be an originally executed counterpart. A
set of the copies of the Loan Documents signed by all the parties thereto shall
be deposited with each of the Borrower and the Agent. Any party to a Loan
Document may rely upon the signatures of any other party thereto which are
transmitted by fax or other electronic means to the same extent as if originally
signed.
11.9. Adjustments; Set-off
--------------------
(a) If any Lender (a "Benefited Lender") shall at any time receive
----------------
any payment of all or any part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or in voluntarily, by set-
off, pursuant to events or proceedings of the nature referred to in Section 9.1
(h) or (i), or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender in respect of such other Lender's Loans,
or interest thereon, such Benefited Lender shall purchase for cash from each of
the other Lenders such portion of each such other Lender's Loans, and shall
provide each of such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders, provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may exercise all
rights of payment (including, without limitation, rights of set-off, to the
extent not prohibited by law) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
-57-
(b) In addition to any rights and remedies of the Lenders provided
by law, upon the acceleration of the obligations owing in connection with the
Loan Documents, or at any time upon the occurrence or during the continuance of
an Event of Default under Section 9.1(a) or (b), each Lender shall have the
right, without prior notice to the Borrower, any such notice being expressly
waived by each Credit Party to the extent not prohibited by applicable law, to
set-off and apply against any obligations, whether matured or unmatured, of such
Credit Party to such Lender, any amount owing from such Lender to such Credit
Party. To the extent not prohibited by applicable law, the aforesaid right of
set-off may be exercised by such Lender against such Credit Party or against any
trustee in bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor of
such Credit Party, or against anyone else claiming through or against such
Credit Party or such trustee in bankruptcy, custodian, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of set-off shall
not have been exercised by such Lender prior to the making, filing or issuance,
or service upon such Lender of, or of notice of, any such petition, assignment
for the benefit of creditors, appointment or application for the appointment of
a receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the applicable Credit Party and the Agent after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
11.10. Construction
------------
Each Credit Party represents that it has been represented by counsel
in connection with the Loan Documents and the transactions contemplated thereby
and that the principle that agreements are to be construed against the draftsman
shall be inapplicable.
11.11. Indemnity
---------
The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and their respective affiliates, directors, officers, employees,
attorneys and agents (each an "Indemnified Person") from and against any loss,
------------------
cost, liability, damage or expense (including the reasonable fees and
disbursements of counsel of such Indemnified Person, including all local counsel
hired by any such counsel) incurred by such Indemnified Person in investigating,
preparing for, defending against, or providing evidence, producing documents or
taking any other action in respect of, any commenced or threatened litigation,
administrative proceeding or investigation under any federal securities law or
any other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon or related to (i)
any of the Loan Documents, the Commitments or the use by any Credit Party or any
of its Subsidiaries or agents of the proceeds of any Loans; or (ii) any
acquisition or proposed acquisition by any Credit Party of Stock. The indemnity
set forth herein shall be in addition to any other obligations or liabilities of
the Borrower to each Indemnified Person under the Loan Documents or at common
law or otherwise, and shall survive any termination of the Loan Documents, the
expiration of the Commitments and the payment of all obligations of the Borrower
under the Loan Documents, provided that the Borrower shall have no obligation
under this Section to an Indemnified Person with respect to any of the foregoing
to the extent found in a final judgment of a court having jurisdiction to have
resulted primarily
-58-
out of the gross negligence or wilful misconduct of such Indemnified Person or
arising solely from claims between one such Indemnified Person and another such
Indemnified Person.
11.12. Governing Law
-------------
The Loan Documents and the rights and obligations of the parties
thereunder shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York, without regard to principles
of conflict of laws.
11.13. Headings Descriptive
--------------------
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.14. Severability
------------
Every provision of the Loan Documents is intended to be severable,
and if any term or provision thereof shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the remaining
provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.15. Integration
-----------
All exhibits to a Loan Document shall be deemed to be a part
thereof. Except for agreements between the Agent and the Borrower with respect
to certain fees, the Loan Documents embody the entire agreement and
understanding among the Credit Parties, the Agent and the Lenders with respect
to the subject matter thereof and supersede all prior agreements and
understandings among the Credit Parties, the Agent and the Lenders with respect
to the subject matter thereof.
11.16. Consent to Jurisdiction
-----------------------
Each Credit Party hereby irrevocably submits to the jurisdiction of
any New York State or Federal court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents.
Each Credit Party hereby irrevocably waives, to the fullest extent permitted or
not prohibited by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Each Credit Party hereby agrees
that a final judgment in any such suit, action or proceeding brought in such a
court, after all appropriate appeals, shall be conclusive and binding upon it.
11.17. Service of Process
------------------
Each Credit Party hereby further irrevocably consents to the service
of process in any suit, action or proceeding by sending the same by first class
mail, return receipt requested or by overnight courier service, to the address
of such Credit Party set
-59-
forth in or referred to in Section 11.2 or in the applicable Loan Document
executed by such Credit Party. Each Credit Party hereby agrees that any such
service (i) shall be deemed in every respect effective service of process upon
it in any such suit, action, or proceeding, and (ii) shall to the fullest extent
enforceable by law, be taken and held to be valid personal service upon and
personal delivery to it.
11.18. No Limitation on Service or Suit
--------------------------------
Nothing in the Loan Documents or any modification, waiver, consent
or amendment thereto shall affect the right of the Agent or any Lender to serve
process in any manner permitted by law or limit the right of the Agent or any
Lender to bring proceedings against any Credit Party in the courts of any
jurisdiction or jurisdictions in which such Credit Party may be served.
11.19. WAIVER OF TRIAL BY JURY
-----------------------
THE AGENT, THE LENDERS AND EACH CREDIT PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, EACH CREDIT PARTY
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE AGENT, OR THE LENDERS,
OR COUNSEL TO THE AGENT OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. EACH CREDIT PARTY
ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
----- ----
12. GUARANTY
--------
In order to induce the Agent and the Lenders to enter into this Agreement
and to induce the Lenders to make the Loans, the Guarantor hereby agrees as
follows:
12.1. Guaranty.
--------
The Guarantor absolutely, irrevocably and unconditionally guarantees
to the Agent and the Lenders the full and prompt payment when due, whether at
stated maturity, by acceleration, by mandatory prepayment, by notice of
intention to prepay or otherwise, of all obligations, now existing and
hereafter arising, of the Borrower, including all principal and interest
(whether accruing before or after any event set forth in sections 9.1(h) or (i)
and whether or not allowed as a claim in connection therewith) under the Loan
Documents to which it is a party, and whether direct, indirect or contingent,
incurred as primary obligor or otherwise, secured or unsecured and whether or
not on open account, and all costs and expenses incurred by the Agent and the
Lenders in enforcing any thereof, whether or not suit is instituted (as the same
may be amended, increased, modified, renewed, refunded, extended, increased or
refinanced from time to time, collectively, the " Guaranteed Obligations").
-----------------------
Regardless of whether the Agent or the Lenders are prevented
-60-
or otherwise hindered by law from collecting or otherwise enforcing any of the
Guaranteed Obligations in accordance with their terms, whether as the result of
the commencement of any bankruptcy or similar proceedings against the Borrower
or otherwise, the Agent and the Lenders shall be entitled to receive hereunder
from the Guarantor upon demand therefor the sums which would have been otherwise
due had such collection or enforcement not been prevented or hindered.
12.2. Absolute Obligation.
-------------------
The obligations of the Guarantor hereunder shall be absolute,
irrevocable, unconditional and continuing until all of the Guaranteed
Obligations are indefeasibly paid in full in cash and have terminated and this
Agreement is of no further force and effect and shall not be subject to any
counterclaim, right of set-off or any defense whatsoever. The Guarantor
acknowledges and agrees that the Agent and the Lenders have no responsibility or
liability, and shall not be deemed to have made any representation or warranty,
with respect to the validity, enforceability or collectability of any of the
Loan Documents or any document executed or delivered in connection therewith, or
any preference or priority ranking with respect to the payment of the Loans. The
Agent and the Lenders shall have no obligation to enforce any Loan Document, by
any action, including, without limitation, making or perfecting any claim
against the Borrower, prior to being entitled to the benefits of this Guaranty.
Nothing except the indefeasible cash payment in full of the Guaranteed
Obligations shall release the Guarantor from liability under this Guaranty.
12.3. Guaranty of Payment.
-------------------
This Guaranty is a guaranty of payment. The liability and
obligations of the Guarantor shall be primary, direct and absolute, and the
Guarantor hereby waives any right to require that resort be had by the Agent or
the Lenders against the Borrower or any other Person, or to require that resort
be had by the Agent or the Lenders to any direct or indirect collateral
security. The Agent may, at its option, proceed against in the first instance to
enforce any obligation to collect any monies, the payment of which is guaranteed
hereby, without first proceeding against the Borrower or any other Person and
without first resorting to any other remedies, as the Agent may deem advisable.
The liability of the Guarantor hereunder shall in no way be affected or impaired
by any acceptance by the Agent or the Lenders of any direct or indirect security
for, or other guarantor upon, any indebtedness, liability or obligation of the
Borrower to the Agent and the Lenders, or by any failure, delay, neglect or
omission of the Agent or any Lender to realize upon or perfect any such
security, indebtedness, liability or obligation, or by any direct or indirect
collateral security therefor, or by the bankruptcy, reorganization or insolvency
of, or by any other proceeding for the relief of debtors commenced against, the
Borrower or any other Person, or by the release, exchange, substitution or any
loss or impairment of any collateral security, or the liability of any other
Person in respect of the Guaranteed Obligations, including, without limitation,
the release of any other guarantor or any collateral security provided thereby,
or by the invalidity or unenforceability of this Agreement, the Notes or any
other Loan Document, or any of the Guaranteed Obligations against the Borrower
for any reason, or by any amendment or waiver of or any consent to or departure
from this Agreement, the Notes or any other Loan Document, or by any other
reason whatsoever.
-61-
12.4. Repayment in Bankruptcy.
-----------------------
If, at any time or times subsequent to the performance by the
Guarantor of its obligations hereunder or the termination of this Guaranty, the
Agent or any Lender shall be required to repay any amounts previously paid by or
on behalf of the Borrower in reduction of the Guaranteed Obligations under any
Loan Document by virtue of an order of any court having jurisdiction in the
premises, including, without limitation, as a result of an adjudication that
such amounts constituted preferential payments or fraudulent conveyances, the
Guarantor unconditionally agrees to pay to the Agent or such Lender on demand a
sum in cash equal to the amount of such repayment, together with interest on
such amount from the date of such demand to the date of payment to the Agent or
such Lender at the applicable post-Default rate set forth in section 2.7(b).
12.5. Waiver of Subrogation.
---------------------
The Guarantor expressly waives any and all rights of subrogation,
reimbursement, indemnity, exoneration, contribution or any other claim which it
may now or hereafter have against any other Person directly or contingently
liable for the Guaranteed Obligations, or against or with respect to such
Person's Property, arising from the existence or performance of this Guaranty,
in each case until the Guaranteed Obligations shall have been indefeasibly paid
in full in cash.
12.6. Other Provisions in Guaranty.
----------------------------
(a) No failure by the Agent or any of the Lenders to exercise, and
no delay by the Agent or any of the Lenders in exercising, any right or remedy
hereunder shall operate as a waiver thereof.
(b) This Guaranty, and the obligations of the Guarantor under this
Guaranty, may not be assigned or otherwise delegated.
(c) The Guarantor waives all errors or omissions of the Agent or any
Lender in connection with the administration of the Loans and any collateral
security therefor, except errors or omissions which constitute gross negligence
or willful misconduct.
(d) Without limiting the foregoing, the Guarantor waives to the
maximum extent permitted by applicable law any act or omission of the Agent or
any Lender which may affect or change in any way the liability of the Guarantor
under this Guaranty.
(e) Each and every right, remedy and power granted to the Agent and
the Lenders hereunder or allowed at law or by any other agreement shall be
cumulative and not exclusive, and may be exercised by the Agent and the Lenders
from time to time.
(f) This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Agent and the
Lenders and their respective successors and assigns.
(g) The Guarantor hereby waives presentment, demand for payment,
notice of default, non-performance and dishonor, protest and notice of protest
of or in respect of
-62-
this Agreement, the Notes and any other Loan Documents and the incurrence of the
Guaranteed Obligations, notice of acceptance of this Guaranty and reliance
hereupon by the Agent and the Lenders, and notice of the making of any Loans
pursuant to this Agreement, notice of any sale of collateral security or any
default of any sort.
(h) The Guarantor agrees that the Agent and the Lenders may at any
time, without notice to or consent of the Guarantor, and without in any manner
affecting the liability of the Guarantor hereunder, amend, increase, extend,
modify, supplement or waive any term or condition of this Agreement, the Notes,
any other Loan Document or all or any part of the Guaranteed Obligations and any
collateral security therefor and otherwise deal with the Borrower as if this
Guaranty did not exist, and the Guarantor shall be bound by, and this Guaranty
shall automatically extend to this Agreement, the Notes and the other Loan
Documents and the Guaranteed Obligations as so amended, increased, extended,
modified, supplemented or waived without any action required by the Guarantor.
(i) No provision of this Guaranty may be waived, modified or
otherwise changed by any means, including, without limitation, any course of
dealing, course of performance or trade usage, or oral evidence of any nature,
except pursuant to a writing executed pursuant to Section 11.1 by the party
against which enforcement of such waiver, modification or change is sought.
(j) The Guarantor agrees that any statement of account from the
Agent or any Lender to the Borrower which binds the Borrower, absent manifest
error, shall also be binding upon the Guarantor and that copies of the Agent's
or such Lender's said statements of account maintained in the regular course of
business may be used in evidence against the Guarantor in order to establish the
obligations of the Guarantor hereunder.
-63-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BLACK ENTERTAINMENT TELEVISION, INC.,
as Borrower
By: [SIGNATURE ILLEGIBLE]
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-----------------------
Title: Executive Vice President, Finance
---------------
Chief Financial Officer and Treasurer
BET HOLDINGS, INC., as Guarantor
By: [SIGNATURE ILLEGIBLE]
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-----------------------
Title: Executive Vice President, Finance
---------------
Chief Financial Officer and Treasurer
THE BANK OF NEW YORK,
Individually and as Agent
By: ________________________
Name: ______________________
Title: ___________________
THE BANK OF NEW YORK COMPANY, INC.
By: ________________________
Name: ______________________
Title: ___________________
THE ▇▇▇▇▇ NATIONAL BANK OF
WASHINGTON, D.C.
By: ________________________
Name: ______________________
Title: ___________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BLACK ENTERTAINMENT TELEVISION, INC.,
as Borrower
By: ________________________
Name: ______________________
Title: ___________________
BET HOLDINGS, INC., as Guarantor
By: ________________________
Name: ______________________
Title: ___________________
THE BANK OF NEW YORK,
Individually and as Agent
By: [SIGNATURE ILLEGIBLE]
------------------------
Name: [SIGNATURE ILLEGIBLE]
----------------------
Title: Vice President
-------------------
THE BANK OF NEW YORK COMPANY, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Title: Autherized Signer
-------------------
THE ▇▇▇▇▇ NATIONAL BANK OF
WASHINGTON, D.C.
By: ________________________
Name: ______________________
Title: ___________________
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BLACK ENTERTAINMENT TELEVISION, INC.,
as Borrower
By: ________________________
Name: ______________________
Title: ___________________
BET HOLDINGS, INC., as Guarantor
By: ________________________
Name: ______________________
Title: ___________________
THE BANK OF NEW YORK,
Individually and as Agent
By:_________________________
Name:_______________________
Title: ___________________
THE BANK OF NEW YORK COMPANY, INC.
By: ________________________
Name:_______________________
Title:____________________
THE ▇▇▇▇▇ NATIONAL BANK OF
WASHINGTON, D.C.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Title: V.P
-------------------
CRESTAR BANK
By: [SIGNATURE ILLEGIBLE]
------------------------
Name: [SIGNATURE ILLEGIBLE]
----------------------
Title: Vice President
-------------------
INDUSTRIAL BANK N.A.
By: ________________________
Name: ______________________
Title: ___________________
NATIONSBANK OF TEXAS, N.A.
By: ________________________
Name: ______________________
Title: ___________________
CRESTAR BANK
By: ________________________
Name:_______________________
Title: ___________________
INDUSTRIAL BANK N.A.
By: [SIGNATURE ILLEGIBLE]
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Title: VICE PRESIDENT
-------------------
NATIONSBANK OF TEXAS, N.A.
By: ________________________
Name: ______________________
Title: ___________________
CRESTAR BANK
By: ________________________
Name:_______________________
Title: ___________________
INDUSTRIAL BANK N.A.
By: ________________________
Name: ______________________
Title: ___________________
NATIONSBANK OF TEXAS, N.A.
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: Vice President
-------------------
BLACK ENTERTAINMENT TELEVISION EXHIBIT A
LIST OF COMMITMENTS
-------------------
Commitment
Bank Commitment Percentage
---- ---------- ----------
The Bank of $29,000,000 38.66666667%
New York Company, Inc
Crestar Bank $15,000,000 20.▇▇▇▇▇▇▇▇%
Nationsbank of Texas, N.A. $15,000,000 20.00000000%
The ▇▇▇▇▇ National Bank
of Washington, D.C. $15,000,000 20.00000000%
Industrial Bank N.A. $ 1,000,000 1.33333333%
TOTAL $75,000,000 100%
----------- ----
BLACK ENTERTAINMENT TELEVISION EXHIBIT B
FORM OF NOTE
------------
$______ December 13, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, BLACK ENTERTAINMENT TELEVISION, INC., a District of
Columbia corporation (the "Borrower"), hereby promises to pay on the Maturity
--------
Date, to the order of _______________ (the "Lender"), at the office of THE BANK
------
OF NEW YORK, as Agent (the "Agent"), located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
-----
▇▇▇▇ or at such other place as the Agent may specify from time to time, in
lawful money of the United States of America, the principal sum of $______, or
such lesser unpaid principal balance as shall be outstanding hereunder,
together with interest from the date hereof, on the unpaid principal balance
hereof, payable at the rate or rates and at the time or times provided for in
the Revolving Credit and Guaranty Agreement, dated as of December 13, 1995,
among the Borrower, BET Holdings, Inc., as Guarantor, the Lenders party thereto
and the Agent (as the same may be amended, modified or supplemented from time
to time, the "Agreement"). Capitalized terms used herein that are defined in
---------
the Agreement shall have the meanings therein defined. In no event shall
interest payable hereon exceed the Highest Lawful Rate.
This Note is one of the Notes referred to in the Agreement and is entitled
to the benefits of, and is subject to the terms set forth in, the Agreement.
The principal of this Note is payable in the amounts and under the
circumstances, and its maturity is subject to acceleration upon terms, set forth
in the Agreement. Except as otherwise provided in the Agreement, if any payment
on this Note become due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next Business Day and interest shall
be payable at the applicable rate or rates specified in the Agreement during
such extension period.
The (i) date and amount of each Loan made by the Lender, (ii) its character
as an ABR Advance, a Eurodollar Advance, or a combination thereof, (iii) the
interest rate and Interest Period (if any) applicable to Eurodollar Advances,
and (iv) each payment and prepayment of the principal thereof, shall be recorded
by the Lender on its books and, prior to any transfer of this Note, indorsed by
the Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or indorsement shall
not affect the obligations of the Borrower to make payment when due of any
amount owing hereunder.
Presentment for payment, demand, protest, notice of protest and notice of
dishonor and all other demands and notices in connection with the delivery,
performance and enforcement of this Note are hereby waived, except as
specifically otherwise provided in the Agreement.
This Note is being delivered in, is intended to be performed in, shall be
construed and interpreted in accordance with, and be governed by the internal
laws of, the State of New York, without regard to principles of conflicts of
law.
This Note may only be amended by an instrument in writing executed pursuant
to the provisions of Section 11.1 of the Agreement.
BLACK ENTERTAINMENT TELEVISION, INC.
By:__________________________
Name:________________________
Title:_______________________
-2-
SCHEDULE TO
-----------
NOTE
----
Interest
Rate on
Eurodollar
Advances
Amount of (without Interest
Type of principal regard to Period (if
Advance (ABR Amount of paid or Applicable Eurodollar Notation
Date or Eurodollar) Advance prepaid Margin) Advance) Made by
---- -------------- --------- ------- ---------- ---------- --------
BLACK ENTERTAINMENT TELEVISION EXHIBIT C
FORM OF BORROWING REQUEST
-------------------------
December 13, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Agency Function Administration
The Bank of New York, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
Re: Revolving Credit and Guaranty Agreement, dated as of
December 13, 1995, by and among BLACK ENTERTAINMENT
TELEVISION, INC., (the "Borrower"), BET HOLDINGS,
--------
INC., the Lenders party thereto and THE BANK OF NEW
-----------
YORK, as Agent (the "Agreement")
---------------------------------------------------
Capitalized terms used herein that are defined in the Agreement shall have
the meanings therein defined.
1. Pursuant to Section 2.3 of the Agreement, the Borrower hereby gives
notice of its intention to borrow Loans in an aggregate principal amount of
$_____ on _______, which borrowing(s) shall consist of the following Advances:
Initial Interest
Type of Advance Period for Eurodollar
(Eurodollar or ABR) Amount Advances
------------------- ------ ---------------------
(a)
(b)
(c)
2. Each of the Borrower (with respect to itself) and the Guarantor hereby
certifies that on the date hereof and on the Borrowing Dare set forth above, and
after giving effect to the Loans requested hereby:
(a) Each Credit Party is and shall be in compliance with all of the
terms, covenants and conditions of the Loan Documents.
(b) There exists and there shall exist no Default or Event of Default
under the Agreement.
(c) Each of the representations and warranties contained in the Loan
Documents (other than the representations and warranties which expressly speak
only as of a different date) which is required to be made on such Borrowing Date
is and shall be true and correct.
(d) After giving effect to the Loans requested to be made hereby, the
aggregate outstanding principal amount of the Loans shall not exceed the
Aggregate Commitments.
IN WITNESS WHEREOF, each of the Borrower and the Guarantor has each caused
this certificate to be executed by its Authorized Signatory as of the date and
year first written above.
BLACK ENTERTAINMENT TELEVISION, INC.
By:__________________________
Name:________________________
Title:_______________________
BET HOLDINGS, INC.
By:__________________________
Name:________________________
Title:_______________________
-2-
BLACK ENTERTAINMENT TELEVISION EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
------------------------------
The undersigned each hereby certifies that he/she is duly authorized to
execute and deliver this Compliance Certificate pursuant to Section 7.1(c) of
the Revolving Credit and Guaranty Agreement, dated as of December 13, 1995, by
and among Black Entertainment Television, Inc. (the "Borrower"), BET Holdings,
--------
Inc. (the "Guarantor"), the Lenders party thereto and The Bank of New York, as
---------
Agent (as the same may be amended or otherwise modified from time to time, the
"Agreement"). Capitalized terms used herein that are defined in the Agreement
---------
shall have the meanings therein defined.
We hereby certify that:
1. The Leverage Ratio as of _______, is __.___:1.00, calculated as
set forth on Schedule 1.
2. The ratio of EBITDA to Pro-Forma Debt Service as of ________, is
__.___:1.00, calculated as set forth on Schedule 2.
3. The ratio of EBITDA to Interest Expense as of _______, is
__.___:1.00, calculated as set forth on Schedule 3.
4. There exists no Default or Event of Default under the Agreement.
5. The representations and warranties contained in the Loan
Documents (other than the representations and warranties which expressly speak
only as of a different date) are true and correct in all material respects.
IN WITNESS WHEREOF, the undersigned have executed this Compliance
Certificate on this ____ day of _____________, 19__.
BLACK ENTERTAINMENT TELEVISION, INC.
By:__________________________
Name:________________________
Title:_______________________
BET HOLDINGS, INC.
By:__________________________
Name:________________________
Title:_______________________
dated __/__/__
I. Section 7.12: Leverage Ratio
A. Maximum for applicable period: 3.00:1.00
B. Actual
1. Funded Debt as of the
date of determination
(see Annex A) $______
2. EBITDA for the immediately
preceding four fiscal
3. Leverage Ratio (1 divided by 2)
___:___
C. In Compliance Yes ___ No ___
Schedule 2 to Compliance Certificate
dated __/__/__
I. Section 7.13: EBITDA to Pro-Forma Debt Service
A. Minimum for applicable period: 2.00:1.00
B. Actual
1. EBITDA for the immediately
preceding four fiscal
quarters (see Annex A) $______
2. Pro-Forma Debt Service
a. Pro-Forma Interest Expense
(see Annex A) $______
b. The scheduled payments of
principal on Funded Debt
required to be made during
the four fiscal quarters
immediately succeeding any
determination thereof $______
c. Pro-Forma Debt Service
(a+b) $______
3. EBITDA to Pro-Forma Debt Service
(1 divided by 2(c)) ___:___
C. In Compliance Yes ___ No ___
Schedule 3 to Compliance Certificate
dated __/__/__
I. Section 7.14: EBITDA to Interest Expense
A. Minimum for applicable period: 2.25:1.00
B. Actual
1. EBITDA for the immediately
preceding four fiscal
quarters (see Annex A) $______
2. Interest Expense for
the immediately preceding
four fiscal quarters $______
3. EBITDA to Interest Expense
(1 divided by 2) ___:___
C. In Compliance Yes ___ No ___
Annex A to Compliance Certificate
I. EBITDA ADJUSTMENT (95% Test)
EBITDA (Consolidated);
A. Income or (loss) from operations
of the Guarantor and its Subsidiaries
on a Consolidated basis for the
immediately preceding four fiscal
quarters $______
B. Depreciation and amortization of
intangibles (excluding amortization
of programming rights) for the
immediately preceding four fiscal
quarters $______
C. Sum of A + B $______
EBITDA (Wholly-Owned):
D. Income or (loss) from operations
of the Guarantor and its
Wholly-Owned Subsidiaries on
a Consolidated basis for the
immediately preceding four fiscal
quarters $______
E. Depreciation and amortization of
intangibles (excluding amortization
of programming rights) for the
immediately preceding four fiscal
quarters $______
F. Sum of D + E $______
EBITDA:
G. EBITDA (Wholly-Owned) as a
percentage of EBITDA (Consolidated)
(F divided by C) ______%
H. If G is less than 95%, then
for each non-Wholly Owned Subsidiary
----
(if more than one non-Wholly Owned
Subsidiary, attach additional sheets
for item H):
1. Portion of EBITDA (Consolidated)
allocable to such non-Wholly Owned
Subsidiary: $______
2. Percentage ownership interest
of such non-Wholly Owned Subsidiary
not owned, directly or indirectly,
---
by the Guarantor ______%
3. EBITDA (Consolidated) reduction
for such non-Wholly Owned Sub-
sidiary (1 multiplied by 2) $______
I. Total reduced EBITDA (Consolidated)
(C minus the sum of 3 for each
non-Wholly Owned Subsidiary) $______
J. EBITDA for the immediately
preceding four fiscal quarters
ending _____________ shall equal C
or if G is less than 95% then I $______
II. FUNDED DEBT
As at __________________.
Pro Forma
Interest Interest
Amount Rate Expense
------ -------- ---------
A. Outstandings under
the Revolving Credit
and Guaranty Agreement
B. Senior Secured Notes
C. Capital Lease Obligations
D. Other Debt
E. Cash and Cash Equivalents in
excess of $1,000,000
F. Funded Debt for all purposes
other than Leverage Ratio
(A + B + C + D)
G. Funded Debt for Leverage Ratio
purposes (F-E)
-2-
BLACK ENTERTAINMENT TELEVISION EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
-------------------------------------------
This Assignment and Acceptance Agreement is made and entered into as of
_______, by and between _____________ (the "Assignor") and ____________ (the
--------
"Assignee").
--------
R E C I T A L S
- - - - - - - -
A. The Assignor, certain other lenders (together with any prior
assignees, the "Lenders") and The Bank of New York, as agent (the "Agent), are
------- -----
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
December 13, 1995 (the "Credit Agreement"), with Black Entertainment Television,
----------------
Inc., a District of Columbia corporation (the "Borrower), and BET Holdings,
--------
Inc., a Delaware corporation ( the "Guarantor"). Pursuant to the Credit
---------
Agreement, the Lenders agreed to make Loans under the Aggregate Commitments in
the aggregate amount of $75,000,000. The amount of the Assignor's Commitment
(without giving effect to the assignment effected hereby or to other assignments
thereof which have not yet become effective) is specified in Item 1 of Schedule
1 hereto. The outstanding principal amount of the Assignor's Loans (without
giving effect to the assignment effected hereby or to other assignments thereof
which have not yet become effective) is specified in Item 2 of Schedule 1
hereto. All capitalized terms not otherwise defined herein are used herein as
defined in the Credit Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor's Commitment specified in Item 3 of Schedule 1 hereto (the "Assigned
--------
Commitment") and (ii) the portion of the Assignor's Loans specified in Item 5 of
----------
Schedule 1 hereto (the "Assigned Loans").
--------------
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth herein and
----------
in the Credit Agreement, the Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, without
recourse, on the date set forth above (the "Assignment Date") (a) all right,
---------------
title and interest of the Assignor to the Assigned Loans and (b) all obligations
of the Assignor under the Credit Agreement with respect to the Assigned
Commitment. As full consideration for the sale of the Assigned Loans and the
Assigned Commitment, the Assignee shall pay to the Assignor on the Assignment
Date the principal amount of the Assigned Loans (the "Purchase Price") [and the
--------------
Assignor shall pay to the Assignee on the Assignment Date the fee specified in
Item 6 of Schedule 1 hereto.]/1/
2. Representation and Warranties. Each of the Assignor and the Assignee
-----------------------------
represents and warrants to the other that (a) it has full power and legal right
to execute and deliver this Agreement and to perform the provisions of this
Agreement; (b) the execution, delivery and performance of this Agreement have
been authorized by all action, corporate
_______________________
1 Omit bracketed language if no fee is being paid.
or otherwise, and do not violate any provisions of its charter or by-laws or any
contractual obligations or requirement of law binding on it; and (c) this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms. The Assignor further represents that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim created by the
Assignor.
3. Condition Precedent. The obligations of the Assignor and the Assignee
-------------------
hereunder shall be subject to the fulfillment of the condition that the Assignor
shall have (a) received payment in full of the Purchase Price and (b) complied
with the other applicable provisions of Section 11.7 of the Credit Agreement.
4. Notice of Assignment. The Assignor agree to give notice of the
--------------------
assignment and assumption of the Assigned Loans and the Assigned Commitment to
the Agent and the Borrower and hereby instructs the Agent and the Borrower to
make all payments with respect to the Assigned Loans and the Assigned Commitment
directly to the Assignee at the applicable Lending Offices specified on Schedule
2 hereto; provided, however, that the Borrower and the Agent shall be entitled
to continue to deal solely and directly with the Assignor in connection with the
interests so assigned until the Agent and the Borrower, to the extent required
by Section 11.7 of the Credit Agreement, shall have received notice of the
assignment, the Borrower shall have consented in writing thereto, and the Agent
shall have recorded and accepted this Agreement and received the Assignment Fee
required to be paid pursuant to Section 11.7 of the Credit Agreement. From and
after the date (the "Effective Date") on which the Agent shall notify the
--------------
Borrower and the Assignor that the requirements set forth in the foregoing
sentence shall have occurred and all consents (if any) required shall have been
given, (i) the Assignee shall be deemed to be a party to the Credit Agreement
and, to the extent that rights and obligations thereunder shall have been
assigned to Assignee as provided in such notice of assignment to the Agent,
shall have rights and obligations of a Lender under the Credit Agreement, and
(ii) the Assignee shall be deemed to have appointed the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto. After the Effective Date, the Agent
shall make all payments in respect of the interest assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustment in payments under
the Assigned Loans and the Assigned Commitment for periods prior to the
Effective Date hereof directly between themselves. If the Assignee is not a
United States Person as defined in Section 7701(a)(30) of the Code, the Assignee
shall deliver herewith the forms required by Section 2.9(c) of the Credit
Agreement to evidence the Assignee's compete exemption from United States
withholding taxes with respect to payments under the Loan Documents.
5. Independent Investigation. The Assignee acknowledges that it is
-------------------------
purchasing the Assigned Loans and the Assigned Commitment from the Assignor
totally without recourse and, except as provided in Section 2 hereof, without
representation or warranty. The Assignee further acknowledges that it has made
it own independent investigation and credit evaluation of the Borrower and the
Guarantor in connection with its purchase of the Assigned Loans and the Assigned
Commitment. Except for the representations or warranties set forth in
Section 2, the Assignee acknowledges that it is not relying on any
representation or warranty of the Assignor, expressed or implied, including
without
-2-
limitation, any representation or warranty relating to the legality, validity,
genuineness, enforceability, collectibility, interest rate, repayment schedule
or accrual status of the Assigned Loans or the Assigned Commitment, the
legality, validity, genuineness or enforceability of the Credit Agreement, the
related Notes, or any other Loan Document referred to in or delivered pursuant
to the Credit Agreement, or financial condition or creditworthiness of the
Borrower, the Guarantor or any other Person. The Assignor has not and will not
be acting as either the representative, agent or trustee of the Assignee with
respect to matters arising out of or relating to the Credit Agreement or this
Agreement. From and after the Effective Date, except as set forth in Section 4
above, the Assignor shall have no rights or obligations with respect to the
Assigned Loans or the Assigned Commitment.
6. Consent of the Borrower; Exchange of Notes.
------------------------------------------
(a) Pursuant to the provisions of Section 11.7 of the Credit
Agreement, and to the extent required thereby, the Borrower, by signing below,
consents to this Agreement and to the assignment contemplated herein. The
Borrower further agrees to execute and deliver:
(i) to the Assignee, a Note, in the aggregate principal amount
of $_____.
(ii) to the Assignor, a Note, in the aggregate principal amount
of $_____.
(b) The Assignor agrees to promptly return to the Borrower its Note,
which has been replaced by the Notes referred to in clause (a) above.
7. Method of Payment. All payments to be made by either party hereunder
-----------------
shall be in funds available at the place of payment on the same day and shall be
made by wire transfer to the account designated by the party to receive payment.
8. Integration. This Agreement shall supersede any prior agreement or
-----------
understanding between the parties (other than the Credit Agreement) as to the
subject matter hereof.
9. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and shall be
binding upon the parties hereto, their successors and assigns.
10. Headings. Section headings have been inserted herein for convenience
--------
only and shall not be construed to be a part hereof.
11. Amendments; Waivers. This Agreement may not be amended, changed,
-------------------
waived or modified except by a writing executed by the parties hereto, and may
not be amended, changed, waived or modified in any manner inconsistent with
Section 11.7 of the Credit Agreement without prior written consent of the Agent.
12. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with the laws of, the State of New York.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
___________________, as Assignor
By:______________________________
Name:____________________________
Title:___________________________
___________________, as Assignee
By:______________________________
Name:____________________________
Title:___________________________
Consented to:
BLACK ENTERTAINMENT TELEVISION, INC.
By:______________________________
Name:____________________________
Title:___________________________
Accepted:
THE BANK OF NEW YORK, as Agent
By:______________________________
Name:____________________________
Title:___________________________
-4-
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
___________________, as Assignor
and
___________________, as Assignee
relating to
Revolving Credit and Guaranty Agreement among
Black Entertainment Television, Inc.,
BET Holdings, Inc.,
the Lenders party thereto,
and
The Bank of New York, as Agent,
dated as of December 13, 1995
Item 1. Assignor's Commitment* $________
Item 2. Assignor's Loans*
Consisting of:
ABR Advances $________
Eurodollar Advances $________
Item 3. Amount of Assigned Commitment $________
Item 4. Percentage of Assigned Commitment
assigned as a percentage of
the Aggregate Commitments
of all Lenders: ______%
Item 5. Amount of Assigned Loans:
consisting of:
ABR Advances $________
Eurodollar Advances $________
_________________________
* Without giving effect to the assignment effected hereby or to other
assignments thereof which have not yet become effective.
Item 6. Amount of Fee
payable to Assignee/1/ $____________
______________________
1 Omit if no fee is to be paid.
-2-
SCHEDULE 2
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
Between
___________________, as Assignor
and
___________________, as Assignee
relating to
Revolving Credit and Guaranty Agreement among
Black Entertainment Television, Inc.,
BET Holdings, Inc.,
the Lenders party thereto,
and
The Bank of New York, as Agent,
dated as of December 13, 1995
Domestic Lending Office
-----------------------
_______________________
_______________________
Attention:_____________
_____________
Telephone:(___)___-____
Fax: (___)___-____
Eurodollar Lending Office
-------------------------
_________________________
_________________________
Attention:_____________
_____________
Telephone:(___)___-____
Fax: (___)___-____
Address for Notices
-------------------
_________________________
_________________________
Attention:_____________
_____________
Telephone:(___)___-____
Fax: (___)___-____
