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EXHIBIT 10.2
$100,000,000 REVOLVING LOAN AGREEMENT
AMONG
TCI MUSIC, INC.
and
THE BANKS WHOSE NAMES APPEAR AS "BANKS"
ON THE SIGNATURE PAGES HEREOF,
with
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT,
and
CREDIT LYONNAIS NEW YORK BRANCH
and
ROYAL BANK OF CANADA,
AS SYNDICATION AGENTS
December 30, 1997
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TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS......................................................................1
ARTICLE 2 - LOANS...........................................................................17
Section 2.1 The Loans.........................................................17
Section 2.2 Manner of Borrowing and Disbursement..............................17
Section 2.3 Interest..........................................................20
Section 2.4 Fees..............................................................22
Section 2.5 Reduction of Commitment...........................................22
Section 2.6 Prepayment........................................................23
Section 2.7 Repayment.........................................................23
Section 2.8 Notes; Loan Accounts..............................................24
Section 2.9 Manner of Payment.................................................24
Section 2.10 Reimbursement.....................................................25
Section 2.11 Application of Proceeds...........................................26
Section 2.12 Capital Adequacy..................................................27
Section 2.13 Bank Tax Forms....................................................27
ARTICLE 3 - CONDITIONS PRECEDENT............................................................28
Section 3.1 Conditions Precedent to Effectiveness of Agreement and Initial
Advance...........................................................28
Section 3.2 Conditions Precedent to Each Advance..............................29
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES..................................................30
Section 4.1 Representations and Warranties....................................30
Section 4.2 Survival of Representations and Warranties, etc...................36
ARTICLE 5 - GENERAL COVENANTS...............................................................36
Section 5.1 Preservation of Existence and Similar Matters.....................36
Section 5.2 Business; Compliance with Applicable Law..........................37
Section 5.3 Maintenance of Properties.........................................37
Section 5.4 Accounting Methods and Financial Records..........................37
Section 5.5 Insurance.........................................................37
Section 5.6 Payment of Taxes and Claims.......................................37
Section 5.7 Visits and Inspections............................................38
Section 5.8 Payment of Indebtedness...........................................38
Section 5.9 Use of Proceeds...................................................38
Section 5.10 ERISA.............................................................38
Section 5.11 Indemnity.........................................................38
Section 5.12 Further Assurances................................................39
Section 5.13 Broker's Claims...................................................40
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Section 5.14 Covenants Regarding Formation of Subsidiaries and Acquisitions....40
ARTICLE 6 - INFORMATION COVENANTS...........................................................40
Section 6.1 Quarterly Financial Statements and Information....................40
Section 6.2 Annual Financial Statements and Information; Certificate of
No Default........................................................41
Section 6.3 Performance Certificates..........................................41
Section 6.4 Copies of Other Reports...........................................42
Section 6.5 Notice of Litigation and Other Matters............................42
Section 6.6 Loss of Agreements................................................43
ARTICLE 7 - NEGATIVE COVENANTS..............................................................43
Section 7.1 Indebtedness for Borrowed Money...................................43
Section 7.2 Investments.......................................................44
Section 7.3 Limitation on Liens...............................................45
Section 7.4 Amendment and Waiver..............................................45
Section 7.5 Liquidation; Disposition or Acquisition of Assets.................46
Section 7.6 Limitation on Guaranties..........................................46
Section 7.7 Restricted Payments and Purchases.................................46
Section 7.8 Leverage Ratio....................................................46
Section 7.9 Pro Forma Debt Service Coverage Ratio.............................47
Section 7.10 Interest Coverage Ratio...........................................47
Section 7.11 Affiliate Transactions............................................47
Section 7.12 ERISA Liabilities.................................................48
Section 7.13 Limitation on Upstream Dividends by Subsidiaries..................48
Section 7.14 TCI Revenue Agreement.............................................48
Section 7.15 Designation of Restricted and Unrestricted Subsidiary.............48
ARTICLE 8 - DEFAULT.........................................................................49
Section 8.1 Events of Default.................................................49
Section 8.2 Remedies..........................................................51
ARTICLE 9 - THE ADMINISTRATIVE AGENT........................................................52
Section 9.1 Appointment and Authorization.....................................52
Section 9.2 Delegation of Duties..............................................52
Section 9.3 Interest Holders..................................................53
Section 9.4 Consultation with Counsel.........................................53
Section 9.5 Documents.........................................................53
Section 9.6 Agents and Affiliates.............................................53
Section 9.7 Responsibility of the Agents......................................53
Section 9.8 Action by Administrative Agent....................................54
Section 9.9 Notice of Default.................................................54
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Section 9.10 Responsibility Disclaimed.........................................55
Section 9.11 Indemnification...................................................55
Section 9.12 Credit Decision...................................................55
Section 9.13 Successor Administrative Agent....................................56
Section 9.14 Syndication Agents and Co-Agents..................................56
ARTICLE 10 - CHANGE IN CIRCUMSTANCES AFFECTING LIBOR ADVANCES...............................56
Section 10.1 LIBOR Basis Determination Inadequate..............................57
Section 10.2 Illegality........................................................57
Section 10.3 Increased Costs...................................................57
Section 10.4 Effect On Other Advances..........................................59
ARTICLE 11 - MISCELLANEOUS..................................................................59
Section 11.1 Notices...........................................................59
Section 11.2 Expenses..........................................................61
Section 11.3 Waivers...........................................................61
Section 11.4 Set-Off...........................................................62
Section 11.5 Assignment........................................................62
Section 11.6 Counterparts......................................................64
Section 11.7 Governing Law.....................................................65
Section 11.8 Severability......................................................65
Section 11.9 Headings..........................................................65
Section 11.10 Interest..........................................................65
Section 11.11 Entire Agreement..................................................66
Section 11.12 Amendment and Waiver..............................................66
Section 11.13 Other Relationships...............................................66
Section 11.14 Confidentiality...................................................66
Section 11.15 Survival of Various Provisions....................................67
ARTICLE 12 - WAIVER OF JURY TRIAL...........................................................67
Section 12.1 Waiver of Jury Trial..............................................67
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LOAN AGREEMENT
FOR
$100,000,000 REVOLVING CREDIT FACILITY
among
TCI MUSIC, INC.
and
THE BANKS WHOSE NAMES APPEAR AS "BANKS"
ON THE SIGNATURE PAGES HEREOF,
with
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT,
and
CREDIT LYONNAIS NEW YORK BRANCH
and
ROYAL BANK OF CANADA,
AS SYNDICATION AGENTS
Dated as of the 30th day of December, 1997
THIS AGREEMENT is made as of the 30th day of December, 1997, by and
among TCI MUSIC, INC., the Administrative Agent (as defined herein) and the
Banks (as defined herein).
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
ARTICLE 1 - Definitions.
For the purposes of this Agreement:
"Acquisition" shall mean (whether by purchase, exchange, issuance of
stock or other equity or debt securities, merger, reorganization or any other
method) (i) any acquisition by the Borrower or any of its Restricted
Subsidiaries of any other Person, which Person shall then become consolidated
with the Borrower or any such Restricted Subsidiary in accordance
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with GAAP, or (ii) any acquisition by the Borrower or any of its Restricted
Subsidiaries of all or any substantial part of the assets of any other Person.
"Administrative Agent" shall mean Bank of America National Trust and
Savings Association, in its capacity as Administrative Agent for the Banks or
any successor Administrative Agent appointed pursuant to Section 9.13 hereof.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at the address set forth in Section 11.1 hereof, or
such other office as may be designated pursuant to the provisions of Section
11.1 hereof.
"Advance" shall mean amounts advanced by the Banks to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing; and Advances
shall mean more than one Advance.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
the Borrower other than a Restricted Subsidiary . For purposes of this
definition, "control" when used with respect to any Person means the power to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.
"Affiliation Agreement" shall mean that certain Affiliation Agreement
dated as of July 1, 1997, between DMX Inc. and Satellite Services, Inc..
"Affiliate Debt Subordination Agreement" shall mean any Affiliate Debt
Subordination Agreement from any Affiliate in favor of the Administrative Agent
and in substantially the form of Exhibit A attached hereto.
"Agreement" shall mean this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"Agreement Date" shall mean December 30, 1997.
"Annualized Operating Cash Flow" shall mean, as of any calculation date,
(a) Operating Cash Flow (for the quarter end being tested or the most recently
completed fiscal quarter, as the case may be) times (b) four (4).
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations, and orders of governmental bodies
or regulatory agencies applicable to such Person, including, without limitation,
all orders and decrees of all courts and arbitrators in proceedings or actions
to which the Person in question is a party or by which it is bound.
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"Applicable Margin" shall mean the interest rate margin applicable to
Base Rate Advances and LIBOR Advances, as the case may be, in each case
determined in accordance with Section 2.3(f) hereof.
"Assignment and Assumption Agreement" shall mean that certain form of
Assignment and Assumption Agreement in substantially the form of Exhibit B
attached hereto, pursuant to which each Bank may, as further provided in Section
11.5 hereof, sell a portion of its Loans or Commitment.
"Authorized Signatory" shall mean, with respect to any Person, such
senior personnel of such Person as may be duly authorized and designated in
writing by such Person to execute documents, agreements, and instruments on
behalf of such Person.
"Banks" shall mean those banks whose names are set forth on the
signature pages hereof under the heading "Banks" and any assignees of the Banks
which hereafter become parties hereto pursuant to and in accordance with Section
11.5 hereof; and "Bank" shall mean any one of the foregoing Banks.
"Base Rate" shall mean, as of any date, a fluctuating interest rate per
annum equal to the sum of (a) the higher of (i) the Prime Rate, or (ii) the sum
of (1) the Federal Funds Rate, plus (2) one-half of one percent (1/2%), plus (b)
the Applicable Margin. The Base Rate shall be adjusted automatically as of the
opening of business on the effective date of each change in the Prime Rate or
the Federal Funds Rate, as the case may be, to account for such change, and
shall also be changed as and when provided in Section 2.3(f) hereof to reflect
changes in the Applicable Margin.
"Base Rate Advance" shall mean an Advance which bears interest at the
Base Rate which the Borrower requests to be made as a Base Rate Advance or is
reborrowed as a Base Rate Advance, in accordance with the provisions of Section
2.2 hereof, and which shall be in a principal amount of at least $500,000 and in
an integral multiple of $250,000, except for a Base Rate Advance which is in an
amount equal to the unused amount of the Commitment, which Advance may be in
such amount.
"Borrower" shall mean TCI Music, Inc., a Delaware corporation.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
London, England, Los Angeles, California and New York, New York, as relevant to
the determination to be made or the action to be taken.
"Capital Expenditures" shall mean with respect to any Person,
expenditures for the purchase of tangible assets of long-term use which would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
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"Capital Stock" shall mean, as applied to any Person, any capital stock
or ownership interests of such Person, regardless of class or designation, and
all warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any obligation
of a Person as lessee under a lease which at the time would be required to be
capitalized on the balance sheet of such lessee in accordance with GAAP.
"Cash Management Suspension Notice" shall mean a notice delivered to the
Borrower executed by the Majority Banks following the occurrence of a Default
stating that it is a "Cash Management Suspension Notice." Such Cash Management
Suspension Notice shall be in effect from the time such notice is sent until the
earlier of (a) such time as it is revoked by notice delivered to the Borrower
executed by the Administrative Agent at the request of the Majority Banks, or
(b) such time as the event to which it relates is cured or waived in accordance
with the terms of this Agreement and the Borrower has given the Administrative
Agent and the Banks written notice of the Borrower's intent to resume its
ordinary cash management practices.
"Change of Control" shall mean any change in the ownership of the
Borrower to which the Majority Banks have not consented in writing that results
in less than fifty and one-tenth of one percent (50.1%) of all voting rights
(after giving effect to any member's agreement or voting trust agreements) with
respect to the Capital Stock of the Borrower (including, without limitation,
warrants, options, conversion rights, voting rights and calls or claims of any
character with respect thereto, to the extent exercisable prior to repayment in
full of the Obligations) being owned directly or indirectly by one or more of
(a) TCI, (b) Liberty, (c) Xxxx X. Xxxxxx, (d) the estate of Xxx Xxxxxxx
(including the legal heirs of Xxx Xxxxxxx), or (e) the legal heirs of Xxxx X.
Xxxxxx; provided, however, that in the case of clause (d) and (e) above, TCI or
Liberty continues to appoint the management of the Borrower.
"Co-Agents" shall mean Fleet National Bank and Banque Paribas; and
"Co-Agent" shall mean any one of the foregoing Co-Agents.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean the several obligations of the Banks to advance
the aggregate sum of up to $100,000,000 to the Borrower pursuant to the terms
hereof, as such obligations may be reduced from time to time.
"Commitment Ratios" shall mean the percentages as of the date of
determination in which the Banks are severally bound to satisfy the Commitment
to make Advances to the
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Borrower pursuant to the terms hereof, which as of the Agreement Date are as set
forth below:
Percentage
(Rounded to the
Banks nearest 1/10%) Dollar Commitment
----- --------------- -----------------
Bank of America National Trust and Savings Association 30.0% $ 30,000,000
Royal Bank of Canada 20.0% $ 20,000,000
Credit Lyonnais New York Branch 20.0% $ 20,000,000
Fleet National Bank 15.0% $ 15,000,000
Banque Paribas 15.0% $ 15,000,000
TOTAL: 100% $ 100,000,000
"Control Shareholders" shall mean any one or more of the following: (i)
TCI or any wholly-owned direct or indirect Subsidiary of TCI; (ii) Liberty or
any wholly-owned direct or indirect Subsidiary of Liberty; and (iii) any other
shareholder holding greater than 20% of the Capital Stock of the Borrower having
ordinary voting power to elect a majority of the board of directors or other
governing body.
"DBS Agreement" shall mean any agreement between the Borrower (or any of
its Restricted Subsidiaries) and a provider of direct broadcast satellite
services pursuant to which such provider agrees, among other things, to
distribute and exhibit to its subscribers programming of the Borrower and/or its
Restricted Subsidiaries.
"Default" shall mean any Event of Default, and any other event specified
in Section 8.1 hereof which with any passage of time or giving of notice (or
both) would constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of (a) the Base Rate or the LIBOR Basis otherwise applicable plus (b) two
percent (2%).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean (a) any corporation which is a member of
the same controlled group of corporations (within the meaning of Code Section
414(b)) as is the Borrower, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c))
with the Borrower, (c) any other corporation, partnership or other organization
which is a member of an affiliated service
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group (within the meaning of Code Section 414(m)) with the Borrower, or (d) any
other entity required to be aggregated with the Borrower pursuant to regulations
under Code Section 414(o).
"Event of Default" shall mean any of the events specified in Section 8.1
hereof, provided that any requirement for notice or lapse of time, or both, has
been satisfied.
"FCC" shall mean the Federal Communications Commission, or any successor
thereto.
"Federal Funds Rate" shall mean, as of any date, the weighted average of
the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by the Administrative Agent.
"Fee Agreements" shall mean all agreements by and between the Borrower
on the one hand, and the Administrative Agent or the Banks (or any of them) on
the other hand, setting forth the applicable fees relating to this Agreement.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles consistently applied.
"Guaranty" or "Guaranteed," as applied to an obligation (each a "primary
obligation"), shall mean and include (a) any guaranty, direct or indirect, in
any manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit or capital
call requirements, without limitation, and any obligation of such Person (the
"primary obligor"), whether or not contingent, (i) to purchase any such primary
obligation or any property or asset constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
such primary obligation or (2) to maintain working capital, equity capital or
the net worth, cash flow, solvency or other balance sheet or income statement
condition of any other Person, (iii) to purchase property, assets, securities or
services primarily for the purpose of assuring the owner or holder of any
primary obligation of the ability of the primary obligor with respect to such
primary obligation to make payment thereof or (iv) otherwise to assure or hold
harmless the owner or holder of such primary obligation against loss in respect
thereof excluding, however, general indemnifications for breach of contract
entered into in the ordinary course of business. For purposes hereof, the amount
of any Guaranty of (i) a
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contract of another Person for the purchase or acquisition of programming by
such other Person in the ordinary course of business shall be the maximum amount
payable under such guaranty in the twelve (12) month period immediately
succeeding the calculation date and (ii) in connection with a permitted sale
hereunder shall be an amount reasonably determined by the Borrower.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of owners', shareholders' and partners' equity or capital stock or
surplus or general contingency or deferred tax reserves, which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, (b) all direct or indirect
obligations secured by any Lien to which any property or asset owned by such
Person is subject, whether or not the obligation secured thereby shall have been
assumed, (c) to the extent not otherwise included, all Capitalized Lease
Obligations of such Person, (d) all reimbursement obligations with respect to
outstanding letters of credit, and (e) all obligations of such Person to pay the
deferred purchase or acquisition price of property or services.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, all money borrowed by such Person and Indebtedness represented by notes
payable by such Person, all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments, and all Indebtedness of such
Person upon which interest charges are customarily paid, all Capitalized Lease
Obligations, all reimbursement obligations with respect to outstanding letters
of credit, all Indebtedness issued or assumed as full or partial payment for
property or services (other than trade payables arising in the ordinary course
of business), whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, and, without duplication, Guaranties
of any of the foregoing. For purposes of this definition, interest which is
accrued but not paid on the original due date or within any applicable cure or
grace period as provided by the underlying contract for such interest shall be
deemed Indebtedness for Money Borrowed. For purposes of this Agreement,
Indebtedness for Money Borrowed shall not include (i) any bond obligation of, or
any Guaranty of or letter of credit securing performance by, either Borrower or
any Restricted Subsidiary undertaken or incurred in the ordinary course of its
or their business (other than in connection with the borrowing of money or
obtaining of credit) as presently conducted for or on behalf of either Borrower
or a Restricted Subsidiary and (ii) a guaranty or other obligation consisting of
a pledge of such Person's interest in any Unrestricted Subsidiary equity,
provided that recourse under any such guaranty or obligation secured by such
pledge shall be limited solely to such Person's interest in such Unrestricted
Subsidiary equity so pledged.
"Interest Hedge Agreement" shall mean the obligations of any Person
pursuant to (a) any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on
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the same notional amount or (b) interest rate swaps, caps, floors, collars and
similar agreements.
"Interest Period" shall mean, (a) in connection with any Base Rate
Advance, each calendar quarter; provided, however, that for any Base Rate
Advance made after the first day of any calendar quarter the first Interest
Period with respect thereto shall be the period beginning on the date such
Advance is made and ending on the last day of the calendar quarter in which such
Advance is made; provided, further, however, that if a Base Rate Advance is made
on the last day of any calendar quarter, it shall have an initial Interest
Period ending on, and its initial Payment Date shall be, the last day of the
following calendar quarter; and, (b) in connection with any LIBOR Advance, the
term of such Advance selected by the Borrower or otherwise determined in
accordance with this Agreement. Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless, with
respect to LIBOR Advances only, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day; (ii) with respect to LIBOR Advances only, any applicable Interest
Period which begins on a day for which there is no numerically corresponding day
in the calendar month during which such Interest Period is to end shall (subject
to clause (i) above) end on the last day of such calendar month; and (iii) no
Interest Period shall extend beyond the Maturity Date or such earlier date as
would interfere with the repayment obligations of the Borrower under Section 2.7
hereof. Interest shall be due and payable with respect to any Advance as
provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Base Rate or the LIBOR Basis, as
appropriate.
"Investment" shall mean, with respect to the Borrower or any of its
Subsidiaries, (a) any loan, advance or extension of credit (other than to
customers in the ordinary course of business) by such Person to, or any Guaranty
or other contingent liability with respect to the capital stock, indebtedness or
other obligations of, or any contributions to the capital of, any other Person,
or any ownership, purchase or other acquisition by such Person of any interest
in any capital stock, limited partnership interests, general partnership
interest, or other securities of such other Person, other than an Acquisition,
and (b) all expenditures by the Borrower or any of its Subsidiaries relating to
the foregoing.
"Leverage Ratio" shall mean, as of any date of determination, the ratio
of (a) Total Debt as of such date to (b) Annualized Operating Cash Flow.
"Liberty" shall mean Liberty Media Corporation, a Delaware corporation.
"LIBOR" shall mean, for any Interest Period, the interest rate per annum
equal to the offered rate for deposits in United States Dollars for an amount
approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for,
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the LIBOR Advance sought by the Borrower, which rate appears on the Xxxxxx'x
Screen LIBO Rate Page (or such other page as may replace that page in that
service) at approximately 11:00 a.m. (London time) two (2) Business Days before
the first day of such Interest Period; provided, that (i) if more than one such
offered rate appears on the Xxxxxx'x Screen, LIBOR shall be the arithmetic
average (rounded upward to the nearest one-sixteenth (1/16) of one percent (1%))
of such offered rates, or (ii) if the Xxxxxx'x Screen is not available, LIBOR
shall be the average offered to the Administrative Agent (or an affiliate
thereof) by two (2) leading banks (rounded upward to the nearest one-sixteenth
(1/16) of one percent (1%)) of the interest rates per annum at which deposits in
United States Dollars for such Interest Period are offered to the Administrative
Agent in the London eurodollar interbank borrowing market at approximately 11:00
a.m. (London time) two (2) Business Days before the first day of such Interest
Period, in an amount approximately equal to the principal amount of, and for a
length of time approximately equal to the Interest Period for, the LIBOR Advance
sought by the Borrower.
"LIBOR Advance" shall mean an Advance which bears interest at the LIBOR
Basis which the Borrower requests to be made as a LIBOR Advance or which is
reborrowed as a LIBOR Advance, in accordance with the provisions of Section 2.2
hereof, and which shall be in a principal amount of at least $500,000 and in an
integral multiple of $250,000, except for a LIBOR Advance which is in an amount
equal to the unused amount of the Commitment, which Advance may be in such
amount.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
sum of (a) LIBOR plus (b) the Applicable Margin. The LIBOR Basis shall be
rounded upward to the nearest one-hundredth of one percent (1/100%) and shall
apply to Interest Periods of one (1), two (2), three (3), and six (6) months,
and, once determined, shall be subject to Article 10 hereof and shall remain
unchanged during the applicable Interest Period. The Borrower may not select an
Interest Period for a LIBOR Advance in excess of six (6) months unless the
Administrative Agent has notified the Borrower (i) that each of the Banks has
available to it funds for such Bank's share of the proposed Advance which are
not required for other purposes and (ii) that such funds are available to each
Bank at a rate (exclusive of reserves and other adjustments) at or below LIBOR
for such proposed Advance and Interest Period. Interest on LIBOR Advances shall
also be subject to adjustment to reflect changes in the Applicable Margin as
provided in Section 2.3(f) hereof.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
actual reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), to the extent any Bank has any
Eurocurrency Liabilities subject to such reserve requirement at that time.
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"Licenses" shall mean any rights, whether based upon any agreement,
statute, order, ordinance, or otherwise, granted by any governmental authority
to the Borrower or its Restricted Subsidiaries to operate its business, together
with any amendment, modification or replacement with respect thereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
respect of such property, whether or not xxxxxx, vested, or perfected.
"Loan Documents" shall mean this Agreement, the Notes, any Subsidiary
Guaranty, the Fee Agreements, all Requests for Advance, all Affiliate Debt
Subordination Agreements and all Interest Hedge Agreements between the Borrower
and the Administrative Agent, the Banks, or any of them and all other documents
and agreements executed or delivered in connection with or contemplated by this
Agreement.
"Loans" shall mean, collectively, amounts advanced by the Banks to the
Borrower under the Commitment.
"Majority Banks" shall mean, at any time, Banks the total of whose
Commitment Ratios equals or exceeds fifty-one percent (51%).
"Materially Adverse Effect" shall mean any materially adverse effect
upon the business, assets, financial condition or results of operations of the
Borrower and its Restricted Subsidiaries, on a consolidated basis in accordance
with GAAP, taken as a whole, or upon the ability of the Borrower and its
Restricted Subsidiaries, taken as a whole, to perform their obligations under
this Agreement or any other Loan Document.
"Maturity Date" shall mean June 30, 2005, or such earlier date as
payment of the Loans shall be due (whether by acceleration or otherwise).
"Maximum Permitted Indebtedness" shall mean, as of any date, the maximum
amount of Indebtedness that the Borrower could incur on such date and remain in
compliance with Section 7.8 hereof.
"MSO Agreement" shall mean any agreement between the Borrower or any of
its Restricted Subsidiaries and a cable television operator pursuant to which
such operator agrees, among other things, to distribute and exhibit to its
subscribers programming of the Borrower or such Restricted Subsidiary and shall
include, without limitation, the Affiliation Agreement.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
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"Necessary Authorizations" shall mean all authorizations, consents,
permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any governmental or other regulatory
authority whether federal, state, or local, and all agencies thereof necessary
for the conduct of the businesses and the ownership (or lease) of the properties
and assets of the Borrower or its Restricted Subsidiaries, including, without
limitation, the Licenses.
"Notes" shall mean, collectively, those certain promissory notes in the
aggregate principal amount of up to $100,000,000, one such note issued to each
of the Banks by the Borrower, each one substantially in the form of Exhibit C
attached hereto, and any extensions, renewals or amendments to any of the
foregoing.
"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of the Borrower and all other obligors to the
Banks and the Administrative Agent under this Agreement and the other Loan
Documents (including any interest, fees and other charges on the Loans or
otherwise under the Loan Documents that would accrue but for the filing of a
bankruptcy action with respect to the Borrower, whether or not a claim for such
amounts is allowed in such bankruptcy action and including Obligations to the
Banks pursuant to Section 5.11 hereof), as they may be amended from time to
time, or as a result of making the Loans, whether such Obligations are direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, now
existing or hereafter arising, and (b) the obligation to pay an amount equal to
the amount of any and all damages which the Banks and the Administrative Agent,
or any of them, may suffer by reason of a breach by the Borrower or any other
obligor of any obligation, covenant, or undertaking with respect to this
Agreement or any other Loan Document.
"Operating Cash Flow" shall mean, with respect to the Borrower and its
Restricted Subsidiaries on a consolidated basis in respect of any period, the
sum of (a) operating income for such period, plus (b) to the extent deducted in
determining operating income, the sum of the following for such period (i)
depreciation, (ii) amortization, and (iii) all other non-cash items and all
extraordinary and non-recurring items; provided, the calculation is made after
giving effect to acquisitions and dispositions of assets of the Borrower or any
Restricted Subsidiary (including designations of Subsidiaries as Restricted or
Unrestricted) during such period as if such transactions had occurred on the
first day of such period.
"Payment Date" shall mean the last day of each Interest Period.
"Permitted Asset Sales" shall mean sales, transfers, exchanges or other
dispositions of assets by the Borrower or any of its Restricted Subsidiaries in
bona fide arms' length transactions in which the Operating Cash Flow for the
most recently completed fiscal quarter of such assets sold, transferred,
exchanged, or disposed of do not exceed in the aggregate
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(when added to amounts for prior sites, transfers, exchanges or other
dispositions) (i) during any period of one year (or shorter period commencing on
the Agreement Date), 30% of the Operating Cash Flow of the Borrower and
Restricted Subsidiaries ending as of the most recently completed fiscal quarter,
and (ii) during any period of five years (or shorter period commencing on the
Agreement Date), 50% of the Operating Cash Flow of the Borrower and Restricted
Subsidiaries ending as of the most recently completed fiscal quarter; provided
that, in the case of exchanges, Operating Cash Flow shall be the net effect of
such exchanges and the following conditions shall have been satisfied: (v) the
assets received by the Borrower or the Restricted Subsidiary are free of any
Liens except for Permitted Liens; (w) the Borrower or such Restricted Subsidiary
receives assets which have comparable value; (x) no Event of Default shall have
occurred and be continuing either before or after the consummation of such
transaction; (y) such trade or exchange shall not have a Materially Adverse
Effect; and (z) the Borrower promptly notifies the Administrative Agent (and the
Administrative Agent shall promptly notify the Banks) of such trade or exchange
(such notice to include information comparing the assets being traded or
exchanged and the methodology used to establish fair and comparable value).
"Permitted Liens" shall mean, as applied to any Person:
(a) any Lien in favor of the Administrative Agent or the
Banks given to secure the Obligations or the obligations under the Loan
Agreement;
(b) (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, judgments, governmental
charges or levies, or claims the non-payment of which is being contested in good
faith by appropriate proceedings and for which adequate reserves as required by
GAAP have been set aside on such Person's books, but only so long as no
foreclosure, distraint, sale, or similar proceedings have been commenced with
respect thereto and which remain unstayed for a period of thirty (30) days after
their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers,
and materialmen incurred in the ordinary course of business for sums not yet due
or being contested in good faith, if such reserve or appropriate provision, if
any, as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) restrictions on the transfer of assets imposed by any
agreement, or by any federal, state or local statute, regulation or ordinance
applicable to such person;
(f) easements, rights-of-way, restrictions, and other
similar encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of
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such Person, or Liens incidental to the conduct of the business of such Person
or to the ownership of its properties which were not incurred in connection with
Indebtedness or other extensions of credit and which do not in the aggregate
materially detract from the value of such properties or materially impair their
use in the operation of the business of such Person;
(g) purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests, on any
property or assets hereinafter acquired by the Borrower (hereafter referred to
individually as a "Purchase Money Security Interest"); provided, however, that:
(i) the transaction in which any Purchase Money
Security Interest is proposed to be created is not otherwise prohibited by this
Agreement;
(ii) any Purchase Money Security Interest shall
attach only to the property or asset acquired in such transaction and shall not
extend to or cover any other assets or properties of the Borrower;
(iii) the Indebtedness secured or covered by any
Purchase Money Security Interest shall not exceed the cost of the property or
asset acquired and shall not be renewed or extended by the Borrower;
(iv) the aggregate outstanding amount of all
Indebtedness secured by Purchase Money Security Interests and Capitalized Lease
Obligations shall not at any time exceed the amounts permitted pursuant to
Section 7.1 hereof; and
(h) other Liens; provided that (i) no Default or Event of
Default exists prior to or after giving effect to the incurrence thereof; and
(ii) the aggregate amount of all Indebtedness secured by such other Liens does
not exceed the amounts permitted pursuant to Section 7.1 hereof.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of Section
3(3) of ERISA maintained by or contributed to by the Borrower or any ERISA
Affiliate.
"Prime Rate" shall mean, at any time, the rate of interest adopted by
Bank of America National Trust and Savings Association, as its reference rate
for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by such bank as its "prime rate."
The Prime Rate is not necessarily the lowest rate of interest charged to
borrowers of The Bank of America National Trust and Savings Association.
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"Pro Forma Debt Service" shall mean for any period the sum of (a) Total
Pro Forma Interest Expense during such period (b) Pro Forma Scheduled Principal
Payments with respect to the Loans during such period; and (c) all payments of
principal on Indebtedness for Money Borrowed of the Borrower and the Restricted
Subsidiaries (other than the Loans) scheduled to be paid during such period.
"Pro Forma Scheduled Principal Payments" shall mean for any period (a)
Loans as of the date of determination minus (b) the Commitment scheduled to be
available on the last day of such period after giving effect to the Commitment
reductions set forth in Section 2.5 hereof.
"Regulatory Change" shall mean, with respect to any Bank, any change on
or after the date of this Agreement in United States Federal, state or foreign
laws or regulations (including the LIBOR Reserve Percentage under Regulation D)
or the adoption or making on or after such date of any interpretations,
directives or requests applying to a class of banks including such Bank of or
under any United States Federal or state, or any foreign, laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"Reportable Event" shall have the meaning set forth in Section 4043(c)
of ERISA.
"Request for Advance" shall mean any certificate signed by an Authorized
Signatory requesting an Advance hereunder which will increase the aggregate
amount of the Loans outstanding, which certificate shall be denominated a
"Revolver Status Advice," and shall be in substantially the form of Exhibit D
attached hereto. Each Request for Advance shall, among other things, (a) specify
the date of the Advance, which shall be a Business Day, the amount of the
Advance, the type of Advance, and, with respect to LIBOR Advances, the Interest
Period selected by the Borrower and (b) state that the requirements of Section
3.2 hereof have been satisfied.
"Restricted Payment" shall mean, (a) any direct or indirect
distribution, dividend, or other payment to any Person (other than to the
Borrower or any wholly-owned Subsidiary of the Borrower) on account of any
general or limited partnership interest in, or other securities of, the
Borrower, or any of its Subsidiaries (other than dividends payable solely in
stock of the Borrower or such Subsidiary, as applicable, and stock splits),
including, without limitation, any direct or indirect distribution, dividend or
other payment to any Person (other than to the Borrower or any Subsidiary of the
Borrower) on account of any warrants or other rights or options to acquire
shares of capital stock of the Borrower or any of its Subsidiaries; and (b) any
consulting, management or other similar fees, or any interest thereon, payable
by the Borrower or its Subsidiaries, to any Affiliate, other than reimbursement
of overhead and employee costs in the ordinary course of business which are
directly attributable to the Borrower and its Subsidiaries.
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"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption, or other acquisition or retirement of any
general or limited partnership interest in, or shares of capital stock or other
securities of, the Borrower or any of the Subsidiaries, including, without
limitation, any warrants or other rights or options to acquire shares of capital
stock of the Borrower or any of the Subsidiaries or any loan, advance, release
or forgiveness of Indebtedness by the Borrower or its Subsidiaries to any
partner, shareholder or Affiliate of any such Person.
"Restricted Subsidiaries" shall mean DMX Inc. and shall include any
other Subsidiary of the Borrower which the Borrower designates (and the Majority
Banks accept) as a "Restricted Subsidiary," and "Restricted Subsidiary" shall
mean any one of the foregoing.
"Significant Default" shall mean a Default described in Sections 8.1(b),
(f) or (g) hereof.
"Subordinated Affiliate Debt" shall mean Indebtedness (a) owed by
Borrower to any Affiliate; (b) which is unsecured; and (c) which has been
subordinated in right of payment to the prior payment of the Obligations,
pursuant to an Affiliate Debt Subordination Agreement.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which greater than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right of
the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any
partnership of which greater than fifty percent (50%) of the outstanding
partnership interests is at the time owned by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person, and (b) any other entity the majority of whose equity interests
having ordinary voting power is at the time owned by such Person.
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty in favor of
the Administrative Agent on behalf of itself and the Banks, given by a
Restricted Subsidiary of the Borrower, each substantially in the form of Exhibit
E attached hereto, including that certain Master Subsidiary Guaranty dated as of
the Agreement Date.
"Syndication Agents" shall mean Credit Lyonnais New York Branch and
Royal Bank of Canada; and "Syndication Agent" shall mean any one of the
foregoing Syndication Agents.
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
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"TCI Revenue Agreement" shall mean, collectively, (a) that certain
Amended and Restated Contribution Agreement, dated as of November 10, 1997,
between the Borrower and TCI, and (b) the Affiliation Agreement.
"Total Debt" shall mean on a consolidated basis, as of any date, without
duplication (a) all outstanding Indebtedness for Money Borrowed of the Borrower
and its Restricted Subsidiaries (other than Subordinated Affiliate Debt) and (b)
the aggregate of all Guarantees by the Borrower and its Restricted Subsidiaries
(provided, however, that the amount of any Guaranty by the Borrower or any of
its Restricted Subsidiaries of (i) a contract of another Person for the purchase
or acquisition of programming by such other Person in the ordinary course of
business shall be the maximum amount payable under such guaranty in the twelve
(12) month period immediately succeeding the calculation date and (ii) in
connection with a permitted sale shall be an amount reasonably determined by the
Borrower).
"Total Interest Expense" shall mean, for any period, an amount equal to
the sum of (a) the interest paid during such period with respect to Indebtedness
for Money Borrowed of the Borrower and its Restricted Subsidiaries and (b)
commitment fees paid with respect to the Loans during such period.
"Total Pro Forma Interest Expense" shall mean, for any period, an amount
equal to the sum of (a) the interest to be paid during such period with respect
to Indebtedness for Money Borrowed of the Borrower and its Restricted
Subsidiaries and (b) commitment fees to be paid with respect to the Loans during
such period. For purposes of clause (a) of this definition only, interest
payable in respect of the Loans, to the extent that interest payments on the
Loans are not fixed by way of a LIBOR Advance or an Interest Hedge Agreement,
shall be calculated using the weighted average of the Interest Rate Bases in
effect on the calculation date.
"Trademarks" shall mean all registered trademarks and pending
applications for trademarks of the Borrower and its Restricted Subsidiaries
which are more fully described on Schedule 1 attached hereto.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower (or any of its Restricted Subsidiaries) and any other Person for
the license, lease or other agreement to use the telecommunications satellites
for purposes of broadcasting the programming of the Borrower and its Restricted
Subsidiaries and any other agreement related to the transmission, origination
and production of such programming and the related technical services.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
which is not a Restricted Subsidiary and shall include, as of the Agreement
Date, The Box Worldwide, Inc. and Paradigm Entertainment Group.
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Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended, or supplemented from time to time with the prior
written consent of the Majority Banks, except as provided in Section 11.12
hereof, and except where the context otherwise requires, definitions imparting
the singular shall include the plural and vice versa. Except where otherwise
specifically restricted, reference to a party to a Loan Document includes that
party and its successors and assigns. All terms used herein which are defined in
Article 9 of the Uniform Commercial Code in effect in the State of New York on
the date hereof and which are not otherwise defined herein shall have the same
meanings herein as set forth therein.
All accounting terms used herein without definition shall be used as
defined under GAAP. All references to financial information and results of the
Borrower shall be determined on a consolidated basis with the Borrower's
Restricted Subsidiaries as appropriate.
ARTICLE 2 - Loans
Section 2.1 The Loans. The Banks agree, severally in accordance with
their respective Commitment Ratios and not jointly, upon the terms and subject
to the conditions of this Agreement, to lend and relend to the Borrower, on or
prior to the Maturity Date, amounts which in the aggregate at any one time
outstanding do not exceed the Commitment (as it may be reduced from time to time
pursuant to the terms hereof).
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, etc. Any Advance shall, at the
option of the Borrower, be made as a Base Rate Advance or a LIBOR Advance;
provided, however, that (i) if the Borrower fails to give the Administrative
Agent written notice specifying whether an Advance is to be repaid or reborrowed
on a Payment Date, such Advance shall be repaid and then reborrowed as a Base
Rate Advance on the Payment Date and (ii) the Borrower may not select a LIBOR
Advance if, at the time of such selection, a Default has occurred and is
continuing. LIBOR Advances shall in all cases be subject to Section 2.3(e) and
Article 10 hereof.
(b) Base Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent in the case of Base Rate Advances irrevocable
written notice in the form of a Request for Advance, or notice by
telephone or telecopy followed immediately by a Request for Advance not
later than 12:00 noon (Eastern time) on the date the Advance is
requested; provided, however, that the failure by the Borrower to
confirm any notice by telephone or telecopy with a Request for Advance
shall not invalidate any
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notice so given. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone or
telecopy of the contents thereof.
(ii) Repayments and Reborrowings. Subject to the
provisions of Section 2.3(e) hereof, the Borrower may repay or prepay a
Base Rate Advance without regard to its Payment Date and (a) upon
irrevocable written notice in accordance with Section 2.2(b)(i) hereof,
reborrow all or a portion of the principal amount thereof as one or more
Base Rate Advances, (b) upon at least three (3) Business Days'
irrevocable prior written notice, reborrow all or a portion of the
principal thereof as one or more LIBOR Advances, or (c) upon at least
one (1) Business Day's irrevocable prior written notice and subject to
Section 2.6 hereof, not reborrow all or any portion of such Base Rate
Advance. On the date indicated by the Borrower, such Base Rate Advance
shall be so repaid and, as applicable, reborrowed.
(c) LIBOR Advances.
(i) Advances. The Borrower shall give the
Administrative Agent in the case of LIBOR Advances at least three (3)
Business Days' irrevocable written notice in the form of a Request for
Advance, or notice by telephone or telecopy followed immediately by a
Request for Advance; provided, however, that the failure of the Borrower
to confirm any notice by telephone or telecopy with a Request for
Advance shall not invalidate any notice so given. The Administrative
Agent, whose determination shall be conclusive absent manifest error,
shall determine the available LIBOR Bases and shall notify the Borrower
of such LIBOR Bases. The Borrower shall promptly notify the
Administrative Agent by telecopy or by telephone, and shall immediately
confirm any such telephonic notice in writing, of its selection of a
LIBOR Basis and Interest Period for such Advance. Upon receipt of such
notice from the Borrower, the Administrative Agent shall promptly notify
each Bank by telephone or telecopy of the contents thereof.
(ii) Repayments and Reborrowings. At least three (3)
Business Days prior to each Payment Date for a LIBOR Advance, subject to
Sections 2.3(e) and 2.2(a) hereof, the Borrower shall give the
Administrative Agent written notice specifying whether all or a portion
of any LIBOR Advance outstanding on the Payment Date (a) is to be repaid
and then reborrowed in whole or in part as a LIBOR Advance, (b) is to be
repaid and then reborrowed in whole or in part as one or more Base Rate
Advances or (c) subject to Section 2.6 hereof, is to be repaid and not
reborrowed. Upon such Payment Date such LIBOR Advance will, subject to
the provisions hereof, be so repaid and, as applicable, reborrowed.
(d) Notification of Banks. Upon receipt of a Request for
Advance or a written notice under this Section 2.2 from the Borrower with
respect to a reborrowing of any
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then outstanding Advance on the Payment Date for such Advance, the
Administrative Agent shall promptly notify each Bank by telephone or telecopy of
the contents thereof and the amount of such Bank's portion of the applicable
Advance. Each Bank shall, not later than 2:00 p.m. (Eastern time) on the date
specified in such notice, make available to the Administrative Agent at the
Administrative Agent's Office, or at such account as the Administrative Agent
shall designate, the amount of its portion of the applicable Advance in
immediately available funds.
(e) Disbursement.
(i) Prior to 2:00 p.m. (Eastern time) on the date of
an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in this Section 2.2 and in
Article 3, disburse the amounts made available to the Administrative
Agent by the Banks in immediately available funds by (A) transferring
the amounts so made available by wire transfer pursuant to the
instructions of the Borrower, or (B) in the absence of such
instructions, crediting the amounts so made available to the account of
the Borrower maintained with the Administrative Agent or an affiliate of
the Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Advance that such
Bank will not make available to the Administrative Agent such Bank's
ratable portion of such Advance, and so long as notice has been given as
provided in Section 2.2(d) hereof, the Administrative Agent may assume
that such Bank has made such portion available to the Administrative
Agent on the date of such Advance and the Administrative Agent may, in
its sole discretion and in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the
extent such Bank shall not have so made such ratable portion available
to the Administrative Agent, such Bank agrees to repay to the
Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid
to the Administrative Agent, at the Federal Funds Rate.
(iii) If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute
such Bank's portion of the applicable Advance for purposes of this
Agreement. The failure of any Bank to fund its portion of any Advance
shall not relieve any other Bank of its obligation, if any, hereunder to
fund its respective portion of the Advance on the date of such
borrowing, but no Bank shall be responsible for any such failure of any
other Bank.
(iv) In the event that, at any time when the Borrower
is not in Default, a Bank for any reason fails or refuses to fund its
portion of an Advance, then,
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until such time as such Bank has funded its portion of such Advance, or
all other Banks have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of such
Advance, such non-funding Bank shall (A) have no right to vote regarding
any issue on which voting is required or advisable under this Agreement
or any other Loan Document, and (B) not be entitled to receive payments
of principal, interest or fees from the Borrower in respect of such
Loans which such Bank failed to make.
Section 2.3 Interest
(a) On Base Rate Advances. Interest on each Base Rate
Advance shall be computed on the basis of a year of 365/366 days for the actual
number of days elapsed and shall be payable at the Base Rate for such Advance in
arrears on the applicable Payment Date. Interest on Base Rate Advances then
outstanding shall also be due and payable on the Maturity Date.
(b) On LIBOR Advances. Interest on each LIBOR Advance shall
be computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the LIBOR Basis for such Advance in arrears on the
applicable Payment Date, and, in addition, if the Interest Period for a LIBOR
Advance exceeds three (3) months, interest on such LIBOR Advance shall also be
due and payable in arrears on each three (3) month anniversary of the making of
such Advance. Interest on LIBOR Advances then outstanding shall also be due and
payable on the Maturity Date.
(c) If No Notice of Selection of Interest Rate Basis. If the
Borrower fails to give the Administrative Agent timely notice of (i) its
selection of a LIBOR Basis or (ii) an election to reborrow a Base Rate Advance
as a Base Rate Advance or if for any reason a determination of a LIBOR Basis for
any Advance is not timely concluded, the Base Rate shall apply to such Advance,
and if the Borrower shall fail to elect to reborrow any LIBOR Advance then
outstanding prior to the last Payment Date applicable thereto in accordance with
the provisions of Section 2.2(c)(ii) hereof, as applicable, the Base Rate shall
apply to such Advance commencing on and after such Payment Date.
(d) Upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Majority Banks shall have the option
(but shall not be required) to give prior notice thereof to the Borrower, to
accelerate the maturity of the Loans, or exercise any other rights or remedies
hereunder in connection with the exercise of this right, to charge interest on
the outstanding principal balance of the Loans at the Default Rate from the date
of such Event of Default. Such interest shall be payable on the earlier of
DEMAND or the Maturity Date and shall accrue until the earlier of (i) waiver or
cure (to the satisfaction of the Majority Banks) of the applicable Event of
Default, (ii) agreement by the Majority Banks to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations.
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(e) LIBOR Advances; Conversions. At no time may the number
of outstanding LIBOR Advances under the Commitment exceed six (6).
(f) Applicable Margin. The Applicable Margin shall be
subject to reduction or increase, as applicable, and as set forth in the table
below, based upon the Leverage Ratio of the Borrower as reflected in the
financial statements required to be delivered for the fiscal quarter most
recently ended pursuant to Section 6.1 or Section 6.2 hereof. The adjustment
provided for in this Section 2.3(f) shall be effective (a) with respect to an
increase of the Applicable Margin, as of the second (2nd) Business Day after the
day on which financial statements are required to be delivered to the
Administrative Agent pursuant to Sections 6.1 and 6.2 hereof, as the case may
be, and (b) with respect to a decrease in the Applicable Margin, as of the
second (2nd) Business Day after except with respect to Interest Periods ending
(or other payments of interest occurring) before the date that such financial
statements are actually delivered to the Administrative Agent, the day on which
such financial statements are required to be delivered to the Administrative
Agent pursuant to Section 6.1 or 6.2 hereof, as the case may be. If the Borrower
shall fail to deliver financial statements within seventy-five (75) days after
the end of any of the first three fiscal quarters of the Borrower's fiscal year
(or within one hundred twenty (120) days after the end of the last fiscal
quarter of the Borrower's fiscal year), as required by Sections 6.1 or 6.2
hereof, it shall be conclusively presumed that the Applicable Margin is based
upon a Leverage Ratio of 4.00:1 for the period from and including the
seventy-sixth (76th) day (or one hundred twenty-first (121st) day, in the case
of the last quarter) after the end of such fiscal quarter, as the case may be,
to the fifth day following the delivery by the Borrower to the Administrative
Agent of such financial statements. The Applicable Margin in effect on the
Agreement Date shall be based upon a certificate, dated the Agreement Date, by
the Borrower's Authorized Signatory showing the Leverage Ratio on a pro forma
basis (after giving effect to initial Advances hereunder) and delivered to the
Administrative Agent on the Agreement Date.
Base Rate Advance LIBOR Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
Greater than or equal to 4.00:1 0.000% 1.250%
3.50:1 or greater, but less than 4.00:1 0.000% 1.125%
3.00:1 or greater, but less than 3.50:1 0.000% 0.875%
less than 3.00:1 0.000% 0.700%
Section 2.4 Fees. The Borrower agrees to pay to the Administrative Agent
for the benefit of the Banks, in accordance with their respective Commitment
Ratios, a commitment fee on the average daily amount of the unborrowed
Commitment for each day from the Agreement Date through the Maturity Date, (A)
at all times during which the Leverage Ratio
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is greater than or equal to 3.5:1, at the rate of three-eighths of one percent
(0.375%) per annum, and (B) at all times during which the Leverage Ratio is less
than 3.5:1, at the rate of one-quarter of one percent (0.250%) per annum. The
commitment fee shall be subject to reduction or increase, as applicable, based
upon the Leverage Ratio of the Borrower for the fiscal quarter most recently
ended as reflected in the financial statements required to be delivered for such
quarter pursuant to Section 6.1 or Section 6.2 hereof. Any adjustment provided
for in this Section 2.4(a)(i) shall be effective (1) with respect to an increase
of the commitment fee, as of the second (2nd) Business Day after the day on
which financial statements are required to be delivered to the Administrative
Agent pursuant to Sections 6.1 and 6.2 hereof, as the case may be, and (2) with
respect to a decrease in the commitment fee, as of the second (2nd) Business Day
after which such financial statements are required to be delivered to the
Administrative Agent pursuant to Section 6.1 or 6.2 hereof, as the case may be,
except with respect to any payment of the commitment fee hereunder occurring
prior to the date such financial statements are actually delivered to the
Administrative Agent. The commitment fee in effect on the Agreement Date shall
be based upon a certificate, dated the Agreement Date, by a senior financial
officer of the Borrower showing the Leverage Ratio on a pro forma basis (after
giving effect to initial Advances hereunder) and delivered to the Administrative
Agent on the Agreement Date. Such commitment fee shall be computed on the basis
of a year of 365/366 days for the actual number of days elapsed, shall be
payable quarterly in arrears on the last day of each calendar quarter,
commencing on March 31, 1998 (for the period from the Agreement Date through
March 31, 1998), and continuing on the last day of each successive calendar
quarter and on the Maturity Date, and shall be fully earned when due and
non-refundable when paid.
Section 2.5 Reduction of Commitment.
(a) Optional. The Borrower shall have the right, at any time
and from time to time after the Agreement Date and prior to the Maturity Date,
upon at least three (3) Business Days' prior written notice to the
Administrative Agent, without premium or penalty, to cancel or reduce
permanently all or a portion of the Commitment on a pro rata basis among the
Banks, provided that any such partial reduction shall be made in an amount not
less than $5,000,000 and in integral multiples of not less than $1,000,000. As
of the date of cancellation or reduction set forth in such notice, the
Commitment shall be permanently reduced to the amount stated in the Borrower's
notice for all purposes herein, and the Borrower shall, subject to Section 2.10
hereof, pay to the Administrative Agent for the account of the Banks the amount
necessary to reduce the principal amount of the Loans then outstanding under the
Commitment to not more than the amount of the Commitment as so reduced, together
with accrued interest on the amount so prepaid. Reductions hereunder shall be
applied to the reductions under Section 2.5(b) hereof on a pro rata basis with
respect to the remaining reductions.
(b) Scheduled Reductions. The Commitment (based upon the
Commitment as of June 29, 2000) shall be reduced automatically and permanently
on a semi-annual
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basis (i.e., each June 30 and December 31) commencing on June 30, 2000 and
ending on the Maturity Date (which percentage reduction shall be in addition to
reductions under Section 2.5(a) hereof during such quarter) in the amounts set
forth below:
Semi-Annual Percentage of
Reduction of
Dates of Commitment as of
Commitment Reduction June 29, 2000
-------------------- -------------------------
June 30, 2000 and December 31, 2000 1.50%
June 30, 2001 and December 31, 2001 5.00%
June 30, 2002 and December 31, 2002 9.00%
June 30, 2003 and December 31, 2003 10.00%
June 30, 2004 and December 31, 2004 12.00%
June 30, 2005 25.00%
Section 2.6 Prepayment. LIBOR Advances may be prepaid prior to the
applicable Payment Date, upon two (2) Business Days' prior written notice to the
Administrative Agent, provided that the Borrower shall reimburse the Banks and
the Administrative Agent, on the earlier of demand or the Maturity Date, for any
loss or out-of-pocket expense incurred by the Banks or the Administrative Agent
in connection with such prepayment, as set forth in Section 2.10 hereof. Base
Rate Loans may be prepaid in full or in part at any time without penalty upon
written notice to the Administrative Agent on the date of such prepayment. Each
notice of prepayment shall be irrevocable, and all amounts prepaid on the Loans
shall be applied first to interest and fees and other amounts due and payable
hereunder as of such date, and then to principal. Partial prepayments shall be
in a principal amount of not less than $1,000,000 and in an integral multiple of
$1,000,000. Upon receipt of any notice of prepayment, the Administrative Agent
shall promptly notify each Bank.
Section 2.7 Repayment.
(a) Loans Exceeding Commitment. If, at any time, the amount
of the Loans then outstanding shall exceed the Commitment, the Borrower shall on
such date make a repayment of the principal amount of the Loans in an amount
equal to such excess.
(b) Maturity. In addition to the foregoing, a final payment
of all Obligations then outstanding shall be due and payable on the Maturity
Date.
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Section 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in accordance with the
terms and provisions set forth herein, and shall be evidenced by the Notes. One
of the Notes shall be payable to the order of each Bank in accordance with the
respective Commitment Ratio of the Bank. The Notes shall be issued by the
Borrower to the Banks and shall be duly executed and delivered by an Authorized
Signatory.
(b) Each Bank may open and maintain on its books in the name
of the Borrower a loan account with respect to the Loans and interest thereon.
Each Bank which opens such loan account or accounts shall debit the applicable
loan account for the principal amount of each Advance made by it and accrued
interest thereon, and shall credit such loan account for each payment on account
of principal of or interest on the Loans. The records of each Bank with respect
to the loan accounts maintained by it shall be, absent manifest error, prima
facie evidence of the Loans and accrued interest thereon, but the failure to
maintain such records shall not impair the obligation of the Borrower to repay
Indebtedness hereunder.
(c) Each Advance from the Banks under this Agreement shall
be made pro rata on the basis of their respective Commitment Ratios.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower
on account of the principal of or interest on the Loans, fees, and any other
amount owed to the Banks or the Administrative Agent under this Agreement, the
Notes, or the other Loan Documents shall be made not later than 1:00 p.m.
(Eastern time) on the date specified for payment under this Agreement or such
other Loan Document to the Administrative Agent to an account designated by the
Administrative Agent for the account of the Banks or the Administrative Agent,
as the case may be, in lawful money of the United States of America in
immediately available funds. The failure of the Borrower to make any such
payment by such time shall not constitute a Default hereunder, provided that
such payment is received by the Administrative Agent in immediately available
funds by 4:00 p.m. (Eastern time) on such due date, but any such payment made
after 1:00 p.m. (Eastern time) 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, unless the Administrative Agent, in fact, was able to
remit to such Bank its pro rata share of such payment by 4:00 p.m. (Eastern
time) on such due date. In the case of a payment for the account of a Bank, the
Administrative Agent will promptly thereafter distribute the amount so received
in like funds to such Bank. If the Administrative Agent shall not have received
any payment from the Borrower as and when due, the Administrative Agent will
promptly notify the Banks accordingly.
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(b) If any payment under this Agreement or any of the Notes
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next day which is a Business Day, and such extension of time
shall in such case be included in computing interest and fees, if any, in
connection with such payment.
(c) So long as the applicable Bank has complied with Section
2.13 hereof, the Borrower agrees to pay principal, interest, fees and all other
amounts due hereunder, under the Notes or under any other Loan Document without
set-off or counterclaim or any deduction whatsoever and free and clear of all
taxes, levies and withholding. So long as the applicable Bank has complied with
Section 2.13 hereof, if the Borrower is required by Applicable Law to deduct any
taxes from or in respect of any sum payable to the such Bank hereunder, under
any Note or under any other Loan Document: (i) the sum payable hereunder or
thereunder, as applicable, shall be increased to the extent necessary to provide
that, after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.9(c)), the Administrative Agent or
such Bank, as applicable, receives an amount equal to the sum it would have
received had no such deductions been made; (ii) the Borrower shall make such
deductions from such sums payable hereunder or thereunder, as applicable, and
pay the amount so deducted to the relevant taxing authority as required by
Applicable Law; and (iii) the Borrower shall provide the Administrative Agent or
such Bank, as applicable, with evidence satisfactory to the Administrative Agent
or such Bank, as applicable, that such deducted amounts have been paid to the
relevant taxing authority. Before making any such deductions, such Bank shall
designate a different lending office and may take such alternative courses of
action if such designation or alternative courses of action will avoid the need
for such deductions and will not in the good faith judgment of such Bank be
otherwise disadvantageous to such Bank.
Section 2.10 Reimbursement.
(a) Whenever any Bank shall actually incur any losses or
reasonable out-of-pocket expenses (other than losses associated with a reduction
in the interest rate margin) in connection with (i) failure by the Borrower to
borrow any LIBOR Advance after having given notice of its intention to borrow in
accordance with Section 2.2 hereof (whether by reason of the election of the
Borrower not to proceed or the non-fulfillment of any of the conditions set
forth in Article 3) other than a failure to borrow resulting from an
unavailability which occurs after notice from the Administrative Agent to the
Borrower pursuant to Section 10.1 or 10.2 hereof, or (ii) prepayment of any
LIBOR Advance in whole or in part (including a prepayment pursuant to Sections
10.2 and 10.3(b) hereof), the Borrower agrees to pay to such Bank, upon the
earlier of such Bank's demand or the Maturity Date, an amount sufficient to
compensate such Bank for all such losses and reasonable out-of-pocket expenses.
Such Bank's good faith determination of the amount of such losses and reasonable
out-of-pocket expenses, absent manifest error, shall be binding and conclusive.
Upon request of the Borrower, any Bank seeking reimbursement under this
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Section 2.10 shall provide a certificate setting forth the amount to be paid to
it by the Borrower hereunder and calculations therefor.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, but without duplication,
expenses incurred by any Bank or any participant of such Bank permitted
hereunder in connection with the re-employment of funds prepaid, paid, repaid,
not borrowed, not converted or not paid, as the case may be, and will be payable
whether the Maturity Date is changed by virtue of an amendment hereto (unless
such amendment expressly waives such payment) or as a result of acceleration of
the Obligations and whether such Bank has a "matched funding" of such Advance.
2.11 Application of Proceeds. Payments made to the Administrative Agent
or the Banks, or any of them, or otherwise received by the Administrative Agent
or the Banks, or any of them (from realization on collateral for the Obligations
or otherwise), shall be distributed as follows: First, to the reasonable costs
and expenses, if any, incurred by the Administrative Agent or the Banks, or any
of them, to the extent permitted by Section 11.2 hereof in the collection of
such amounts under this Agreement or any of the other Loan Documents, including,
without limitation, any reasonable costs incurred in connection with the sale or
disposition of any collateral for the Obligations; Second, pro rata among the
Administrative Agent and the Banks based on the total amount of fees then due
and payable hereunder or under any other Loan Document to any Administrative
Agent's fees then due and payable hereunder or under any other Loan Document and
to such fees then due and payable to the Banks; Third, pro rata among the Banks
based on the outstanding principal amount of the Loans outstanding immediately
prior to such payment, to any unpaid interest which may have accrued on the
Loans; Fourth, pro rata among the Banks based on the outstanding principal
amount of the Loans outstanding immediately prior to such payment, to any unpaid
principal of the Loans; Fifth, to any other Obligations not otherwise referred
to in this Section 2.11 until all such Obligations are paid in full; Sixth, to
damages incurred by the Administrative Agent or the Banks, or any of them, by
reason of any breach hereof or of any other Loan Documents; and Seventh, upon
satisfaction in full of all Obligations, to the Borrower or as otherwise
required by law. If any Bank shall obtain any payment (whether involuntary or
otherwise) on account of the Loans made by it in excess of its ratable share of
the Loans then outstanding and such Bank's share of any expenses, fees and other
items due and payable to it hereunder, such Bank shall forthwith purchase a
participation in the Loans from the other Banks as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the purchase
price to the extent of such recovery. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation so long as the Borrower's
Obligations are not increased.
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2.12 Capital Adequacy. In the event that a Regulatory Change does or
shall have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, ten (10) days
after submission by such Bank to the Borrower (with a copy to the Agent) of a
written request therefor, together with a certificate (which shall be conclusive
absent manifest error), setting forth the calculations evidencing such requested
additional amount, and the law or regulation with respect thereto and certifying
that such request is consistent with such Bank's treatment of other similar
customers having similar provisions generally in their agreements with such
Bank, and that such request is being made on the basis of a reasonable
allocation of the costs resulting from such law or regulation, the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank for such reduction. Allocations shall not be deemed reasonable unless made
ratably, to the extent practicable, to all affected assets, commitments,
activities or other relevant aspects of such Bank's business, whether or not the
Bank is entitled to compensation with respect thereto. Notwithstanding the
foregoing, the Borrower shall only be obligated to compensate such Bank for any
amount under this subsection arising or occurring during (i) in the case of each
such request for compensation, any time or period commencing not more than sixty
(60) days prior to the date on which such Bank submits such request and (ii) any
other time or period during which, because of the unannounced retroactive
application of such law, regulation, interpretation, request or directive, such
Bank could not have known that the resulting reduction in return might arise.
Each Bank will notify the Borrower that it is entitled to compensation pursuant
to this subsection as promptly as practicable after it determines to request
such compensation; provided, however, that the failure to provide such notice
shall not restrict the ability of such Bank to be reimbursed under this Section
2.12 except as provided in clause (i) above.
2.13 Bank Tax Forms. On or prior to the Agreement Date, each Bank which
is organized in a jurisdiction other than the United States shall provide each
of the Administrative Agent and the Borrower with properly executed originals of
Forms 4224 or 1001 (or any successor form) prescribed by the Internal Revenue
Service or other documents satisfactory to the Borrower and the Administrative
Agent, and each such Bank shall provide properly executed Internal Revenue
Service Forms W-8 or W-9, as the case may be, certifying (i) as to such Bank's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to such Bank hereunder and under
the Notes or (ii) that all payments to be made to such Bank hereunder and under
the Notes are subject to such taxes at a rate reduced to zero by an applicable
tax treaty. Each such Bank agrees to provide the Administrative Agent and the
Borrower with new forms prescribed by the Internal Revenue Service upon the
expiration or obsolescence of any previously delivered form, or after the
occurrence of any event requiring a change in the most recent forms delivered by
it to the Administrative Agent and the Borrower.
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ARTICLE 3 - Conditions Precedent.
Section 3.1 Conditions Precedent to Effectiveness of Agreement and
Initial Advance. The obligation of the Banks to undertake the Commitment and to
make the initial Advance hereunder is subject to the prior fulfillment of each
of the following conditions:
(a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Administrative Agent:
(i) duly executed Notes;
(ii) duly executed Subsidiary Guaranty;
(iii) evidence satisfactory to the Administrative Agent that
the Borrower and its Subsidiaries have a Transponder Lease Agreement
providing for unqualified access to a non-preemptable transponder;
(iv) the loan certificate of the Borrower dated as of the
Agreement Date, including a certificate of incumbency with respect to
the signature of each Authorized Signatory, which loan certificate shall
be in substantially the form of Exhibit F attached hereto, together with
appropriate attachments thereto;
(v) a loan certificate from each of the Restricted
Subsidiaries dated as of the Agreement Date, in substantially the form
attached hereto as Exhibit G, including a certificate of incumbency with
respect to each Authorized Signatory of such Person;
(vi) legal opinion of (i) Xxxxxxx & Xxxxxx L.L.C., special
counsel to the Borrower and its Subsidiaries, and (ii) Xxxxxxx X. Xxxxx,
Esq., in-house counsel to the Borrower and its Subsidiaries, each dated
as of the Agreement Date addressed to each Bank and the Administrative
Agent and dated as of the Agreement Date substantially in the form of
Exhibits H-1 and H-2, respectively, attached hereto;
(vii) receipt by the Administrative Agent and the Banks of all
appropriate fees to be paid to them by the Borrower on or prior to the
Agreement Date;
(viii) any required consents to the closing of this Agreement
or to the execution, delivery and performance of this Agreement and the
other Loan Documents, each of which shall be in form and substance
satisfactory to the Administrative Agent and the Banks;
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(ix) duly executed Fee Agreements;
(x) duly executed Leverage Ratio Certificate in
substantially the form of Exhibit I attached hereto; and
(xi) all such other documents as the Administrative Agent may
reasonably request, certified by an appropriate governmental official or
Authorized Signatory if so requested.
(b) The Administrative Agent shall have received evidence
satisfactory to it that all material Necessary Authorizations, including all
necessary consents to the closing of this Agreement, have been obtained or made,
are in full force and effect and are not subject to any pending or, to the
knowledge of the Borrower, threatened reversal or cancellation, and the
Administrative Agent shall have received a certificate of an Authorized
Signatory so stating.
(c) The Borrower shall certify to the Administrative Agent and the
Banks that each of the representations and warranties in Article 4 hereof are
true and correct in all material respects as of the Agreement Date, that no
Default then exists or is continuing.
(d) No material adverse change from the financial condition and
operations as reflected in the pro forma financial statements as of June 30,
1997 and the unaudited financial statements as of September 30, 1997 of the
Borrower.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Banks to make each Advance, including the initial Advance hereunder, other than
an Advance which does not increase the principal amount outstanding hereunder,
is subject to the fulfillment of each of the following conditions immediately
prior to or contemporaneously with such Advance:
(a) All of the representations and warranties of the Borrower under
this Agreement and the other Loan Documents, which, in accordance with Section
4.2 hereof, are made at and as of the time of such Advance, shall be true and
correct at such time, both before and after giving effect to the application of
the proceeds of the Advance;
(b) There shall not exist, on the date of the making of the Advance
and after giving effect thereto, a Default hereunder and the Administrative
Agent and each of the Banks shall have received a Request for Advance so
certifying;
(c) The Administrative Agent and each of the Banks shall have
received all such other certificates, reports, statements, opinions of counsel
or other documents as any of them may reasonably request; and
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(d) With respect to any Advance relating to any Acquisition or the
formation of any Subsidiary which is permitted hereunder, the Administrative
Agent and the Banks shall have received such documents and instruments relating
to such Acquisition or formation of a new Subsidiary as are described in Section
5.14 hereof or otherwise required herein.
The acceptance of the proceeds of any Loans which would increase the aggregate
Dollar amount of the Loans outstanding shall be deemed to be a representation
and warranty by the Borrower as to compliance with this Section 3.2 on the date
any such Loan is made.
ARTICLE 4 - Representations and Warranties.
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents, and warrants that:
(a) Organization; Power; Qualification.
(i) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware. The Borrower has the power and
authority to own or lease and operate its properties and to carry on its
business as now being and hereafter proposed to be conducted, and is duly
qualified and authorized to do business, in each jurisdiction in which such
qualification is necessary in view of the character of its properties or the
nature of its business requires such qualification or authorization, except for
qualifications and authorizations, the lack of which, singly or in the
aggregate, has not had and is not likely to have a Materially Adverse Effect.
(ii) Each Restricted Subsidiary of the Borrower is a
corporation, partnership or a limited liability company duly organized and
validly existing under the laws of its state of formation. Each Restricted
Subsidiary of the Borrower has the power and the authority to own or lease and
operate its properties and to carry on its business as now being and hereafter
proposed to be conducted, and is duly qualified and authorized to do business in
each jurisdiction in which such qualification is necessary in view of the
character of its properties or the nature of its business requires such
qualification or authorization, except for qualifications and authorizations,
the lack of which, singly or in the aggregate, has not had and is not likely to
have a Materially Adverse Effect.
(b) Authorization; Enforceability. The Borrower has the necessary
power and has taken all necessary action to authorize it to execute, deliver,
and perform this Agreement and each of the other Loan Documents to which it is a
party in accordance with the terms thereof and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by the Borrower, and is, and each of the other Loan Documents to which
the Borrower is a party is, a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to limitations on
enforceability
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under bankruptcy, reorganization, insolvency and similar laws affecting
creditors' rights generally and limitations on the availability of the remedy of
specific performance imposed by the application of general equity principles.
(c) Subsidiaries Authorization; Enforceability. The Subsidiaries and
the Borrower's direct and indirect ownership thereof as of the Agreement Date
are as set forth on Schedule 3 attached hereto, and to the extent such
Subsidiaries are Restricted Subsidiaries and are corporations, the Borrower has
the unrestricted right to vote the issued and outstanding shares of the
Subsidiaries shown thereon and such shares of such Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable. Each Restricted
Subsidiary has the necessary power and has taken all necessary action to
authorize it to execute, deliver and perform each of the Loan Documents to which
it is a party in accordance with their respective terms and to consummate the
transactions contemplated by this Agreement and by such Loan Documents. Each of
the Loan Documents to which any Restricted Subsidiary is party is a legal, valid
and binding obligation of such Restricted Subsidiary enforceable against such
Restricted Subsidiary in accordance with its terms, subject, to limitations on
enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors' rights generally and limitations on the availability of the
remedy of specific performance imposed by the application of general equity
principles. The Borrower's ownership interest in each of the Restricted
Subsidiaries represents a direct or indirect controlling interest of such
Restricted Subsidiary for purposes of directing or causing the direction of the
management and policies of each Restricted Subsidiary.
(d) Compliance with Laws, Other Loan Documents, and Contemplated
Transactions. The execution, delivery, and performance by the Borrower and its
Restricted Subsidiaries of this Agreement and each of the other Loan Documents
in accordance with the terms thereof and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any Applicable
Law, (ii) result in a breach of, or constitute a default under, the certificate
or articles of incorporation or by-laws or partnership agreements, as the case
may be, as amended, of the Borrower or of any Restricted Subsidiary of the
Borrower or under any indenture, agreement, or other instrument to which the
Borrower or any of its Restricted Subsidiaries is a party or by any of them or
any of their respective properties may be bound, or (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Borrower or any of its Restricted
Subsidiaries except Permitted Liens; except where such violations, breaches,
defaults or Liens, if any, singly or in the aggregate, has not had and is not
likely to have a Materially Adverse Effect.
(e) Necessary Authorizations. No approval or consent of, or filing
or registration with, any federal, state or local commission or other regulatory
authority is required in connection with the execution, delivery and performance
by the Borrower or any of its Restricted Subsidiaries of such of this Agreement,
the Notes, and the other Loan Documents to which any of them is a party.
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(f) Title to Properties. The Borrower has good, marketable, and
legal title to, or a valid leasehold interest in, all of its respective material
tangible properties and assets free and clear of all Liens, except Permitted
Liens. Except for financing statements evidencing Permitted Liens, no financing
statement under the Uniform Commercial Code as in effect in any jurisdiction and
no other filing which names the Borrower or any of the Restricted Subsidiaries
as debtor or which covers or purports to cover any of the assets of the Borrower
or any of its Restricted Subsidiaries is currently effective and on file in any
state or other jurisdiction, and neither the Borrower nor any of its Restricted
Subsidiaries has signed any such financing statement or filing or any security
agreement authorizing any secured party thereunder to file any such financing
statement or filing.
(g) Collective Bargaining. There are no collective bargaining
agreements between the Borrower or any of its Restricted Subsidiaries and any
trade or labor union or other employee collective bargaining agent.
(h) Taxes. All federal, state, and other tax returns of the Borrower
and each Subsidiary of the Borrower required by law to be filed have been duly
filed, and all federal, state, and other taxes, assessments, and other
governmental charges or levies upon the Borrower or any of the Subsidiaries of
the Borrower or any of their respective properties, income, profits, and assets,
which are due and payable, have been paid, except any such tax payment (i) of
which the Borrower or any Subsidiary of the Borrower is diligently contesting in
good faith by appropriate proceedings, (ii) for which adequate reserves as
required by GAAP have been provided on the books of the Borrower or any
Subsidiary of the Borrower and (iii) as to which neither any Lien other than a
Permitted Lien has attached nor any foreclosure, distraint, sale, or similar
proceedings have been commenced. The charges, accruals, and reserves on the
books of the Borrower or any of its Subsidiaries in respect of taxes are, in the
reasonable judgment of the Borrower, adequate.
(i) Financial Statements. The Borrower has furnished, or caused to
be furnished, to the Banks unaudited pro forma financial statements for the
Borrower and its Subsidiaries which present fairly in accordance with GAAP the
financial position of the Borrower and its Subsidiaries as at December 1, 1996,
and the results of operations for the periods then ended. Except as disclosed in
the financial statements most recently furnished to the Banks pursuant to
Section 6.2 hereof (or until such financial statements are delivered hereunder,
the audited financial statement referred to in the preceding sentence), none of
the Borrower or any of its Subsidiaries had any material liabilities, contingent
or otherwise, and there are no material unrealized or anticipated losses of the
Borrower which have not heretofore been disclosed in writing to the Banks.
(j) Licenses, etc. The material Licenses have been duly issued and
are in full force and effect. The Borrower and its Restricted Subsidiaries are
in compliance in all material respects with all of the provisions thereof. The
Borrower and its Restricted
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Subsidiaries have secured all material Necessary Authorizations and all such
Necessary Authorizations are in full force and effect. Neither any material
License nor any material Necessary Authorization is the subject of any pending
or, to the best of the Borrower's knowledge, threatened revocation.
(k) No Adverse Change. There has occurred no event since June 30,
1997 which has or could reasonably be expected to have a Materially Adverse
Effect.
(l) Investments and Guaranties. The Borrower has not made material
investments, advances to, or guaranties of, the obligations of any Person,
except as reflected in the financial statements referred to in Section 4.1(i)
above or as otherwise permitted by the terms of this Agreement.
(m) Liabilities, Litigation, etc. Except for liabilities incurred in
the normal course of business, neither the Borrower nor any of its Restricted
Subsidiaries has any material (individually or in the aggregate) liabilities,
direct or contingent, except as disclosed or referred to in the financial
statements referred to in Section 4.1(i) above. Except as set forth on Schedule
4 attached hereto, there is no material litigation, legal or administrative
proceeding, investigation, or other action of any nature pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower, any of
its Restricted Subsidiaries or any of its properties which involves the
possibility of any material judgment or liability not fully covered by
insurance.
(n) ERISA. The Borrower and each ERISA Affiliate and each of their
respective Plans are in substantial compliance with ERISA and the Code and
neither the Borrower nor any of its ERISA Affiliates has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. The Borrower and each of its ERISA Affiliates have
complied with all requirements of ERISA Sections 601 through 608 and Code
Section 4980B in all material respects. The Borrower has incurred no material
liability to the Pension Benefit Guaranty Corporation in connection with any
Plan. The assets of each Plan which is subject to Title IV of ERISA are
sufficient to provide the benefits under such Plan, the payment of which the
Pension Benefit Guaranty Corporation would guarantee if such Plan were
terminated, and such assets are also sufficient to provide all other "benefit
liabilities" (as defined in ERISA Section 4001(a)(16)) due under the plan upon
termination. No Reportable Event has occurred and is continuing with respect to
any Plan which could reasonably be likely to have a Materially Adverse Effect.
No Plan or trust created thereunder, or party in interest (as defined in Section
3(14) of ERISA, or any fiduciary (as defined in Section 3(21) of ERISA), has
engaged in a "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject the Borrower or any ERISA
Affiliate to a material penalty or tax on "prohibited transactions" imposed by
Section 502 of ERISA or Section 4975 of the Code. Neither the Borrower nor any
of its ERISA Affiliates is a participant in or is obligated to make any payment
to a Multiemployer Plan which has or is expected to have any withdrawal
liability if such Plan were terminated or
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if such Person were to withdraw from such Plan which could reasonably be likely
to have a Materially Adverse Effect.
(o) Patents, Trademarks, etc. The Borrower and each of its
Restricted Subsidiaries owns, possesses or has the right to use all licenses and
rights to all patents, Trademarks, trademark rights, trade names, trade name
rights, service marks, and copyrights, and rights with respect thereto,
necessary to conduct its business in all material respects as now conducted,
without known conflict with any patent, Trademark, trade name, service xxxx,
license or copyright of any other Person, and in each case, with respect to
patents, Trademarks, trademark rights, trade names, trade name and copyrights
and licenses with respect thereto owned by Borrower or its Restricted
Subsidiaries, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option. All such licenses and
rights with respect to patents, Trademarks, trademark rights, trade names, trade
name rights, service marks and copyrights are in full force and effect, and to
the extent applicable, the Borrower and its Restricted Subsidiaries are in full
compliance in all material respects with all of the provisions thereof. No such
patent, Trademark, trademark rights, trade names, trade name rights, service
marks, copyrights or licenses is subject to any pending or, to the best of the
Borrower's knowledge, threatened attack or revocation. Neither the Borrower nor
any of its Restricted Subsidiaries owns any registered copyrights or patents
(other than general business licenses and permits).
(p) Compliance with Law; Absence of Default. The Borrower and each
of its Restricted Subsidiaries is in compliance with all Applicable Laws, and no
event has occurred or has failed to occur which has not been remedied or waived,
the occurrence or non-occurrence of which constitutes (i) a Default or (ii) a
default by the Borrower or any of its Restricted Subsidiaries under any other
indenture, agreement, or other instrument, or any judgment, decree, or order to
which the Borrower or any of its Restricted Subsidiaries is a party or by which
the Borrower or any of its Restricted Subsidiaries or any of its or their
properties may be bound, which default could reasonably be considered to have a
Materially Adverse Effect.
(q) Compliance with Regulations G, U, and X. The Borrower is neither
engaged principally in, nor as one of its important activities in the business
of, extending credit for the purpose of purchasing or carrying any "margin
security" or "margin stock" as defined in Regulations G, U, and X (12 C.F.R.
Parts 221 and 224) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). None of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
stock or for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
said Regulations G, U, and X. Neither the Borrower nor any bank acting on its
behalf has taken or will take any action which might cause this Agreement or the
Notes to violate Regulation G, U, or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
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Act of 1934, in each case as now in effect or as the same may hereafter be in
effect. If so requested by the Bank, the Borrower will furnish the Bank with (i)
a statement or statements in conformity with the requirements of Federal Reserve
Forms G-3 and/or U-1 referred to in Regulations G and U of said Board of
Governors and (ii) other documents evidencing its compliance with the margin
regulations, including without limitation an opinion of counsel in form and
substance satisfactory to the Banks. Neither the making of the Loans nor the use
of proceeds thereof will violate, or be inconsistent with, the provisions of
Regulation G, U, or X of said Board of Governors.
(r) Broker's or Finder's Commissions. No broker's or finder's fee or
commission will be payable with respect to the issuance of the Notes, and no
other similar fees or commissions will be payable by the Borrower for any other
services rendered to the Borrower ancillary to the transactions contemplated
herein.
(s) Governmental Regulation. Neither the Borrower nor any of its
Restricted Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authority in connection with the performance,
in accordance with their respective terms, of this Agreement or any other Loan
Document the failure of which to obtain could have a Materially Adverse Effect.
(t) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Subsidiaries and furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or the Banks were, at the time
furnished, true, complete and correct in all material respects to the extent
necessary to give the Administrative Agent and the Banks true and accurate
knowledge of the subject matter.
(u) Payment of Wages. The Borrower and each of its Restricted
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and to the knowledge of the Borrower and each of its
Restricted Subsidiaries, such Persons have paid all minimum and overtime wages
required by law to be paid to their respective employees.
(v) Business. The Borrower's business and the business of its
Restricted Subsidiaries include distributing and acquiring music programming,
distributing and selling such programming to cable and other non-broadcast
delivery systems, and directly related media activities.
(w) Investment Company Act. Neither the Borrower nor any of its
Restricted Subsidiaries is required to register under the provisions of the
Investment Company Act of 1940, as amended, and neither the entering into or
performance by the Borrower and its Restricted Subsidiaries of this Agreement
and the Loan Documents to which they are
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respectively party nor the issuance of the Notes violates any provision of such
Act or requires any consent, approval, or authorization of, or registration
with, the Securities and Exchange Commission, any governmental or public body or
authority pursuant to any of the provisions of such Act.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date and the
date of each Advance hereunder, except to the extent previously fulfilled in
accordance with the terms hereof and to the extent subsequently inapplicable.
All representations and warranties made under this Agreement shall survive, and
not be waived by, the execution hereof by the Banks and the Administrative
Agent, any investigation or inquiry by any Bank or the Administrative Agent, or
the making of any Advance under this Agreement.
ARTICLE 5 - General Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Majority Banks shall
otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and, except as permitted by Section 7.5 hereof, will cause each of its
Restricted Subsidiaries to, (a) preserve and maintain its existence, rights,
licenses, and privileges in its jurisdiction of formation and (b) qualify and
remain qualified and authorized to do business in each jurisdiction in which
such qualification is necessary in view of the character of its properties or
the nature of its business requires such qualification or authorization, except
for qualifications and authorizations, the lack of which, singly or in the
aggregate, has not had and is not likely to have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Restricted Subsidiaries to, (a) engage primarily in
the business described in Section 4.1(w) hereof and related businesses and (b)
comply with the requirements of all Applicable Law, including environmental
laws, the non-compliance with which could have a Materially Adverse Effect.
Section 5.3 Maintenance of Properties. The Borrower will, and will cause
each of its Restricted Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order, and condition all
properties necessary in its business (whether owned or held under lease).
Section 5.4 Accounting Methods and Financial Records. The Borrower will,
and will cause each of its Restricted Subsidiaries to, maintain a system of
accounting established
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and administered in accordance with GAAP, and keep adequate records and books of
account in which complete entries will be made in accordance with GAAP
reflecting all transactions required to be reflected by GAAP and keep accurate
and complete records of their respective properties and assets. The Borrower and
its Restricted Subsidiaries will maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Restricted Subsidiaries to maintain insurance on its assets and properties and
on its operations including, but not limited to, public liability, business
interruption, property and crime, from responsible insurance companies in such
amounts and against such risks as shall be customary for similar businesses. The
Borrower and each of its Restricted Subsidiaries shall at all times maintain
insurance coverage comparable to that in place on the Agreement Date, taking
into account the growth of the Borrower's and the Restricted Subsidiaries'
business and operations after the Agreement Date.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will
cause each of its Restricted Subsidiaries to, pay and discharge all taxes,
assessments, and governmental charges or levies imposed upon it or upon its
incomes or profits or upon any properties belonging to it prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials, and
supplies which, if unpaid, might become a Lien other than a Permitted Lien upon
any of its properties; except that, no such tax, assessment, charge, levy, or
claim need be paid which is being contested in good faith by appropriate
proceedings and for which adequate reserves as required by GAAP shall have been
set aside on the appropriate books, but only so long as such tax, assessment,
charge, levy, or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale, or similar proceedings shall have been
commenced and remain unstayed for a period of thirty (30) days after such
commencement. The Borrower will, and will cause each of its Restricted
Subsidiaries to, timely file all information returns required by federal, state
or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will permit, and will
cause each of its Restricted Subsidiaries to permit, representatives of the
Administrative Agent and each Bank to (a) visit and inspect the properties of
the Borrower and each of its Restricted Subsidiaries at reasonable times during
normal business hours, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers its businesses, assets, liabilities, financial positions, results of
operations, and business prospects relating to the Borrower and each of its
Restricted Subsidiaries. The Borrower and each of its Restricted Subsidiaries
will also permit representatives of the Administrative Agent to discuss with
their respective accountants the Borrower's and its Restricted Subsidiaries'
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.8 Payment of Indebtedness. The Borrower will pay, and will
cause each of its Restricted Subsidiaries to pay, subject to any provisions
therein regarding
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subordination, any and all of their respective Indebtedness when and as the same
becomes due, other than Indebtedness the non-payment of which will not have a
Materially Adverse Effect, and which the Borrower is contesting in good faith
and has established adequate reserves on its books and records.
Section 5.9 Use of Proceeds. The Borrower will use the proceeds of the
Loans solely for (a) Acquisitions permitted hereunder, (b) Capital Expenditures,
(c) refinancing existing Indebtedness owed to Affiliates of the Borrower and (d)
general corporate purposes.
Section 5.10 ERISA. The Borrower shall (a) notify the Banks as soon as
practicable of any Reportable Event for which the Pension Benefit Guaranty
Corporation has not waived the thirty (30) day notice requirement and of any
additional act or condition arising in connection with any such Plan which the
Borrower believes might constitute grounds for the termination thereof by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan and (b)
furnish to the Banks, promptly upon the Banks' request therefor, such additional
information concerning any such Plan as may be reasonably requested by the
Banks.
Section 5.11 Indemnity. The Borrower agrees to indemnify and hold
harmless each Bank and the Administrative Agent, and each of their respective
affiliates, employees, representatives, shareholders, officers and directors
(any of the foregoing shall be an "Indemnitee") from and against any and all
claims, liabilities, losses, damages, actions, reasonable attorneys' fees and
expenses (as such fees and expenses are incurred) and demands by any party
(other than the Borrower), including the costs of investigating and defending
such claims, whether or not the Borrower, any Subsidiary or the Person seeking
indemnification is the prevailing party (a) resulting from any breach or alleged
breach by the Borrower or any Restricted Subsidiary of the Borrower of any
representation or warranty made hereunder; or (b) otherwise arising out of (i)
the Commitment or otherwise under this Agreement, any Loan Document or any
transaction contemplated hereby or thereby, including, without limitation, the
use of the proceeds of Loans hereunder in any fashion by the Borrower or the
performance of their respective obligations under the Loan Documents by the
Borrower, (ii) allegations of any participation by the Banks or the
Administrative Agent, or any of them, in the affairs of the Borrower or any of
its Subsidiaries, or allegations that any of them has any joint liability with
the Borrower or any of its Subsidiaries for any reason, (iii) any claims against
the Banks or the Administrative Agent, or any of them, by any shareholder or
other investor in or lender to the Borrower or any Subsidiary, by any brokers or
finders or investment advisers or investment bankers retained by the Borrower or
by any other third party, arising out of the Commitment or otherwise under this
Agreement or any other Loan Document; or (c) in connection with taxes (not
including federal or state income taxes or other taxes based solely upon the
revenues of such Persons), fees, and other charges payable in connection with
the Loans, or the execution, delivery, and enforcement of this Agreement, the
other Loan Documents, and any amendments thereto or waivers of any of the
provisions thereof; unless the Person seeking indemnification hereunder is
determined in such
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case to have acted with gross negligence or willful misconduct, in any case, by
a final, non-appealable judicial order. The obligations of the Borrower under
this Section 5.11 are in addition to, and shall not otherwise limit, any
liabilities which the Borrower might otherwise have in connection with any
warranties or similar obligations of the Borrower in any other Loan Document.
Section 5.12 Further Assurances. The Borrower will promptly cure, or
cause to be cured, defects in the creation and issuance of the Notes and the
execution and delivery of the Loan Documents (including this Agreement),
resulting from any act or failure to act by the Borrower or any of its
Restricted Subsidiaries or any employee or officer thereof. The Borrower at its
expense will promptly execute and deliver to the Administrative Agent and the
Banks, or cause to be executed and delivered to the Administrative Agent and the
Banks, all such other and further documents, agreements, and instruments in
compliance with or accomplishment of the covenants and agreements of the
Borrower in the Loan Documents, including this Agreement, or to correct any
omissions in the Loan Documents, or more fully to state the obligations set out
herein or in any of the Loan Documents, or to obtain any consents, all as may be
necessary or appropriate in connection therewith as may be reasonably requested.
Section 5.13 Broker's Claims. The Borrower hereby indemnifies and agrees
to hold the Administrative Agent and each of the Banks harmless from and against
any and all losses, liabilities, damages, costs and expenses which may be
suffered or incurred by the Administrative Agent and each of the Banks in
respect of any claim, suit, action or cause of action now or hereafter asserted
by a broker or any Person acting in a similar capacity arising from or in
connection with the execution and delivery of this Agreement or any other Loan
Document or the consummation of the transactions contemplated herein or therein.
Section 5.14 Covenants Regarding Formation of Subsidiaries and
Acquisitions. At the time of (a) any Acquisition by a Restricted Subsidiary of
the Borrower, (b) any Acquisition of a Person which becomes a Restricted
Subsidiary of the Borrower, or (c) the formation of any new Restricted
Subsidiary of the Borrower which is permitted under this Agreement, the Borrower
will, and will cause its Subsidiaries, as appropriate, to (i) provide to the
Administrative Agent an executed Subsidiary Guaranty for such new Restricted
Subsidiary, in substantially the form of Exhibit E attached hereto, which shall
constitute a Loan Document for purposes of this Agreement, as well as a loan
certificate for such new Restricted Subsidiary, substantially in the form of
Exhibit G attached hereto, together with appropriate attachments; and (ii) all
other documentation, including one or more opinions of counsel, reasonably
satisfactory to the Administrative Agent which in its reasonable opinion is
appropriate with respect to such Acquisition or the formation of such Restricted
Subsidiary. Any document, agreement or instrument executed or issued pursuant to
this Section 5.14 shall be a "Loan Document" for purposes of this Agreement.
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ARTICLE 6 - Information Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Banks shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each Bank and to the Administrative Agent at their respective offices:
Section 6.1 Quarterly Financial Statements and Information. Within
seventy-five (75) days after the last day of each of the first three (3)
quarters in each calendar year, the unaudited balance sheet of the Borrower and
its Restricted Subsidiaries as at the end of such quarter, and the related
unaudited statement of operations and related unaudited statement of cash flows
of the Borrower and its Restricted Subsidiaries for the elapsed portion of the
year ended with the last day of such quarter, certified by an Authorized
Signatory of the Borrower to have been prepared in accordance with GAAP and, in
his or her opinion, present fairly in all material respects the financial
position of the Borrower and its Restricted Subsidiaries, as at the end of such
period and the results of operations for such period, and for the elapsed
portion of the year ended with the last day of such period, subject only to
normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate of
No Default. Within one hundred twenty (120) days after the end of each calendar
year the audited consolidated balance sheet of the Borrower and its Restricted
Subsidiaries and the related audited consolidated statements of operations and
related audited consolidated statements of cash flows of the Borrower and its
Restricted Subsidiaries for such calendar year and set forth in comparative form
such figures as at the end of and for the previous calendar year, all in
reasonable detail, and in each case prepared in accordance with GAAP throughout
the periods involved and shall be certified by independent certified public
accountants of recognized national standing which certification shall (a) be
accompanied by the opinion of such accountants without reservation or exception
as to the scope of their audit, (b) state that the examination by such
accountants in connection with the financial statements has been made in
accordance with generally accepted auditing standards, (c) include the opinion
of such accountants that such financial statements have been prepared in
accordance with GAAP, except as otherwise specified in such opinion, (d) include
an expression of their opinion that the computations by the Borrower in
connection with the certificate delivered pursuant to Section 6.3 hereof show
compliance with Sections 7.8, 7.9 and 7.10 hereof; and (e) stating that, in
making the examination necessary for their audit of the financial statements of
the Borrower for such year, nothing came to their attention of a financial or
accounting nature that caused them to believe that the Borrower was not in
compliance with the terms, covenants, provisions or conditions of this
Agreement, or that there shall have occurred any condition or event which would
constitute a Default or, if so, specifying all such instances of non-compliance
and the nature and status thereof.
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Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate
of an Authorized Signatory of the Borrower in form and substance satisfactory
to the Majority Banks:
(a) Setting forth as at the end of such quarter or calendar year, as
the case may be, the arithmetical calculations required to establish (i)
adjustments to the Applicable Margin, as provided for in Section 2.3(f) hereof,
and (ii) whether or not the Borrower was in compliance with the requirements of
Sections 7.8, 7.9 and 7.10 hereof; and
(b) Stating that the signer has reviewed the terms of this Agreement
and that in the course of the performance of his or her duties, he or she would
normally have knowledge of any condition or event which would constitute a
Default and certifying that, to the best of his or her knowledge, no Default has
occurred as at the end of such quarter or year, as the case may be, or, if a
Default has occurred, disclosing each such Default and its nature, when it
occurred, whether it is continuing, and the steps being taken by the Borrower
with respect to such Default.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower by its independent public accountants including,
without limitation, any management report prepared in connection with the annual
financial statements referred to in Section 6.2 hereof.
(b) Within sixty (60) days after the end of each year of the
Borrower, the annual budget for the Borrower for the next succeeding year.
(c) Promptly after the preparation of the same, copies of all
material reports or financial information filed with any governmental agency,
department, bureau, division or other governmental authority or regulatory body
evidencing facts or containing information which could have a Materially Adverse
Effect.
(d) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents, or further information regarding
the business, assets, liabilities, financial position, projections, results of
operations of the Borrower or any of its Subsidiaries as the Administrative
Agent, upon request of the Majority Banks, may reasonably request.
Section 6.5 Notice of Litigation and Other Matters. Prompt notice of
the following events as to which the Borrower has received notice or otherwise
become aware thereof:
(a) The commencement of all proceedings and investigations by or
before any governmental body and all actions and proceedings in any court or
before any arbitrator
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against or in any other way relating adversely and directly to the Borrower or
any of its Restricted Subsidiaries or any of its properties, assets, or
businesses, or which calls into question the validity of this Agreement or any
other Loan Document, which, if determined adversely to the Borrower or such
Subsidiary, could reasonably be expected to have a Materially Adverse Effect.
(b) Any material adverse change with respect to the business,
assets, liabilities, financial position, or results of operations of the
Borrower or any of its Restricted Subsidiaries, other than changes in the
ordinary course of business which have not had and are not likely to have a
Materially Adverse Effect;
(c) Any Default or the occurrence or non-occurrence of any event (i)
which constitutes, or which with the passage of time or giving of notice or both
would constitute a default by the Borrower or any Restricted Subsidiary of the
Borrower under any material agreement other than this Agreement and the other
Loan Documents to which the Borrower or any Restricted Subsidiary of the
Borrower is party or by which any of their respective properties may be bound,
and (ii) which could reasonably be expected to have a Materially Adverse Effect,
giving in each case the details thereof and specifying the action proposed to be
taken with respect thereto;
(d) The occurrence of any Reportable Event for which the PBGC has
not waived the 30-day notice request or a "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Code) that is not
subject to an individual, class, or statutory prohibited transaction exemption
with respect to any Plan of the Borrower or any of its ERISA Affiliates or the
institution or threatened institution by the Pension Benefit Guaranty
Corporation of proceedings under ERISA to terminate or to partially terminate
any such Plan or the commencement or threatened commencement of any litigation
regarding any such Plan or naming it or the trustee of any such Plan with
respect to such Plan if such occurrence would reasonably be expected to result
in a Materially Adverse Effect; and
(e) The occurrence of any event subsequent to the Agreement Date
which, if such event had occurred prior to the Agreement Date, would have
constituted an exception to the representation and warranty in Section 4.1(n) of
this Agreement.
Section 6.6 Loss of Agreements. The Borrower shall notify the
Administrative Agent and the Banks within fifteen (15) days of the occurrence of
any termination of any MSO Agreement or DBS Agreement which results in a
reduction of ten percent (10%) or more of the total revenue of the Borrower and
its Restricted Subsidiaries in any calendar quarter when added to all other
terminations and after giving effect to any additions in such quarter. In
addition, the Borrower shall notify the Administrative Agent and the Banks
promptly upon receipt of any notice that a Transponder Lease Agreement is in
default.
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ARTICLE 7 - Negative Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Banks shall
otherwise give their prior consent in writing:
Section 7.1 Indebtedness for Borrowed Money. The Borrower shall not
create, assume, incur or otherwise become or remain obligated in respect of, or
permit to be outstanding, and the Borrower shall not permit any of its
Restricted Subsidiaries to create, assume, incur or otherwise become or remain
obligated in respect of or permit to be outstanding, any Indebtedness for Money
Borrowed except:
(a) the Obligations;
(b) Indebtedness existing as of the Agreement Date as described on
Schedule 6 attached hereto;
(c) obligations under Interest Hedge Agreements in respect of the
Loans;
(d) Capitalized Lease Obligations, Purchase Money Security Interests
and other Indebtedness for Money Borrowed of the Borrower and the Restricted
Subsidiaries (including, without duplication, Guarantees); provided, that (i) no
Default or Event of Default exists prior to or after giving effect to the
occurrence thereof, and (ii) the aggregate amount of all such other Capitalized
Lease Obligations, Purchase Money Security Interests and Indebtedness for Money
Borrowed does not at the time of the incurrence in the aggregate exceed fifteen
percent (15%) of Maximum Permitted Indebtedness;
(e) Indebtedness owed to the Borrower or any Restricted Subsidiary;
and
(f) Subordinated Affiliate Debt.
Section 7.2 Investments. The Borrower shall not, and shall not permit
any of its Restricted Subsidiaries to, make any loan, advance, or otherwise
acquire evidences of Indebtedness, capital stock or other securities of any
Person, except that the Borrower and its Restricted Subsidiaries may:
(a) purchase or otherwise acquire and own:
(i) marketable, direct obligations of the United States of
America maturing within three hundred sixty-five (365) days of the date
of purchase;
(ii) commercial paper issued by any Bank as of the Agreement
Date or by corporations, which conduct a substantial part of their
business in the United States of
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America, maturing within one hundred eighty (180) days from the date of
the original issue thereof, and carrying the highest rating by Moody's
Investor's Service, Inc. or Standard and Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc.;
(iii) repurchase agreements in such amounts and with such
financial institutions having the highest rating from Moody's Investor's
Service, Inc. or the highest rating from Standard and Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc., as the Borrower may select from
time to time;
(iv) certificates of deposit maturing within three hundred
sixty-five (365) days of the date of purchase which are issued by any
Bank or by a United States national or state bank or foreign bank having
capital, surplus and undivided profits totaling more than $100 million,
and having a rating of Baa or better from Xxxxx'x Investors Service,
Inc.; and
(v) money market mutual funds substantially invested in
obligations of the United States of America.
(b) so long as no Significant Default then exists or would be caused
thereby and the Borrower has not delivered a Cash Management Suspension Notice,
make investments in and loans to a Subsidiary or make advances to any
Unrestricted Subsidiary in the course of its normal cash management practices;
(c) the Borrower and its Restricted Subsidiaries may make other
advances to and investments in the Borrower's Affiliates, provided that the
aggregate amount of all such advances to and investment in the Borrower's
Affiliates does not exceed (i) during calendar year 1997, $19,000,000, (ii)
during calendar year 1998, $25,000,000, and (iii) during calendar year 1999,
$25,000,000, and (iv) each calendar year thereafter, $15,000,000; provided,
further, that amounts not invested in any calendar year may be carried forward
to the immediately succeeding calendar year, with such amounts being deemed to
be the first dollars spent in such succeeding year;
(d) make investments permitted under Section 7.5 hereof; and
(e) the Borrower and its Restricted Subsidiaries may make
investments in Restricted Subsidiaries.
Section 7.3 Limitation on Liens. The Borrower shall not create, assume,
incur or permit to exist or to be created, assumed, incurred or permitted to
exist, directly or indirectly, and the Borrower shall not permit any Restricted
Subsidiary to create, assume, incur or permit to exist, or to be created,
assumed or incurred or permitted to exist, directly or indirectly, any Lien on
any of its properties or assets, whether now owned or hereafter acquired, except
for Permitted Liens.
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Section 7.4 Amendment and Waiver. The Borrower shall not, without the
prior written consent of the Majority Banks, enter into any material amendment
of, or agree to or accept any material waiver of the certificate or articles of
incorporation and bylaws of the Borrower or its Restricted Subsidiaries, in each
case which would have or could reasonably be expected to have an adverse effect
upon the rights and remedies of the Banks hereunder or under any Loan Document.
Section 7.5 Liquidation; Disposition or Acquisition of Assets. The
Borrower shall not and shall not at any time permit any of its Restricted
Subsidiaries to:
(a) (i) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, or (ii) enter into any merger or
consolidation, or (iii) sell, lease, abandon, transfer or otherwise dispose of
any assets (other than contract rights) or business other than Permitted Asset
Sales; provided, however, that (x) the Borrower may merge or consolidate with a
wholly-owned Restricted Subsidiary of the Borrower (so long as the Borrower is
the surviving entity), and (y) wholly-owned Restricted Subsidiaries of the
Borrower may merge or consolidate with other wholly-owned Restricted
Subsidiaries of the Borrower; or
(b) acquire assets, property, stock or business of any other Person,
except so long as no Default exists or would be caused thereby, the Borrower and
its Restricted Subsidiaries may (i) make expenditures or advances (A) in the
ordinary course of the Borrower's and its Restricted Subsidiaries' businesses
and (B) for expansion into related businesses (including Acquisitions by the
Borrower and its Restricted Subsidiaries) and (ii) make Capital Expenditures.
Section 7.6 Limitation on Guaranties. The Borrower shall not, and shall
not permit any of its Restricted Subsidiaries to, at any time Guaranty, or
assume, be obligated with respect to, or permit to be outstanding any Guaranty
of, any obligation of any other Person other than (a) as may be contained in any
Loan Document, (b) obligations under agreements to indemnify Persons who have
issued bid or performance bonds or letters of credit issued in lieu of such
bonds in the ordinary course of business of the Borrower or its Subsidiaries, as
the case may be, securing other performance by the Borrower or any of its
Subsidiaries of activities otherwise permissible hereunder, (c) a guaranty by
endorsement of negotiable instruments for collection in the ordinary course of
business, and (d) Guarantees permitted under Section 7.1(d) hereof.
Section 7.7 Restricted Payments and Purchases. The Borrower shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly declare or make any Restricted Payment or Restricted Purchase,
provided, that so long as no Default then exists or would be caused thereby, (a)
and so long as on such date, the Borrower confirms that its Leverage Ratio is
less than 3.50 to 1.0, before and after giving effect to such Restricted
Payment, the Borrower may make Restricted Payments to its shareholders, and (b)
any
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Subsidiary of the Borrower may make distributions to the Borrower or a
Restricted Subsidiary of the Borrower.
Section 7.8 Leverage Ratio. (a) As of the end of any calendar quarter
and (b) at the time of any Advance increasing the principal amount of the Loans
hereunder (after giving effect to such Advance), the Borrower shall not permit
the ratio of (x) Total Debt to (y) Annualized Operating Cash Flow to exceed the
ratios set forth below during the periods indicated:
Period Ratio
------ -----
Agreement Date through
December 31, 2000 4.50:1
January 1, 2001 through
December 31, 2002 4.00:1
January 1, 2003 and thereafter 3.50:1
Section 7.9 Pro Forma Debt Service Coverage Ratio. (a) As of the end of
any calendar quarter and (b) at the time of any Advance increasing the
Obligations hereunder (after giving effect to such Advance), the Borrower shall
not permit the ratio of (x) Annualized Operating Cash Flow to (y) Pro Forma Debt
Service as of such date, to be less than 1.20:1.
Section 7.10 Interest Coverage Ratio. (a) As of the end of any calendar
quarter and (b) at the time of any Advance increasing the principal amount of
the Loans hereunder (after giving effect to such Advance), the Borrower shall
not permit the ratio of (x) Annualized Operating Cash Flow to (y) its Total
Interest Expense for the same period, to be less than the amounts set forth for
such date in the table below:
Period Ratio
------ -----
Agreement Date through
December 31, 2000 1.75:1
January 1, 2001 and thereafter 2.00:1
Section 7.11 Affiliate Transactions. Except for transactions pursuant to
any Transponder Lease Agreement between the Borrower and an Affiliate,
agreements which are direct cost or direct revenue pass through in nature and
any renewals or extensions of any of the foregoing, the Borrower shall not, and
shall not permit any of its Restricted Subsidiaries to, at any time engage in
any transaction with an Affiliate (other than the Borrower or a
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Restricted Subsidiary of the Borrower), nor make an assignment or other transfer
of any of its assets to any Affiliate (other than the Borrower or a Restricted
Subsidiary of the Borrower), on terms less advantageous than would be the case
if such transaction had been effected with a non-Affiliate.
Section 7.12 ERISA Liabilities. The Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, fail to meet all of the applicable
minimum funding requirements of ERISA and the Code, without regard to any
waivers thereof, and, to the extent that the assets of any of its Plans would be
less than an amount sufficient to provide all accrued benefits payable under
such Plans, shall make the maximum deductible contributions allowable under the
Code. The Borrower shall not, and shall not permit any of its Subsidiaries to,
become a participant in any Multiemployer Plan.
Section 7.13 Limitation on Upstream Dividends by Subsidiaries. The
Borrower shall not permit any of its Restricted Subsidiaries to enter into or
agree, or otherwise become subject, to any agreement, contract or other
arrangement with any Person pursuant to the terms of which (a) such Restricted
Subsidiary is or would be prohibited from declaring or paying any cash dividends
or distributions on any class of its stock or any partnership interests owned
directly or indirectly by the Borrower or from making any other distribution on
account of any class of any such stock or any such partnership interests owned
directly or indirectly by the Borrower (herein referred to as "Upstream
Dividends") or (b) the declaration or payment of Upstream Dividends by a
Restricted Subsidiary to the Borrower or to another Restricted Subsidiary of the
Borrower, on an annual or cumulative basis, is or would be otherwise limited or
restricted.
Section 7.14 TCI Revenue Agreement. The Borrower shall not, and shall
not permit its Subsidiaries to, terminate or make any material amendment to the
TCI Revenue Agreement without the prior written consent of the Majority Banks,
except that the Borrower may enter into amendments or modifications of the TCI
Revenue Agreement provided that the contracted revenues to be received through
the Maturity Date are not less than ninety percent (90%) of the revenues that
would have been derived under the TCI Revenue Agreement as of the Agreement
Date.
Section 7.15 Designation of Restricted and Unrestricted Subsidiary. The
Borrower shall not, and shall not permit its Restricted Subsidiaries to,
designate a Restricted Subsidiary as an Unrestricted Subsidiary or an
Unrestricted Subsidiary as a Restricted Subsidiary except in accordance
herewith. The Borrower and its Subsidiaries are permitted to designate a
Restricted Subsidiary as an Unrestricted Subsidiary (other than DMX, Inc.) and
an Unrestricted Subsidiary as a Restricted Subsidiary by the delivery to the
Administrative Agent and the Banks of a written notice, not later than twenty
(20) Business Days after such designation, certifying that all conditions set
forth in this Section 7.17 are satisfied as of the effective date of such
designation, which certification shall state the effective date of such
designation and shall be signed by a Authorized Signatory, provided that: (a) no
Event of De-
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fault shall exist immediately before or after the effective date of such
designation; (b) after giving effect to such designation, there shall not be a
Materially Adverse Effect, and such designation shall not render the Borrower
and its Restricted Subsidiaries on a consolidated basis insolvent or generally
unable to pay its or their respective debts as they become due; and (c) in the
case of the designation of an Unrestricted Subsidiary as a Restricted
Subsidiary, such notice shall also serve as the certification of the Borrower
that, with respect to such Restricted Subsidiary, the representations and
warranties made in Article 4 hereto are true and correct on and as of the
effective date of such designation to the extent applicable (provided that,
together with such notice, the Borrower may submit a revised Schedules to be
attached hereto to make revisions to such Schedules attached hereto with respect
to the Subsidiary to be so designated as may be necessary for the
representations in Article 4 to be true and correct with respect to such
Subsidiary).
ARTICLE 8 - Default
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
shall prove incorrect or misleading in any material respect when made or deemed
to have been made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of (i) any
interest, fees and other amounts payable hereunder or under the Notes, or any of
them, or under the other Loan Documents and such default shall continue
unremedied for a period of five (5) days or (ii) any principal when due
hereunder or under the Notes, or any of them;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Article 7, Sections 6.1,
6.2 or 6.3 hereof;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured to the Majority Banks' satisfaction within a period of thirty (30)
days from the date of the occurrence of such default;
(e) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or as
otherwise provided in this Section 8.1 of
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this Agreement), which shall not be cured to the Majority Banks' satisfaction
within a period of thirty (30) days from the occurrence of such default;
(f) There shall be entered a decree or order for relief in
respect of any of the Borrower or any Subsidiary of the Borrower under Title 11
of the United States Code, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or similar
official of any of the Borrower or any Subsidiary of the Borrower or of any
substantial part of their respective properties, or ordering the winding-up or
liquidation of the affairs of any of the Borrower and its Subsidiaries or an
involuntary petition shall be filed against any of the Borrower and its
Subsidiaries and a temporary stay entered, and (i) such petition and stay shall
not be diligently contested, or (ii) any such petition and stay shall continue
undismissed for a period of sixty (60) consecutive days;
(g) The Borrower or any Subsidiary of the Borrower shall
file a petition, answer, or consent seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy law or other similar law, or the Borrower or any
Subsidiary of the Borrower shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or other similar official of the Borrower or any Subsidiary of the
Borrower or of any substantial part of their respective properties, or the
Borrower or any Subsidiary of the Borrower shall fail generally to pay its
respective debts as they become due, or the Borrower or any Subsidiary of the
Borrower shall take any action in furtherance of any such action;
(h) A final judgment shall be entered by any court against
any of the Borrower or any Subsidiary of the Borrower for the payment of money
which exceeds $1,000,000, which judgment is not covered by insurance or a
warrant of attachment or execution or similar process shall be issued or levied
against property of any of the Borrower or any Subsidiary of the Borrower which,
together with all other such property of the Borrower and its Subsidiaries
subject to other such process, exceeds in value $1,000,000 in the aggregate, and
if, within thirty (30) days after the entry, issue, or levy thereof, such
judgment, warrant, or process shall not have been paid or discharged or stayed
pending appeal, or if, after the expiration of any such stay, such judgment,
warrant, or process shall not have been paid or discharged;
(i) (i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan; or (ii) a trustee shall be appointed by a United States District Court
to administer any Plan; or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any Plan; or (iii) any of the Borrower and
its ERISA Affiliates shall incur any liability to the Pension Benefit Guaranty
Corporation in connection with the termination of any Plan; or (iv) any Plan or
trust created under any Plan of any of the Borrower and its ERISA Affiliates
shall engage in a
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non-exempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject the Borrower or any ERISA
Affiliate to the tax or penalty on "prohibited transactions" imposed by Section
502 of ERISA or Section 4975 of the Code; and by reason of any or all of the
events described in clauses (i) through (iv), as applicable, the Borrower shall
have waived (and/or is likely to incur) and/or incurred liability in excess of
$1,000,000 in the aggregate;
(j) There shall occur any default under any material
indenture, agreement, or instrument evidencing or relating to Indebtedness for
Money Borrowed of the Borrower or any of its Subsidiaries having an aggregate
principal amount in excess of $10,000,000, which default is not cured or waived
within any applicable cure period which default shall give the holder thereof
the right to accelerate the obligations thereunder;
(k) All or any portion of any Loan Document shall at any
time and for any reason be declared by a court of competent jurisdiction in a
suit with respect to such Loan Document to be null and void, or a proceeding
shall be commenced by any governmental authority involving a legitimate dispute
or by the Borrower or any of its Subsidiaries having jurisdiction over the
Borrower or any of its Subsidiaries seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof);
(l) There shall occur any default by the Borrower under or a
cancellation of, without replacement, any Transponder Lease Agreement which
results (or is reasonably likely to result in) a termination of the Borrower's
access to a transponder thereunder; or
(m) There shall occur any Change of Control.
Section 8.2 Remedies. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in
Sections 8.1(f) or (g), the Administrative Agent, shall at the request, or may
with the consent, of the Majority Banks, (A) terminate the Commitment, and/or
(B) declare the principal of and interest on the Loans and the Notes and all
other Obligations to be forthwith due and payable, without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the Notes to the contrary notwithstanding, or
both.
(b) Upon the occurrence an Event of Default under Sections
8.1(f) or (g) hereof, such principal, interest, and other obligations shall
thereupon and concurrently therewith become due and payable, and the Commitment
shall forthwith terminate, all without any action by the Administrative Agent or
the Banks or the holders of the Notes, all without presentment, demand, protest,
or other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the Notes to the contrary notwithstanding.
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(c) The Administrative Agent, with the concurrence of the
Majority Banks, shall exercise all of the post-default rights granted to it and
to them under the Loan Documents or under Applicable Law.
(d) Upon acceleration of the Notes, as provided in
subsection (a) or (b) of this Section 8.2, the Administrative Agent, upon
request of the Majority Banks shall have the right to the appointment of a
receiver for the properties and assets of the Borrower and its Subsidiaries, and
the Borrower, for itself and on behalf of its Subsidiaries, hereby consents to
such rights and such appointment and hereby waives any objection the Borrower or
any Subsidiary of the Borrower may have thereto or the right to have a bond or
other security posted by the Administrative Agent on behalf of the Banks, in
connection therewith. The rights of the Administrative Agent under this Section
8.2(d) shall be subject to its prior compliance with the Communications Act and
the FCC rules and policies promulgated thereunder to the extent applicable to
the exercise of such rights.
(e) The rights and remedies of the Administrative Agent and
the Banks hereunder shall be cumulative, and not exclusive.
ARTICLE 9 - The Administrative Agent.
Section 9.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes, and hereby agrees that it will require any transferee
of any of its interest in its Loans and in its Notes irrevocably to appoint and
authorize, the Administrative Agent to take such actions as its agent on its
behalf and to exercise such powers hereunder as are delegated by the terms
hereof, together with such powers as are reasonably incidental thereto. Neither
the Administrative Agent nor any of its directors, officers, employees, or
agents shall be liable for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct as determined by a final non-appealable
judicial order of a court of competent jurisdiction.
Section 9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under the Loan Documents by or through agents or attorneys
selected by it using reasonable care and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible to any Bank for the negligence or misconduct of any agents or
attorneys selected by it with reasonable care.
Section 9.3 Interest Holders. The Administrative Agent may treat each
Bank, or the Person designated in the last notice filed with the Administrative
Agent under this Section 9.3, as the holder of all of the interests of such Bank
in its Loans and in its Notes until written notice of transfer, signed by such
Bank (or the Person designated in the last notice filed with the Administrative
Agent) and by the Person designated in such written
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notice of transfer, substantially in the form of Exhibit A attached hereto or in
another form and substance satisfactory to the Administrative Agent, shall have
been filed with the Administrative Agent.
Section 9.4 Consultation with Counsel. The Administrative Agent may
consult with legal counsel selected by it and shall not be liable for any action
taken or suffered by it in good faith in reliance thereon.
Section 9.5 Documents. The Administrative Agent shall not be under any
duty to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Note, or any instrument, document, or
communication furnished pursuant hereto or in connection herewith, and the
Administrative Agent shall be entitled to assume that they are valid, effective,
and genuine, have been signed or sent by the proper parties, and are what they
purport to be.
Section 9.6 Agents and Affiliates. With respect to the Commitment and
the Loans, the Bank which is an Affiliate of the Administrative Agent shall have
the same rights and powers hereunder as any other Bank, and the Administrative
Agent and its other affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Affiliates of,
or Persons doing business with, the Borrower, as if it were not affiliated with
the Administrative Agent and without any obligation to account therefor.
Section 9.7 Responsibility of the Agent. The duties and obligations of
the Administrative Agent under this Agreement are only those expressly set forth
in this Agreement. The Administrative Agent shall be entitled to assume that no
Default or Event of Default has occurred and is continuing unless it has actual
knowledge, or has been notified by the Borrower, of such fact, or has been
notified by a Bank in writing that such Bank considers that a Default or an
Event of Default has occurred and is continuing, and such Bank shall specify in
detail the nature thereof. The Administrative Agent shall not be liable
hereunder for any action taken or omitted to be taken except for its own gross
negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court of competent jurisdiction. The Administrative Agent
shall provide each Bank with copies of such documents received from the Borrower
as such Bank may reasonably request.
Section 9.8 Action by Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent shall have been instructed
by the Majority Banks to exercise or refrain from exercising such rights or to
take or refrain from taking such action, provided that the Administrative Agent
shall not exercise any rights under Section 8.2(a) of this Agreement without the
request of the
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Majority Banks unless time is of the essence, in which case, such action can be
taken. The Administrative Agent shall incur no liability under or in respect of
this Agreement with respect to anything which it may do or refrain from doing in
the reasonable exercise of its judgment or which may seem to it to be necessary
or desirable in the circumstances, except for its gross negligence or willful
misconduct as determined by a final, non-appealable judicial order of a court of
competent jurisdiction.
(b) The Administrative Agent shall not be liable to the
Banks or to any Bank in acting or refraining from acting under this Agreement in
accordance with the instructions of the Majority Banks, and any action taken or
failure to act pursuant to such instructions shall be binding on all Banks. The
Administrative Agent shall not be obligated to take any action which is contrary
to law or which would in its reasonable opinion subject it to liability.
Section 9.9 Notice of Default. In the event that the Administrative
Agent or any Bank shall acquire actual knowledge, or shall have been notified in
writing, of any Default, the Administrative Agent or such Bank shall promptly
notify the Banks and the Administrative Agent (provided failure to give such
notice shall not result in any liability on the part of such Bank or
Administrative Agent), and the Administrative Agent shall take such action and
assert such rights under this Agreement as the Majority Banks shall request in
writing, and the Administrative Agent shall not be subject to any liability by
reason of its acting pursuant to any such request. If the Majority Banks shall
fail to request the Administrative Agent to take action or to assert rights
under this Agreement in respect of any Default or Event of Default within ten
(10) days after their receipt of the notice of any Default or Event of Default
from the Administrative Agent, or shall request inconsistent action with respect
to such Default or Event of Default, the Administrative Agent may, but shall not
be required to, take such action and assert such rights (other than rights under
Article 8 hereof) as it deems in its discretion to be advisable for the
protection of the Banks, except that, if the Majority Banks have instructed the
Administrative Agent not to take such action or assert such right, in no event
shall the Administrative Agent act contrary to such instructions unless time is
of the essence, in which case, the Administrative Agent may act in accordance
with its reasonable discretion.
Section 9.10 Responsibility Disclaimed. The Administrative Agent shall
not have any liability or responsibility whatsoever in its capacity as
Administrative Agent:
(a) To the Borrower or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any Bank
or Banks of any of its or their obligations under this Agreement;
(b) To any Bank or Banks, as a consequence of any failure or
delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this
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Agreement or the Notes or any other Loan Document (ii) any Subsidiary or any
other obligor under any other Loan Document;
(c) To any Bank or Banks for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency of
this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
Section 9.11 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including fees and expenses of
experts, agents, consultants, and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Loan Document, or any other document contemplated by this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement,
any other Loan Document, or any other document contemplated by this Agreement,
except that no Bank shall be liable to the Administrative Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent as determined by a
final, non-appealable judicial order of a court of competent jurisdiction. The
provisions of this Section 9.11 shall survive the termination of this Agreement.
Section 9.12 Credit Decision. Each Bank represents and warrants to each
other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and
to make Advances it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrower and
that it has made an independent credit judgment, and that it has not relied upon
information provided by the Administrative Agent; and
(b) So long as any portion of the Loans remains outstanding,
it will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower.
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Section 9.13 Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving written notice thereof to
the Banks and the Borrower and may be removed at any time for cause by the
Majority Banks. Upon any such resignation or removal, the Majority Banks shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Majority Banks'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent
which shall be any Bank or a commercial bank organized under the laws of the
United States of America or any political subdivision thereof which has combined
capital and reserves in excess of $250,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties, and obligations of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Section 9.13 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent.
Section 9.14 Syndication Agents and Co-Agents. None of the Syndication
Agents or Co-Agents shall have any duties or obligations under this Agreement or
the other Loan Documents in their capacities as Syndication Agents and
Co-Agents.
ARTICLE 10 - Change in Circumstances Affecting LIBOR Advances.
Section 10.1 LIBOR Basis Determination Inadequate. Notwithstanding
anything contained herein which may be construed to the contrary, if with
respect to any proposed LIBOR Advance for any Interest Period, the
Administrative Agent determines after consultation with the Banks that deposits
in dollars (in the applicable amount) are not being offered to each of the Banks
in the relevant market for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such situation no longer exist, the obligations of the Banks to make such types
of LIBOR Advances shall be suspended.
Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law, or any change in
interpretation or administration thereof by any governmental authority, central
bank, or
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comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank with any request or directive (whether or not having the
force of law) of any such authority, central bank, or comparable agency, shall
make it unlawful or impossible for any Bank to make, maintain, or fund its LIBOR
Advances, such Bank shall so notify the Administrative Agent, and the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower. Before giving any notice to the Administrative Agent pursuant to
this Section 10.2, such Bank shall designate a different lending office and
shall take such alternative courses of action if such designation or courses of
action will avoid the need for giving such notice and will not, in the good
faith judgment of such Bank, be otherwise disadvantageous to such Bank. Upon
receipt of such notice, notwithstanding anything contained in Article 2 hereof,
the Borrower shall repay in full the then outstanding principal amount of each
affected LIBOR Advance of such Bank so affected, together with accrued interest
thereon, either (a) on the last day of the then current Interest Period
applicable to such Advance if such Bank may lawfully continue to maintain and
fund such Advance to such day or (b) immediately if such Bank may not lawfully
continue to fund and maintain such Advance to such day. Concurrently with
repaying each affected LIBOR Advance of such Bank, notwithstanding anything
contained in Article 2 hereof, the Borrower shall borrow a Base Rate Advance (or
other LIBOR Advance, if available) from such Bank, and such Bank shall make such
Base Rate Advance in an amount such that the outstanding principal amount of the
Note held by such Bank shall equal the outstanding principal amount of such Note
immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If any Regulatory Change:
(i) Shall subject any Bank to any tax, duty, or
other charge with respect to its share of the Commitment or its
obligation to make LIBOR Advances, or its LIBOR Advances, or shall
change the basis of taxation of payments to any Bank of the principal of
or interest on its LIBOR Advances or in respect of any other amounts due
under this Agreement in respect of its LIBOR Advances or its share of
the Commitment or its obligation to make LIBOR Advances (except for
changes in the rate of tax on the overall net income of such Bank); or
(ii) Shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System and any change in the LIBOR
Reserve Percentage), special deposit, capital adequacy, assessment, or
other requirement or condition against assets of, deposits with or for
the account of, or commitments or credit extended by any Bank, or shall
impose on any Bank or the eurodollar interbank borrowing market any
other condition affecting its obligation to make such LIBOR Advances or
its LIBOR Advances;
and the result of any of the foregoing is to increase the cost to such Bank of
maintaining its share of the Commitment or making or maintaining any such LIBOR
Advances, or to reduce
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the amount of any sum received or receivable by such Bank under this Agreement
or under its Notes with respect thereto, then, on the earlier of demand by such
Bank or the Maturity Date, the Borrower agrees to pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
costs. Each Bank will promptly notify the Borrower and the Administrative Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section 10.3 and will
designate a different lending office and shall take alternative courses of
action if such designation or courses of action will avoid the need for, or
reduce the amount of, such compensation and will not, in the good faith judgment
of such Bank, be otherwise disadvantageous to such Bank.
(b) A certificate of any Bank claiming compensation under
this Section 10.3 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. If any Bank demands compensation under this
Section 10.3, the Borrower may at any time, upon at least five (5) Business
Days' prior notice to such Bank, prepay in full the then outstanding affected
LIBOR Advances of such Bank, together with accrued interest thereon to the date
of prepayment, along with any reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance (or other type of LIBOR Advance, if available) from such Bank,
and such Bank shall make such Base Rate Advance in an amount such that the
outstanding principal amount of the Notes held by such Bank shall equal the
outstanding principal amount of such Notes immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given pursuant
to Section 10.1, 10.2 or 10.3 hereof suspending the obligation of any Bank to
make any type of LIBOR Advance, or requiring LIBOR Advances of any Bank to be
repaid or prepaid, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by such Bank as to the LIBOR Advances shall, at
the option of the Borrower, be made instead as Base Rate Advances or, if
available, the other type of LIBOR Advance, as specified by the Borrower.
ARTICLE 11 - Miscellaneous.
Section 11.1 Notices.
(a) All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been given three (3)
days after deposit in the mail, designated as certified mail, return receipt
requested, post-prepaid, or one (1) day after being entrusted to a reputable
commercial overnight delivery service, or telecopy addressed to the party to
which such notice is directed at its address determined as provided in this
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Section 11.1 All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:
(i) If to the Borrower, to it at:
TCI Music, Inc.
c/o Liberty Media Corporation
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
Telecopy No.: (000) 000-0000
with a copy to:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Treasury Department
Telecopy No.: (000) 000-0000
(ii) If to the Administrative Agent, to it at:
Bank of America National Trust and Savings
Association
000 Xxxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
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(iii) If to the Banks, to them at the addresses set
forth below:
Bank of America National Trust and
Savings Association
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
Royal Bank of Canada
USA Headquarters
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Credit Lyonnais New York Branch
Credit Lyonnais Building
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx
Telecopy No.: (000) 000-0000
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Banque Paribas
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof and failure to provide such copies shall not
affect the validity of the notice given to the primary recipient.
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(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 Expenses. The Borrower agrees to promptly pay:
(a) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement and the other Loan Documents executed on the
Agreement Date, the transactions contemplated hereunder and thereunder, and the
making of the initial Advance hereunder (whether or not such Advance is made)
including, but not limited to, the fees and disbursements of counsel for the
Administrative Agent;
(b) All reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of any waiver, amendment, or consent by the Administrative Agent
and Banks, or any of them, relating to this Agreement or the other Loan
Documents whether or not executed, including, but not limited to, the fees and
disbursements of counsel for the Administrative Agent; and
(c) All reasonable out-of-pocket costs and expenses of
enforcement of rights and collection if an Event of Default occurs in the
payment of the Notes, which in each case shall include fees and out-of-pocket
expenses of counsel (including the allocated cost of in-house counsel) for the
Administrative Agent and each of the Banks, and the reasonable fees and
out-of-pocket expenses of counsel and of any experts, agents, or consultants of
the Administrative Agent and each of the Banks.
Section 11.3 Waivers. The rights and remedies of the Administrative
Agent and the Banks under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Administrative Agent, the Majority
Banks, or the Banks in exercising any right shall operate as a waiver of such
right. The Administrative Agent and the Banks expressly reserve the right to
require strict compliance with the terms of this Agreement in connection with
any funding of a request for an Advance. In the event the Banks decide to fund a
request for an Advance at a time when the Borrower is not in strict compliance
with the terms of this Agreement, such decision by the Banks shall not be deemed
to constitute an undertaking by the Banks to fund any further requests for
Advances or preclude the Banks from exercising any rights available to the Banks
under the Loan Documents or at law or equity. Any waiver or indulgence granted
by the Banks or by the Majority Banks shall not constitute a modification of
this Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Banks at variance with the
terms of the Agreement such as to require further notice by the Banks of the
Banks' intent to require strict adherence to the terms of the Agreement in the
future.
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Section 11.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Administrative Agent and the Banks and any subsequent holder or holders of the
Notes are hereby authorized by the Borrower at any time or from time to time
after the Maturity Date (whether by acceleration or otherwise), without notice
to the Borrower or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate and apply any and all deposits (general or
special, time or demand, including, but not limited to, Indebtedness evidenced
by certificates of deposit, in each case whether matured or unmatured) and any
other Indebtedness at any time held or owing by the Banks or such holder to or
for the credit or the account of the Borrower, against and on account of the
obligations and liabilities of the Borrower, to the Banks or such holder under
this Agreement, the Notes, and any other Loan Document, including, but not
limited to, all Obligations and any other claims of any nature or description
arising out of or connected with this Agreement, the Notes, or any other Loan
Document, irrespective of whether or not (a) the Administrative Agent and the
Banks or the holder of the Notes shall have made any demand hereunder or (b) the
Administrative Agent and the Banks shall have declared the principal of and
interest on the Loans and Notes and other amounts due hereunder to be due and
payable as permitted by Section 8.2 hereof and although said obligations and
liabilities, or any of them, shall be contingent or unmatured. Any sums obtained
by the Administrative Agent, any Bank or any subsequent holder of the Notes
shall be subject to the application of payments provisions of Article 2 hereof.
Upon direction by the Administrative Agent, with the consent of the Majority
Banks, after the Maturity Date (whether by reason of acceleration or otherwise)
each Bank holding deposits of the Borrower shall exercise its set-off rights as
so directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its
rights or obligations hereunder or under the Notes without the prior written
consent of each Bank.
(b) Each of the Banks may at any time enter into assignment
agreements or participations with respect to its interest hereunder and under
the other Loan Documents with one or more other banks or other Persons,
provided, that (i) all assignments (other than assignments described in clause
(ii) hereof) shall be in minimum principal amounts of $5,000,000, (ii) each Bank
may sell assignments and participations of up to one hundred percent (100%) of
its interest hereunder to (A) one or more affiliates of such Bank, (B) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank (no such assignment or participation shall
relieve such Bank from its obligations hereunder) or (C) one or more Banks, and
(iii) all assignments and participations (other than assignments and
participations described in clause (ii) hereof) hereunder shall be subject to
the following additional terms and conditions:
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(A) No such assignment shall be sold without the
consent of the Administrative Agent, and prior to the occurrence of a
Default, the Borrower, which consents to assignments comprising in the
aggregate up to fifty percent (50%) of any Bank's Commitment as of the
Agreement Date shall not be unreasonably withheld.
(B) Any Person purchasing a participation or an
assignment of the Loans from any Bank shall be required to represent and
warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 4.1(n) hereof).
(C) The Borrower, the Banks, and the Administrative
Agent agree that assignments permitted hereunder (including the
assignment of any Advance or portion thereof) may be made with all
voting rights and shall be made pursuant to an Assignment and Assumption
Agreement. An administrative fee of $3,000 shall be payable to the
Administrative Agent by the assigning Bank at the time of any assignment
hereunder.
(D) No participation agreement shall confer any
rights under this Agreement or any other Loan Document to any purchaser
thereof, or relieve any issuing Bank from any of its obligations under
this Agreement, and all actions hereunder shall be conducted as if no
such participation had been granted; provided, however, that any
participation agreement may confer on the participant the right to
approve or disapprove decreases in the interest rate, increases or
forgiveness of the principal amount of the Loans participated in by such
participant, decreases in fees, releases of the collateral or
guarantors, except for collateral the sale or disposition of which is
permitted hereunder, and extensions of the Maturity Date or other
principal payment date for the Loans or of the scheduled reduction of
the Commitment.
(E) Each Bank agrees to provide the Administrative
Agent and the Borrower with prompt written notice of any issuance of
participations or assignments of its interests hereunder.
(F) No assignment, participation or other transfer
of any rights hereunder or under the Notes shall be effected that would
result in any interest requiring registration under the Securities Act
of 1933, as amended, or qualification under any state securities law.
(G) No such assignment may be made to any bank or
other financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Corporation or the Office of
Thrift Supervision) has been appointed or (y) that has failed to meet
any of the capital requirements of its primary regulator or insurer.
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(H) If applicable, each Bank shall, and shall cause
each of its assignees to provide to the Administrative Agent on or prior
to the Agreement Date or effective date of any assignment, as the case
may be, an appropriate Internal Revenue Service form as required by
Applicable Law supporting such Bank's position that no withholding by
the Borrower or the Administrative Agent for U.S. income tax payable by
the Bank in respect of amounts received by it hereunder is required on
the effective date of such assignment. For purposes of this Agreement,
an appropriate Internal Revenue Service form shall mean Form 1001
(Ownership Exemption or Reduced Rate Certificate of the U.S. Department
of Treasury), or Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the
United States), or any successor or related forms adopted by the
relevant U.S. taxing authorities.
(c) Except specifically set forth in Section 11.5(b) hereof,
nothing in this Agreement or the Notes, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Notes.
(d) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties hereto as if no such participation had been sold.
Section 11.6 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.7 Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the internal laws of the State of
New York applicable to agreements made and to be performed in New York. If any
action or proceeding shall be brought by the Administrative Agent or any Bank
hereunder or under any other Loan Document in order to enforce any right or
remedy under this Agreement or under any Note or any other Loan Document, the
Borrower hereby consents and will, and the Borrower will cause each Subsidiary
to, submit to the jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of New
York on the date of this Agreement. The Borrower, for itself and on behalf of
its Subsidiaries, hereby agrees that service of the summons and complaint and
all other process which may be served in any such suit, action or proceeding may
be effected by mailing by registered mail a copy of such process to the offices
of the Borrower at the address given in Section 11.1 hereof and that personal
service of process shall not be required. Nothing herein shall be construed to
prohibit service of process by any other method permitted by law, or the
bringing of any suit, action or proceeding in any other jurisdiction. The
Borrower agrees that final judgment in
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such suit, action or proceeding shall be conclusive and may be enforced in any
other jurisdiction by suit on the judgment or in any other manner provided by
Applicable Law.
Section 11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or is inadvertently received by any Bank, then such excess sum shall be
credited as a payment of principal, unless the Borrower shall notify such Bank
in writing that it elects to have such excess sum returned forthwith. It is the
express intent hereof that the Borrower not pay and the Banks not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Banks of the Prime Rate,
the LIBOR Rate and the Federal Funds Rate as reference rates for the
determination of interest on the Loans, the Banks shall be under no obligation
to obtain funds from any particular source in order to charge interest to the
Borrower at interest rates tied to such reference rates.
Section 11.11 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement, the Notes, and the Loan Documents to which the Borrower
is a party embody the entire Agreement and understanding among the parties
hereto and thereto and supersede all prior agreements, understandings, and
conversations relating to the subject matter hereof and thereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any term
hereof nor any Loan Document may be amended orally, nor may any provision hereof
be waived orally, but only by an instrument in writing signed by the Majority
Banks or the Borrower, as the case may be, and, in the case of an amendment, by
the Borrower and the Majority Banks, except that in the event of (a) any
increase or decrease (other than pro rata) in the amount of the Commitment, (b)
any change in the timing of, or reduction of the amount of, payments of
principal, interest, and fees due hereunder, (c) any release or impairment of
collateral or any guaranty issued in favor of the Administrative Agent and the
Banks, (d) any waiver of any Event of Default due to the failure by the Borrower
to pay any sum due hereunder, (e) any amendment of this Section 11.12, Section
11.5(a) or of the definition of Majority Banks, or
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(f) any waiver of any condition precedent specified in Section 3.1 to the
initial Advance hereunder, any amendment or waiver may be made only by an
instrument in writing signed by each of the Banks and, in the case of an
amendment, also by the Borrower. Any amendment to any provision hereunder
governing the rights, obligations, or liabilities of the Administrative Agent in
its capacity as such, may be made only by an instrument in writing signed by
such affected Person and by each of the Banks.
Section 11.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the
Administrative Agent and each Bank to enter into or maintain business
relationships with the Borrower, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.14 Confidentiality. Each Bank and the Administrative Agent
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement, provided that (a) nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for any of the
Banks or the Administrative Agent, (iii) to bank examiners, auditors or
accountants, (iv) to the Administrative Agent or any other Bank, (v) in
connection with any litigation to which any one or more of the Banks or the
Administrative Agent is a party, or (vi) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) shall have agreed to keep such information
confidential as set forth herein, and (b) in no event shall any Bank or the
Administrative Agent be obligated or required to return any materials furnished
by the Borrower.
Section 11.15 Survival of Various Provisions. Notwithstanding anything
herein which may be construed to the contrary, rights pursuant to Sections
2.9(c), 2.10, 2.14(f), 5.11, 9.11 and 10.3 hereof shall survive the termination
of this Agreement and the payment and performance of all other Obligations.
ARTICLE 12 - Waiver of Jury Trial.
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON
BEHALF OF THE SUBSIDIARIES, THE ADMINISTRATIVE AGENT AND THE BANKS HEREBY AGREE
TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY
ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE SUBSIDIARIES,
ANY OF THE BANKS, THE ADMINISTRATIVE AGENT OR ANY OF THEIR RESPECTIVE
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SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY
OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE OTHER LOAN
DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION 12.1.
EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHTS IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS SECTION, ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS AGREEMENT (i) CERTIFIES
THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT
OR ANY BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE
AGENT OR ANY BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE
BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT
TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: TCI MUSIC, INC., a Delaware corporation
By: /s/ XXXXXXXXX X. XXXXXXX
----------------------------------------
Title: Authorized Officer
-----------------------------------
ADMINISTRATIVE AGENT,
SYNDICATION AGENTS,
CO-AGENTS and BANKS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ XXXXXX XXXXXXX
----------------------------------------
Its: Xxxxxx Xxxxxxx
Vice President
Agency Specialist
-----------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Bank
By: /s/ XXXXXXX X. XXXX
----------------------------------------
Its: XXXXXXX X. XXXX
VICE PRESIDENT
-----------------------------------
ROYAL BANK OF CANADA, as a Syndication Agent
and a Bank
By: /s/ XXXXXXX MEYIR
----------------------------------------
Its: Senior Manager
-----------------------------------
REVOLVING LOAN AGREEMENT
TCI MUSIC, INC.
Signature Page 1
72
CREDIT LYONNAIS NEW YORK BRANCH, as a
Syndication Agent and a Bank
By: [ ] CAPELLONE
----------------------------------------
Its: Authorized Officer
-----------------------------------
FLEET NATIONAL BANK, as a Co-Agent and a
Bank
By: /s/ XXX XXXXXXXX
----------------------------------------
Its: Vice President
-----------------------------------
BANQUE PARIBAS, as a Co-Agent and a Bank
By: /s/ XXXXX X. XXXXXX
----------------------------------------
Xxxxx X. Xxxxxx
Its: Vice President
-----------------------------------
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxx
Its: General Manager, Western Region
----------------------------------
REVOLVING LOAN AGREEMENT
TCI MUSIC, INC.
Signature Page 2