$7,500,000,000
CREDIT AGREEMENT
dated as of
November 10, 1997
among
TIME WARNER INC.
TIME WARNER COMPANIES, INC.
TIME WARNER ENTERTAINMENT COMPANY, L.P.
TURNER BROADCASTING SYSTEM, INC.
TIME WARNER ENTERTAINMENT-ADVANCE/NEWHOUSE PARTNERSHIP
TWI CABLE INC.
and
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
THE BANK OF NEW YORK
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation and Syndication Agents
---------------------------
CHASE SECURITIES INC.,
as Arranger
TABLE OF CONTENTS
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ARTICLE I.
DEFINITIONS
SECTION 1.1. Defined Terms ............................................... 1
SECTION 1.2. Classification of Loans and Borrowings ...................... 32
SECTION 1.3. Terms Generally ............................................. 32
SECTION 1.4. Accounting Terms; GAAP ...................................... 32
ARTICLE II.
THE CREDITS
SECTION 2.1. Commitments ................................................. 32
SECTION 2.2. Loans and Borrowings ........................................ 33
SECTION 2.3. Requests for Revolving Borrowings ........................... 33
SECTION 2.4. Swingline Loans ............................................. 34
SECTION 2.5. Funding of Borrowings ....................................... 35
SECTION 2.6. Interest Elections .......................................... 36
SECTION 2.7. Termination and Reduction of Commitments and Borrowings Caps 37
SECTION 2.8. Repayment of Loans; Evidence of Debt ........................ 38
SECTION 2.9. Prepayment of Loans ......................................... 39
SECTION 2.10. Fees ....................................................... 39
SECTION 2.11. Interest ................................................... 40
SECTION 2.12. Alternate Rate of Interest ................................. 40
SECTION 2.13. Increased Costs ............................................ 41
SECTION 2.14. Break Funding Payments ..................................... 42
SECTION 2.15. Taxes ...................................................... 43
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs 44
SECTION 2.17. Mitigation Obligations; Replacement of Lenders ............. 45
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Organization; Powers ........................................ 46
SECTION 3.2. Authorization; Enforceability ............................... 46
SECTION 3.3. Governmental Approvals; No Conflicts ........................ 47
SECTION 3.4. Financial Condition; No Material Adverse Change ............. 47
SECTION 3.5. Properties .................................................. 48
SECTION 3.6. Litigation and Environmental Matters ........................ 48
SECTION 3.7. Compliance with Laws and Agreements ......................... 48
SECTION 3.8. Government Regulation ....................................... 49
SECTION 3.9. Taxes ....................................................... 49
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SECTION 3.10. ERISA ...................................................... 49
SECTION 3.11. True and Complete Disclosure ............................... 49
SECTION 3.12. Partnership Tax Matters .................................... 50
SECTION 3.13. Beneficial Assets .......................................... 50
SECTION 3.14. Guarantees ................................................. 50
ARTICLE IV.
CONDITIONS PRECEDENT
SECTION 4.1. Initial Loans ............................................... 50
SECTION 4.2. Assumptions ................................................. 52
SECTION 4.3. Diamond Implementation ...................................... 54
SECTION 4.4. Each Credit Event ........................................... 54
ARTICLE V.
AFFIRMATIVE COVENANTS
SECTION 5.1. Financial Statements and Other Information .................. 55
SECTION 5.2. Notices of Material Events .................................. 57
SECTION 5.3. Existence; Conduct of Business .............................. 57
SECTION 5.4. Payment of Obligations ...................................... 57
SECTION 5.5. Maintenance of Properties; Insurance ........................ 57
SECTION 5.6. Books and Records; Inspection Rights ........................ 58
SECTION 5.7. Compliance with Laws ........................................ 58
SECTION 5.8. Use of Proceeds ............................................. 58
SECTION 5.9. Fiscal Periods; Accountants ................................. 58
SECTION 5.10. Enforcement of Rights Under Partnership Agreements ......... 58
SECTION 5.11. TWE Beneficial Assets ...................................... 58
SECTION 5.12. TWEAN Beneficial Assets .................................... 59
SECTION 5.13. Guarantees ................................................. 59
ARTICLE VI.
NEGATIVE COVENANTS
SECTION 6.1. Changes in Business ......................................... 60
SECTION 6.2. Mergers, Etc ................................................ 60
SECTION 6.3. Liens ....................................................... 61
SECTION 6.4. Indebtedness ................................................ 63
SECTION 6.5. Investments ................................................. 64
SECTION 6.6. Restricted Payments ......................................... 64
SECTION 6.7. Transactions with Affiliates ................................ 66
SECTION 6.8. ERISA ....................................................... 66
SECTION 6.9. Financial Covenants ......................................... 67
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SECTION 6.10. Amendment or Waiver of Organizational Documents ............ 68
SECTION 6.11. Certain Agreements ......................................... 68
SECTION 6.12. Unrestricted Subsidiaries .................................. 69
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.1. Payments .................................................... 69
SECTION 7.2. Representations, Etc ........................................ 70
SECTION 7.3. Covenants ................................................... 70
SECTION 7.4. Default Under Other Agreements .............................. 70
SECTION 7.5. Bankruptcy, Etc ............................................. 70
SECTION 7.6. ERISA ....................................................... 71
SECTION 7.7. Judgments ................................................... 71
SECTION 7.8. Change of Control ........................................... 71
SECTION 7.9. Dissolution ................................................. 71
SECTION 7.10. Taxation ................................................... 72
SECTION 7.11. Conflicting Agreements ..................................... 72
SECTION 7.12. Certain Guarantees ......................................... 72
ARTICLE VIII.
THE ADMINISTRATIVE AGENT
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Notices ..................................................... 75
SECTION 9.2. Waivers; Amendments ......................................... 75
SECTION 9.3. Expenses; Indemnity; Damage Waiver .......................... 76
SECTION 9.4. Successors and Assigns ...................................... 77
SECTION 9.5. Survival .................................................... 80
SECTION 9.6. Counterparts; Integration; Effectiveness .................... 80
SECTION 9.7. Severability ................................................ 80
SECTION 9.8. Right of Setoff ............................................. 80
SECTION 9.9. Governing Law; Jurisdiction; Consent to Service of Process .. 81
SECTION 9.10. WAIVER OF JURY TRIAL ....................................... 81
SECTION 9.11. Headings ................................................... 81
SECTION 9.12. Confidentiality ............................................ 82
SECTION 9.13. Independence of Representations, Warranties and Covenants .. 82
SECTION 9.14. Release of Certain Guarantees .............................. 82
SECTION 9.15. Partners ................................................... 83
SECTION 9.16. Calculations; Computations; Interpretation ................. 83
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SECTION 9.17. Distribution of Documents .................................. 85
SCHEDULES:
Schedule A Guarantors
Schedule 2.1 Lenders and Commitments
Schedule 3.13A TWE Material Beneficial Assets
Schedule 3.13B TWEAN Material Beneficial Assets
Schedule 6.3 Existing Liens
Schedule 6.12 Unrestricted Subsidiaries
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Officer's Solvency Certificate
Exhibit C Form of Interest Rate Certificate
Exhibit D-1 Form of Subsidiary Guarantee
Exhibit D-2 Form of TWE Partner Guarantee
Exhibit D-3 Form of TWI Guarantee
Exhibit D-4 Form of TWEAN Holder Guarantee
Exhibit D-5 Form of Paragon Guarantee
Exhibit D-6 Form of TWE Guarantee
Exhibit D-7 Form of TWIC Guarantee
Exhibit D-8 Form of Diamond Guarantee
Exhibit E-1 Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
(Closing)
Exhibit E-2 Form of Opinion of General Counsel (Closing)
Exhibit F Form of Advance Letter/Newhouse Letter
Exhibit G-1 Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
(Transfers)
Exhibit G-2 Form of Opinion of General Counsel (Transfers)
Exhibit H Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
(Diamond Implementation)
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CREDIT AGREEMENT, dated as of November 10, 1997, among TIME WARNER
INC., TIME WARNER COMPANIES, INC., TIME WARNER ENTERTAINMENT COMPANY, L.P.,
TURNER BROADCASTING SYSTEM, INC., TIME WARNER ENTERTAINMENT--ADVANCE/NEWHOUSE
PARTNERSHIP, TWI CABLE INC., the LENDERS party hereto, and THE CHASE MANHATTAN
BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquired Indebtedness" shall mean (i) Indebtedness of an entity, which
entity is acquired by any Borrower or any of its Subsidiaries after the Closing
Date; provided that such Indebtedness shall be outstanding at the time of the
acquisition of such entity, shall not be created in contemplation of or in
connection with such acquisition and shall not be, directly or indirectly,
recourse (including by way of setoff) to any Company or any asset thereof other
than to the entity and its Subsidiaries so acquired and the assets of the entity
and its Subsidiaries so acquired or (ii) Indebtedness of any Borrower or any of
its Subsidiaries that is not, directly or indirectly, recourse (including by way
of setoff) to any Company or any asset thereof other than to specified assets
acquired by such Borrower or such Subsidiary after the Closing Date, which
Indebtedness is outstanding at the time of the acquisition of such assets and is
not created in contemplation of or in connection with such acquisition and the
holder of which waives, for the benefit of the other lenders thereto, any claims
against any other assets of any Company or against the general credit of any
Company (which waiver shall, in the judgment of the Administrative Agent after
consultation with its counsel, constitute a satisfactory waiver under Section
1111(b) of the Bankruptcy Code).
"Adjusted Financial Statements" shall mean, of any Person for any
period, (x) the balance sheet of such Person and its Restricted Subsidiaries
(treating Unrestricted Subsidiaries as equity investments of such Person to the
extent that such Unrestricted Subsidiaries would not otherwise be treated as
equity investments of such Person in accordance with GAAP) as of the end of such
period and (y) the related statements of operations and stockholders' or
partners' equity for such period and, if such period is not a fiscal year, for
the then elapsed portion of the fiscal year (treating Unrestricted Subsidiaries
as equity investments to the extent that such Unrestricted Subsidiaries would
not otherwise be treated as equity investments of such Person in accordance with
GAAP).
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
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"Administrative Agent" shall mean Chase, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Advance" shall mean Advance Communication Corp., a New York
corporation.
"Advance/Newhouse" shall mean Advance/Newhouse Partnership, a New York
general partnership, of which Advance and Newhouse are general partners.
"Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the specified Person;
provided that two or more Persons shall not be deemed Affiliates solely because
an individual is a director and/or officer of each such Person.
"Agreement" shall mean this Credit Agreement.
"Allocated Loans" shall have the meaning provided in the definition of
"Transfer."
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean, with respect to any Lender, the
percentage of the Total Commitment represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" shall mean, for any day, with respect to any
Eurodollar Loan or the Commitment Fee of any Borrower, the applicable rate per
annum set forth below under the caption "Eurodollar Spread" or "Commitment Fee,"
as the case may be, based upon the ratings by Moody's and S&P, respectively,
applicable on such date to the Index Debt of such Borrower:
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Index Debt Ratings
------------------
Moody's S&P Eurodollar Spread Commitment Fee
------- --- ----------------- --------------
Baa1 or higher BBB+ or higher 0.300% 0.100%
Baa2 BBB 0.350% 0.125%
Baa3 BBB- 0.400% 0.150%
Ba1 BB+ 0.600% 0.225%
Ba2 BB 0.750% 0.250%
Ba3 BB- 0.875% 0.300%
For purposes of the foregoing, (i) if the Index Debt of any Borrower is rated by
only one Rating Agency (other than by reason of the circumstances referred to in
the last sentence of this paragraph), then the rating assigned by such Rating
Agency shall be used; (ii) if the ratings assigned by Moody's and S&P for the
Index Debt of such Borrower shall fall within different levels (including
numerical modifiers and (+) and (-) as levels), the Applicable Rate shall be
based on the higher of the two ratings unless one of the two ratings is two or
more levels (including numerical modifiers and (+) and (-) as levels) lower than
the other, in which case the Applicable Rate shall be determined by reference to
the level next below that of the higher of the two ratings; and (iii) if the
ratings assigned by Moody's and S&P for the Index Debt of such Borrower shall be
changed (other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is first
announced by the applicable Rating Agency. Each change in the Applicable Rate
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall change, or if either such
Rating Agency shall cease to be in the business of rating corporate debt
obligations, the Borrowers and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such Rating Agency and, pending the effectiveness
of any such amendment, the Applicable Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation. If a
Rating Agency shall cease to assign a rating to a Borrower's Index Debt solely
because such Borrower elects not to participate or otherwise cooperate in the
ratings process of such Rating Agency, the Applicable Rate for such Borrower
shall not be less than that before such Rating Agency's rating became
unavailable.
If neither Rating Agency has assigned a rating to a Borrower's Index
Debt, then the "Applicable Rate" shall mean, for any day, with respect to any
Eurodollar Loan or the Commitment Fee of such Borrower, the applicable rate per
annum set forth below under the caption "Eurodollar Spread" or "Commitment Fee,"
as the case may be, opposite the Leverage Ratio of such Borrower on such day:
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Leverage Ratio Eurodollar Spread Commitment Fee
-------------- ----------------- --------------
less than 4.0 0.350% 0.125%
less than 4.5 and greater than or equal to 4.0 0.400% 0.150%
less than 5.0 and greater than or equal to 4.5 0.600% 0.225%
less than 5.5 and greater than or equal to 5.0 0.750% 0.250%
greater than or equal to 5.5 0.875% 0.300%
Any change in the Leverage Ratio of such Borrower shall be effective to adjust
the Applicable Rate as of the date for which the Leverage Ratio is calculated in
the Interest Rate Certificate delivered pursuant to Section 5.1(c).
Notwithstanding the foregoing, (I) prior to the Diamond Implementation,
the Applicable Rate for TWIC will be what the Applicable Rate for TWI or TWCI
(whichever is lower) would be if TWI and TWCI were Borrowers and (II) at or
after the Diamond Implementation, the Applicable Rate for TBS and TWIC will be
the same as the Applicable Rate for TWI or TWCI (whichever is lower).
"Applicable Transfer" shall mean, for any representation or warranty or
any condition precedent, the Transfer being consummated on the date such
representation or warranty is to be made or such condition precedent is to be
satisfied.
"Assessment Rate" shall mean, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.4), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Assumption" shall mean the assumption of the Allocated Loans of TWIC
by TWEAN in a Transfer.
"Assumption Date" shall mean the date of any Assumption.
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"Authorized Officer" shall mean, with respect to any Person, any
officer of such Person reasonably acceptable to the Administrative Agent and
designated as such in writing to the Administrative Agent by such Person.
"Availability" shall mean, with respect to any Borrower, the excess, if
any, of such Borrower's Borrowing Cap then in effect (after giving effect to the
proviso in Section 2.1) over the aggregate amount of Loans then outstanding to
such Borrower, but in no event shall the aggregate Availability of all the
Borrowers at any time exceed the Total Unutilized Commitment then in effect. The
amount of Loans outstanding for purposes of calculating Availability under
Section 2.10(a) shall not include Swingline Loans. In allocating Availability
among Borrowers for purposes of determining the Commitment Fee, Availability
shall first be allocated to the Borrower with the highest Applicable Rate then
in effect, next to the Borrower with the next highest Applicable Rate then in
effect, and so on.
"Availability Period" shall mean the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Bankruptcy Code" shall have the meaning provided in Section 7.5.
"Base CD Rate" shall mean the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Beneficial Assets" shall mean the TWE Beneficial Assets and the TWEAN
Beneficial Assets, and the related net cash flows.
"Beneficial Subsidiary" shall have the meaning provided in Section
9.16(b).
"Borrowers" shall mean (i) TWE, (ii) TBS, (iii) TWEAN, (iv) TWIC, (v)
at or after the Diamond Implementation, TWI, and (vi) at or after the Diamond
Implementation, TWCI, collectively; and "Borrower" shall mean any of them;
provided that from and after the date on which any Borrower shall terminate its
Borrowing Cap in accordance with Section 2.7(c) and all of such Borrower's
Obligations shall have been paid in full, such Borrower shall cease to be a
"Borrower" under the Credit Documents and shall cease to be subject as a
Borrower to Articles V and VI.
"Borrowing" shall mean (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Cap" shall mean, (i) with respect to TWE, $7.5 billion, (ii)
with respect to TWEAN, $2.0 billion and (iii) with respect to each other
Borrower, (x) prior to the Diamond Implementation, $4.0 billion and (y) at or
after the Diamond Implementation, $6.0 billion, in each case, as such amount may
be reduced from time to time pursuant to Section 2.7.
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"Borrowing Request" shall mean a request by the Borrower for a
Revolving Borrowing in accordance with Section 2.3.
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Cable Business" shall mean a business substantially all of which
consists of the construction, ownership, operation, management, promotion,
extension or other utilization of any type of cable television distribution
system or any similar distribution business, including the obtaining of a
license or franchise to operate such a system or business.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, partnership interests or other equivalents (however designated and
whether voting or non-voting) of, such Person's equity, whether outstanding on
the date hereof or hereafter issued, and any and all rights, warrants or options
to purchase or acquire or exchangeable for or convertible into such shares,
partnership interests or other equivalents.
"Cash Balance" shall mean, with respect to any Borrower, the aggregate
amount of cash and Cash Equivalents held by such Borrower.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) that (a) have maturities of not
more than six months from the date of acquisition thereof or (b) are subject to
a repurchase agreement with an institution described in clause (ii)(x) or (y)
below exercisable within six months from the date of acquisition thereof, (ii)
U.S. Dollar-denominated and Eurodollar time deposits, certificates of deposit
and bankers' acceptances of (x) any domestic commercial bank of recognized
standing having capital and surplus in excess of $500.0 million or (y) any bank
whose short-term commercial paper rating from S&P is at least A-2 or the
equivalent thereof or from Moody's is at least P-2 or the equivalent thereof
(any such bank, an "Approved Lender"), in each case with maturities of not more
than six months from the date of acquisition thereof, (iii) commercial paper and
variable and fixed rate notes issued by any Lender or Approved Lender or by the
parent company of any Lender or Approved Lender and commercial paper and
variable rate notes issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's,
and
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in each case maturing within six months after the date of acquisition
thereof, and (iv) tax-exempt commercial paper of United States municipal, state
or local governments rated at least A-2 or the equivalent thereof by S&P or at
least P-2 or the equivalent thereof by Moody's and maturing within six months
after the date of acquisition thereof.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Change of Control" shall mean any of the following:
(i) with respect to TWI, either (a) a Person or "group" (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act) acquiring or
having beneficial ownership (it being understood that a tender of shares or
other equity interests shall not be deemed acquired or giving beneficial
ownership until such shares or other equity interests have been accepted
for payment) of securities (including options) having a majority of the
ordinary voting power of TWI (including options to acquire such voting
power) or (b) persons who are directors of TWI as of the date hereof or
persons designated or approved by such directors ceasing to constitute a
majority of the board of directors of TWI;
(ii) with respect to TWCI, TWCI ceasing to be a direct or indirect
Wholly Owned Subsidiary of TWI;
(iii) with respect to TWE, (a) TWI ceasing to own beneficially,
directly or indirectly through Subsidiaries, at least 43-3/4% of the total
equity in TWE, (b) a Person or "group" (within the meaning of Sections
13(d) and 14(d) of the Exchange Act) owning an equity interest in TWE
greater than that owned by TWI and its Wholly Owned Subsidiaries or (c)
there being any managing General Partner of TWE other than TWI and/or one
or more of its Wholly Owned Subsidiaries;
(iv) with respect to TBS, (a) until the Leverage Ratio of TBS is less
than 5.0:1.0, TBS ceasing to be a direct or indirect Wholly Owned
Subsidiary of TWI or (b) after such time, TWI ceasing to own, directly or
indirectly through Subsidiaries, Capital Stock representing at least 66-
2/3% of the ordinary voting power or value of the Capital Stock of TBS;
(v) with respect to TWEAN, (a) TWE and TWI together ceasing to own
beneficially, directly or indirectly, a majority of the TWEAN Partnership
Interests, (b) TWE ceasing to own beneficially, directly or indirectly
through Subsidiaries, at least 40% of the TWEAN Partnership Interests or
(c) TWE ceasing to have management or operational control over TWEAN under
the TWEAN Partnership Agreement comparable in all material respects
-8-
to such control on the Closing Date (it being understood that a liquidation
of TWEAN permitted under Section 6.2(b) shall not be deemed a Change of
Control); or
(vi) with respect to TWIC, (a) until the Leverage Ratio of TWIC is less
than 3.5:1.0, TWIC ceasing to be a direct or indirect Wholly Owned
Subsidiary of TWI, (b) after such time, TWI ceasing to own beneficially,
directly or indirectly through Subsidiaries, Capital Stock representing at
least 66-2/3% of the ordinary voting power or value of the Capital Stock of
TWIC or (c) TWI ceasing to have the managerial and operational control over
TWIC that it would have if TWIC were a Subsidiary of TWE or TWEAN;
provided that the events described in paragraphs (i) through (vi) shall not
constitute a "Change of Control" with respect to any Person if such event arises
out of a liquidation, consolidation or merger of such Person permitted by
Section 6.2(b).
"Chase" shall mean The Chase Manhattan Bank.
"Class," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans.
"Closing Date" shall mean November 14, 1997, the date of the Initial
Loans.
"Code" shall mean the Internal Revenue Code of 1986.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Revolving Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.8 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.4. The initial amount of each Lender's Commitment is set
forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable.
"Commitment Fee" shall have the meaning provided in Section 2.10(a).
"Commitment Termination Date" shall mean the Business Day immediately
preceding the Maturity Date.
"Companies" shall mean each of the Credit Parties and their respective
Subsidiaries, collectively; and "Company" shall mean any of them.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum dated October 1997 relating to the loan facilities
hereunder.
-9-
"Consolidated Amortization Expense" shall mean, for any period, for any
Person, the amortization expense of such Person and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Cash Flow" shall mean, for any period, for any Person,
(A) the Consolidated Net Income of such Person and its consolidated Subsidiaries
for such period plus (B) (to the extent deducted in calculating such
Consolidated Net Income) the sum of (i) Consolidated Depreciation Expense, (ii)
Consolidated Amortization Expense (excluding amortization of film inventory that
does not constitute amortization of capitalized interest expense, capitalized
depreciation expense and purchase price amortization), (iii) Consolidated
Interest Expense, (iv) income tax expenses of such Person and its Subsidiaries,
(v) non-recurring non-cash items and (vi) minority interest expense in respect
of preferred stock of Subsidiaries of such Person minus (C) the sum of (i) to
the extent included in calculating such Consolidated Net Income, interest income
(including interest on cash or Cash Equivalents) and (ii) to the extent not
previously deducted as an expense in determining Consolidated Net Income,
Management Fees actually paid in cash or other consideration in such period by
such Person or its Subsidiaries, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Cash Fixed Charges" shall mean the sum of Consolidated
Cash Interest Expense plus Consolidated Cash Preferred Dividends.
"Consolidated Cash Interest Expense" shall mean, for any period, for
any Person, Consolidated Interest Expense of such Person, but excluding, to the
extent otherwise included therein, interest expense to the extent not payable in
cash (e.g., interest on securities paid in additional securities, imputed
interest and amortization of original issue discount), amortization of discount
and deferred financing costs.
"Consolidated Cash Preferred Dividends" shall mean, for any period, for
any Person, dividends payable in cash during such period in respect of any
preferred stock of such Person and its consolidated Subsidiaries, determined on
a consolidated basis in accordance with GAAP, but decreased by the amount of
such dividends paid with the proceeds of Stock Option Loans and excluding any
dividends with respect to preferred stock of any other Person accrued during any
period that the income (or loss) of such other Person is excluded from
Consolidated Net Income of such Person by reason of clause (i) of the definition
thereof.
"Consolidated Depreciation Expense" shall mean, for any period, for any
Person, the depreciation expense of such Person and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, for any
Person, the interest expense of such Person and its consolidated Subsidiaries,
including, without duplication, total interest expense for such period
(including that attributable to Capital Lease Obligations in accordance with
GAAP) with respect to all outstanding Indebtedness of such Person and its
consolidated Subsidiaries, including all capitalized interest, all commissions,
discounts and other fees and charges
-10-
owed with respect to letters of credit and bankers' acceptance financing, as
such amount may be increased or decreased by the net income or loss from
Interest Rate Agreements for such period determined in accordance with GAAP, but
excluding, without duplication, (i) any amounts payable pursuant to Section
2.10, (ii) any amounts with respect to Indebtedness of any other Person accrued
during any period that the income (or loss) of such other Person is excluded
from Consolidated Net Income of such Person by reason of clause (i) of the
definition thereof and (iii) interest on Stock Option Loans, all determined on a
consolidated basis for such period taken as a single accounting period.
"Consolidated Net Income" shall mean, for any period, for any Person,
the net income (or loss) of such Person and its consolidated Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in accordance with GAAP; provided that the following, without
duplication, shall be excluded: (i) the income (or loss) of any other Person
accrued prior to the date that it becomes a Subsidiary of such Person or is
merged into or consolidated with such Person or any of its Subsidiaries or that
such other Person's assets are acquired by such Person or any of its
Subsidiaries, (ii) the income of any Subsidiary of such Person to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement or instrument (other than this Agreement),
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary (provided that the income of any Subsidiary of such Person shall
not be excluded by reason of this clause (ii) so long as such Subsidiary
guarantees the Obligations of such Person), (iii) dividends, interest, income or
other distributions or payments on any investment in or with respect to any
Unrestricted Subsidiary or with respect to any other Person (including, when
calculating Consolidated Net Income of TWE or TWEAN, Paragon to the extent
treated as an equity investment of TWE and/or TWEAN as a result of the operation
of Section 9.16(c)(iii)) which is not a consolidated Subsidiary of such Person
(other than with respect to calculations made pursuant to Section 6.9(I)(b) or
(II)(b) to the extent any such dividends, interest, or other distributions or
payments are actually paid or made), (iv) the income (or loss) realized by such
Person or any of its consolidated Subsidiaries from dispositions of assets
otherwise than in the ordinary course of business (including as the result of
the sale of any business assets, business segment, business operation or
Investment), (v) the income resulting from any write-up of any asset, (vi) the
aggregate net gain (or loss) arising from any revaluation (but not sale) of
readily marketable securities, (vii) the aggregate net gain (or loss) arising
from extraordinary transactions and (viii) the income (or loss) from
discontinued operations.
"Consolidated Total Debt" of any Person shall mean, as at any time of
determination, the total Indebtedness (other than any Stock Option Loans and, in
the case of TWE and TBS, up to $250.0 million of Film Financing in the aggregate
for both of TWE and TBS) of such Person and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as at such time.
"Contingent Obligations," as applied to any Person, shall mean any
direct or indirect liability, contingent or otherwise, of that Person (x) with
respect to any indebtedness, lease, dividend, letter of credit or other monetary
obligation of another if the primary purpose or intent thereof by the
-11-
Person incurring the Contingent Obligation is to provide assurance to the
obligee of such obligation of another that such obligation of another will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (y) under any letter of credit issued for
the account of that Person or for which that Person is otherwise liable for
reimbursement thereof, or (z) under Currency Agreements or Interest Rate
Agreements. Contingent Obligations shall include (a) the direct or indirect
guarantee, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, and (b) any liability of such
Person for the obligations of another through any agreement (contingent or
otherwise) (i) to purchase, repurchase, or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another, or (iii) to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, if in the case of any agreement
described under clause (i) or (ii) the primary purpose or intent thereof is as
described in the preceding sentence; provided that Contingent Obligations shall
not include obligations (not otherwise constituting Indebtedness) of any Person
in respect of customary representations, warranties and covenants made or agreed
to by such Person in connection with the sale and securitization of accounts
receivable or similar contract rights. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. A Person shall be deemed to Control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. "Controlling" and "Controlled" have
meanings correlative thereto.
"Convertible Intercompany Debt" shall mean any Indebtedness for money
borrowed of (a) any Borrower owing to TWI or any of its Subsidiaries or (b) any
Foreign Subsidiary owing to TWI that, in each case, (i) is issued on terms
reasonably satisfactory to the Administrative Agent and (ii) if owed by a
Borrower to a Person other than a Borrower or a Restricted Subsidiary of a
Borrower, is convertible into equity of the Borrower of such Indebtedness or is
extinguishable, in each case, upon (x) the liquidation or dissolution of the
Borrower of such Indebtedness, (y) failure to repay any Loans at final maturity
or (z) acceleration of the maturity of any Loans hereunder; provided that any
Convertible Intercompany Debt of a Borrower shall be subordinated in right of
payment to the Obligations on terms and conditions reasonably satisfactory to
the Administrative Agent.
"Copyright Liens" shall mean any Liens granted by any Borrower or any
of its Subsidiaries on copyrights relating to movies or other programming that
is subject to contracts entitling such Borrower or Subsidiary to future payments
in respect of such movies or other programming, which contractual rights to
future payments are to be transferred by such Borrower or Subsidiary to a
special purpose Subsidiary of such Borrower or Subsidiary organized for the
purpose
-12-
of monetizing such rights to future payments and which Liens (x) are granted
directly or indirectly for the benefit of the special purpose Subsidiary and/or
the Persons who purchase such contractual rights to future payments from such
special purpose Subsidiary and (y) extend only to the copyrights for the movies
or other programming subject to such contracts for the purpose of permitting the
completion, distribution and exhibition of such movies or other programming.
"Coverage Ratio" as of any date shall mean, with respect to any
Borrower, the ratio of Consolidated Cash Flow to Consolidated Cash Fixed Charges
of such Borrower, in each case for the Four Quarter Period ending on such date.
"Credit Documents" shall mean this Agreement and each of the
Guarantees, including the exhibits, schedules and any other attachments hereto
and thereto.
"Credit Event" shall mean (i) the effectiveness of the obligations of
the Lenders to make Loans hereunder, (ii) any Transfer or Assumption, (iii) the
Diamond Implementation or (iv) the making of any Loan hereunder (it being
understood that the continuation or conversion of any Loan shall not be deemed
the making of a Loan).
"Credit Parties" shall mean the Borrowers and the Guarantors; and
"Credit Party" shall mean any of them.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement designed to protect the Persons entering into same against
fluctuations in currency values.
"Default" shall mean any event, act or condition which constitutes, or
with notice or lapse of time, or both, would constitute, an Event of Default.
"Diamond Guarantee" shall mean a guarantee by TWI, TWCI, TBS and TWIC
of all of the Obligations (other than the Obligations of TWE Entities),
substantially in the form of Exhibit D-8.
"Diamond Implementation" shall mean the addition of TWI and TWCI as
Borrowers, which shall become effective upon TWI, TWCI and TBS executing and
delivering the Diamond Guarantee and the satisfaction or waiver of each of the
other conditions set forth in Section 4.3.
"Diamond Parties" shall mean (i) TWI, (ii) TWCI, (iii) TBS and (iv)
TWIC, collectively; and "Diamond Party" shall mean any of them.
"Documents" shall mean the Credit Documents and the Transfer Documents.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" shall have the meaning provided in Section 9.6.
-13-
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Company directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" shall mean, with respect to any Credit Party, any
trade or business (whether or not incorporated) that, together with such Credit
Party, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Entity" shall mean each of the Credit Parties and each of their
respective ERISA Affiliates, collectively; and "ERISA Entity" shall mean any of
them.
"ERISA Event" shall mean (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, or the failure to make by its due date a required installment under
Section 412(m) of the Code with respect to any Plan or the failure to make any
required contribution to a Multiemployer Plan; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any ERISA Entity of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by any ERISA Entity from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, or
the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (f) the incurrence by any ERISA Entity of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any ERISA Entity of any notice, or the
receipt by any Multiemployer Plan from any ERISA Entity of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; or (h) the occurrence of a non exempt
prohibited transaction (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could result in liability to a Credit Party.
-14-
"Eurodollar," when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Excluded Taxes" shall mean, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Credit Party hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income, assets or net worth by the United
States of America, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which any Credit Party is located and (c)
in the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrowers under Section 2.17(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable
to such Foreign Lender's failure to comply with Section 2.15(f), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from any Borrower with respect to such withholding tax
pursuant to Section 2.15(a).
"Existing Credit Agreements" shall mean (i) the Credit Agreement dated
as of June 30, 1995 among TWE, TWEAN and TWIC, as borrowers, Chase, as
administrative agent, and the lenders party thereto, (ii) the Credit Agreement
dated as of July 1, 1993 among TBS, as borrower, Chase, as administrative agent,
and the lenders party thereto and (iii) the Credit Agreement dated as of
September 7, 1994 among TBS, as borrower, Chase, as administrative agent, and
the lenders party thereto.
"FCC" shall mean the Federal Communications Commission.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Film Financing" shall mean, without duplication, monetary obligations
arising out of transactions in which so-called tax-based financing groups or
other third-party investors provide financing for the acquisition, production or
distribution of motion pictures, television programs, sound recordings or books
or rights with respect thereto in exchange, in part, for certain tax or other
-15-
benefits which are derived from such motion pictures, television programs, sound
recordings, books or rights; provided that no such monetary obligations shall
be, directly or indirectly, recourse (including by way of set-off) to any
Restricted Company or any of its assets other than to the profits or
distribution rights related to such motion pictures, television programs, sound
recordings, books or rights and other than to a Subsidiary of TWE or TBS
substantially all of the assets of which consist of the motion pictures, video
and television programming or rights which are the subject of such transaction
and related cash and Cash Equivalents.
"Financial Officer" shall mean, with respect to any Person, the chief
financial officer, principal accounting officer, treasurer or controller of such
Person.
"Financial Statements" shall mean, of any Person for any period, (x)
the balance sheet of such Person and its Subsidiaries, on a consolidated basis,
as of the end of such period and (y) the related statements of operations,
stockholders' or partners' equity and cash flows for such period and, if such
period is not a fiscal year, for the then elapsed portion of the fiscal year.
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrowers are located. For
purposes of this definition, the United States of America, each state thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" shall mean any Subsidiary of a Borrower that is
incorporated or organized under the laws of any jurisdiction other than the
United States or any state thereof, the U.S. Virgin Islands and Puerto Rico and
does substantially all of its business outside the United States, the U.S.
Virgin Islands and Puerto Rico.
"Four Quarter Period" shall mean a period consisting of four full
consecutive fiscal quarters.
"Franchise" shall mean, with respect to any Person, a franchise,
license, authorization or right to construct, own, operate, manage, promote,
extend or otherwise utilize any cable television distribution system operated or
to be operated by such Person or any of its Subsidiaries granted by any state,
county, city, town, village or other local government authority or by the FCC,
but shall not include any such franchise, license, authorization or right that
is incidentally required for the purpose of installing, constructing or
extending a cable television system.
"GAAP" shall mean generally accepted accounting principles in the
United States of America. See Section 1.4 and 9.16.
"General Partner" shall mean any Person defined as such in the TWE
Partnership Agreement or any TWEAN Partner.
"Governmental Authority" shall mean the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency,
-16-
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other monetary obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other monetary obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other monetary obligation or (d) as
an account party in respect of any letter of credit or letter of guaranty issued
to support such Indebtedness or monetary obligation; provided, that the term
guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantees" shall mean (i) the TWE Partner Guarantees, (ii) the TWI
Guarantee, (iii) the TWEAN Holder Guarantees, (iv) the Subsidiary Guarantees,
(v) the TWE Guarantee, (vi) the Paragon Guarantee, (vii) the TWIC Guarantee and
(viii) the Diamond Guarantee, collectively; and "Guarantee" shall mean any of
them.
"Guaranteed Percentage" shall mean, with respect to any TWE
Partner Guarantor, the percentage of the obligations of TWE hereunder being
guaranteed by such TWE Partner Guarantor. The Guaranteed Percentage of each TWE
Partner Guarantor shall be as follows: Warner Communications Inc.: 44.88%;
American Television and Communications Corporation: 40.73%; and Warner Cable
Communications Inc.: 14.39%; provided that the Guaranteed Percentage of any TWE
Partner Guarantor may be changed by TWE from time to time by written notice to
the Administrative Agent in connection with the merger or consolidation of such
TWE Partner Guarantor; provided that (i) at all times the sum of the Guaranteed
Percentages of all TWE Partner Guarantors shall equal 100% and (ii) with respect
to any TWE Partner Guarantor that owns, directly or indirectly, any Beneficial
Assets, such TWE Partner Guarantor's Guaranteed Percentage may not be changed
unless at the time of such change the representations and warranties contained
in Section 3.13(a) shall be true and correct.
"Guarantors" shall mean (i) the TWE Partner Guarantors, (ii) TWI in its
capacity as guarantor under the TWI Guarantee, (iii) the TWEAN Holder
Guarantors, (iv) the Subsidiary Guarantors, (v) TWE in its capacity as guarantor
under the TWE Guarantee, (vi) Paragon in its capacity as guarantor under the
Paragon Guarantee, (vii) TWI and TWCI in their capacities as guarantors under
the TWIC Guarantee and (viii) TWI, TWCI, TBS and TWIC in their capacities as
guarantors under the Diamond Guarantee, collectively; and "Guarantor" shall mean
any of them, each of which is designated as such on Schedule A.
-17-
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Incur" shall mean, with respect to any Indebtedness, to incur, create,
issue, assume, guarantee or otherwise become liable for or with respect to, or
become responsible for the payment of, contingently or otherwise, such
Indebtedness; provided that the term "Incur" shall not include conversions or
continuations of Loans.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) the deferred purchase price of any
acquisition of a business, operation, business segment or other group of
operating or revenue-producing assets (including any payments in respect of
non-compete or other similar arrangements entered into in connection with such
acquisition), whether or not such acquisition was made in the ordinary course of
business, (iii) the face amount of all letters of credit issued for the account
of such Person to the extent of all drafts drawn thereunder, (iv) all
indebtedness of a second Person secured by any Lien on any property owned by
such first Person (other than any Lien permitted by Section 6.3(b)(iv) and any
Copyright Lien), whether or not such indebtedness has been assumed (but only to
the extent of the lesser of the fair market value of the property subject to
such Lien and the amount of indebtedness of such second Person), (v) all
Capitalized Lease Obligations of such Person, (vi) all obligations of such
Person to pay a specified purchase price for goods or services whether or not
delivered or accepted (i.e., take-or-pay and similar obligations) (other than
where the obligation is classified on such Person's financial statements in
accordance with GAAP as an account payable), (vii) all Contingent Obligations of
such Person to the extent such Contingent Obligations relate to any obligation
that would otherwise constitute Indebtedness and (viii) Film Financings and all
other obligations that would otherwise be Film Financings but for the proviso
contained in the definition thereof. Notwithstanding the foregoing, Indebtedness
shall not include (a) obligations in respect of trade payables and accrued
expenses, in each case arising in the ordinary course of business (including up
to $150,000,000 in the aggregate at any time outstanding for all of the
Borrowers of undrawn obligations with respect to commercial letters of credit
supporting lease payment obligations, insurance premium payment obligations and
other trade payables entered into in the ordinary course of business that, in
each case, are not secured by the related assets); (b) any obligation of such
Person or any Subsidiary thereof to purchase products and services utilized in
its business pursuant to agreements entered into the ordinary course of business
(including under Negative Pick-Up Facilities); (c) any obligation of such Person
to guarantee performance of, or enter into indemnification agreements with
respect to, obligations, entered into in the ordinary course of business, under
any and all Franchises, leases, performance bonds, franchise bonds, obligations
to reimburse drawings under letters of credit issued in lieu of performance or
franchise bonds; (d) completion bonds or guarantees or indemnities of a similar
nature issued in the ordinary course of business in connection with the
production of motion pictures and video and television programming (including
under Negative PickUp Facilities); (e) obligations, if any, to make Tax
Distributions; (f) amounts owed to TWI by any TWE Partner Guarantor or any
-18-
holder of TWE Material Beneficial Assets arising in the ordinary course of
business with respect to deferred tax payments arising out of assets (other than
Beneficial Assets) held by such holder but only if such obligations are
subordinated to the Guarantee of such holder; (g) any Guarantee or any guarantee
by TWIC or any of its Subsidiaries of the Obligations of (x) TWEAN or (y) any
Guarantor of the Obligations of TWEAN; (h) any reimbursement obligation among
Guarantors with respect to any Guarantees or among TWIC and its Subsidiaries
with respect to any guarantees by TWIC or any of its Subsidiaries of any
Obligations of (x) TWEAN or (y) any Guarantor of the Obligations of TWEAN;
provided that any such obligation shall be subordinated to the obligations of
the Guarantors under the Credit Documents. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning provided in Section 9.3.
"Index Debt," of any Borrower, shall mean each separate issuance or
series of outstanding long term debt of such Borrower that is (a) unsecured, (b)
not subordinated in right of payment to any other Indebtedness of such Borrower
and (c) (i) not guaranteed and not otherwise credit enhanced, directly or
indirectly, by any other Person or (ii) guaranteed or otherwise credit enhanced
so long as the Loans of such Borrower, if any, are equally and ratably
guaranteed or otherwise credit enhanced, as the case may be; provided that if at
any time no such Indebtedness shall be outstanding, Index Debt shall include the
Revolving Loans.
"Information" shall have the meaning specified in Section 9.12.
"Initial Loans" shall mean the initial Loans to be made hereunder.
"Interest Election Request" shall mean a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.6.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing of any
Borrower, the period commencing on the date of such Borrowing or on the last day
of the immediately preceding Interest Period applicable to such Borrowing, as
the case may be, and ending on the numerically
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corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is (i) one, two, three or six months thereafter,
as such Borrower may elect, (ii) twelve months thereafter if such Borrower shall
have so elected and the Administrative Agent, after consultation with the
Lenders, shall have determined in good faith based on then prevailing conditions
in the interbank Eurodollar market that U.S. Dollar deposits are generally then
being offered to first class banks in the interbank Eurodollar market for a
comparable maturity and all of the Lenders shall have agreed to such Interest
Period or (iii) one month thereafter if such Borrower shall have made no
election as to the Interest Period; and (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as the case may be, and
ending on the earliest of (i) the next succeeding March 31, June 30, September
30 or December 31, (ii) the Maturity Date, and (iii) the date such Borrowing is
converted to a Borrowing of a different Type in accordance with Section 2.6 or
repaid or prepaid in accordance with Section 2.9 or 2.10; provided that (x) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of Eurodollar Loans only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (y) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
futures contract, interest rate option contract or other similar agreement or
arrangement designed to manage the exposure of a Person or any of its
Subsidiaries to fluctuating interest rates.
"Interest Rate Certificate" shall mean an Officers' Certificate
substantially in the form of Exhibit B, delivered pursuant to Section
4.1(c)(iii) or 5.1(f).
"Interest Rate Determination Date" shall mean each date for calculating
the Eurodollar Rate for purposes of determining the interest rate in respect of
an Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period.
"Investment" by any Person means any direct or indirect (i) loan,
advance or other extension of credit or contribution to any other Person (by
means of transfers of cash or other property to others, payments for property or
services for the account or use of others, mergers or otherwise), (ii) purchase
or acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by any other Person (whether by merger,
consolidation, amalgamation or otherwise and whether or not purchased directly
from the issuer of such securities or evidences of Indebtedness), and (iii) all
other items that would be classified as investments on a balance sheet of such
Person prepared in accordance with GAAP. Investments shall exclude
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extensions of trade credit and advances to customers and suppliers to the extent
in the ordinary course of business and made in accordance with customary
industry practice. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"Lenders" shall mean the Persons listed on Schedule 2.1 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Leverage Ratio" shall mean, as of any date, (i) with respect to any
Person (other than TWI prior to the Diamond Implementation for purposes of
Section 6.4(I)(c)), the ratio of Net Total Debt of such Person as of such date
to Consolidated Cash Flow of such Person for the Four Quarter Period ending on
such date, and (ii) with respect to TWI prior to the Diamond Implementation for
purposes of Section 6.4(I)(c), the ratio of Consolidated Total Debt of TWI as of
such date to Consolidated Cash Flow of TWI for such Four Quarter Period. For
purposes of calculating the Leverage Ratio, in the event of any material
acquisition or disposition by any Company during any Four Quarter Period,
Consolidated Cash Flow shall be adjusted to give effect to such acquisition or
disposition by including or excluding, as the case may be, from Consolidated
Cash Flow of such Person all Consolidated Cash Flow derived from the asset
acquired or disposed of for that portion of such Four Quarter Period occurring
before such acquisition or disposition.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities, including any agreement to give any of the foregoing.
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"Loans" shall mean the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"Management Fees" shall mean (i) the management fees payable by TWE to
TWI in an amount equal to $5.0 million per month, as adjusted to reflect
increases in the Consumer Price Index from January 1, 1991, (ii) without
duplication of any amounts paid under clause (iii) below, the management fees
payable by TWE to USW pursuant to Section 8(h) of the Admission Agreement dated
as of May 16, 1993 between TWE and USW, in an aggregate amount equal to $60.0
million, (iii) the management fees payable by TWEAN to TWE pursuant to Section
3.1(h) of the TWEAN Partnership Agreement and (iv) the management fees paid by
TWIC to TWE in consideration of TWE's managing and providing other services to
the Cable Businesses owned by TWIC, which fees shall be determined on an arms'
length basis.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on (i)
the condition (financial or other), business, results of operations, properties
or liabilities of any Borrower and its Subsidiaries, taken as a whole, or of TWI
and its Subsidiaries, taken as a whole, (ii) the ability of any Credit Party to
perform its obligations to the Lenders under any Credit Document to which it is,
or will be, a party or (iii) the rights of or benefits available to the Lenders
under any Credit Document.
"Material Beneficial Asset" shall mean a TWE Material Beneficial Asset
or a TWEAN Material Beneficial Asset.
"Material Plan" shall have the meaning provided in Section 7.6.
"Material Subsidiary," of any Person, at any date, shall mean each
Subsidiary of such Person which, either alone or together with the Subsidiaries
of such Subsidiary, meets any of the following conditions:
(i) as of the last day of such Person's most recently ended fiscal
quarter for which financial statements have been filed with the SEC or have
become generally available the investments of such Person and its
Subsidiaries in, or their proportionate share (based on their equity
interests) of the fair market or book value of the total assets (after
intercompany eliminations) of, the Subsidiary in question exceeds 5% of the
fair market or book value, respectively, of the total assets of such Person
and its consolidated Subsidiaries;
(ii) for the Four Quarter Period ended on the last day of such Person's
most recently ended fiscal quarter for which financial statements have been
filed with the SEC or have become generally available, the equity of such
Person and its Subsidiaries in the revenues from continuing operations of
the Subsidiary in question exceeds 5% of the revenues from continuing
operations of such Person and its consolidated Subsidiaries; or
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(iii) for the Four Quarter Period ended on the last day of such
Person's most recently ended fiscal quarter for which financial statements
have been filed with the SEC or have become generally available, the equity
of such Person and its Subsidiaries in the Consolidated Cash Flow of the
Subsidiary in question exceeds 5% of the Consolidated Cash Flow of such
Person.
For purpose of Section 7.4, "Material Subsidiary" shall include any
Person that is defined as such under the Indenture dated as of April 30, 1992
among TWI, TWE, the TWE Partners signatory thereto and The Bank of New York, as
trustee.
"Maturity Date" shall mean the fifth anniversary of the Closing Date
and, if such day is not a Business Day, the next preceding Business Day.
"Maximum Permitted Indebtedness" shall mean, with respect to any
Borrower at any time, the maximum amount of Indebtedness that such Borrower
could then have outstanding pursuant to this Agreement without giving rise to a
Default.
"Minimum Borrowing Amount" shall mean $20.0 million.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a "multiemployer plan," as defined in
Section 4001(a)(3) of ERISA, (i) to which any ERISA Entity is contributing, or
at any time within the immediately preceding five calendar years has
contributed, (ii) to which any ERISA Entity has, or, at any time within the
immediately preceding five calendar years has had, an obligation to contribute
or (iii) with respect to which any ERISA Entity retains any liability.
"Negative Pick-Up Facilities" shall mean (i) the Loan and
Security Agreement dated as of June 27, 1997 among LIS Financing, Inc. and the
other borrowers from time to time party thereto, ABN AMRO Bank N.V., as agent
and as enhancer, the liquidity providers from time to time party thereto and
Amsterdam Funding Corporation, as in effect on the date hereof, and (ii)
facilities substantially similar to the foregoing (with appropriate
modifications for single picture facilities).
"Net Total Debt" shall mean, for any Borrower, the excess, if
any, over the Cash Balance of the sum of, without duplication, (i) Consolidated
Total Debt of such Borrower, (ii) in the case of TWE, any unpaid Tax
Distributions of such Person, whether or not accrued or required to be accrued
under applicable accounting principles and (iii) in the case of TWE or TWEAN,
any Indebtedness of any holder of TWE Material Beneficial Assets or TWEAN
Material Beneficial Assets, as the case may be, other than (x) the Specified
Holders and (y) in the case of TWEAN, TWE and its Restricted Subsidiaries (other
than TWEAN and its Restricted Subsidiaries) or TWIC and its Restricted
Subsidiaries; provided that any Indebtedness of any holder of TWE Material
Beneficial Assets or TWEAN Material Beneficial Assets included in the Net Total
Debt of TWE or TWEAN, as applicable, shall be excluded from the Net Total Debt
of the Borrower of which such holder of Material Beneficial Assets is legally a
Subsidiary.
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"Newhouse" shall mean Newhouse Broadcasting Corporation, a New
York corporation.
"Non-Recourse Purchase Money Indebtedness" shall mean Purchase
Money Indebtedness for which the sole legal recourse for collection of principal
and interest on such Indebtedness is against the property acquired with the
proceeds thereof, which property is specifically identified in the instruments
evidencing or securing such Indebtedness.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Administrative Agent or any Lender pursuant to any Credit Document.
"Officers' Certificate" shall mean, with respect to any
Person, a certificate executed on behalf of such Person by one of its Authorized
Officers and by a Financial Officer; provided that every Officers' Certificate
with respect to the compliance with a condition precedent to any Credit Event
shall include (i) a statement that the officer or officers making or giving such
Officers' Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that
they have made or have caused to be made such examination or investigation as is
necessary, in the opinion of the signers, to enable them to express an informed
opinion as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has been
complied with.
"Officer's Solvency Certificate" shall mean a solvency
certificate signed by the Chief Financial Officer (or its equivalent) of a
Borrower, substantially in the form of Exhibit C.
"Organizational Documents" shall mean (i) the Certificate of
Limited Partnership of TWE filed with the Secretary of State of the State of
Delaware, (ii) the Partnership Agreements, (iii) the TWEAN Contribution
Agreement, (iv) the articles of incorporation of each Credit Party that is a
corporation, which for purposes of Section 4.1(e) shall be certified as of a
recent date by the Secretary of State of the state of incorporation of such
Credit Party, (v) the bylaws of each Credit Party that is a corporation, which
for purposes of Section 4.1(e) shall be certified as of a recent date by the
secretary or any assistant secretary of such Credit Party, and (vi) the
organizational documents of each Credit Party (other than any Borrower) that is
not a corporation.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, any Credit Document.
"Paragon" shall mean Paragon Communications, a Colorado general
partnership.
"Paragon Guarantee" shall mean a guarantee by Paragon of all of the
Obligations of TWIC and of TWEAN, substantially in the form of Exhibit D-5.
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"Partner" shall mean a TWE Partner or a TWEAN Partner.
"Partnership Agreements" shall mean the TWE Partnership Agreement and
the TWEAN Partnership Agreement; and "Partnership Agreement" shall mean any of
them.
"Partnership Borrowers" shall mean TWE and TWEAN.
"Partnership Interest" shall mean a TWE Partnership Interest or a TWEAN
Partnership Interest.
"Payment Office" shall mean 270 Park Avenue, New York, New York 10017
or such other place as shall be designated by the Administrative Agent to the
Borrowers in writing.
"PBGC" shall mean Pension Benefit Guaranty Corporation.
"Permitted Intercompany Indebtedness" shall mean:
(a) prior to the Diamond Implementation, Indebtedness for money
borrowed of any Borrower or any of its Restricted Subsidiaries
owing to such Borrower or any of its Restricted Subsidiaries; and
(b) at or after the Diamond Implementation, Indebtedness for money
borrowed of any Test Party or any of its Restricted Subsidiaries
owing to such Test Party or any of its Restricted Subsidiaries;
provided that for purposes of this definition only, (i) TWE and its Restricted
Subsidiaries shall be deemed not to be Restricted Subsidiaries of TWI and (ii)
TWEAN and its Restricted Subsidiaries shall be deemed not to be Restricted
Subsidiaries of TWE or TWI.
"Permitted Lien" shall mean any of the Liens described in Section
6.3(b).
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and (i) which is maintained or
contributed to by any Credit Party or any of their respective ERISA Affiliates
or (ii) with respect to which any Credit Party retains any liability.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
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"Purchase Money Indebtedness" of any Person shall mean Indebtedness of
such Person Incurred for the purpose of financing all or any part of the
purchase price, or the cost of construction or improvement, of any property to
be used in the ordinary course of business by such Person and its Restricted
Subsidiaries; provided that (i) the aggregate principal amount of such
Indebtedness shall not exceed such purchase price or cost and (ii) such
Indebtedness shall be Incurred no later than 90 days after the acquisition of
such property or completion of such construction or improvement.
"Rating Agency" shall mean each of Moody's and S&P.
"Register" shall have the meaning provided in Section 9.4(c).
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Requesting Borrower" shall mean the Borrower requesting a Loan or a
conversion or a continuation of a Loan.
"Required Lenders" shall mean, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
the total Revolving Credit Exposures and the Total Unutilized Commitment at such
time.
"Restricted Companies" shall mean the Companies other than any
Unrestricted Subsidiaries.
"Restricted Material Subsidiary" is a Material Subsidiary that is a
Restricted Subsidiary.
"Restricted Payments" shall mean, with respect to any Person, any
direct or indirect (i) dividend or other payment or distribution on account of
or with respect to any Capital Stock (including, in the case of TWE, A, B, C or
D sub-accounts, senior sub-accounts, special sub-accounts or common
sub-accounts) of such Person, (ii) redemption, purchase, retirement, sinking
fund or similar payment or other acquisition for value of any Capital Stock
(including, in the case of TWE, A, B, C or D sub-accounts, senior sub-accounts,
special sub-accounts or common sub-accounts) of such Person, or (iii) entering
into any obligation to effect any of the foregoing, except in each case
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any made (or, in the case of clause (iii), permitted to be made) solely by the
issuance of additional common equity of the issuer of such Capital Stock
(including, in the case of TWE, payments under Article VIII, XIII or XV of the
TWE Partnership Agreement). Notwithstanding the foregoing, so long as no Default
is continuing or would occur after giving effect to such transaction, the
following shall not constitute Restricted Payments: (a) the payment of
Management Fees and Tax Distributions in accordance with the definitions
thereof; and (b) any payment by any Borrower (or any Test Party, as applicable)
to the extent of any cash common equity contributions made to such Borrower (or
such Test Party, as applicable) following the Closing Date (including such
contributions consisting of the cash received as the exercise price of stock
options (other than any applied toward repayment of Stock Option Loans)).
"Restricted Subsidiaries" of any Borrower as of any date shall mean all
Subsidiaries of such Borrower that have not been designated as Unrestricted
Subsidiaries by such Borrower pursuant to Section 6.12 or have been so
designated as Unrestricted Subsidiaries by such Borrower but prior to such date
have been (or have been deemed to be) redesignated by such Borrower as
Restricted Subsidiaries pursuant to Section 6.12.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its Swingline Exposure at such time.
"Revolving Loan" shall mean a Loan made pursuant to Section 2.3.
"S&P" shall mean Standard & Poor's Ratings Group.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933.
"Specified Holders" shall mean Advance, Newhouse and Advance/Newhouse.
"Specified Indebtedness" shall mean Indebtedness described in clauses
(i), (ii) and (vii) of the definition thereof, other than any Permitted
Intercompany Indebtedness or Convertible Intercompany Debt.
"Statutory Reserve Rate" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board of Governors of the Federal Reserve System
to which the Administrative Agent is subject (a) with respect to the Base CD
Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000
with maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board of Governors of the
Federal Reserve System). Such reserve percentages shall include those
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imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stock Option Loans" shall mean (i) borrowings under that certain
Credit Agreement dated as of May 23, 1996 between TWI, The Chase Manhattan Bank,
as administrative agent, and the lenders party thereto, as such agreement is in
effect on the date hereof or as amended hereafter in any manner not materially
less favorable either to the lenders thereunder or to the other creditors of
TWI; provided the lenders thereunder shall not have the benefit of any Lien
other than on the Capital Stock of TWI and proceeds therefrom or (ii) borrowings
under substantially similar facilities.
"Subsidiary" of any Person shall mean and include (a) (i) any
corporation more than 50% of whose Capital Stock of any class or classes having
by the terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries and (ii) any partnership,
association, joint venture or other entity in which such Person directly or
indirectly through Subsidiaries has more than a 50% equity interest at the time,
and (b) with respect to TWIC, Paragon so long as Paragon shall be consolidated
with TWIC pursuant to Section 9.16(c)(iii).
"Subsidiary Guarantee" shall mean a guarantee by a Subsidiary Guarantor
of the Obligations of the Borrower that is its most immediate direct or indirect
parent, substantially in the form of Exhibit D-1.
"Subsidiary Guarantor" shall mean any Person that is required to
execute and deliver a Subsidiary Guarantee pursuant to Section 5.13.
"Summit" shall mean Summit Communications Group, Inc., a Delaware
corporation.
"Swingline Borrowers" shall mean TWE and, following the Diamond
Implementation, TWI.
"Swingline Exposure" shall mean, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" shall mean Chase, in its capacity as lender of
Swingline Loans hereunder.
"Swingline Loan" shall mean a Loan made pursuant to Section 2.4.
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"Swingline Loan Commitment" shall mean $50.0 million for each Swingline
Borrower.
"Tax Distributions" shall mean, with respect to any period,
distributions made (i) to TWE Partners by TWE on or with respect to income and
other taxes under the TWE Partnership Agreement, (ii) to TWEAN Partners by TWEAN
on or with respect to income and other taxes under the TWEAN Partnership
Agreement, (iii) to TWI by TWIC on or with respect to income and other taxes,
which distributions are not in excess of the tax liabilities that would have
been payable by TWIC and its Subsidiaries on a stand-alone basis, or (iv) to TWI
by TBS on or with respect to income and other taxes, which distributions are not
in excess of the tax liabilities that would have been payable by TBS and its
Subsidiaries on a stand-alone basis, in each case, which distributions are
calculated in accordance with, and made no earlier than as required by, the
terms of the applicable agreement.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TBS" shall mean Turner Broadcasting System, Inc., a Georgia
corporation.
"Test Parties" shall mean (i) TWI, (ii) TWE and (iii) TWEAN; and "Test
Party" shall mean any of them.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board of Governors of the Federal Reserve System through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board of Governors of the Federal
Reserve System, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m. on such day (or, if such
day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Total Commitment" shall mean, at any date of determination, the sum of
the Commitments then in effect of each of the Lenders and shall initially equal
$7.5 billion.
"Total Unutilized Commitment" shall mean, at any time, the excess of
the Total Commitment then in effect over the Total Utilized Commitment at such
time.
"Total Utilized Commitment" shall mean, at any time, the sum of (i) the
aggregate principal amount of Revolving Loans then outstanding and (ii) the
aggregate principal amount of Swingline Loans then outstanding.
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"Transactions" shall mean the execution, delivery and performance by
the Credit Parties of the Credit Documents, the borrowing of Loans and the use
of the proceeds thereof.
"Transfer" shall mean the transfer or beneficial assignment to TWEAN by
TWIC or any of its Subsidiaries of one or more Cable Businesses (or one or more
cable systems comprising parts thereof), together with the portion of the then
outstanding Loans (the "Allocated Loans") of TWIC allocated to the applicable
Cable Business or applicable cable system, as the case may be, including the
Transfers contemplated by the TWEAN Transaction Agreement.
"Transfer Documents" shall mean, with respect to any Transfer, the
TWEAN Transaction Agreement or any other documents, agreements and instruments
relating to, or delivered in connection with, such Transfer.
"TWCI" shall mean Time Warner Companies, Inc., a Delaware corporation.
"TWE" shall mean Time Warner Entertainment Company, L.P., a Delaware
limited partnership.
"TWE Beneficial Asset" shall have the meaning given to the term
"Beneficial Asset" in the TWE Partnership Agreement.
"TWE Entities" shall mean TWE, TWEAN and their respective Restricted
Subsidiaries; and "TWE Entity" shall mean any of them.
"TWE Guarantee" shall mean a guarantee by TWE of the Obligations of
TWEAN, substantially in the form of Exhibit D-6.
"TWE Material Beneficial Asset" shall mean any TWE Beneficial Asset
that is (i) a cable franchise and related assets that together have a book or
fair market value of greater than $25.0 million or (ii) any other asset
(including Capital Stock), related group of assets, business or division of TWI
or any of its Subsidiaries (other than TWE and its Subsidiaries) that (x) for
the most recently ended fiscal year of TWE accounted for more than 1% of the
Consolidated Cash Flow of TWE and its Subsidiaries taken as a whole for such
period or (y) has a book or fair market value of greater than $25.0 million.
"TWE Partner" shall mean each Person who shall from time to time be
admitted as a partner of TWE in accordance with the terms hereof and the TWE
Partnership Agreement.
"TWE Partner Guarantee" shall mean a guarantee by a TWE Partner
Guarantor of its Guaranteed Percentage of the Obligations of TWE, substantially
in the form of Exhibit D-2.
"TWE Partner Guarantor" shall mean American Television and
Communications Corporation, Warner Communications Inc. and Warner Cable
Communications Inc.
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"TWE Partnership Agreement" shall mean the Agreement of Limited
Partnership of TWE dated as of October 29, 1991 by and among TWI, USW and
certain of their respective subsidiaries.
"TWE Partnership Interest" shall have the meaning given to the term
"Partnership Interest" in the TWE Partnership Agreement.
"TWEAN" shall mean Time Warner Entertainment-Advance/Newhouse
Partnership, a New York general partnership.
"TWEAN Beneficial Asset" shall have the meaning given to the term
"Beneficial Asset" in the TWEAN Contribution Agreement, including any asset
beneficially assigned pursuant to the TWEAN Transaction Agreement or other
Transfer Document and treated as such pursuant to Section 6.7 of the TWEAN
Contribution Agreement.
"TWEAN Contribution Agreement" shall mean the Contribution Agreement
dated as of September 9, 1994 by and among TWE, Advance, Newhouse and
Advance/Newhouse.
"TWEAN Holder Guarantee" shall mean a guarantee by a TWEAN Holder
Guarantor of the Obligations of TWEAN, substantially in the form of Exhibit D-4.
"TWEAN Holder Guarantor" shall mean a holder of TWEAN Material
Beneficial Assets (other than Advance, Newhouse, Advance/Newhouse and TWE).
"TWEAN Material Beneficial Asset" shall mean any TWEAN Beneficial Asset
that is (i) a cable franchise and related assets that together have a book or
fair market value of greater than $25.0 million or (ii) any other asset
(including Capital Stock), related group of assets, business or division of TWE,
Advance/Newhouse or any of their Subsidiaries (other than TWEAN and its
Subsidiaries) that (x) for the most recently ended fiscal year of TWE or
Advance/Newhouse, as the case may be, would have accounted for more than 1% of
the Consolidated Cash Flow of TWEAN and its Subsidiaries taken as a whole for
such period or (y) has a book or fair market value of greater than $25.0
million.
"TWEAN Partner" shall mean TWE, Advance/Newhouse and each other Person
who shall from time to time be admitted as a partner of TWEAN in accordance with
the terms hereof and the TWEAN Partnership Agreement.
"TWEAN Partnership Agreement" shall mean the Partnership Agreement
dated as of September 9, 1994 by and between Advance/Newhouse and TWE.
"TWEAN Partnership Interest" shall have the meaning given to the term
"Partnership Interest" in the TWEAN Partnership Agreement.
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"TWEAN Transaction Agreement" shall mean the Amended and Restated
Transaction Agreement dated as of October 27, 1997 among Advance, Newhouse,
Advance/Newhouse, TWE, TW Holding Co. and TWEAN.
"TWI" shall mean Time Warner Inc., a Delaware corporation.
"TWI Guarantee" shall mean a guarantee by TWI of the Obligations of
TBS, substantially in the form of Exhibit D-3.
"TWIC" shall mean TWI Cable Inc., a Delaware corporation.
"TWIC Guarantee" shall mean a guarantee by TWI and TWCI of all of the
Obligations of TWIC, substantially in the form of Exhibit D-7.
"Two Thirds Lenders" shall mean, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing at least two-thirds of the
sum of the total Revolving Credit Exposures and the Total Unutilized Commitment
at such time.
"Type," when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unrestricted Subsidiary" of any Borrower shall mean a Subsidiary of
such Borrower that is not a Restricted Subsidiary.
"U.S. Dollars" shall mean dollars in lawful currency of the United
States of America.
"USW" shall mean U S WEST, Inc., a Delaware corporation.
"Wholly Owned Restricted Subsidiary" of any Person shall mean a Wholly
Owned Subsidiary of such Person that is a Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' or nominees' qualifying shares, are
owned by such Person and its Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
"written" or "in writing" shall mean any form of written communication
or a communication by means of telex, telecopier device, telegraph or cable.
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SECTION 1.2. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "ABR Revolving Loan"). Borrowings also may be classified and referred
to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "ABR Revolving Borrowing").
SECTION 1.3. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (b) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, and (c)
all references herein to (i) Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (ii) Persons include their respective permitted successors and
assigns or, in the case of governmental Persons, Persons succeeding to the
relevant functions of such Persons, (iii) agreements and other contractual
instruments include subsequent amendments, assignments, and other modifications
thereto to the date hereof and thereafter, but in the case of any amendment,
assignment or modification after the date hereof, only to the extent such
amendments, assignments or other modifications thereto are not prohibited by
Section 6.10, (iv) statutes and related regulations include any amendments of
same and any successor statutes and regulations, and (v) time shall be deemed to
be to New York City time.
SECTION 1.4. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP. Calculations shall be made in accordance with
Section 9.16.
ARTICLE II.
THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to each Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender's Revolving Credit Exposure exceeding such
Lender's Commitment or (b) the sum of the total Revolving Credit Exposures
exceeding the Total Commitment; provided that (i) the aggregate amount of Loans
outstanding to any one Borrower shall not at any time exceed such Borrower's
Borrowing Cap, (ii) prior to the Diamond Implementation, the aggregate amount of
Loans outstanding to TWIC and TWEAN shall not at any time exceed $5.0 billion
and (iii) at or after the Diamond Implementation, the aggregate amount of Loans
outstanding to the Borrowers (other than TWE or TWEAN) shall not at any time
exceed $6.0 billion. Within the foregoing limits and subject to the
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terms and conditions set forth herein, each Borrower may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.2. Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.12, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Requesting Borrower
may request in accordance herewith. Each Swingline Loan shall be an ABR Loan.
Each Lender at its option may make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower
thereof to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1.0 million and not less than the Minimum Borrowing Amount. At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1.0 million and not less than
the Minimum Borrowing Amount; provided that an ABR Revolving Borrowing may be in
an aggregate amount that is equal to the Total Unutilized Commitment. Each
Swingline Loan shall be in an amount that is an integral multiple of $1.0
million and not less than $5.0 million. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of twenty (20) Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the
Maturity Date.
SECTION 2.3. Requests for Revolving Borrowings. To request a Revolving
Borrowing, a Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., one Business Day before the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.2:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
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(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(v) the location and number of the Requesting Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.5.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Borrowing, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.4. Swingline Loans. (a) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to each
Swingline Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans to such Swingline
Borrower exceeding its Swingline Loan Commitment, (ii) the aggregate principal
amount of outstanding Loans to such Swingline Borrower exceeding its Borrowing
Cap or (iii) the sum of the total Revolving Credit Exposures exceeding the Total
Commitment; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, each Swingline
Borrower may borrow, prepay and reborrow its Swingline Loans.
(b) Notwithstanding paragraph (a), the Administrative Agent (i) shall
not be required to make or to continue to make Swingline Loans to any Swingline
Borrower if it shall have notified such Swingline Borrower of the unavailability
(for any or no reason, in the Administrative Agent's sole discretion) of
Swingline Loans hereunder at least three Business Days prior to the date on
which such Swingline Borrower shall have made its telephonic request therefor,
which notice shall remain effective until rescinded by the Administrative Agent.
(c) To request a Swingline Loan, a Swingline Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon on the day of a proposed Swingline Loan. Each such notice
shall be irrevocable and shall specify the requested date (which shall be a
Business Day) and amount of the requested Swingline Loan. The Administrative
Agent will promptly advise the Swingline Lender of any such notice received from
a Swingline Borrower. The Swingline Lender shall make each Swingline Loan
available to the requesting Swingline Borrower by means of a credit to the
general deposit account of such Swingline Borrower with the Swingline Lender by
3:00 p.m. on the requested date of such Swingline Loan.
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(d) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m. on any Business Day require the
Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding. Such notice shall specify the aggregate amount
of Swingline Loans in which Lenders will participate. Promptly upon receipt of
such notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Lender
shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.5 with
respect to Loans made by such Lender (and Section 2.5 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify each Swingline Borrower
of any participations in any Swingline Loan to it acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from a Swingline Borrower (or other party on
behalf of a Swingline Borrower) in respect of a Swingline Loan to it after
receipt by the Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments pursuant
to this paragraph and to the Swingline Lender, as their interests may appear.
The purchase of participations in a Swingline Loan to any Swingline Borrower
pursuant to this paragraph shall not relieve such Swingline Borrower of any
default in the payment thereof. Notwithstanding the foregoing, a Lender shall
not have any obligation to acquire a participation in a Swingline Loan pursuant
to this paragraph if an Event of Default shall have occurred and be continuing
at the time such Swingline Loan was made and such Lender shall have notified the
Swingline Lender in writing, at least one Business Day prior to the time such
Swingline Loan was made, that such Event of Default has occurred and that such
Lender will not acquire participations in Swingline Loans made while such Event
of Default is continuing.
SECTION 2.5. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.4. The
Administrative Agent will make such Loans available to the Requesting Borrower
by promptly crediting the amounts so received, in like funds, to an account of
the Requesting Borrower maintained with the Administrative Agent in New York
City and designated by the Requesting Borrower in the applicable Borrowing
Request.
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(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Requesting
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Requesting Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Requesting Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Requesting Borrower, the interest rate applicable to ABR Loans.
If such Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.6. Interest Elections. (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.
(b) To make an election pursuant to this Section, the Requesting
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.3 if the
Requesting Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent and
signed by the Requesting Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.2:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
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(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period."
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Requesting Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Requesting Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
SECTION 2.7. Termination and Reduction of Commitments and Borrowings
Caps. (a) Unless previously terminated, the Commitments shall terminate on the
Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time
reduce, the Total Commitment; provided that (i) each reduction of the Total
Commitment shall be in an amount that is an integral multiple of $1.0 million
and not less than the Minimum Borrowing Amount and (ii) the Borrowers shall not
terminate or reduce the Total Commitment if, after giving effect to any
concurrent repayment of the Loans in accordance with Section 2.9, the Revolving
Credit Exposures would exceed the Total Commitment. Any reduction or termination
of the Total Commitment shall reduce Borrowing Caps to the extent necessary so
that no Borrowing Cap will be in excess of the Total Commitment.
(c) Any Borrower may at any time terminate, or from time to time
reduce, its Borrowing Cap; provided that (i) each reduction of a Borrowing Cap
shall be in an amount that is an integral multiple of $1.0 million and not less
than the Minimum Borrowing Amount and (ii) a Borrower shall not terminate or
reduce its Borrowing Cap if, after giving effect to any concurrent
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repayment of the Loans to it in accordance with Section 2.9, the Revolving
Credit Exposures to such Borrower would exceed its Borrowing Cap.
(d) Notice shall be made to the Administrative Agent of any election
under paragraph (b) or (c) of this Section at least three Business Days prior to
the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by a Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Total Commitment delivered by the
Borrowers may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrowers (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Total Commitment or a Borrowing Cap shall be permanent. Each reduction of
the Total Commitment shall reduce the Commitment of each Lender ratably.
SECTION 2.8. Repayment of Loans; Evidence of Debt. (a) In the event
that any limitation set forth in Section 2.1 is exceeded, the applicable
Borrowers shall repay Loans so that such limitation is not exceeded. Each
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Revolving
Loan to it on the Maturity Date. Each Swingline Borrower hereby unconditionally
promises to pay to the Swingline Lender the then unpaid principal amount of each
Swingline Loan to it on the earlier of the Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made to any Swingline
Borrower, such Swingline Borrower shall repay all Swingline Loans to it then
outstanding.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or any Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Loans in accordance with the terms of this Agreement.
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(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.4) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.9. Prepayment of Loans. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section.
(b) The Borrower that desires to make a prepayment shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., three Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., one
Business Day before the date of prepayment or (iii) in the case of prepayment of
a Swingline Loan, not later than 12:00 noon on the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Total Commitment as contemplated by Section 2.7, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.7. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.2.
Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.11 and such other payments as may
be required by Section 2.14.
SECTION 2.10. Fees. (a) Commitment Fee. The Borrowers, jointly and
severally, shall pay to the Administrative Agent for the ratable account of the
Lenders, on each March 31, June 30, September 30, and December 31 and on the
Maturity Date, an aggregate commitment fee (the "Commitment Fee") equal to the
Applicable Rate of each Borrower on the daily average amount of each Borrower's
Availability. The Commitment Fee shall begin to accrue on and after the
Effective Date and shall cease to accrue on the earlier of the Maturity Date and
the date on which the Total Commitment shall have been terminated in full. The
Commitment Fee shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
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(b) The Borrowers agree, jointly and severally, to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrowers and the Administrative
Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of the Commitment Fee, to the Lenders. Fees paid shall not be
refundable under any circumstances.
SECTION 2.11. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, the greater of (x) 2% plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section and (y) 2% plus the rate applicable to ABR Loans and
(ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
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(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.13. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise) by an amount deemed by such Lender
in good faith to be material, then the Borrowers will, jointly and severally,
pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender in good faith to be
material, then from time to time the Borrowers will, jointly and severally, pay
to such Lender such additional amount or amounts as will compensate such Lender
or such Lender's holding company for any such reduction suffered.
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(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall,
jointly and severally, pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Borrowers shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 90 days prior to the date that such Lender
notifies the Borrowers of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 90-day period referred to above shall be
extended to include the period of retroactive effect thereof. Notwithstanding
any other provision of this Section 2.13, no Lender shall demand compensation
for any increased costs or reduction referred to above if it shall not be the
general policy or practice of such Lender to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if any (it
being understood that this sentence shall not in any way limit the discretion of
any Lender to waive the right to demand such compensation in any given case).
SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.9(b) and is revoked in accordance therewith) or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by a Borrower pursuant to
Section 2.17, then, in any such event, the Borrowers shall compensate each
Lender for the loss, cost and expense attributable to such event. Such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrowers and shall be
conclusive absent manifest error. The applicable Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
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SECTION 2.15. Taxes. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or each
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions and (iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes arising out of
its Loans or its or any of its Subsidiaries' being party to any Credit Document
to the relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent and each
Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of such Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to such Borrower by a Lender or by the Administrative Agent on its own behalf or
on behalf of a Lender shall be conclusive absent manifest error.
(d) If a Lender or the Administrative Agent shall become aware that it
is entitled to claim a refund from a taxation authority in respect of
Indemnified Taxes or Other Taxes or Other Taxes as to which it has been
indemnified by a Borrower or with respect to which a Borrower has paid
additional amounts pursuant to this Section 2.15, it shall promptly notify such
Borrower of the availability of such refund claim and shall, within 30 days
after receipt of a request by such Borrower, make a claim to such taxation
authority for such refund at such Borrower's expense. If a Lender or the
Administrative Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) in respect of any Indemnified Taxes or
Other Taxes as to which it has been indemnified by a Borrower or with respect to
which a Borrower has paid additional amounts pursuant to this Section 2.15, it
shall within 30 days from the date of such receipt pay over such refund to such
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section 2.15 with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund, as determined by
such Lender in its sole discretion), net of all out-of-pocket expenses of such
Lender or the Administrative Agent and without interest (other than interest
paid by the relevant taxation authority with respect to such refund); provided
that such Borrower, upon the request of such Lender or the Administrative Agent,
agrees to repay the amount paid over to such Borrower (plus penalties, interest
or other charges) to such Lender or the Administrative Agent in the event such
Lender or the Administrative Agent is required to repay such refund to such
taxation authority.
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(e) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(f) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by such Borrower as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or of amounts payable under
Section 2.13, 2.14 or 2.15, or otherwise) prior to 1:00 p.m. on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.3 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall (subject to the proviso contained in
the definition of "Interest Period") be extended to the next succeeding Business
Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. All payments hereunder shall be
made in U.S. Dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans and
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participations in Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans and participations in Swingline Loans; provided
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by any Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to any Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due from such Borrower to the
Administrative Agent for the account of the Lenders hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event, if such Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.4(c), 2.5(b) or 2.16(d), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.13, or if any Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. Such Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
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(b) If any Lender requests compensation under Section 2.13, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Swingline Lender), which consent shall
not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Each of TWI and the Borrowers represents and warrants (as to itself and
its Subsidiaries) to the Lenders that:
SECTION 3.1. Organization; Powers. Each Credit Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required. Each other Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required, in
each case except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.2. Authorization; Enforceability. The Transactions are within
the Credit Parties' organizational powers and have been duly authorized by all
necessary organizational action. Each Credit Document has been duly executed and
delivered by the Credit Parties party thereto and constitutes a legal, valid and
binding obligation of each such Credit Party, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws
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affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3. Governmental Approvals; No Conflicts. The Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate (i) any
applicable law or regulation or any order of any Governmental Authority or (ii)
any Organizational Document of any Company, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon any
Company or its assets, or give rise to a right thereunder to require any payment
to be made by any Company, and (d) will not result in the creation or imposition
of any Lien on any asset of any Company, except, in each case (other than clause
(b)(ii) with respect to any Credit Party), such as could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
SECTION 3.4. Financial Condition; No Material Adverse Change. (a) Each
of TWI, TWE, TBS, TWEAN and TWIC has heretofore furnished to the Lenders its
audited Financial Statements for the fiscal year ended December 31, 1996 and the
unaudited Financial Statements for the three months and six months ended June
30, 1997 and 1996 (it being understood that the audited Financial Statements of
TBS for the fiscal year ended December 31, 1996 were prepared on a historical
basis without giving effect to the merger of TBS with a wholly owned subsidiary
of TWI). Such Financial Statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the entities to
which they relate as of the dates and for the periods to which they relate in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the interim statements.
(b) The projected financial statements of any Person included in the
Confidential Information Memorandum were prepared by management of such Person
on the basis of the assumptions set forth therein that such management
reasonably believed were reasonable at the date of such projected financial
statements in light of the historical financial performance of such Person and
its Subsidiaries and of their current and reasonably foreseeable business
conditions.
(c) After giving effect to all Indebtedness and other obligations to be
Incurred by the Companies as of each date this representation is required to be
made and after giving effect to the application of the proceeds of any such
Indebtedness and other obligations (including to the repayment of other
Indebtedness), (i) no final judgments against any Company in actions for money
damages with respect to pending or threatened litigation will have been rendered
in an amount such that such Company will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered), (ii) the sum of the
assets, at a fair valuation, of each Credit Party will exceed its debts, (iii)
no Credit Party will have incurred or intended to, or believe that it will,
incur debts beyond its ability to pay such debts as such debts mature and (iv)
each Credit Party will have sufficient capital with which to conduct its
business. For purposes of this Section 3.4, "debt" shall mean any liability on a
claim; and "claim" shall mean any (x) right to payment whether or not such a
right is reduced to judgment, liquidated, unliquidated,
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fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(d) Since December 31, 1996, there has been no material adverse change
in the business, assets, operations or condition, financial or otherwise, of TWI
and its Subsidiaries, taken as a whole, or of any Borrower and its Subsidiaries,
taken as a whole.
SECTION 3.5. Properties. (a) Each Borrower and its Subsidiaries and TWI
and its Subsidiaries (other than any Borrower and its Subsidiaries) have good
title to, or valid leasehold interests in, all its real and personal property
material to the business of such Borrower and its Subsidiaries taken as a whole
or TWI and such Subsidiaries taken as a whole, as the case may be, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes.
(b) Each Borrower and its Subsidiaries and TWI and its Subsidiaries
(other than any Borrower and its Subsidiaries) own, or are licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to the business of such Borrower and its Subsidiaries taken as a whole
or TWI and such Subsidiaries taken as a whole, as the case may be, and the use
thereof by such Company does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.6. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrowers, threatened
against or affecting any Company as to which there is a reasonable possibility
of an adverse determination and that, if adversely determined, could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(b) Except with respect to any matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, (x) no Company (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, or (iii) has received notice of any claim with respect to any
Environmental Liability and (y) no Borrower has knowledge of any basis for any
Environmental Liability on the part of any Restricted Company.
SECTION 3.7. Compliance with Laws and Agreements. Each Company is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.
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SECTION 3.8. Government Regulation. No Company (i) is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, (ii) is subject
to regulation under the Federal Power Act or the Interstate Commerce Act, (iii)
is an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, or (iv) is subject to
any other statute or regulation which regulates the incurrence of indebtedness
for borrowed money, other than, in the case of this clause (iv), Federal and
state securities laws and as could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.9. Taxes. Each Company has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which such
Company has set aside on its books adequate reserves in accordance with GAAP or
(b) to the extent that the failure to do so could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations of all underfunded Plans of all Companies (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $50.0 million the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11. True and Complete Disclosure. As of the date hereof and
as of the Closing Date, all information heretofore or contemporaneously
furnished by or on behalf of any Company (including all information contained in
the Documents, the Confidential Information Memorandum and the annexes,
schedules and other attachments thereto but not including any projected
financial statements), when taken together with the reports and other filings
with the SEC made under the Exchange Act by TWI, TWE and TWIC in 1997, is, and
all other such information hereafter furnished, including all information
contained in any of the Documents, including any annexes or schedules thereto,
by or on behalf of any Company to or on behalf of any Lender is and will be (as
of their respective dates, the Effective Date and the Closing Date), true and
accurate in all material respects and not incomplete by omitting to state a
material fact necessary to make such information not misleading at such time.
There is no fact of which TWI or any Borrower is aware which has not been
disclosed to the Lenders in writing pursuant to the terms of this Agreement
prior to the date hereof and which, singly or in the aggregate with all such
other facts of which TWI or such Borrower is aware, could reasonably be expected
to result in a Material Adverse Effect. All statements of fact and
representations concerning the present and anticipated business, operations and
assets of each Company, the Documents and the transactions referred to therein
are true and correct in all material respects, and all assumptions with respect
thereto contained therein are reasonable in all material respects.
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SECTION 3.12. Partnership Tax Matters. As of the Closing Date, each of
TWE and TWEAN will be treated as a partnership for federal income tax purposes,
and not as a publicly traded partnership within the meaning of Section 7704 of
the Code.
SECTION 3.13. Beneficial Assets. (a) The fair market value (in the
reasonable good faith judgment of TWE) at the Closing Date of all TWE Beneficial
Assets (without duplication) will not exceed $2.0 billion. Schedule 3.13A sets
forth a complete and accurate list of all TWE Material Beneficial Assets and the
holders thereof as of the date hereof. All TWE Material Beneficial Assets are
directly held by TWE Partner Guarantors. The fair market value of all TWE
Beneficial Assets held by Persons other than TWE Partner Guarantors does not
exceed $100.0 million in the aggregate.
(b) The fair market value (in the reasonable good faith judgment of
TWEAN) at the Closing Date of all TWEAN Beneficial Assets (without duplication)
will not exceed $2.0 billion. Schedule 3.13B sets forth a complete and accurate
list of all TWEAN Material Beneficial Assets and the holders thereof as of the
date hereof. Except as set forth in Schedule 3.13B, all TWEAN Material
Beneficial Assets are held by Guarantors of the Obligations of TWEAN. The fair
market value of all TWEAN Beneficial Assets held by Persons other than
Guarantors of the Obligations of TWEAN does not exceed $100.0 million in the
aggregate, and the number of subscribers served by cable television systems
constituting TWEAN Material Beneficial Assets held by Persons other than
Guarantors of the Obligations of TWEAN does not exceed 20,000.
SECTION 3.14. Guarantees. Schedule A sets forth a true and complete
list as of the date hereof of all the Persons that are required to be Guarantors
hereunder and the Guarantees required to be delivered by each.
ARTICLE IV.
CONDITIONS PRECEDENT
SECTION 4.1. Initial Loans. The Initial Loans shall be subject to the
satisfaction of each of the following conditions:
(a) Credit Agreement. The Administrative Agent (or its counsel) shall
have received from each Credit Party listed on the signature pages hereof a
duly executed counterpart of this Agreement.
(b) Opinions of Counsel. The Administrative Agent shall have received a
favorable written opinion (addressed to the Administrative Agent and the
Lenders and dated the Closing Date) of Paul, Weiss, Rifkind, Wharton &
Garrison, counsel for the Credit Parties, substantially in the form of
Exhibit E-1, and of Peter R. Haje, Esq., General Counsel of the Borrowers,
substantially in the form of Exhibit E-2, and, in each case, with such
changes and covering such other matters as the Administrative Agent shall
reasonably agree to or request. The Credit Parties hereby request such
counsel to deliver such opinion.
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(c) Officers' Certificates.
(i) The Administrative Agent shall have received (with copies for
each Lender) an Officers' Certificate from TWI and each Borrower dated
the Closing Date, in form and substance reasonably satisfactory to the
Administrative Agent, stating that each of the conditions set forth in
Sections 4.1(d), (e) (only as to the second sentence thereof), and (j)
and 4.4 are, as to such Person and its Subsidiaries, satisfied as of
the Closing Date.
(ii) The Administrative Agent shall have received (with copies for
each Lender) an Officer's Solvency Certificate dated the Closing Date
from each Borrower.
(iii) The Administrative Agent shall have received (with copies for
each Lender) a certificate from each Borrower setting forth the
Applicable Rate for such Borrower and (i) if based on ratings, such
Borrower's Index Debt and the ratings therefor and (ii) if based on
such Borrower's Leverage Ratio, the calculation of such Leverage Ratio
in reasonable detail.
(d) No Defaults. No default shall have occurred, and no event shall
have occurred and no condition shall exist that with the lapse of time or
notice or both would constitute a default, before giving effect to the
Initial Loans and the other transactions to occur on the Closing Date,
under the Existing Credit Agreements.
(e) Organizational Documents, Etc. The Administrative Agent shall have
received copies of (i) each Organizational Document and (ii) any material
agreements entered into by any Credit Party, as of the Closing Date,
governing the terms and relative rights of the Capital Stock of any Credit
Party and any such agreements entered into by partners or shareholders (as
applicable) relating to any Credit Party, certified as true and complete by
an appropriate officer or Governmental Authority, and the provisions of
each of the foregoing shall be reasonably satisfactory to the
Administrative Agent. Each Organizational Document shall be in full force
and effect.
(f) Corporate Proceedings. All corporate, partnership, legal and other
proceedings in connection with the authorization, execution and delivery by
the Credit Parties of the Credit Documents and the transactions to occur on
the Closing Date shall be reasonably satisfactory in form and substance to
the Administrative Agent. The Administrative Agent shall have received all
information and copies of all certificates, documents and papers, including
records of corporate, partnership and other proceedings and governmental
approvals, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or partnership authorities
or Governmental Authorities.
(g) Payment of Fees. All fees and reimbursable expenses due and payable
to the Lenders and the Administrative Agent and its counsel pursuant to the
Credit Documents and
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their respective commitment letters, fee letters and otherwise, and
pursuant to the Existing Credit Agreements and otherwise, shall have been
paid in full to each such Person.
(h) Guarantees. There shall have been duly executed and delivered to
the Administrative Agent: (i) a TWE Partner Guarantee from each TWE Partner
Guarantor; (ii) the TWI Guarantee; (iii) a TWEAN Holder Guarantee from each
TWEAN Holder Guarantor; (iv) the TWE Guarantee; (v) the Paragon Guarantee;
(vi) the TWIC Guarantee; and (vii) each Subsidiary Guarantee required at
such time by Section 5.13.
(i) Beneficial Assets. To the extent that any TWEAN Beneficial Assets
held by an affiliate of Advance or Newhouse are to be included in the
covenant calculations pursuant to Section 9.16, the Administrative Agent
shall have received a letter from each of Advance and Newhouse addressed to
the Lenders, in the form of Exhibit F, stating that Advance or Newhouse, as
the case may be, agrees to comply, and cause each other holder of TWEAN
Beneficial Assets that is an Affiliate of Advance or Newhouse, as the case
may be, to comply, with each and every covenant or other provision of the
Credit Agreement applicable to Advance or Newhouse, as the case may be, in
its capacity as a holder of TWEAN Material Beneficial Assets or to such
other holder.
(j) Termination of Existing Credit Agreements. Simultaneously with the
making of the Initial Loans, all Indebtedness outstanding under the
Existing Credit Agreements shall be repaid, together with all interest
thereon and other amounts owing in respect thereof, all commitments
thereunder shall be cancelled and the Existing Credit Agreements shall be
terminated, all on terms reasonably satisfactory to the Administrative
Agent.
Notwithstanding the foregoing, the obligations of the Lenders to make Initial
Loans shall not become effective unless each of the foregoing conditions is
satisfied at or prior to 3:00 p.m. on November 30, 1997 (and, in the event such
conditions are not so satisfied, the Commitments shall terminate at such time).
SECTION 4.2. Assumptions. Each Assumption is subject to the
satisfaction of each of the following conditions:
(a) Officers' Certificates.
(i) Each Lender shall have received, seven (7) Business Days prior to
the applicable Assumption Date (or at such other time as the Administrative
Agent shall agree), an Officers' Certificate that shall (1) outline the
material terms and conditions of the Applicable Transfer, including the
consideration to be received (including the amount of Allocated Loans to be
assigned) by TWIC and its Subsidiaries, (2) list the Persons, if any, that
will cease to be Subsidiaries of TWIC and become Subsidiaries of TWEAN upon
consummation of the Applicable Transfer, (3) state the Leverage Ratio of
each Borrower as of the last day of the most recently ended fiscal quarter
for which financial statements have been filed with the SEC or become
generally
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available, determined on a pro forma basis after giving effect to the
Applicable Transfer, (4) set forth the amount of the Allocated Loans and
(5) set forth such other information as the Administrative Agent or the
Required Lenders shall reasonably request, and each of the foregoing shall
be reasonably satisfactory to the Administrative Agent and the Required
Lenders.
(ii) The Administrative Agent shall have received an Officers'
Certificate from TWIC dated such Assumption Date stating that, in form and
substance reasonably satisfactory to the Administrative Agent, the
conditions set forth in Sections 4.2(c) (only as to the first sentence
thereof), (d), (e) and (f) and 4.4 are satisfied.
(b) Opinions of Counsel. The Administrative Agent shall have received
opinions in form and substance reasonably satisfactory to the Administrative
Agent, addressed to the Administrative Agent and to each Lender and dated such
Assumption Date, from (i) Paul, Weiss, Rifkind, Wharton & Garrison or such other
counsel for the Credit Parties acceptable to the Administrative Agent, which
opinion shall cover the matters contained in Exhibit G-1, and (ii) Peter R.
Haje, Esq., General Counsel of the Borrowers, which opinion shall cover the
matters contained in Exhibit G-2, and, in each case, with such changes and
covering such other matters as the Administrative Agent shall reasonably agree
to or request. The Credit Parties hereby request such counsel to deliver such
opinion.
(c) Terms of Transfer. The consideration to be paid (including TWEAN's
assumption of the Allocated Loans) by TWEAN shall not exceed the fair market
value of the assets to be acquired (including by beneficial assignment) by
TWEAN. The terms and conditions of the Applicable Transfer shall be reasonably
satisfactory to the Administrative Agent (it being understood that the
provisions of the TWEAN Transaction Agreement are satisfactory to the
Administrative Agent).
(d) Assumption of Loans. The Assumption of the Allocated Loans shall
occur simultaneously with the consummation of the Applicable Transfer.
(e) Borrowing Cap. After giving pro forma effect to the Applicable
Transfer, including the Assumption of the Allocated Loans, all Loans then
outstanding to each of TWIC and TWEAN shall not exceed such Borrower's Borrowing
Cap and the limitations set forth in the proviso of Section 2.1.
(f) Transfer Documents. The Administrative Agent shall have received
true and complete copies of all of the applicable Transfer Documents. Any
amendment, modification, waiver or forbearance of any provision of any of the
applicable Transfer Documents shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(g) Guarantees. Each Guarantee required by Section 5.13 shall have been
executed and delivered to the Administrative Agent.
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(h) Corporate Proceedings. All corporate, partnership, legal
and other proceedings shall be reasonably satisfactory in form and
substance to the Administrative Agent. The Administrative Agent shall
have received all information and copies of all certificates, documents
and papers, including records of corporate, partnership and other
proceedings and governmental approvals, if any, which the
Administrative Agent reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified
by proper corporate or partnership authorities or Governmental
Authorities.
SECTION 4.3. Diamond Implementation. The effectiveness of the addition
of TWI and TWCI as Borrowers is subject to the satisfaction of each of the
following conditions:
(a) Guarantees. The Diamond Guarantee and each Guarantee required by
5.13 shall have been duly executed and delivered to the Administrative
Agent.
(b) Corporate Proceedings. All corporate, partnership, legal and other
proceedings in connection with the authorization, execution and delivery of
the Diamond Guarantee and the transactions to occur at the Diamond
Implementation shall be reasonably satisfactory in form and substance to
the Administrative Agent. The Administrative Agent shall have received all
information and copies of all certificates, documents and papers, including
records of corporate, partnership and other proceedings and governmental
approvals, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or partnership authorities
or Governmental Authorities.
(c) Opinion of Counsel. The Administrative Agent shall have received an
opinion in form and substance reasonably satisfactory to the Administrative
Agent, addressed to the Administrative Agent and each Lender and dated the
date of the Diamond Implementation, from Paul, Weiss, Rifkind, Wharton &
Garrison or such other counsel for the Credit Parties acceptable to the
Administrative Agent, which opinion shall cover the matters contained in
Exhibit H, with such changes and covering such other matters as the
Administrative Agent shall reasonably agree to or request. The Credit
Parties hereby request such counsel to deliver such opinion.
(d) Other. Any obligation of TWI or any of its Subsidiaries (other than
any Borrower or any of its Subsidiaries) to effect any transaction limited
by Section 6.6(b) shall be permitted under Section 6.6 (treating such
obligation as if it were being entered into as of the proposed date of the
Diamond Implementation).
SECTION 4.4. Each Credit Event. Each Credit Event is subject to the
satisfaction (or waiver in accordance with Section 9.2) of each of the following
conditions:
(a) The representations and warranties of the Credit Parties set forth
in this Agreement shall be true and correct on and as of the date of such
Credit Event, except to the extent expressly made as of an earlier date.
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(b) At the time of and immediately after giving effect to such Credit
Event, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Credit Parties on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V.
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan, all fees payable hereunder and all other
Obligations, are paid in full (but with respect to such other Obligations only
to the extent that actual amounts hereunder are owing at the time the Loans,
together with interest and fees, have been paid in full), TWI (prior to the
Diamond Implementation as to Sections 5.1, 5.2, 5.9 and 5.11 only) and each
Borrower (for itself and its Subsidiaries), covenants and agrees with the
Lenders that:
SECTION 5.1. Financial Statements and Other Information. (x) Prior to
the Diamond Implementation, TWI and such Borrower and (y) at or after the
Diamond Implementation, each Test Party will furnish to the Administrative Agent
and each Lender:
(a) within 105 days after the end of each fiscal year of such Person,
its audited Financial Statements and unaudited Adjusted Financial
Statements for such year, setting forth in each case in comparative form
the figures for the previous fiscal year (it being understood that, in the
case of TBS, no such comparative figures shall be required for any period
prior to January 1, 1997), and, in the case of the audited Financial
Statements, reported on by Ernst & Young LLP or other independent public
accountants of recognized national standing (without a "going concern"
qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such Financial Statements
present fairly in all material respects the financial condition and results
of operations of such Person and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied; provided
that, so long as no Default has occurred and is continuing, such Person
shall not be required to furnish Adjusted Financial Statements for any
fiscal year if all Unrestricted Subsidiaries of such Person (other than any
such Unrestricted Subsidiaries that are already treated as equity
investments on such Person's Financial Statements) on a combined basis
would not have constituted a Material Subsidiary of such Person for such
fiscal year;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of such Person (beginning with the fiscal
quarter ended September 30, 1997), its Financial Statements and Adjusted
Financial Statements for such fiscal quarter and the then elapsed portion
of the fiscal year, setting forth in each case in comparative form the
figures for (or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year (it being
understood that, in the case of TBS, no such comparative
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figures shall be required for any period prior to January 1, 1997), all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of such
Person and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes; provided that, so long as no
Default has occurred and is continuing, such Person shall not be required
to furnish Adjusted Financial Statements for any fiscal quarter if all
Unrestricted Subsidiaries of such Person (other than any such Unrestricted
Subsidiaries that are already treated as equity investments on such
Person's Financial Statements) on a combined basis would not have
constituted a Material Subsidiary of such Person for such fiscal quarter;
(c) concurrently with any delivery of Financial Statements under clause
(a) or (b) above, a certificate of a Financial Officer of such Person, (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto and (ii) setting forth (1) reasonably
detailed calculations demonstrating compliance with Sections 6.6 and 6.9,
(2) prior to the Diamond Implementation, a reasonably detailed calculation
of the ratio described in Section 6.4(I)(c) as of the last day of the
fiscal period covered by such Financial Statements, (3) in the case of TWE,
a list of the TWE Material Beneficial Assets then still held by TWI and its
Affiliates, (4) in the case of TWEAN, a list of the TWEAN Material
Beneficial Assets held by TWEAN Partners and their Affiliates and (5) a
reasonably detailed calculation of each Borrower's Maximum Permitted
Indebtedness;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
any Company with respect to its securities with the SEC, or with any
national securities exchange, or distributed by any Company to its security
holders generally, as the case may be (other than registration statements
on Form S- 8, filings under Section 16(a) of the Exchange Act and routine
filings relating to employee benefit plans);
(e) (i) within 60 days after the close of each of the first three
fiscal quarters and within 105 days after the close of each fiscal year
of such Borrower or, after the Diamond Implementation, such Test Party,
an Interest Rate Certificate setting forth the Applicable Rate for such
Borrower and (i) if based on ratings, such Borrower's Index Debt and
the ratings therefor and (ii) if based on such Borrower's Leverage
Ratio, the calculation of such Leverage Ratio in reasonable detail as
at the end of such fiscal quarter or fiscal year;
(ii) within 5 Business Days after any change in any rating of the
Index Debt of such Borrower or, after the Diamond Implementation, such
Test Party, an Interest Rate Certificate setting forth the new rating
and the effective date thereof; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of TWI
or such Borrower or any of their
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respective Subsidiaries, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request, including
quarterly cable television statistical data.
SECTION 5.2. Notices of Material Events. Promptly after obtaining
knowledge thereof, TWI and such Borrower will furnish to the Administrative
Agent and each Lender written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any
Company that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability to the Companies in an aggregate amount exceeding $10.0
million; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of each Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 5.3. Existence; Conduct of Business. Such Borrower will, and
will cause each of its Restricted Material Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and, except as could not reasonably be expected to have a
Material Adverse Effect, the rights, licenses, permits, privileges and
franchises for the conduct of its business; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.2.
SECTION 5.4. Payment of Obligations. Such Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.5. Maintenance of Properties; Insurance. Such Borrower will,
and will cause each of its Restricted Subsidiaries to, (a) keep and maintain all
property material to the conduct of the business of such Borrower and its
Subsidiaries, taken as a whole in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
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insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.6. Books and Records; Inspection Rights. Such Borrower will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. Such Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.7. Compliance with Laws. Such Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.8. Use of Proceeds. The proceeds of the Loans will be used to
refinance indebtedness (including the Existing Credit Agreements and certain
intercompany indebtedness), and for general corporate purposes, including
capital expenditures, working capital needs, acquisitions, dividends,
distributions and other payments permitted hereunder. No part of the proceeds of
any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board of Governors of the
Federal Reserve System, including Regulations G, U and X.
SECTION 5.9. Fiscal Periods; Accountants. (a) TWI and its Subsidiaries
will keep the same financial reporting periods as are in effect on the date
hereof.
(b) Unless the Administrative Agent shall have otherwise consented in
writing (which consent shall not be unreasonably withheld), such Borrower will
maintain the same firm of certified independent accountants as the other
Borrowers and TWI, which firm shall be of national standing.
SECTION 5.10. Enforcement of Rights Under Partnership Agreements. Each
of the Partnership Borrowers will take all reasonable action, on a reasonably
timely basis, to enforce all of its rights against its respective Partners and
their Affiliates under the applicable Partnership Agreement or otherwise, except
to the extent that a failure to do so could not reasonably be expected to result
in a Material Adverse Effect (provided that such exception shall not apply with
respect to the right of TWE and TWEAN to receive contributions of cash flow from
TWE Material Beneficial Assets and TWEAN Material Beneficial Assets,
respectively).
SECTION 5.11. TWE Beneficial Assets. TWI will (i) cause each holder of
TWE Beneficial Assets to comply with each and every covenant or other provision
of this Agreement applicable to such holder and (y) use its best efforts
(subject to its reasonable business judgment) to
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continue to seek all relevant authorizations, orders, approvals and franchises
with respect to the transfer of such TWE Beneficial Assets to TWE, and
contribute any assets contemplated to be transferred to TWE but not so
transferred as of the Closing Date.
SECTION 5.12. TWEAN Beneficial Assets. TWE will, or will cause each
holder of TWEAN Beneficial Assets that is an Affiliate of TWE, to (i) comply
with each and every covenant or other provision of this Agreement applicable to
such holder and (ii) use its best efforts (subject to its reasonable business
judgment) to continue to seek all relevant authorizations, orders, approvals and
fran chises with respect to the transfer of such TWEAN Beneficial Assets to
TWEAN), and to contribute any assets contemplated to be transferred to TWEAN but
not so transferred as of the Closing Date (subject to Section 6.7 of the TWEAN
Contribution Agreement).
SECTION 5.13. Guarantees. (a) Such Borrower will cause each of its
Restricted Subsidiaries that guarantees, or otherwise provides credit support
with respect to, any Indebtedness of TWI or any of TWI's Subsidiaries (other
than Subsidiaries of such Restricted Subsidiary) to execute and deliver to the
Administrative Agent a Subsidiary Guarantee, guaranteeing the Obligations of
such Borrower.
(b) TBS will cause its Restricted Subsidiaries to execute and deliver
to the Administrative Agent a Subsidiary Guarantee, guaranteeing the Obligations
of TBS, to the extent necessary so that the aggregate amount of Specified
Indebtedness owed by Restricted Subsidiaries of TBS that are not Guarantors does
not exceed $100.0 million.
(c) At or after the Diamond Implementation, TWI will cause its
Restricted Subsidiaries to execute and deliver to the Administrative Agent a
Subsidiary Guarantee, guaranteeing the Obligations of TWI, to the extent
necessary so that the aggregate amount of Specified Indebtedness owed by
Restricted Subsidiaries of TWI (other than any Borrower and any Subsidiary of
any Borrower) that are not Guarantors does not exceed $150.0 million.
(d) Each of TWEAN and TWIC will cause each of its Wholly Owned
Restricted Subsidiaries that has Specified Indebtedness outstanding and is, or
together with any other such Subsidiary that has Specified Indebtedness
outstanding and is not already party to a Subsidiary Guarantee would be, a
Material Subsidiary to execute and deliver a Subsidiary Guarantee guaranteeing
the Obligations of its Borrower parent (it being understood that Subsidiaries
that collectively would not be a Material Subsidiary need not execute a
Subsidiary Guarantee unless any such Subsidiary conducts a business that is part
of that conducted by another Subsidiary that executes or is required to execute
a Subsidiary Guarantee).
(e) Section 5.13(b), (c) or (d) shall not require a Subsidiary
Guarantee from any Subsidiary that is (a) a Foreign Subsidiary, (b) a domestic
Subsidiary whose only assets are (x) the Capital Stock of one or more Foreign
Subsidiaries or (y) foreign business operations or (c) subject to a contractual
restriction that prohibits such Subsidiary from issuing a Subsidiary Guarantee
(so long as such restriction is in effect), which restriction is existing at the
Closing Date or at the time such Subsidiary is acquired.
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(f) TWEAN will cause holders of TWEAN Beneficial Assets to execute and
deliver a TWEAN Holder Guarantee to the extent necessary so that the
representation in the second and third sentences of Section 3.13(b) will
continue to be accurate.
(g) Each Guarantee shall be delivered together with board resolutions
authorizing the same and an opinion of counsel as to its due authorization,
execution, delivery and enforceability (with customary exceptions), to the
Administrative Agent.
ARTICLE VI.
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan, all fees payable hereunder and all other Obligations
are paid in full (but with respect to such other Obligations only to the extent
that actual amounts hereunder are owing at the time the Loans, together with
interest and fees, have been paid in full), TWI (prior to the Diamond
Implementation as to Section 6.3(c) only) and each Borrower, or Test Party, as
applicable (for itself and its Subsidiaries), covenants and agrees with the
Lenders that:
SECTION 6.1. Changes in Business. Such Borrower will not, and will not
cause or permit any of its Restricted Material Subsidiaries to, directly or
indirectly, alter in a fundamental and substantial manner the character or scope
of the businesses of such Borrower and its Subsidiaries taken as a whole from
that conducted by its respective businesses immediately prior to the Closing
Date (other than as would occur as a result of any Transfer).
SECTION 6.2. Mergers, Etc. (a) (i) Prior to the Diamond Implementation,
such Borrower will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, in a single transaction or series of
related transactions, sell, transfer or otherwise dispose of all or a
substantial portion of such Borrower's consolidated assets (other than in a
Transfer and other than a sale, transfer or disposition to such Borrower or any
Restricted Subsidiary of such Borrower).
(ii) At or after the Diamond Implementation, such Test Party will not,
and will not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, in a single transaction or series of related transactions, sell,
transfer or otherwise dispose of all or a substantial portion of such Test
Party's consolidated assets (other than in a Transfer and other than a sale,
transfer or disposition to such Test Party or any Restricted Subsidiary of such
Test Party).
(b) Such Borrower will not, directly or indirectly, cause or suffer the
wind up, liquidation or dissolution of its affairs (other than, in the case of a
Partnership Borrower, a temporary dissolution immediately followed by
reformation deemed to occur because of a transfer of a Partnership Interest);
provided that (i) if (x) all Loans to TWEAN have been or are being repaid in
full (together with all interest thereon and all other amounts then owing in
respect thereof) and (y) the Borrowing Cap of TWEAN is permanently reduced to
$0, TWEAN may be dissolved or liquidated in
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accordance with the terms of the TWEAN Partnership Agreement; or (ii) following
the Diamond Implementation, any Diamond Party may liquidate or merge into its
Diamond Party parent.
(c) Such Borrower will not enter into a transaction of consolidation or
merger unless (i) before and after giving effect on a pro forma basis to such
consolidation or merger, no Default shall have occurred and be continuing and
(ii) such Borrower shall survive the consolidation or merger, unless such
consolidation or merger is with another Borrower or a Restricted Subsidiary of
any Borrower and the survivor of such consolidation or merger assumes all of the
Obligations of such Borrower on terms reasonably satisfactory to the
Administrative Agent.
(d) No holder of TWE Material Beneficial Assets shall enter into a
transaction of consolidation or merger with any Person; provided that, if before
and after giving effect thereto, no Default shall have occurred and be
continuing, the foregoing clause shall not prohibit a consolidation or merger
with (i) a TWE Partner Guarantor, (ii) any Person that holds TWE Material
Beneficial Assets or (iii) any other Person that guarantees the Obligations of
TWE on terms reasonably satisfactory to the Administrative Agent. No holder of
TWEAN Material Beneficial Assets (other than Advance, Newhouse or
Advance/Newhouse) shall enter into a transaction of consolidation or merger with
any Person; provided that, if before and after giving effect thereto, no Default
shall have occurred and be continuing, the foregoing clause shall not prohibit a
consolidation or merger with (x) another Person that holds TWEAN Material
Beneficial Assets or (y) any other Person that guarantees the Obligations of
TWEAN on terms reasonably satisfactory to the Administrative Agent.
SECTION 6.3. Liens. (a) Such Borrower will not, and will not cause or
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to any of its property or assets (whether
real or personal, tangible or intangible and whether now owned or here after
acquired) to secure Indebtedness.
(b) The foregoing shall not prohibit:
(i) Liens existing on the date hereof described on Schedule 6.3,
without giving effect to any subsequent extension, renewal or
refunding, which Liens do not secure Indebtedness in excess of $10.0
million in the aggregate for each such Borrower and its Subsidiaries
(other than any Borrower and its Subsidiaries) or apply to property or
assets of each such Borrower and its Subsidiaries (other than any
Borrower and its Subsidiaries) having a fair market value in excess of
$10.0 million in the aggregate;
(ii) Liens (including security interests arising under or in
connection with Capital Lease Obligations) securing Indebtedness of any
Borrower or any of its Restricted Subsidiaries otherwise permitted to
be outstanding hereunder, so long as at the time of the securing of any
such Indebtedness, the aggregate amount of such secured Indebtedness of
(x) prior to the Diamond Implementation, such Borrower and its
Restricted Subsidiaries in the aggregate does not exceed 10% (5% in the
case of TWIC) of such Borrower's Maximum Permitted Indebtedness
(calculated on a pro
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forma basis) and (y) at or after the Diamond Implementation, such Test
Party and its Restricted Subsidiaries in the aggregate does not exceed
10% of such Test Party's Maximum Permitted Indebtedness (calculated on
a pro forma basis); provided that the fair market value of all assets
subject to Liens under this clause (ii) shall not at the time of
creation of any such Lien exceed 120% of the total amount of
Indebtedness so secured (it being understood that the fair market value
used for the foregoing calculation shall be the fair market value of
each relevant asset at the time of creation of the Lien with respect to
such asset, without a re-determination of such fair market value being
made at the time of creation of any subsequent Liens on any other
asset);
(iii) Liens securing Indebtedness of any Borrower or any Subsidiary
of such Borrower to such Borrower or to a Wholly Owned Restricted
Subsidiary of such Borrower;
(iv) Liens on interests in or investments in any Unrestricted
Subsidiary or in any other Person that is not a Subsidiary of such
Borrower securing Indebtedness of such Unrestricted Subsidiary or such
other Person;
(v) with respect to TWE or TBS, Liens to secure Film Financings
permitted under Section 6.4(I)(a)(i)(1) or (ii)(1) or Section
6.4(II)(ii)(1) or (iii)(1); provided that such Liens shall extend only
to the property or assets acquired with such Film Financing;
(vi) any Lien securing Acquired Indebtedness or Purchase Money
Indebtedness (including security interests arising under or in
connection with Capital Lease Obligations); provided that such Liens
shall not extend to any asset or Person other than the asset or Person
acquired or subject to such capital lease;
(vii) Liens on Capital Stock of TWI and proceeds therefrom securing
Stock Option Loans to the extent permitted by the definition thereof;
and
(viii) any Copyright Liens securing obligations specified in the
definition thereof.
(c) TWI will not cause or permit any Capital Stock owned by it or any
of its Subsidiaries in any Borrower (other than Capital Stock of TWI) to be
subject to any Lien. Such Borrower will not cause or permit any Capital Stock
owned by it or any of its Subsidiaries in any Material Restricted Subsidiary of
such Borrower to be subject to any Lien. The foregoing shall not prohibit any
Lien (i) permitted by Section 6.3(b)(iii), (ii) constituting a restriction on
transfer of Capital Stock contained in a partnership or stockholders agreement,
(iii) arising by operation of law and being contested in good faith or (iv) on
Capital Stock of any Material Restricted Subsidiary existing at the time it
became a Subsidiary of a Borrower (and not incurred in anticipation of such
Material Restricted Subsidiary becoming a Subsidiary of a Borrower).
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SECTION 6.4. Indebtedness. (I) Prior to the Diamond Implementation:
(a) Such Borrower will not cause or permit any of its Restricted
Subsidiaries (other than a Borrower) or any holder of Material Beneficial Assets
(other than any Specified Holder or any Borrower) to Incur any Indebtedness
other than:
(i) with respect to Restricted Subsidiaries of TWE (other than TWEAN
and its Subsidiaries) and holders of TWE Material Beneficial Assets (other
than any Specified Holder), (1) Film Financings and (2) other Indebtedness
of up to $350.0 million in the aggregate at any time outstanding;
(ii) with respect to Restricted Subsidiaries of TBS, (1) Film
Financings and (2) other Indebtedness of up to $250.0 million in the
aggregate at any time outstanding;
(iii) with respect to Restricted Subsidiaries of TWEAN, Indebtedness of
up to $100.0 million in the aggregate at any time outstanding;
(iv) with respect to Restricted Subsidiaries of TWIC, Indebtedness of
up to $50.0 million in the aggregate at any time outstanding;
(v) Convertible Intercompany Debt and Permitted Intercompany
Indebtedness;
(vi) the Guarantees and any guarantee by TWIC or any of its
Subsidiaries of the Obligations of (x) TWEAN or (y) any Guarantor of the
Obligations of TWEAN (and equal and ratable guarantees of pari passu debt,
to the extent required by contractual provisions then in effect);
(vii) Non-Recourse Purchase Money Debt; or
(viii) Acquired Indebtedness.
(b) Neither TBS nor any of its Subsidiaries may guarantee any
obligation of TWI, TWCI or any of their respective Subsidiaries (other than TBS
or any of its Subsidiaries).
(c) Such Borrower (other than TWEAN) will not, and will not cause or
permit any of its Restricted Subsidiaries (other than TWEAN) to, Incur any
Indebtedness if, before or after giving effect thereto, the Leverage Ratio of
TWI, determined on a pro forma basis, would exceed 7.0:1.0 as of the last day of
the most recently ended fiscal quarter for which financial statements have been
filed with the SEC or have become generally available.
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(II) At or after the Diamond Implementation, such Test Party will not
cause or permit any of its Restricted Subsidiaries (other than a Borrower) or
any holder of Material Beneficial Assets (other than any Specified Holder) to
Incur any Indebtedness other than:
(i) with respect to Restricted Subsidiaries of TWI (other than a
Borrower), (1) Indebtedness of up to $350.0 million in the aggregate at any
time outstanding and (2) as otherwise permitted by clauses (ii) through
(vi);
(ii) with respect to Restricted Subsidiaries of TWE (other than TWEAN
and its Subsidiaries) and holders of TWE Material Beneficial Assets, (1)
Film Financings and (2) other Indebtedness of up to $350.0 million in the
aggregate at any time outstanding;
(iii) with respect to Restricted Subsidiaries of TBS, (1) Film
Financings and (2) other Indebtedness of up to $250.0 million in the
aggregate at any time outstanding;
(iv) with respect to Restricted Subsidiaries of TWEAN, Indebtedness of
up to $100.0 million in the aggregate at any time outstanding;
(v) with respect to Restricted Subsidiaries of TWIC, Indebtedness of up
to $50.0 million in the aggregate at any time outstanding;
(vi) Permitted Intercompany Indebtedness;
(vii) the Guarantees and any guarantee by TWIC or any of its
Subsidiaries of the Obligations of (x) TWEAN or (y) any Guarantor of the
Obligations of TWEAN (and equal and ratable guarantees of pari passu debt,
to the extent required by contractual provisions then in effect);
(viii) Non-Recourse Purchase Money Debt; or
(ix) Acquired Indebtedness.
(III) Neither TWIC nor any of its Restricted Subsidiaries may guarantee
any obligation (other than any Obligation) of TWI, TWCI or TBS or any of their
respective Restricted Subsidiaries (other than TWIC or any of its Restricted
Subsidiaries).
SECTION 6.5. Investments. Such Borrower will not, and will not cause or
permit any of its Restricted Subsidiaries to, make any Investment if, before or
after giving effect thereto on a pro forma basis, a Default shall have occurred
and be continuing.
SECTION 6.6. Restricted Payments. (a) Prior to the Diamond
Implementation, (i) such Borrower will not, directly or indirectly, make or
declare any Restricted Payment and (ii) such
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Borrower will not, and will not suffer or permit any of its Restricted
Subsidiaries to, directly or indirectly, purchase or otherwise acquire for value
(or enter into any obligation to purchase or otherwise acquire for value) any
Capital Stock of TWI or any of its Subsidiaries (other than any Borrower or any
Restricted Subsidiary of any Borrower), unless:
(i) in the case of TWE or TWEAN or any of their respective Restricted
Subsidiaries, after giving effect thereto on a pro forma basis, no Default
shall have occurred and be continuing; and
(ii) in the case of TBS or TWIC or any of their respective Restricted
Subsidiaries, (x) after giving effect thereto on a pro forma basis, no
Default shall have occurred and be continuing and (y) at the time of such
Restricted Payment and after giving effect thereto on a pro forma basis,
the Leverage Ratio of the applicable Borrower as of the last day of the
most recently ended fiscal quarter for which financial statements have been
filed with the SEC or have become generally available would not exceed,
during any period set forth below, the ratio set forth opposite such
period:
Period Ratio
------ -----
Closing to September 30, 1999 6.0x
October 1, 1999 to September 30, 2000 5.5
October 1, 2000 to Maturity Date 5.0
(b) At or after the Diamond Implementation, (i) such Test Party will
not, directly or indirectly, make or declare any Restricted Payment and (ii)
such Test Party will not, and will not suffer or permit any of its Restricted
Subsidiaries to, directly or indirectly, purchase or otherwise acquire for value
(or enter into any obligation to purchase or otherwise acquire for value) any
Capital Stock of TWI, unless:
(i) in the case of TWE or TWEAN or any of their respective Restricted
Subsidiaries, after giving effect thereto on a pro forma basis, no Default
shall have occurred and be continuing; and
(ii) in the case of TWI or any of its Restricted Subsidiaries, (x)
after giving effect thereto on a pro forma basis, no Default shall have
occurred and be continuing and (y) at the time of such Restricted Payment
and after giving effect thereto on a pro forma basis, the Leverage Ratio of
TWI as of the last day of the most recently ended fiscal quarter for which
financial statements have been filed with the SEC or have become generally
available would not exceed, during any period set forth below, the ratio
set forth opposite such period:
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Period Ratio
------ -----
Closing to June 30, 1998 6.25x
July 1, 1998 to September 30, 1999 6.0
October 1, 1999 to September 30, 2000 5.5
October 1, 2000 to Maturity Date 5.0
; provided that so long as no Default shall have occurred and be continuing
on a pro forma basis after giving effect to such Restricted Payment, TWI
may (x) purchase, redeem or otherwise refinance its Series M Preferred
Stock, (y) defease dividends payable with respect to existing preferred
stock with the cash proceeds of Stock Option Loans and (z) pay regular
quarterly cash dividends on the common stock and required cash dividends on
preferred stock (including dividends on preferred stock that may be paid in
cash or in kind at the option of TWI).
(c) The limitations in this Section 6.6 will not prevent (x) any
Company from entering into any commercial transaction in the ordinary course of
its business not prohibited by Section 6.7, (y) any holder of Material
Beneficial Assets (other than TWE) from distributing or otherwise transferring
any assets other than such Material Beneficial Assets or (z) TWEAN from assuming
any Allocated Loans (subject to satisfaction of the conditions in Sections 4.3
and 4.4).
SECTION 6.7. Transactions with Affiliates. Such Borrower will not, and
will not cause or permit any of its Restricted Subsidiaries to, enter into any
transaction or series of transactions, whether or not in the ordinary course of
business, with any Affiliate of such Borrower other than on terms and conditions
substantially as favorable to such Borrower or such Subsidiary as would be
obtainable by such Borrower or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than any Affiliate of such
Borrower; provided that the foregoing restrictions shall not apply to (i)
transactions between Subsidiaries of such Borrower, or among such Borrower and
its Subsidiaries and with existing joint ventures, in each case, in accordance
with arrangements existing on the date hereof or in the ordinary course of
business of such Borrower and its Subsidiaries, (ii) transactions between or
among Restricted Companies of the type existing on the Closing Date and
consistent with past practice, (iii) any arrangements with officers, directors,
representatives or other employees of such Borrower and its Subsidiaries
relating specifically to employment as such and (iv) transactions expressly
permitted by Section 6.6 or the definition of Restricted Payments.
SECTION 6.8. ERISA. Such Borrower will not, and will not cause or
permit any of its ERISA Affiliates to:
(i) engage in any transaction which is not timely corrected and in
connection with which such Borrower or any of its ERISA Affiliates is
reasonably likely to be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975
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of the Code, which penalties and taxes for all such transactions could,
singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect;
(ii) permit to exist any accumulated funding deficiency (within the
meaning of Section 302 of ERISA and Section 412 of the Code), whether or
not a waiver has been obtained from the Internal Revenue Service, with
respect to any Pension Plan;
(iii) permit any failure to make contributions or any amount of
Unfunded Benefit Liabilities which creates, or with the passage of time
would create, any statutory Lien under ERISA or the Code in favor of the
PBGC or any Pension Plan or other entity; or
(iv) permit any failure to make contributions to any Multiemployer Plan
which, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 6.9. Financial Covenants.
(I) Prior to the Diamond Implementation:
(a) Leverage. None of TWE, TBS, TWEAN or TWIC will cause or permit its
Leverage Ratio as of the end of any fiscal quarter (commencing with the first
fiscal quarter ending after the Closing Date) to exceed the ratio set forth
opposite such period below for such Borrower:
Period TWE TBS TWEAN TWIC
- ------ ---- ---- ----- ----
Closing to September 30, 1999 5.00x 6.50x 5.00x 6.50x
October 1, 1999 to September 30, 2000 5.00 6.00 5.00 6.00
October 1, 2000 to Maturity Date 5.00 5.00 5.00 5.00
(b) Coverage. None of TWE, TBS or TWIC will cause or permit its
Coverage Ratio as of the end of any fiscal quarter (commencing with the first
fiscal quarter ending after the Closing Date) to be less than the ratio set
forth opposite such period below for such Borrower:
Period TWE TBS TWIC
- ------ ---- ---- ----
Closing to September 30, 1999 2.50x 1.50x 1.50x
October 1, 1999 to September 30, 2000 2.50 1.75 1.75
October 1, 2000 to Maturity Date 2.50 2.00 2.00
(II) At or after the Diamond Implementation:
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(a) Leverage. Such Test Party will not cause or permit its Leverage
Ratio as of the end of any fiscal quarter (commencing with the first fiscal
quarter ending at or after the Diamond Implementation) to exceed the ratio set
forth opposite such period below for such Borrower:
Period TWI TWE TWEAN
- ------ ---- ---- -----
Closing to September 30, 1999 6.50x 5.00x 5.00x
October 1, 1999 to September 30, 2000 6.00 5.00 5.00
October 1, 2000 to Maturity Date 5.00 5.00 5.00
(b) Coverage. Neither TWI nor TWE will cause or permit its Coverage
Ratio as of the end of any fiscal quarter (commencing with the first fiscal
quarter ending at or after the Diamond Implementation) to be less than the ratio
set forth opposite such period below for such Borrower:
Period TWI TWE
- ----- ---- ----
Closing to September 30, 1999 1.50x 2.50x
October 1, 1999 to September 30, 2000 1.75 2.50
October 1, 2000 to Maturity Date 2.00 2.50
SECTION 6.10. Amendment or Waiver of Organizational Documents. Such
Borrower will not cause or permit to be amended, modified or waived, or cause or
permit any of its Restricted Sub sidiaries to amend, modify or, in any material
respect, waive, any provision of any Organizational Document or the TWEAN
Transaction Agreement, or, in the case of any Partnership Borrower, admit any
additional Partners, unless the Administrative Agent shall have determined,
after consultation with its counsel, that such amendment, modification or waiver
(taken as a whole, together with any other amendments, modifications or waivers
occurring at such time) are not more onerous to the Lenders than are the
Organizational Documents or the TWEAN Transaction Agreement, as applicable, in
effect prior to such amendment, modification or waiver, as the case may be;
provided that this Section 6.10 shall not prevent (i) TWIC or any of its
Restricted Subsidiaries from receiving any Partnership Interest as partial
consideration from and in TWEAN in any Transfer or (ii) any amendments or
modifications of any Organizational Document resulting from a liquidation,
merger or consolidation of any Borrower that is not prohibited by Section 6.2.
SECTION 6.11. Certain Agreements. Such Borrower will not, and will not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
enter into any agreement (other than any Franchise or the Partnership Agreements
as in effect on the date hereof or modified in a manner not inconsistent with
this Agreement and other than this Agreement) that would, in effect, prohibit
such Borrower or any of its Restricted Subsidiaries from granting Liens or
agreeing to grant Liens; provided that any Company may (i) enter into agreements
with lenders (including holders of debt
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securities) to such Company or any of its Subsidiaries of Indebtedness for money
borrowed that prohibit the granting of Liens to third parties unless said
lenders are equally and ratably secured, (ii) agree that an asset subject to a
Permitted Lien will not be subject to any other Lien or (iii) agree that in
connection with the sale of accounts receivable or similar contract rights such
Company will not grant a Lien on or with respect to any such accounts receivable
or contract rights or any proceeds therefrom.
SECTION 6.12. Unrestricted Subsidiaries. (a) Schedule 6.12 sets forth
those Subsidiaries of each Borrower that have been designated Unrestricted
Subsidiaries. Such Borrower will not designate any of its Subsidiaries an
Unrestricted Subsidiary unless (i) such Subsidiary is designated an Unrestricted
Subsidiary at the time it becomes a Subsidiary of any Credit Party; and (ii) at
the time such Subsidiary is designated an Unrestricted Subsidiary, before and
after giving effect to such designation on a pro forma basis, no Default shall
have occurred and be continuing, as shown in an Officers' Certificate delivered
to the Administrative Agent at the time of such designation. Such Officers'
Certificate shall also state the specific purpose for which such designation is
being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted
Subsidiaries.
(b) Such Borrower will not re-designate any Unrestricted Subsidiary a
Restricted Subsidiary unless at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary, before and after giving effect to such
redesignation on a pro forma basis, no Default shall have occurred and be
continuing, as shown in an Officer's Certificate delivered to the Administrative
Agent at the time of such designation.
(c) An Unrestricted Subsidiary shall be deemed to be redesignated a
Restricted Subsidiary at any time if (a) any Restricted Company (i) provides
guarantees or similar credit support for any Indebtedness or other monetary
obligations of such Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness or other monetary
obligations) or (ii) is directly or indirectly liable for any Indebtedness of
such Unrestricted Subsidiary or (b) such Unrestricted Subsidiary incurs
Indebtedness or other monetary obligations pursuant to which the lender has
recourse (including by way of set-off) to any of the assets of any Restricted
Company; provided that the foregoing shall not apply to (x) a pledge of the
Capital Stock of any Unrestricted Subsidiary to secure Indebtedness or other
obligations of such Unrestricted Subsidiary, (y) any Copyright Lien or (z) any
recourse to any Restricted Company in respect of customary representations,
warranties and covenants made or agreed to by such Restricted Company in
connection with the sale and securitization of accounts receivable or similar
contract rights.
ARTICLE VII.
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
SECTION 7.1. Payments. Any Borrower shall (i) default in the payment
when due of any principal of the Loans when due; or (ii) default in the payment
when due of any interest on the
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Loans or any fees or any other amounts owing under any Credit Document, which
default under this clause (ii) shall have continued unremedied for at least five
days but in no event less than three Business Days; or
SECTION 7.2. Representations, Etc. Any representation, warranty or
statement made or deemed made by, or on behalf of, any Credit Party in any
Credit Document or in any other Document or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
SECTION 7.3. Covenants. Any Borrower shall (a) default in the due
performance or observance of any term, covenant or agreement contained in
Section 5.2(a), (b) or (d) or Article VI, or (b) default in the due performance
or observance of any term, covenant or agreement (other than those referred to
in Section 7.1 or 7.2 or clause (a) of this Section 7.3) contained in this
Agreement and such default under this clause (b) shall continue unremedied for a
period of at least 30 days after notice from the Administrative Agent or the
Required Lenders, in each case acting on behalf of the Lenders; or
SECTION 7.4. Default Under Other Agreements. (a) Any Restricted Company
or any Material Subsidiary of any Borrower shall (i) default in any payment with
respect to any Indebtedness (other than the Loans) in excess of $10.0 million
individually or $50.0 million in the aggregate beyond the period of grace, if
any, provided in the instrument or agreement governing such Indebtedness or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness referred to in clause (i) above in excess of the
thresholds set forth therein or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or con
dition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, any such Indebtedness to
become due prior to its stated maturity and such default or event or condition
shall continue beyond the period of grace, if any, provided in the instrument or
agreement governing such Indebtedness (after giving effect to any consent or
waiver obtained and then in effect thereunder); or (b) any such Indebtedness
referred to in clause (a)(i) above in excess of the thresholds set forth therein
shall, in accordance with its terms, be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled or required
prepayment prior to the stated maturity thereof; or
SECTION 7.5. Bankruptcy, Etc. Any Borrower, any Material Subsidiary of
any Borrower, TWI or any General Partner (each, a "Default Entity") shall
commence a voluntary case con cerning itself, or any Partner shall commence such
a case concerning any Borrower, under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto
or any similar foreign statute (the "Bankruptcy Code"); or an involuntary case
is commenced against any Default Entity and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of any Default Entity;
or any Default Entity commences any other proceeding under any reorganization,
arrangement,
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adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
any Default Entity; or there is commenced against any Default Entity any such
proceeding which remains undismissed for a period of 60 days; or any Default
Entity is adjudicated (by any court of competent jurisdiction) insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Default Entity suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or any Default Entity makes a
general assignment for the benefit of creditors; or any Default Entity shall
admit in writing its inability to pay its debts as they become due or any
General Partner shall admit in writing the inability of the partnership of which
it is General Partner to pay its debts as they become due; or any corporate or
other action is taken by any Default Entity for the purpose of effecting any of
the foregoing; or
SECTION 7.6. ERISA. Any ERISA Entity shall fail to pay when due an
amount or amounts aggregating in excess of $25.0 million which it shall have
become liable to pay to the PBGC; or notice of intent to terminate one or more
Plans having aggregate Unfunded Current Liabilities in excess of $25.0 million
(collectively, a "Material Plan") shall be filed under Title IV of ERISA by any
ERISA Entity, any Plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Material Plan; or any other
event or condition that the Required Lenders determine constitutes reasonable
grounds under Section 4042 of ERISA for the termination of a Material Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer or liquidate any Material Plan shall have occurred;
or a proceeding shall be instituted by a fiduciary of any Multiemployer Plan
against any ERISA Entity (i) to enforce Section 515 of ERISA with respect to
amounts in excess of $25.0 million (which amount is not being disputed, or as to
which all administrative remedies under Title I of ERISA have been exhausted) or
(ii) to require immediate payment of withdrawal liability (which is not being
disputed, or as to which all remedies under Title IV of ERISA have been
exhausted) in excess of $25.0 million following a "default" (as defined in
Section 4219(c)(5) of ERISA), and such proceeding shall not have been stayed or
dismissed within sixty (60) days thereafter; or
SECTION 7.7. Judgments. One or more judgments, attachments or decrees
shall be entered against TWI, any General Partner, one or more of the Borrowers
and/or any of their Material Subsidiaries involving a liability of $20.0 million
or more in the case of any one such judgment or decree and $50.0 million or more
in the aggregate at any one time for all such judgments and decrees for such
Persons (not paid or to the extent not fully covered by insurance provided by a
carrier that has acknowledged coverage) and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or
SECTION 7.8. Change of Control. A Change of Control shall have
occurred; or
SECTION 7.9. Dissolution. There shall be a dissolution or liquidation
for any reason (whether voluntary or involuntary) of any Partnership Borrower
other than as permitted by Section 6.2(b); or
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SECTION 7.10. Taxation. Any Partnership Borrower shall, for any reason,
(i) not be treated as a partnership for federal income tax purposes or (ii) be
treated as a publicly traded partnership under Section 7704 of the Code; or
SECTION 7.11. Conflicting Agreements. Any Company shall enter into any
contract, agreement, instrument or understanding (other than any Franchise or
the Partnership Agreements as in effect on the Closing Date (or modified in a
manner not inconsistent with this Agreement) and any contract, agreement or
instrument governing long-term debt of any Company) that has the effect of
restricting (x) any Borrower from Incurring or repaying Indebtedness or (y) any
Borrower or any Restricted Subsidiary of any Borrower from granting Liens (other
than (i) any contract, agreement or instrument that requires the obligations
thereunder to be equally and ratably secured with any other obligations that
become secured, (ii) that prohibits an asset subject to a Permitted Lien from
being subject to any other Lien or (iii) prohibits a seller of accounts
receivable or similar contract rights from granting any Lien on or with respect
to such accounts receivable or other contract rights or proceeds therefrom) to
any Person; or
SECTION 7.12. Certain Guarantees. Except as otherwise expressly
permitted by this Agreement (including Section 9.14) or such Guarantee, any
Guarantee shall cease to be in full force and effect, or any Guarantor shall
disavow its obligations under its Guarantee;
THEN (i) upon the occurrence of any Event of Default described in the
foregoing Section 7.5 in respect of any Borrower or TWI, the unpaid principal
amount of and accrued interest on all Loans and Notes then outstanding to each
Borrower shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Borrower, and the obligation of each Lender to
make any Loan hereunder shall thereupon terminate, and (ii) upon the occurrence
and during the continuance of any other Event of Default, the Administrative
Agent shall, upon the written request of the Required Lenders, by written notice
to the Borrowers, declare all Loans and all Notes then outstanding to each
Borrower to be, and the same shall forthwith become, due and payable, together
with accrued interest thereon and any other Obligations and the obligation of
each Lender to make any Loan hereunder shall thereupon terminate.
Notwithstanding anything contained in the foregoing paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to the
preceding paragraph, the Borrowers shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Defaults
(other than non-payment of the principal of and accrued interest on the Loans,
in each case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 9.2, then the Two Thirds Lenders, by
written notice to the Borrowers, may at their option rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Default or impair any right consequent thereon. The provisions of
this paragraph are intended merely to bind the Lenders to a decision which may
be made at the election of the Two Thirds Lenders and are not intended to
benefit
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the Borrowers and do not grant the Borrowers the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
ARTICLE VIII.
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof, together with such actions and powers as are
reasonably incidental thereto. The Administrative Agent agrees to give promptly
to each Lender a copy of each notice or other document received by it pursuant
to any Credit Document (other than any that are required to be delivered
directly to the Lenders by any Credit Party).
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Company or Affiliate thereof as if it were not
the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.2), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Company that
is communicated to or obtained by the bank serving as Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.2) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrowers or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
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The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such subagent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor which, so long as
no Event of Default is continuing shall be reasonably acceptable to the
Borrowers. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.3 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
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ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it at 75 Rockefeller Plaza, New York, New
York 10019, Attention: Chief Financial Officer (Telecopy No. 212-307-0126),
with copies to its General Counsel (Telecopy No. 212-956-7281) and to Paul,
Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York,
New York 10019, Attention: Robert B. Schumer, Esq. (Telecopy No.
212-373-2348);
(b) if to the Administrative Agent or the Swingline Lender, to The
Chase Manhattan Bank, Agent Bank Services Group, Grand Central Tower, One
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention:
Janet Belden (Telecopy No. (212) 552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York 10017, Re: Time Warner (Telecopy
No. (212) 270-4164);
(c) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
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(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or by the Borrowers and
the Administrative Agent with the consent of the Required Lenders; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
increase the Borrowing Cap of any Borrower or the limitations specified in
clause (ii) or (iii) of the proviso in Section 2.1, without the written consent
of each Lender, (vi) limit or release any Guarantee (other than as permitted by
Section 9.14), without the written consent of each Lender, (vii) waive any
provision of Section 4.1, 4.2 or 4.3 without the written consent of each Lender,
or (viii) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Swingline Lender hereunder without the prior written consent of the
Administrative Agent or the Swingline Lender, as the case may be.
SECTION 9.3. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall, jointly and severally, pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Credit Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), and (ii)
all reasonable out-of-pocket expenses incurred by the Administrative Agent or
any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent or any Lender, in connection with the
enforcement or protection of its rights in connection with the Credit Documents,
including its rights under this Section, or in connection with the Loans made
hereunder, including all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans.
(b) The Borrowers shall, jointly and severally, indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Credit Document or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
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transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Company, or any
Environmental Liability related in any way to any Company, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that (x) such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee and
(y) the foregoing shall not constitute a joint and several obligation to repay
the Loans or any interest thereon.
(c) To the extent that the Borrower fails to pay any amount required to
be paid by them to the Administrative Agent or the Swingline Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Swingline Lender, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Swingline Lender in its capacity as
such.
(d) Each Credit Party acknowledges that neither the Administrative
Agent nor any Lender has any fiduciary relationship with or fiduciary duty to
any Credit Party arising out of or in connection with any Credit Document and
the relationship between the Administrative Agent and the Lenders, on the one
hand, and the Credit Parties, on the other hand, in connection therewith is
solely that of debtor and creditor. To the extent permitted by applicable law,
no Borrower shall assert, and each Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any agreement or instrument
contemplated hereby, or the Transactions.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.4. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Credit Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by such Credit Party without such consent shall be null
and void), except pursuant to a Transfer as permitted by the other provisions of
this Agreement. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
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(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, the
Administrative Agent (and, in the case of an assignment of all or a portion of a
Commitment or any Lender's obligations in respect of its Swingline Exposure, the
Swingline Lender) must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed), (ii) except in the case
of an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10.0 million (or
such lesser amount as the Borrowers and the Administrative Agent otherwise agree
from time to time), (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) except in the case of an assignment to an Affiliate
of the Assigning Lender on the Effective Date, the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; and provided further that any consent of
the Borrowers otherwise required under this paragraph shall not be required if
any Event of Default has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.3). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The information in the Register shall be available to the
Borrowers and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
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(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or the Swingline Lender, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.2(b) that affects such Participant. Subject to paragraph (f) of this Section,
each Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.8 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.16(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrowers'
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.15 unless the
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.15(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
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SECTION 9.5. Survival. All covenants, agreements, representations and
warranties made by the Credit Parties herein and in the certificates or other
instruments delivered in connection with or pursuant to the Credit Documents
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of the Credit Documents and the making
of any Loans, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Administrative Agent or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time of any Credit Event, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under any Credit Document is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.13, 2.14, 2.15 and 9.3 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of the Credit Documents or any
provision thereof.
SECTION 9.6. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Credit Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when it shall have been executed
by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto (such time, the "Effective Date"). Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.7. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.8. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Credit Party against any of and all the obligations of any Credit Party now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under any Credit Document
and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
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SECTION 9.9. Governing Law; Jurisdiction; Consent to Service of
Process. (a) Each Credit Document shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Credit Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Credit Document or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in any Credit Document shall affect any right that the Administrative
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Credit Party or its properties in the
courts of any jurisdiction.
(c) Each Credit Party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Credit Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to any Credit Document irrevocably consents to service
of process in the manner provided for notices in Section 9.1. Nothing in any
Credit Document will affect the right of any party to any Credit Document to
serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO ANY CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE CREDIT
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
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SECTION 9.12. Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to any Credit Document or the
enforcement of rights thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the
Borrowers or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrowers or another Person known to be disclosing such
information in breach of a duty of confidentiality. For the purposes of this
Section, "Information" shall mean all information received from the Borrowers
relating to the Borrowers or their business, other than any such information
that is or becomes available to the Administrative Agent or any Lender on a
nonconfidential basis; provided that, in the case of information received from
the Borrowers after the date hereof, such information is clearly identified at
the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13. Independence of Representations, Warranties and
Covenants. The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exception be deemed to permit any action or omission that would be in
contravention of applicable law.
SECTION 9.14. Release of Certain Guarantees. (a) Any TWE Partner
Guarantee, any TWEAN Holder Guarantee and the TWE Guarantee may be released
without the consent of any Lender if (i) the Guarantor thereof shall no longer
hold any Material Beneficial Assets (or in the case of TWE, any TWEAN Beneficial
Assets), (ii) such Guarantor shall not be in breach of its Guarantee, (iii) no
Default shall have occurred and be continuing, (iv) such Guarantee is not, by
operation of Section 5.13, required to be in effect and (v) no Obligations with
respect to principal or interest are then due and owing by such Guarantor. Such
release shall in all respects be subject to any reinstatement provisions set
forth in such Guarantee. TWE or TWEAN, as the case may be, shall notify the
Administrative Agent upon any such release, and the Administrative Agent shall
notify the Lenders of such release. Nothing in this Section 9.14 shall prohibit
the merger or consolidation of any TWE Partner Guarantor with or into any other
Person so long as, after giving effect to such merger or
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consolidation on a pro forma basis, (x) no Default shall have occurred and be
continuing and (y) the representations and warranties set forth in Section 3.13
shall be true and correct.
(b) The Paragon Guarantee may be released without the consent of any
Lender at such time as Paragon shall become substantially wholly-owned by TWIC
if (i) Paragon shall no longer hold any TWEAN Material Beneficial Assets, (ii)
such Paragon Guarantee is not, by operation of Section 5.13, required to be in
effect, and (iii) no Obligations with respect to principal or interest are then
due and owing by Paragon.
SECTION 9.15. Partners. Each Lender (a) acknowledges that each of TWE
and TWEAN is a partnership and (b) agrees that it will not cause or seek to
cause any Partner or any assignee of any Partner's Partnership Interest to be
liable, as a Partner, to such Lender with respect to any of the Loans or any
fees or other amounts payable to such Lender or participant by the partnership
in which such Partner is a partner under this Agreement (except as set forth
below or pursuant to any other written agreement or understanding between or
among such Persons), it being agreed that (i) recourse for such purposes and any
claim in respect thereof shall be limited to the Partnership Interests of such
Persons and the assets and properties of TWE and TWEAN and (ii) no judgment,
order or execution entered in any suit, action or proceeding (whether legal or
equitable) in respect thereof shall be enforced or obtained against any Partner
or any assignee of any Partner's Partnership Interest beyond the extent of such
Person's Partnership Interest; provided that this paragraph shall not (x)
operate as a waiver of any rights or claims against any Partner or any assignee
of any Partner's Partnership Interest arising out of or resulting from such
Person's misrepresentations, misconduct or violation of law or (y) affect the
validity or enforceability of any direct obligations of any Partner hereunder or
under any of the other Credit Documents, including the direct obligations of TWE
hereunder and under the TWE Guarantee and the obligations of TWE Partners under
the TWE Partner Guarantees.
SECTION 9.16. Calculations; Computations; Interpretation. (a) All
Financial Statements to be furnished to the Lenders hereunder shall be prepared,
and all calculations determining compliance with Article VI (including the
definitions used therein) shall be made, for the relevant Person and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto; provided that except as otherwise specifically provided herein,
all calculations for determining compliance with Article VI shall utilize
accounting principles and policies in effect at the time of the preparation of,
and in conformity with those used to prepare, (x) in the case of TWI and each
Borrower other than TBS, the audited Financial Statements of such Person for the
fiscal year ended December 31, 1996 and (y) in the case of TBS, its unaudited
Financial Statements for the fiscal quarter ended June 30, 1997. Notwithstanding
the foregoing:
(i) the assets and liabilities and results of operations of TWE shall
include, without duplication, (x) the TWE Beneficial Assets and any related
liabilities of the holders thereof and (y) the cash flow received by TWE
with respect to TWE Beneficial Assets;
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(ii) the assets and liabilities and results of operations of TWEAN
shall include, without duplication, (x) the TWEAN Beneficial Assets and any
related liabilities of the holders thereof and (z) the cash flow received
by TWEAN with respect to TWEAN Beneficial Assets; and
(iii) to the extent that Beneficial Assets and any related liabilities
of the holders thereof and the related cash flows are included in the
calculations for TWE or TWEAN, as the case may be, they shall be excluded
from the calculations for any other Borrower (except to the extent that the
calculations for such other Borrower otherwise include the assets,
liabilities and results of operations and cash flows of TWE or TWEAN, as
the case may be).
(b) The covenants contained in Article V and Article VI (other than
Section 6.9) shall apply as if holders of TWE Material Beneficial Assets were
Restricted Subsidiaries of TWE and holders of TWEAN Material Beneficial Assets
(other than any Borrower or any Restricted Subsidiary of any Borrower) were
Restricted Subsidiaries of TWEAN during any period and on any date on which such
holders (each, a "Beneficial Subsidiary") own such Beneficial Assets (but with
respect to the Specified Holders, only to the extent of the assets and
liabilities related to Material Beneficial Assets). Nothing contained in this
Agreement shall prohibit or otherwise limit or restrict (i) any merger of a
Beneficial Subsidiary into a Borrower, a TWE Partner Guarantor or into another
Beneficial Subsidiary, (ii) the distribution or other payment by a Beneficial
Subsidiary of any amounts distributed to it by TWE or TWEAN in accordance with
the terms hereof (such amounts so distributed or paid by such Beneficial
Subsidiary shall not be deemed Restricted Payments for purposes of this
Agreement) or (iii) the ability of any holder of Beneficial Assets from selling,
transferring, distributing or encumbering any assets, other than the Beneficial
Assets.
(c) Calculations pursuant to the covenants set forth in Article VI
shall be made for each Person and its Restricted Subsidiaries on a consolidated
basis in accordance with GAAP and the related definitions set forth in Article
I, it being understood that:
(i) prior to the Diamond Implementation, for purposes of determining
compliance with Section 6.4(I)(c), TWE and any entity (including TWEAN) in
which TWI owns, directly or indirectly, at least 50% of the common equity
(including Restricted Subsidiaries and Unrestricted Subsidiaries of TWI)
shall be so consolidated with TWI as if each were a Wholly Owned Subsidiary
of TWI;
(ii) with respect to TWE, only such percentage of the results of
operations and assets and liabilities of TWEAN as is equal to the
percentage of the common equity of TWEAN owned by TWE shall be so included
in the results of operations and assets and liabilities of TWE;
(iii) as long as (x) TWIC owns, directly or indirectly, at least 50% of
the common equity of Paragon and (y) the Borrowers collectively own,
directly or indirectly, 100% of the common equity of Paragon, (A) Paragon
shall be consolidated with TWIC as if it were a Wholly Owned Subsidiary of
TWIC and (B) if so consol-
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idated, Paragon shall still be treated as an equity investment by TWE and
TWEAN (to the extent of their respective interests therein); provided that
the amount of any distributions actually received from Paragon by TWE
and/or TWEAN or their respective Subsidiaries shall, without duplication,
be deducted from the Consolidated Cash Flow of TWIC in the period of such
distribution; provided however that Paragon may make distributions to its
partners of up to $250.0 million in the aggregate and the portion of such
distribution received by TWE and/or TWEAN or their Subsidiaries shall not
be deducted from the Consolidated Cash Flow of TWIC; and
(iv) All Unrestricted Subsidiaries shall be excluded from all such
calculations, except as otherwise expressly provided in the definitions
relating thereto.
SECTION 9.17. Distribution of Documents. If any provision hereof
requires the Borrowers to provide a document to the Lenders, the Borrowers shall
be entitled to provide such document to the Administrative Agent (with
sufficient copies for the Lenders) for distribution to the Lenders.
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TIME WARNER INC.
By: /s/ R. M. Ruckman
-----------------------------------
Name: R. Mackereth Ruckman
Title: Vice President & Treasurer
TIME WARNER COMPANIES, INC
By: /s/ R. M. Ruckman
----------------------------------
Name: R. Mackereth Ruckman
Title: Vice President & Treasurer
TURNER BROADCASTING SYSTEM, INC.
By: /s/ Thomas W. McEnerney
----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER ENTERTAINMENT-
ADVANCE/NEWHOUSE PARTNERSHIP
By: TIME WARNER ENTERTAINMENT
COMPANY, L.P., Managing Partner
By: /s/ R. M. Ruckman
----------------------------------
Name: R. Mackereth Ruckman
Title: Vice President & Treasurer
TWI CABLE INC.
By: /s/ R. M. Ruckman
----------------------------------
Name: R. Mackereth Ruckman
Title: Vice President & Treasurer
S-1a
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TIME WARNER ENTERTAINMENT
COMPANY, L.P.
By: /s/ R. M. Ruckman
-----------------------------------
Name: R. Mackereth Ruckman
Title: Vice Presdient & Treasurer
S-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE CHASE MANHATTAN BANK,
as Lender and as Administrative Agent,
By: /s/ Tracey A. Navin
-----------------------------------
Name: Tracey A. Navin
Title: Vice President
S-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
----------------------------------,
as Lender (type full name)
By:
-----------------------------------
Name:
Title: