EXHIBIT 10.35
EXECUTION VERSION
================================================================================
LOAN AGREEMENT
AMONG
RAINBOW MEDIA HOLDINGS, INC., AS BORROWER;
THE GUARANTORS PARTY HERETO, AS GUARANTORS;
TD SECURITIES (USA) INC.
AND
BANC OF AMERICA SECURITIES LLC,
AS CO-LEAD ARRANGERS AND CO-BOOK RUNNERS;
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT;
WACHOVIA BANK, NATIONAL ASSOCIATION,
GENERAL ELECTRIC CAPITAL CORPORATION
AND THE BANK OF NOVA SCOTIA,
AS CO-DOCUMENTATION AGENTS;
TORONTO DOMINION (TEXAS), INC.,
AS ADMINISTRATIVE AGENT
AND
THE OTHER CREDIT PARTIES PARTY HERETO
DATED AS OF MARCH 14, 2003
================================================================================
ARTICLE 1 - DEFINITIONS.................................................................................1
ARTICLE 2 - LOANS......................................................................................30
Section 2.1 The Loans................................................................30
Section 2.2 Manner of Borrowing and Disbursement.....................................31
Section 2.3 Interest.................................................................35
Section 2.4 Fees.....................................................................37
Section 2.5 Optional Prepayments and Reductions......................................37
Section 2.6 Mandatory Commitment Reductions and Prepayments..........................39
Section 2.7 Repayment................................................................41
Section 2.8 Swing Loans..............................................................43
Section 2.9 Notes; Loan Accounts.....................................................45
Section 2.10 Manner of Payment........................................................46
Section 2.11 Reimbursement............................................................49
Section 2.12 Application of Payments..................................................50
Section 2.13 Capital Adequacy.........................................................51
Section 2.14 Incremental Facility Loans...............................................52
Section 2.15 Letters of Credit........................................................54
ARTICLE 3 - GUARANTEE..................................................................................58
Section 3.1 Guarantee................................................................58
Section 3.2 Waivers and Releases.....................................................59
Section 3.3 Miscellaneous............................................................60
ARTICLE 4 - CONDITIONS PRECEDENT.......................................................................62
Section 4.1 Conditions Precedent to Closing..........................................62
Section 4.2 Conditions Precedent to Each Advance.....................................65
Section 4.3 Conditions Precedent to Issuance of Letters of Credit....................66
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES.............................................................67
Section 5.1 Representations and Warranties...........................................67
Section 5.2 Survival of Representations and Warranties, etc..........................73
ARTICLE 6 - GENERAL COVENANTS..........................................................................73
Section 6.1 Preservation of Existence and Similar Matters............................73
Section 6.2 Compliance with Applicable Law...........................................74
Section 6.3 Maintenance of Properties................................................74
Section 6.4 Accounting Methods and Financial Records.................................74
Section 6.5 Insurance................................................................74
Section 6.6 Payment of Taxes and Claims..............................................75
Section 6.7 Visits and Inspections...................................................75
Section 6.8 Payment of Indebtedness..................................................75
I
Section 6.9 Use of Proceeds..........................................................75
Section 6.10 ERISA....................................................................75
Section 6.11 Further Assurances.......................................................76
Section 6.12 Broker's Claims..........................................................76
Section 6.13 Indemnity................................................................76
Section 6.14 Covenants Regarding Formation of Subsidiaries,
Investments and Acquisitions.............................................76
Section 6.15 Interest Rate Hedging....................................................79
ARTICLE 7 - INFORMATION COVENANTS......................................................................79
Section 7.1 Quarterly Financial Statements and Information...........................79
Section 7.2 Annual Financial Statements and Information; Certificate of No Default...80
Section 7.3 Performance Certificates.................................................81
Section 7.4 Copies of Other Reports..................................................82
Section 7.5 Notice of Litigation and Other Matters...................................82
ARTICLE 8 - NEGATIVE COVENANTS.........................................................................83
Section 8.1 Indebtedness.............................................................83
Section 8.2 Investments..............................................................84
Section 8.3 Limitation on Liens......................................................86
Section 8.4 Amendment and Waiver.....................................................86
Section 8.5 Liquidation; Disposition or Acquisition of Assets........................86
Section 8.6 Limitation on Guaranties.................................................87
Section 8.7 Restricted Payments and Purchases........................................88
Section 8.8 Total Leverage Ratio.....................................................89
Section 8.9 Senior Leverage Ratio....................................................89
Section 8.10 Interest Coverage Ratio..................................................89
Section 8.11 Affiliate Transactions...................................................90
Section 8.12 Real Estate..............................................................90
Section 8.13 ERISA Liabilities........................................................90
Section 8.14 Sales and Leasebacks.....................................................90
Section 8.15 Negative Pledge..........................................................90
ARTICLE 9 - DEFAULT....................................................................................90
Section 9.1 Events of Default........................................................91
Section 9.2 Remedies.................................................................94
ARTICLE 10 - THE AGENTS................................................................................94
Section 10.1 Appointment and Authorization............................................95
Section 10.2 Delegation of Duties.....................................................95
Section 10.3 Interest Holders.........................................................95
Section 10.4 Consultation with Counsel................................................95
II
Section 10.5 Documents................................................................95
Section 10.6 Security Documents.......................................................95
Section 10.7 Arrangers and Affiliates.................................................96
Section 10.8 Responsibility of the Agents.............................................96
Section 10.9 Action by Agents.........................................................97
Section 10.10 Notice of Default or Event of Default....................................97
Section 10.11 Responsibility Disclaimed................................................97
Section 10.12 Indemnification..........................................................98
Section 10.13 Credit Decision..........................................................98
Section 10.14 Successor Agents.........................................................98
ARTICLE 11 - CHANGE IN CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES.....................................99
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair......................99
Section 11.2 Illegality...............................................................99
Section 11.3 Increased Costs and Taxes...............................................100
Section 11.4 Effect On Other Advances................................................101
ARTICLE 12 - MISCELLANEOUS............................................................................101
Section 12.1 Notices.................................................................101
Section 12.2 Expenses................................................................104
Section 12.3 Waivers.................................................................104
Section 12.4 Set-Off.................................................................105
Section 12.5 Assignment..............................................................105
Section 12.6 Counterparts............................................................108
Section 12.7 Governing Law...........................................................108
Section 12.8 Severability............................................................108
Section 12.9 Headings................................................................108
Section 12.10 Interest................................................................108
Section 12.11 Entire Agreement........................................................109
Section 12.12 Amendment and Waiver....................................................109
Section 12.13 Other Relationships.....................................................110
Section 12.14 Confidentiality.........................................................110
Section 12.15 Liability of Partners, Members and Other Persons........................110
Section 12.16 Survival................................................................110
Section 12.17 Delivery of Lender Addenda..............................................110
ARTICLE 13 - WAIVER OF JURY TRIAL.....................................................................110
Section 13.1 Waiver of Jury Trial....................................................111
Section 13.2 Consent to Jurisdiction.................................................111
III
LOAN AGREEMENT
AMONG
RAINBOW MEDIA HOLDINGS, INC., AS BORROWER;
THE GUARANTORS PARTY HERETO, AS GUARANTORS;
TD SECURITIES (USA) INC.
AND
BANC OF AMERICA SECURITIES LLC,
AS CO-LEAD ARRANGERS AND CO-BOOK RUNNERS;
BANK OF AMERICA, N.A., AS SYNDICATION AGENT;
WACHOVIA BANK, NATIONAL ASSOCIATION,
GENERAL ELECTRIC CAPITAL CORPORATION
AND THE BANK OF NOVA SCOTIA,
AS CO-DOCUMENTATION AGENTS;
TORONTO DOMINION (TEXAS), INC., AS ADMINISTRATIVE AGENT
AND
THE OTHER CREDIT PARTIES PARTY HERETO
The parties to this Agreement hereby agree as follows, as of this 14th
day of March, 2003:
ARTICLE 1 - DEFINITIONS.
For the purposes of this Agreement:
"ACCRUED TAX LIABILITIES" shall mean, for any period, payments accrued
from and after January 1, 2003, and allocable to the Borrower in accordance with
the Tax Sharing Policy, which payments shall be determined on the basis of the
financial income, taxable income, credits and other amounts directly related to
the members of the Rainbow Group which would generally be comparable to those
payments that would have resulted if the Borrower had filed a separate tax
return.
"ACQUISITION" shall mean (a) any acquisition of all or substantially
all of the assets of a business or a business unit, (b) any acquisition of all
or substantially all of the capital stock or other ownership interest of any
other Person, or (c) any merger by any Rainbow Company of or with any other
Person, such that, in any such case, such Person shall become consolidated with
such Rainbow Company in accordance with GAAP after consummating such
transaction.
"ADDITIONAL AMOUNTS" shall have the meaning set forth in Section
2.10(c)(ii) hereof.
"ADJUSTED STOCK INCENTIVE CHARGES" shall mean, for the MGM Operating
Companies on a consolidated basis, the result, to the extent positive, of (a)
Employee Stock Incentive Expense, MINUS (b) seven percent (7%) of Calendar
Operating Cash Flow for the immediately preceding fiscal year of the MGM
Operating Companies, MINUS (c)
the lesser of (i) Employee Stock Incentive Income attributable to the MGM
Operating Companies during such period and (ii) $25,000,000, in each case for
the most recently completed twelve (12) month period.
"ADJUSTMENT DATE" shall mean the second (2nd) Business Day after the
date on which the financial statements referred to in Section 7.1 hereof for the
first two (2) full fiscal quarters of the Borrower from and after the Agreement
Date have been delivered to the Arrangers.
"ADMINISTRATIVE AGENT" shall mean Toronto Dominion (Texas), Inc., a
Delaware corporation, acting as administrative agent for the Credit Parties,
together with any successor administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" shall mean the office of the
Administrative Agent located at the address set forth in Section 12.1 hereof, or
such other office as may be designated pursuant to the provisions of Section
12.1 hereof.
"ADVANCE" or "ADVANCES" shall mean amounts advanced to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing.
"AFFILIATE" shall mean, with respect to any Person, any Person (other
than an individual whose sole relationship with such Person is as an employee)
directly or indirectly controlling, controlled by, or under common control with
such Person, and with respect to the Rainbow Companies to the extent not
otherwise so deemed an Affiliate, each Unrestricted Subsidiary and each MGM
Company shall be deemed an Affiliate of the Rainbow Companies. For purposes of
this definition, "control" when used with respect to any Person includes the
power to direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"AGENTS" shall mean, collectively, the Administrative Agent, the
Co-Documentation Agents, the Syndication Agent and the Arrangers, and "AGENT"
shall mean any one of the foregoing Agents.
"AGREEMENT" shall mean this
Loan Agreement.
"AGREEMENT DATE" shall mean March 14, 2003.
"AMC" shall mean American Movie Classics Company, a
New York general
partnership.
"AMC CONSULTING AGREEMENT" shall mean that certain Consulting
Agreement dated as of March 29, 2001, among CSC Holdings, AMC and WE, pursuant
to which CSC Holdings has agreed to provide consulting services to AMC and WE
for an annual fee equal to three and one-half percent (3.50%) of the gross
revenues of AMC and
2
WE during the applicable year and reimbursement of the cost and expenses
incurred by CSC Holdings in connection with the consulting services.
"AMC CREDIT PARTIES" shall mean "Credit Parties" as such term is
defined in the AMC
Loan Agreement.
"AMC
LOAN AGREEMENT" shall mean that certain
Loan Agreement dated as
of the Agreement Date among AMC, IFC and WE, as borrowers, TD Securities (USA)
Inc. and Banc of America Securities LLC, as co-lead arrangers and co-book
runners, Bank of America, N.A., as syndication agent, Toronto Dominion (Texas),
Inc., as administrative agent, and the other AMC Credit Parties party thereto.
"AMC INTERCOMPANY INDEBTEDNESS" shall mean up to $70,000,000 of
Indebtedness owing by any of the Rainbow Companies in favor of either AMC or IFC
outstanding immediately prior to the Agreement Date.
"ANNUALIZED CASH FLOW" shall mean, as of any calculation date for the
MGM Operating Companies on a consolidated basis, eighty percent (80%) of (a) the
product of (i) the result of (A) Cash Flow, PLUS (B) Employee Stock Incentive
Expense, MINUS (C) Employee Stock Incentive Income, MINUS (D) Restructuring
Charges, in each case for the most recently completed six (6) month period,
TIMES (ii) two (2), MINUS (b) Adjusted Stock Incentive Charges, MINUS (c)
Restructuring Charges for the most recently completed six (6) month period.
"APPLICABLE LAW" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and all orders and decrees of
all courts and arbitrators in proceedings or actions to which the Person in
question is a party or by which it is bound.
"APPLICABLE MARGIN" shall mean the interest rate margin applicable to
Advances hereunder as determined in accordance with Section 2.3(f) hereof.
"APPROVED FUND" shall mean, with respect to any Lender that is a Fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"ARRANGERS" shall mean, collectively, TD Securities (USA) Inc. and
Banc of America Securities LLC, in their respective capacities as co-lead
arrangers and co-book runners under this Agreement, and "ARRANGER" shall mean
any one of the foregoing Arrangers.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean that certain form of
Assignment and Assumption Agreement in substantially the form of EXHIBIT A
attached
3
hereto, pursuant to which each Lender may, as further provided in Section 12.5
hereof, sell a portion of its Loans (other than Swing Loans) or Commitments.
"AUTHORIZED DEBT ISSUANCE" shall mean, with respect to the issuance of
any Indebtedness For Money Borrowed by the Borrower, up to $250,000,000 in
principal amount raised by the Borrower on or before March 31, 2005, on terms
and conditions which shall (i) have a maturity date no earlier than one (1) year
after the Final Maturity Date, (ii) not have any required cash redemptions prior
to one (1) year after the Final Maturity Date, (iii) be unsecured, (iv) be
contractually subordinated to the Obligations, (v) be issued subject to
demonstration to the reasonable satisfaction of the Arrangers of pro forma
compliance with the Financial Covenants through the Final Maturity Date, (vi) be
issued on market terms and conditions which shall be no more restrictive on the
Rainbow Companies and the MGM Companies than the terms and conditions of this
Agreement and the other Loan Documents, and (vii) be otherwise reasonably
satisfactory to the Arrangers.
"AUTHORIZED SIGNATORY" shall mean, with respect to any Person, such
senior personnel of such Person as may be duly authorized and designated in
writing by such Person to execute documents, agreements and instruments on
behalf of such Person.
"AVAILABLE BASKET AMOUNT" shall mean, with respect to each year during
the term of this Agreement, the amount set forth below with respect to such year
ending during the relevant period set forth below:
Period Available Basket Amount
------ -----------------------
Agreement Date through $ 200,000,000
December 31, 2003
January 1, 2004 through $ 50,000,000
December 31, 2004
January 1, 2005 through $ 35,000,000
December 31, 2005
January 1, 2006 through $ 35,000,000
December 31, 2006
January 1, 2007 through $ 35,000,000
December 31, 2007
January 1, 2008 through the $ 35,000,000
Maturity Date
4
Notwithstanding the foregoing, (a) to the extent that amounts available under
the Available Basket Amount with respect to any calendar year are not used, such
amounts may, subject to the clause (b) below, be carried forward to increase the
Available Basket Amount during the immediately following year (but only such
immediately following year and not any subsequent year), (b) amounts available
under the Available Basket Amount during the current year must be used before
any amounts carried forward pursuant to the immediately preceding clause (a) may
be used, and (c) to the extent that amounts available under the Available Basket
Amount with respect to the period from the Agreement Date through December 31,
2003, are used to make loans to CVC or CSC Holdings which loans are repaid prior
to December 31, 2003, the amounts available under the Available Basket Amount
shall be replenished, on a one-time basis, to the extent of such repayment.
"AVAILABLE REVOLVING LOAN COMMITMENT" shall mean, as of any date, the
excess of (a) the Revolving Loan Commitment, over (b) the sum of (i) the
aggregate principal amount of Revolving Loans outstanding on such date and (ii)
the L/C Obligations outstanding on such date.
"BANKRUPTCY CODE" shall mean the United States Bankruptcy Code (11
U.S.C. Section 101 et seq.), as now or hereafter amended, and any successor
statute, or any other applicable federal or state bankruptcy law or other
similar law.
"BASE RATE" shall mean, as of any date, a fluctuating interest rate
per annum equal to the greater of (a) the Prime Rate and (b) the sum of (i) the
Federal Funds Rate, plus (ii) one-half of one percent (0.50%). The Base Rate
shall be adjusted automatically as of the opening of business on the effective
date of each change in the Prime Rate or the Federal Funds Rate, as the case may
be.
"BASE RATE ADVANCE" shall mean an Advance (other than a Swing Loan)
which the Borrower requests to be made as a Base Rate Advance or which is
converted to a Base Rate Advance in accordance with the provisions of Section
2.2 hereof.
"BORROWER" shall mean Rainbow Media Holdings, Inc., a Delaware
corporation.
"BORROWER PLEDGE AGREEMENT" shall mean that certain Pledge Agreement
between the Borrower and the Administrative Agent, dated as of the Agreement
Date, in substantially the form of EXHIBIT B attached hereto, pursuant to which
the Borrower has pledged to the Administrative Agent, for the ratable benefit of
the Credit Parties, all of the stock and other equity interests owned directly
by the Borrower (other than the stock or other equity interests of any
Unrestricted Subsidiary) to secure the Obligations.
"BORROWER SECURITY AGREEMENT" shall mean that certain Security
Agreement between the Borrower and the Administrative Agent, dated as of the
Agreement Date, in substantially the form of EXHIBIT C attached hereto.
5
"BUSINESS DAY" shall mean a day on which banks are not authorized or
required to be closed and foreign exchange markets are open for the transaction
of business required for this Agreement in London, England, Houston, Texas, and,
in each case,
New York,
New York, as relevant to the determination to be made or
the action to be taken.
"CALENDAR OPERATING CASH FLOW" shall mean, as of each fiscal year end
for the MGM Operating Companies on a consolidated basis, (a) the result of (i)
Cash Flow, PLUS (ii) Employee Stock Incentive Expense, MINUS (iii) Employee
Stock Incentive Income, in each case for the twelve (12) month period then
ended, MINUS (b) Adjusted Stock Incentive Charges.
"CAPITAL EXPENDITURES" shall mean expenditures for the purchase of
assets of long-term use which are capitalized in accordance with GAAP (excluding
any expenditures for and under Film Rights Agreements of the Rainbow Companies).
"CAPITALIZED LEASE OBLIGATION" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"CASH EQUIVALENTS" shall mean the following:
(a) marketable, direct obligations of the United States of America
maturing within three hundred ninety-seven (397) days of the date of
purchase;
(b) commercial paper issued by any Lender (or any Lender Affiliate)
or by corporations, each of which shall have a consolidated net worth of at
least $250,000,000 and each of which conducts a substantial part of its
business in the United States of America, maturing within one hundred
eighty (180) days from the date of the original issue thereof, and rated
"P-1" or better by Xxxxx'x Investors Service, Inc. or "A-1" or better by
Standard & Poor's;
(c) fully collateralized repurchase agreements in such amounts and
with such financial institutions having a rating of Baa or better from
Xxxxx'x Investors Service, Inc., or a rating of "A-" or better from
Standard & Poor's, as the Borrower may select from time to time;
(d) certificates of deposit, banker's acceptances and time deposits
maturing within three hundred ninety-seven (397) days of the date of
purchase, which are issued by any Lender or by a United States national or
state bank or foreign bank having capital, surplus and undivided profits
totaling more than $100,000,000, and having a rating of Baa or better from
Xxxxx'x Investors Service, Inc., or a rating of "A-" or better from
Standard & Poor's; and
6
(e) money market funds that (i) comply with the criteria set forth in
SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA
by Standard & Poor's and Aaa by Moody's and (iii) have portfolio assets of
at least $5,000,000,000.
"CASH FLOW" shall mean, for any period, the sum of (a) Net Income
(excluding any unusual, non-recurring or extraordinary items), plus (b) the sum,
in each case to the extent deducted in calculating Net Income, of (i) Interest
Expense, (ii) depreciation, (iii) amortization (excluding Film Rights
Amortization) and (iv) taxes.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"CO-DOCUMENTATION AGENTS" shall mean, collectively, Wachovia Bank,
National Association, General Electric Capital Corporation and The Bank of Nova
Scotia, and "CO-DOCUMENTATION AGENT" shall mean any one of the foregoing
Co-Documentation Agents.
"COLLATERAL" shall mean any assets in which any Credit Party may have
a security interest pursuant to any Security Document.
"COMMITMENT PERCENTAGE" shall mean, with respect to any Lender, the
ratio, expressed as a percentage, of (a) the Commitments of such Lender, divided
by (b) the aggregate Commitments of all of the Lenders. As of the Agreement
Date, the Commitment Percentage of each Lender is set forth on Schedule 1 to the
Lender Addendum delivered by such Lender.
"COMMITMENTS" shall mean, collectively, the Revolving Loan Commitment,
the Term B Loan Commitment and any Incremental Facility Commitments issued
hereunder.
"COMPANY" shall mean any corporation, partnership, limited liability
company or other legal entity.
"CONSTITUENT DOCUMENTS" shall mean, (a) with respect to any
corporation, such corporation's certificate or articles of incorporation and
by-laws, (b) with respect to any partnership, such partnership's partnership
agreement and certificate of limited partnership (if applicable), and (c) with
respect to any limited liability company, such limited liability company's
operating agreement and certification of organization (or other similar
document, as the case may be).
"CREDIT PARTIES" shall mean, collectively, the Administrative Agent,
the Co-Documentation Agents, the Syndication Agent, the Arrangers, the Lenders,
the Swing Loan Lender, the Issuing Bank and any Incremental Facility Lenders.
7
"CSC HOLDINGS" shall mean CSC Holdings, Inc., a Delaware corporation.
"CSC HOLDINGS PLEDGE AGREEMENT" shall mean that certain Pledge
Agreement between CSC Holdings and the Administrative Agent, dated as of the
Agreement Date, in substantially the form of EXHIBIT D attached hereto, pursuant
to which CSC Holdings shall pledge to the Administrative Agent, for the ratable
benefit of the Credit Parties, all of the stock and other equity interests in
the Borrower owned by CSC Holdings to secure the Obligations.
"CUBS GUARANTY" shall mean the guaranty provided by the Borrower in
respect of those certain payments to be made under a programming rights
agreement dated as of March 4, 1999, by SC-CHI, pursuant to which SC-CHI
obtained the right to broadcast certain games of the Chicago Cubs, a Major
League Baseball franchise.
"CVC" shall mean Cablevision Systems Corporation, a Delaware
corporation.
"DEFAULT" shall mean any Event of Default, and any of the events
specified in Section 9.1 hereof which with any passage of time or giving of
notice (or both) would constitute such event an Event of Default.
"DEFAULT RATE" shall mean a simple per annum interest rate equal to
the sum of (a) the Base Rate, (b) the Applicable Margin then in effect with
respect to Base Rate Advances, and (c) two percent (2%).
"XXXXX" shall mean Xxxxxxx X. Xxxxx.
"XXXXX FAMILY INTERESTS" shall mean (a) any Xxxxx Family Member, (b)
any trusts for the benefit of any Xxxxx Family Members, (c) any estate or
testamentary trust of any Xxxxx Family Member for the benefit of any Xxxxx
Family Members, (d) any executor, administrator, conservator or legal or
personal representative of any Person or Persons specified in clauses (a), (b)
and (c) above to the extent acting in such capacity on behalf of any Xxxxx
Family Member or Members and not individually, and (e) any corporation,
partnership, limited liability company or other similar entity, in each case,
eighty percent (80%) of which is owned and controlled by any of the foregoing or
combination of the foregoing.
"XXXXX FAMILY MEMBERS" shall mean Xxxxx, his spouse, his descendants
and any spouse of any of such descendants.
"DOLLARS" or "$" shall mean the basic unit of the lawful currency of
the United States of America.
"ELIGIBLE ASSIGNEE" shall mean (a) a Lender, (b) a Lender Affiliate,
(c) an Approved Fund, or (d) any other Person (other than the Borrower or any of
its Affiliates)
8
approved by the Administrative Agent and, unless a Default has occurred and is
continuing, the Borrower (such approval of the Administrative Agent and the
Borrower not to be unreasonably withheld or delayed).
"EMPLOYEE STOCK INCENTIVE EXPENSE" shall mean, with respect to any
Person, the expense incurred for the respective period in respect of the
employee stock incentive programs of such Person, as determined in accordance
with GAAP.
"EMPLOYEE STOCK INCENTIVE INCOME" shall mean, with respect to any
Person, income attributable to such Person for the respective period as a result
of the reversal of any Employee Stock Incentive Expense accrued during a prior
period, as determined in accordance with GAAP.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA AFFILIATE" shall mean any "affiliate" of the Borrower and its
Subsidiaries within the meaning of Section 414 of the Code.
"EURODOLLAR ADVANCE" shall mean an Advance (other than a Swing Loan)
which the Borrower requests to be made as a Eurodollar Advance or which is
continued as or converted to a Eurodollar Advance in accordance with the
provisions of Section 2.2 hereof.
"EURODOLLAR ADVANCE PERIOD" shall mean, in connection with any
Eurodollar Advance, the term of such Advance selected by the Borrower, which may
be one (1), two (2), three (3) or six (6) months, and subject to the last
proviso of this definition nine (9) or twelve (12) months, or otherwise
determined in accordance with this Agreement; PROVIDED, HOWEVER, notwithstanding
the foregoing, (a) any applicable Eurodollar Advance Period which would
otherwise end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Eurodollar Advance Period shall end on the next
preceding Business Day, (b) any applicable Eurodollar Advance Period which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Eurodollar Advance Period is to end shall
(subject to clause (a) above) end on the last day of such calendar month, and
(c) no Eurodollar Advance Period shall extend beyond the Final Maturity Date or
such earlier date as would interfere with the repayment obligations of the
Borrower under Section 2.7 hereof; PROVIDED FURTHER, HOWEVER, the Borrower may
not select a Eurodollar Advance Period in excess of six (6) months unless the
Administrative Agent has notified the Borrower that (i) that each of the Lenders
has available to it funds for such Lender's share of the proposed Advance which
are not required for other purposes, (ii) such funds are available to each
Lender at a rate (exclusive of reserves and other adjustments) at or below the
Eurodollar Rate for such proposed Advance and Eurodollar Advance Period, and
(iii) each Lender has, in its sole discretion, agreed to fund such Advance.
9
"EURODOLLAR BASIS" shall mean a simple per annum interest rate
(rounded upward, if necessary, to the nearest one-hundredth of one percent
(1/100%)) equal to the quotient of (a) the Eurodollar Rate divided by (b) one
minus the Eurodollar Reserve Percentage, stated as a decimal, and once
determined, shall be subject to Article 11 hereof and shall remain unchanged
during the applicable Eurodollar Advance Period, except for changes to reflect
adjustments in the Eurodollar Reserve Percentage.
"EURODOLLAR RATE" shall mean, for any Eurodollar Advance Period, the
rate per annum determined by the Administrative Agent to be the arithmetic mean
of the interest rates per annum (rounded upward to the nearest one-sixteenth of
one percent (1/16%)) which appear on Telerate Page 3750 as of 11:00 a.m. (London
time), or, if unavailable, the Reuters Screen LIBO Page, two (2) Business Days
before the first day of such Eurodollar Advance Period, in an amount
approximately equal to the principal amount of, and for a length of time
approximately equal to the Eurodollar Advance Period for, the Eurodollar Advance
sought by the Borrower.
"EURODOLLAR RESERVE PERCENTAGE" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the actual reserve requirement applicable with respect to Eurocurrency
liabilities (as that term is defined in Regulation D), to the extent any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. The Eurodollar Basis for any Eurodollar Advance shall be adjusted as of
the effective date of any change in the Eurodollar Reserve Percentage.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
9.1 hereof, provided that any requirement for notice or lapse of time, or both,
has been satisfied.
"EXCESS FUNDING GUARANTOR" shall have the meaning ascribed thereto in
Article 3 hereof.
"EXCESS PAYMENT" shall have the meaning ascribed thereto in Article 3
hereof.
"EXEMPTION CERTIFICATE" shall have the meaning set forth in Section
2.10(c)(iii) hereof.
"EXISTING INVESTMENT GUARANTIES" shall mean, collectively, the Cubs
Guaranty, the Sportsvision Guaranty, the Sterling Digital Guaranty and the Janus
Guaranty.
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
10
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of
New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three (3) federal
funds brokers of recognized standing selected by the Administrative Agent.
"FEE LETTERS" shall mean those certain Fee Letters by and between the
Borrower and each of the Administrative Agent, the Arrangers and the Lenders
setting forth the applicable fees relating to this Agreement.
"FILM RIGHTS AGREEMENTS" shall mean, collectively, each agreement
between any of the Rainbow Companies or any of the MGM Companies and any other
Person for the agreement to use, produce, exhibit or distribute programming.
"FILM RIGHTS AMORTIZATION" shall mean the amortization of expenditures
of the MGM Operating Companies for the acquisition of film rights and broadcast
programming, which expenditures shall, at all times, be amortized in accordance
with GAAP.
"FINAL MATURITY DATE" shall mean March 31, 2009, or such earlier date
on which the payment of all outstanding Obligations shall be due (whether by
acceleration or otherwise), as such date may be accelerated as set forth in the
definition of "Maturity Date".
"FINANCIAL COVENANTS" shall mean the financial covenants applicable to
the Borrower from time to time as set forth in Sections 8.8, 8.9 and 8.10
hereof.
"FINANCIAL STATEMENTS DELIVERY DATE" shall mean (a) with respect to
the delivery of quarterly financial statements and information pursuant to
Section 7.1 hereof for (i) the fiscal quarters of the Borrower ended March 31,
2003, June 30, 2003, and September 30, 2003, the date which is seventy-five (75)
days after the last day of each such quarter, and (ii) each fiscal quarter of
the Borrower ended thereafter, the date which is sixty-five (65) days after the
last day of each such fiscal quarter, and (b) with respect to the delivery of
annual financial statements and information pursuant to Section 7.2 hereof for
(i) the fiscal year of the Borrower ended December 31, 2002, the date which is
one hundred eighty (180) days after the end of such fiscal year, and (ii) each
fiscal year of the Borrower ended thereafter, the date which is one hundred
twenty (120) days after the end of each such fiscal year; PROVIDED, HOWEVER, in
the event the SEC shall reduce the time period during which the Borrower may
file its quarterly or annual financial statements with the SEC, the foregoing
time periods shall be reduced by a like number of days.
11
"FOREIGN LENDER" shall have the meaning set forth in Section
2.10(c)(iii) hereof.
"FUND" shall mean any Person (other than the Borrower or any of its
Affiliates) that is (or will be) primarily engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.
"GAAP" shall mean generally accepted accounting principles in the
United States, as in effect from time to time, consistently applied.
"GE STOCK" shall mean the stock of General Electric Company received
by the Borrower in connection with the sale of the equity interests owned by the
Borrower in Bravo Company.
"GE STOCK MONETIZATION TRANSACTION" shall mean the monetization of the
value of the GE Stock pursuant to variable share pre-paid forward contracts.
"GE SUBSIDIARIES" shall mean, collectively, RMH GE Holdings I, Inc., a
Delaware corporation, RMH GE Holdings II, Inc., a Delaware corporation, and RMH
GE Holdings III, Inc., a Delaware corporation, each of which has been formed by
the Borrower for the sole purpose of consummating the GE Stock Monetization
Transaction and has no assets other than the GE Stock.
"GUARANTEE SUPPLEMENT" shall have the meaning set forth in Section
6.14 hereof.
"GUARANTORS" shall mean all of the now or hereafter existing direct
and indirect Subsidiaries of the Borrower.
"GUARANTY" or "GUARANTEED" as applied to an obligation (each a
"primary obligation"), shall mean and include (a) any guaranty, direct or
indirect, in any manner, of any part or all of such primary obligation, and (b)
any agreement, direct or indirect, contingent or otherwise, the practical effect
of which is to assure in any way the payment or performance (or payment of
damages in the event of non-performance) of any part or all of such primary
obligation, including, without limiting the foregoing, any reimbursement
obligations as to amounts drawn down by beneficiaries of outstanding letters of
credit and any obligation of a Person (the "primary obligor"), whether or not
contingent, (i) to purchase any such primary obligation or any property or asset
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of such primary obligation or (B) to
maintain working capital, equity capital or the net worth, cash flow, solvency
or other balance sheet or income statement condition of any other Person, (iii)
to purchase property, assets, securities or services primarily for the purpose
of assuring the owner or holder of any primary obligation of the ability of the
primary obligor with respect to such primary obligation to
12
make payment thereof, or (iv) otherwise to assure or hold harmless the owner or
holder of such primary obligation against loss in respect thereof.
"IFC" shall mean The Independent Film Channel LLC, a Delaware limited
liability company.
"INCREMENTAL FACILITY COMMITMENT" shall mean the commitment of any of
the Incremental Facility Lenders to make Incremental Facility Loans to the
Borrower in accordance with Section 2.14 hereof. The Borrower may obtain
Incremental Facility Commitments from more than one Incremental Facility Lender,
which commitments shall be several obligations of each such Incremental Facility
Lender.
"INCREMENTAL FACILITY INDEBTEDNESS" shall mean all principal,
interest, fees, and other amounts from time to time due or accrued in connection
with the Incremental Facility Loans.
"INCREMENTAL FACILITY LENDERS" shall mean any lenders having an
Incremental Facility Commitment or making Incremental Facility Loans pursuant
thereto.
"INCREMENTAL FACILITY LOANS" shall mean the amounts advanced by the
Incremental Facility Lenders to the Borrower as Incremental Facility Loans under
the Incremental Facility Commitment, not to exceed the amount of the Incremental
Facility Commitment.
"INCREMENTAL FACILITY MATURITY DATE" shall mean the maturity date for
the Incremental Facility Loans as set forth in the Notice of Incremental
Facility Commitment applicable thereto.
"INCREMENTAL FACILITY NOTES" shall mean those certain Incremental
Facility Notes described in Section 2.14 hereof.
"INDEBTEDNESS" shall mean, with respect to any Person, (a) all items
(except items of shareholders' and partners' equity or capital stock or surplus
or general contingency or deferred tax reserves) which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, (b) all direct or indirect obligations
secured by any Lien to which any property or asset owned by such Person is
subject, whether or not the obligation secured thereby shall have been assumed,
(c) to the extent not otherwise included, all Capitalized Lease Obligations of
such Person, (d) all reimbursement obligations with respect to outstanding
letters of credit, and (e) all net obligations in respect of Interest Hedge
Agreements.
"INDEBTEDNESS FOR MONEY BORROWED" shall mean, with respect to any
Person, all money borrowed by such Person and all Indebtedness represented by
notes payable by such Person and drafts accepted representing extensions of
credit to such Person, all obligations of such Person evidenced by bonds,
debentures, notes, or other
13
similar instruments, all net obligations in respect of Interest Hedge
Agreements, all reimbursement obligations with respect to letters of credit, all
Indebtedness of such Person upon which interest charges, commitment fees or
letter of credit fees are customarily paid, and all Indebtedness of such Person
issued or assumed as full or partial payment for property or services, whether
or not any such notes, drafts, obligations, or Indebtedness represent
Indebtedness for money borrowed (excluding accounts payable and other accruals
incurred in the ordinary cause of business). For purposes of this definition,
interest which is accrued but not paid on the original due date or within any
applicable cure or grace period as provided by the underlying contract for such
interest shall be deemed Indebtedness For Money Borrowed.
"INDEMNIFIED PARTIES" shall have the meaning given thereto in Section
6.13 hereof.
"INITIAL MATURITY DATE" shall mean March 31, 2008, or such earlier
date on which the payment of all outstanding Obligations in respect of the
Revolving Loan Commitment shall be due (whether by acceleration or otherwise),
as such date may be accelerated as set forth in the definition of "Maturity
Date".
"INSOLVENCY PROCEEDING" shall mean, with respect to any Person, any
insolvency, receivership, bankruptcy, dissolution, liquidation or reorganization
proceeding, or any other proceeding, whether voluntary or involuntary, by or
against such Person, under the Bankruptcy Code or any other bankruptcy or
insolvency law or laws, federal or state, relating to the relief of debtors of
any jurisdiction, whether now or hereafter in effect, and any out-of-court
composition, assignment for the benefit of creditors, readjustment of
Indebtedness, reorganization, extension or other debt arrangement of any kind.
"INTEREST COVERAGE RATIO" shall mean, on any calculation date, the
ratio of (a) Six Month Cash Flow to (b) Trailing Six Month Interest Expense.
"INTEREST EXPENSE" shall mean, for any period with respect to any
Person, an amount equal to the sum of (a) the interest and commitment fees
accrued during such period with respect to the aggregate amount of Indebtedness
For Money Borrowed and (b) the interest component of Capitalized Lease
Obligations.
"INTEREST HEDGE AGREEMENT" shall mean any interest rate swap, cap,
collar, floor, caption or swap agreement, or any similar arrangement designed to
hedge the risk of variable interest rate volatility or to reduce interest costs,
arising at any time between the Borrower, on the one hand, and any other Person,
on the other hand, as such agreement or arrangement may be modified,
supplemented, amended, and in effect from time to time.
"INVESTMENT" shall mean (a) any capital contributions to, loans to,
repurchase agreements with or investments in securities of, or Guaranties (other
than the
14
Existing Investment Guaranties) issued for the benefit of, a Person (including,
without limitation, any of the Unrestricted Subsidiaries or any of the MGM
Companies), but in any case shall not include any Acquisition, and (b) payments
made under each of the Existing Investment Guaranties.
"ISSUING BANK" shall mean the Administrative Agent and, upon any such
Person's agreement to act as an Issuing Bank hereunder, any Lender or any Lender
Affiliate, in each case as issuer of any Letter of Credit hereunder.
"JANUS GUARANTY" shall mean the guaranty provided by the Borrower in
respect of certain payments to be made by Rainbow Films Holdings, LLC under a
Television Rights Purchase Agreement, dated as of March 14, 1995, among City
Entertainment Corporation, Janus Films Company and Bravo Company, as assigned to
Rainbow Films Holdings, LLC.
"L/C OBLIGATIONS" shall mean, at any date, the sum of (a) the
aggregate amount then available to be drawn under all outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed by the Borrower pursuant to Section 2.15 hereof.
"LENDER ADDENDUM" shall mean, with respect to any initial Lender, a
Lender Addendum, substantially in the form of EXHIBIT E attached hereto, to be
executed and delivered by such Lender on the Agreement Date as provided in
Section 12.17 hereof.
"LENDER AFFILIATE" shall mean with respect to any Lender, (a) any
Person directly or indirectly controlling, controlled by or under common control
with such Lender or (b) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is wholly-owned by a Lender or a Lender Affiliate of such Lender.
"LENDERS" shall mean the financial institutions or other entities that
from time to time become parties to this Agreement as Lenders (including the
Swing Loan Lender), and "LENDER" shall mean any one of the foregoing Lenders.
"LETTER OF CREDIT" shall mean any Letter of Credit issued by any
Issuing Bank pursuant to Section 2.15 hereof.
"LETTER OF CREDIT COMMITTED AMOUNT" shall mean $10,000,000.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
respect of such property, whether or not xxxxxx, vested, or perfected.
15
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Fee
Letters, the Security Documents, the Subordination of Intercompany Obligations
Agreement, all documents executed in connection with the Incremental Facility
Loans, all Letters of Credit, all Requests for Advance, all Requests for
Issuance of Letters of Credit, all documents executed by any of the Rainbow
Companies pursuant to Section 6.14 hereof and all Interest Hedge Agreements
between the Borrower, on the one hand, and any Credit Party (or any Lender
Affiliate thereof or any Person that was a Credit Party (or a Lender Affiliate
thereof) on the date of entering into such Interest Hedge Agreement), on the
other hand, and all other documents, instruments, certificates and agreements
executed or delivered in connection with or contemplated by this Agreement.
"LOANS" shall mean, collectively, the Revolving Loans, the Term B
Loans, the Swing Loans and, if any Incremental Facility Commitments have been
issued, the Incremental Facility Loans made under such Incremental Facility
Commitments, and "LOAN" shall mean any of the foregoing.
"MAJORITY LENDERS" shall mean, at any time, (a) prior to the
occurrence of an Event of Default and termination of the Commitments, Lenders
the sum of whose Undrawn Commitments plus Loans then outstanding equals or
exceeds fifty and one-tenth percent (50.1%) of the sum of the Undrawn
Commitments plus the Loans then outstanding for all Lenders, or (b) at any time
that there exists an Event of Default hereunder and the Commitments have been
terminated, Lenders the total of whose Loans outstanding equals or exceeds fifty
and one-tenth percent (50.1%) of the total principal amount of the Loans then
outstanding hereunder.
"MANDATORY BORROWING" shall have the meaning given thereto in Section
2.8(b) hereof.
"MATERIAL AFFILIATE CONTRACTS" shall mean, collectively, (a) the AMC
Consulting Agreement, (b) the Services Agreement, (c) the Tax Sharing Policy and
(d) each agreement between any of the Rainbow Companies with any of its
Affiliates or any MGM Company identified on SCHEDULE 1 attached hereto.
"MATERIAL FILM RIGHTS AGREEMENT" shall mean any Film Rights Agreement
of any Rainbow Company pursuant to which such Rainbow Company is obligated to
make payments of $10,000,000 or more in the aggregate.
"MATERIAL MSO AGREEMENT" shall mean any agreement between any Rainbow
Company and a cable television operator covering 1,000,000 or more subscribers
pursuant to which such operator agrees, among other things, to distribute and
exhibit to its subscribers programming of such Rainbow Company.
"MATERIAL SUBSIDIARIES" shall mean, collectively, (a) the Guarantors,
(b) the MuchMusic Companies, and (c) any other Subsidiaries of the Borrower
having (either individually or collectively, in the case of any holding company
Subsidiaries, with their
16
respective operating Subsidiaries) a "fair market value" of $5,000,000 or more,
as determined by the Arrangers in their reasonable discretion.
"MATERIALLY ADVERSE EFFECT" shall mean any materially adverse effect
upon the business, assets, financial condition or results of operations of the
Rainbow Companies, taken as a whole on a consolidated basis in accordance with
GAAP, or upon the ability of the Rainbow Companies, taken as a whole, to perform
their respective Obligations under this Agreement or any other Loan Document.
"MATURITY DATE" shall mean, with respect to all amounts owing or
Advances made, under (a) the Revolving Loan Commitment, the Initial Maturity
Date, (b) the Term B Loan Commitment, the Final Maturity Date, and (c) any
Incremental Facility Commitment, the Incremental Facility Maturity Date
applicable thereto; PROVIDED, HOWEVER, notwithstanding anything to the contrary
contained in this Agreement, in the event that (a) the Indebtedness outstanding
under AMC
Loan Agreement shall be repaid in full and the commitment of the AMC
Credit Parties to make loans thereunder shall be terminated or cancelled or (b)
the maturity of the Indebtedness outstanding under the AMC
Loan Agreement shall
be accelerated, each of the foregoing Maturity Dates shall be accelerated such
that the Obligations outstanding under this Agreement shall mature concurrently
with the Indebtedness outstanding under the AMC
Loan Agreement.
"MAXIMUM GUARANTEED AMOUNT" shall have the meaning ascribed thereto in
Article 3 hereof.
"MGM COMPANIES" shall mean, collectively, AMC, IFC, WE and each of
their respective Subsidiaries, and "MGM COMPANY" shall mean any one of the
foregoing MGM Companies.
"MGM OPERATING COMPANIES" shall mean all MGM Companies which are
designated as of the Agreement Date as MGM Operating Companies on SCHEDULE
5.1(c)-2 hereto and which have been likewise designated as "MGM Operating
Companies" under the AMC
Loan Agreement, and "MGM OPERATING COMPANY" shall mean
any one of the foregoing MGM Operating Companies; PROVIDED, HOWEVER, that so
long as no Default or Event of Default then exists or would be caused thereby,
the Borrower may designate additional MGM Companies as MGM Operating Companies
after the Agreement Date, upon five (5) Business Days' prior written notice to
the Administrative Agent and subject to such MGM Companies being concurrently
designated as "MGM Operating Companies" under the AMC Loan Agreement; PROVIDED
FURTHER, HOWEVER, that notwithstanding the foregoing, (x) AMC, IFC and WE shall
not cease to be MGM Operating Companies without the consent of all of the
Lenders, and (y) no Company which is or becomes a MGM Operating Company shall
cease to be a MGM Operating Company for purposes of this Agreement without the
consent of the Majority Lenders. To the extent that additional MGM Companies
shall be designated as "MGM Operating Companies" under the AMC Loan Agreement,
such MGM Companies shall likewise be
17
designated as MGM Operating Companies under this Agreement, and to the extent
that any Company shall cease to be a MGM Operating Company for purposes of the
AMC Loan Agreement, such Company shall likewise cease to be a MGM Operating
Company for purposes of this Agreement.
"MGM OPERATING COMPANY INTEREST EXPENSE" shall mean, for any period,
eighty percent (80%) of Interest Expense for the MGM Operating Companies on a
consolidated basis.
"MGM OPERATING COMPANY TOTAL DEBT" shall mean, as of any date with
respect to the MGM Operating Companies on a consolidated basis, eighty percent
(80%) of (a) all outstanding Indebtedness For Money Borrowed (excluding
obligations in respect of Interest Hedge Agreements), (b) all obligations
Guaranteed by the MGM Operating Companies in respect of Indebtedness For Money
Borrowed, and (c) all Capitalized Lease Obligations (other than obligations
under Film Rights Agreements of the MGM Operating Companies).
"MSG COMPANIES" shall mean, collectively, Rainbow Garden Corp., a
Delaware corporation, MSG Eden Corp., a Delaware corporation, Regional MSG
Holdings LLC, a Delaware limited liability company, and Madison Square Garden,
L.P., a Delaware limited partnership, and "MSG COMPANY" shall mean any one of
the foregoing MSG Companies.
"MUCHMUSIC COMPANIES" shall mean, collectively, MuchMusic Holdings
LLC, a Delaware limited liability company, MuchMusic U.S.A. Venture, a
New York
general partnership, and MuchMusic Programming, Inc., a Delaware corporation,
and "MUCHMUSIC COMPANY" shall mean any one of the foregoing MuchMusic Companies.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"NECESSARY AUTHORIZATIONS" shall mean all authorizations, consents,
permits, approvals, licenses and exemptions from, and all filings and
registrations with, and all reports to, any governmental or other regulatory
authority whether federal, state or local, and all agencies thereof necessary
for the conduct of the businesses and the ownership (or lease) of the properties
and assets of each of the Rainbow Companies.
"NET CASH PROCEEDS" shall mean, with respect to any issuance or sale
by any Person of Indebtedness or stock or other equity interests, and with
respect to any sale, lease, transfer or other disposition of assets, the amount
equal to (a) the gross cash consideration (including, without limitation, any
payments received in respect of covenants not to compete, consulting or
management fees, and any portion of the amount received in cash upon payment of
a buyer promissory note or other evidence of Indebtedness) in connection with
such issuance, sale, lease, transfer or other disposition, minus (b) the sum of
(i) any underwriting or commitment fees or sales commissions
18
required to be paid on the closing of such transaction, (ii) any attorneys fees
incurred by such Person in connection with such transaction, (iii) cash taxes
related to the transaction to the extent payable by such Person, and (iv) with
respect to any sale of R/L DBS Company, the aggregate amount of any Investments
made pursuant to Section 8.2(c)(i) by any member of the Rainbow Group in R/L DBS
Company during the term of this Agreement.
"NET INCOME" shall mean, with respect to any Person for any period,
the aggregate amount of net income of such Person, after taxes (unless such
Person is a partnership or limited liability company), for such period as
determined in accordance with GAAP.
"NEW AFFILIATED EQUITY" shall mean any infusion of equity by CVC, any
Affiliate of CVC or any other Person satisfactory to the Majority Lenders into
the Borrower after the Agreement Date (whether the amount of such equity shall
have been obtained by any such Person in connection with the public issuance of
stock or other equity interests by such Person or otherwise) to the extent the
Net Cash Proceeds received in connection with the issuance of any such equity
are not required to be used to repay the Loans under Section 2.6 hereof.
"NOTES" shall mean, collectively, the Revolving Notes, the Term B
Notes, the Swing Loan Note and, if applicable, the Incremental Facility Notes.
"NOTICE OF CONTINUATION/CONVERSION" shall mean a notice in
substantially the form of EXHIBIT F attached hereto.
"NOTICE OF INCREMENTAL FACILITY COMMITMENT" shall have the meaning set
forth in Section 2.14(b) hereof.
"OBLIGATIONS" shall mean (a) all payment and performance obligations
of the Borrower and all other obligors to the Lenders, the Swing Loan Lender,
the Incremental Facility Lenders, the Administrative Agent and the other Credit
Parties under this Agreement and the other Loan Documents, as they may be
amended from time to time, or as a result of making the Loans or the Incremental
Facility Loans, including, without limitation, obligations of the Borrower under
Interest Hedge Agreements (only to the extent that such Interest Hedge
Agreements are permitted pursuant to Section 8.1(d) hereof) with any Credit
Party or any Lender Affiliate of a Credit Party (or any Person that was a Credit
Party (or a Lender Affiliate thereof) on the date of entering into such Interest
Hedge Agreement), and (b) the obligation to pay an amount equal to the amount of
any and all damages which the Lenders, the Swing Loan Lender, the Incremental
Facility Lenders, the Administrative Agent or the other Credit Parties, or any
of them, or any of their Lender Affiliates, may suffer by reason of a breach by
the Borrower or any other obligor of any obligation, covenant or undertaking
with respect to this Agreement or any other Loan Document.
19
"PARTNERSHIP PLEDGE AGREEMENT" shall mean that certain Partnership
Pledge Agreement among the Borrower, the Rainbow Partners and the Administrative
Agent, for the ratable benefit of the Credit Parties, dated as of the Agreement
Date, in substantially the form of EXHIBIT G attached hereto, pursuant to which
the Borrower and the Rainbow Partners have pledged to the Administrative Agent,
for the ratable benefit of the Credit Parties, all of their respective rights in
and to the Constituent Documents of AMC and IFC, including, without limitation,
the equity interests owned by each of the Rainbow Partners in AMC and IFC.
"PAYMENT DATE" shall mean the last day of each Eurodollar Advance
Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED INVESTMENTS" shall mean Investments described in and
permitted to be made under Section 8.2 hereof.
"PERMITTED LIENS" shall mean, as applied to any Person:
(a) Any Lien in favor of any Credit Party given to secure the
Obligations;
(b) Liens in favor of the AMC Credit Parties on the rights of the
Borrower and the Rainbow Partners under the Constituent Documents of AMC and IFC
and on the equity interests owned by the Rainbow Partners in AMC and IFC, all of
which Liens are subordinated to the Liens on such Collateral granted to the
Administrative Agent pursuant to the Partnership Pledge Agreement;
(c) (i) Liens on real estate for real estate taxes not yet delinquent
and (ii) Liens for taxes, assessments, judgments, governmental charges or
levies, or claims the non-payment of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been set aside on
such Person's books, but only so long as no foreclosure, distraint, sale, or
similar proceedings have been commenced with respect thereto and remain unstayed
for a period of thirty (30) days after their commencement;
(d) Liens of carriers, warehousemen, mechanics, laborers, and
materialmen incurred in the ordinary course of business for sums not yet due or
being contested in good faith, if such reserve or appropriate provision, if any,
as shall be required by GAAP shall have been made therefor;
(e) Liens incurred in the ordinary course of business in connection
with worker's compensation and unemployment insurance;
20
(f) Restrictions on the transfer of assets imposed by any agreement
(other than any agreement relating to Indebtedness), or by any federal, state or
local statute, regulation or ordinance applicable to such Person;
(g) Easements, rights-of-way, restrictions, and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens on real property
incidental to the conduct of the business of such Person or to the ownership of
its real properties which were not incurred in connection with Indebtedness or
other extensions of credit and which do not in the aggregate materially detract
from the value of such properties or materially impair their use in the
operation of the business of such Person; and
(h) Liens in respect of Capitalized Lease Obligations permitted under
this Agreement.
"PERSON" shall mean an individual, Company, unincorporated
organization, or a government or any agency or political subdivision thereof.
"PLAN" shall mean, with respect to the Borrower and its Subsidiaries,
an employee benefit plan within the meaning of Section 3(3) of ERISA sponsored
or maintained by or contributed to by the Borrower or any of its Subsidiaries
for the benefit of employees of the Borrower or such Subsidiaries, as the case
may be, but excluding any Multiemployer Plan.
"PRE-FUNDED AMOUNT" shall mean, as of any date of determination
without duplication, the aggregate amount of all distributions made to the
Borrower by AMC, IFC and WE during the term of this Agreement for the purpose of
funding any principal payments with respect to the Loans or any payments of
Interest Expense with respect to any of the Loans, any Interest Hedge Agreements
entered into with respect to the Loans or any Authorized Debt Issuance.
"PRIME RATE" shall mean, at any time, the rate of interest adopted by
The Toronto-Dominion Bank,
New York Branch, as its reference rate for the
determination of interest rates for loans of varying maturities in United States
dollars to United States residents of varying degrees of creditworthiness and
being quoted at such time by such bank as its "prime rate." The Prime Rate is
not necessarily the lowest rate of interest charged to borrowers of The
Toronto-Dominion Bank,
New York Branch.
"PRO RATA SHARE" shall have the meaning ascribed thereto in Article 3
hereof.
"RAH" shall mean Rainbow Advertising Holdings LLC, a Delaware limited
liability company.
21
"RAINBOW/FOX ENTITIES" shall mean, collectively, RPP, National
Advertising Partners, a
New York general partnership, National Sports Partners,
a
New York general partnership, and their respective Subsidiaries, and
"RAINBOW/FOX ENTITY" shall mean any one of the foregoing Rainbow/Fox Entities.
"RAINBOW COMPANIES" shall mean, collectively, the Borrower and the
Guarantors, and "RAINBOW COMPANY" shall mean any one of the foregoing Rainbow
Companies; provided that, in the event that the Guarantee of any MuchMusic
Company and the Administrative Agent's Lien on the properties and assets of such
MuchMusic Company shall be released, such MuchMusic Company (and each of its
Subsidiaries) shall cease to be a Rainbow Company for purposes of this
Agreement.
"RAINBOW GROUP" shall mean, collectively, the Rainbow Companies, the
Unrestricted Subsidiaries and the MGM Companies.
"RAINBOW INTEREST EXPENSE" shall mean, for any period, Interest
Expense for the Rainbow Companies on a consolidated basis. For purposes of the
fiscal quarters ending March 31, 2003 and June 30, 2003, Rainbow Interest
Expense shall be calculated based on the assumption that the full amount of the
Loans hereunder was outstanding during the six (6) month period then ended at
the rate of interest applicable to Base Rate Advances made on the last day of
such period.
"RAINBOW PARTNERS" shall mean, collectively, American Movie Classics
Holding Corporation, a
New York corporation, AMC II Holding Corporation, a
Delaware corporation, and IFC Holding Corporation, a Delaware corporation, and
"RAINBOW PARTNER" shall mean any one of the foregoing Rainbow Partners.
"RAINBOW TOTAL DEBT" shall mean, as of any date with respect to the
Rainbow Companies on a consolidated basis, (a) all outstanding Indebtedness For
Money Borrowed (excluding obligations in respect of Interest Hedge Agreements),
(b) all obligations Guaranteed by the Rainbow Companies in respect of
Indebtedness For Money Borrowed, (c) all Capitalized Lease Obligations (other
than obligations under Film Rights Agreements of the Rainbow Companies), and (d)
all Accrued Tax Liabilities.
"REGISTER" shall have the meaning set forth in Section 12.5(b) hereof.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any change
on or after the Agreement Date in United States Federal, state or foreign laws
or regulations (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) or the adoption or making on or after
such date of any interpretations, directives or requests applying to a class of
banks including such Lender of or under any United States Federal or state, or
any foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
22
"REPORTABLE EVENT" shall have the meaning set forth in Section 4043 of
ERISA, other than an event for which the reporting requirement has been waived
by regulations promulgated under such Section.
"REQUEST FOR ADVANCE" shall mean any certificate signed by an
Authorized Signatory of the Borrower requesting an Advance (other than a Swing
Loan) hereunder, which certificate shall be in substantially the form of EXHIBIT
H-1 attached hereto.
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" shall mean any certificate
signed by an Authorized Signatory of the Borrower requesting a Letter of Credit
hereunder, which certificate shall be in substantially the form of EXHIBIT H-2
attached hereto.
"RESTRICTED PAYMENT" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person on account of any shares
of capital stock or other securities of any of the Rainbow Companies, (b) any
payment of consulting or management fees, or any interest thereon, by any of the
Rainbow Companies to CVC or to any other Affiliate of the Rainbow Companies
(including, without limitation, payments under the Services Agreement), (c) any
payment of amounts due in respect of any Accrued Tax Liabilities pursuant to the
Tax Sharing Policy, and (d) any payment of principal or interest on account of
any Indebtedness of any of the Rainbow Companies issued in connection with an
Authorized Debt Issuance.
"RESTRICTED PURCHASE" shall mean any payment on account of the
purchase, redemption, or other acquisition or retirement of any shares of
capital stock or other securities of any of the Rainbow Companies, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock or other securities of any of the Rainbow Companies.
"RESTRUCTURING CHARGES" shall mean, as determined for any period for
the MGM Operating Companies on a consolidated basis, restructuring charges
incurred by the MGM Operating Companies in connection with exiting an activity
or restructuring an operation or activity, in accordance with GAAP.
"REVOLVING COMMITMENT PERCENTAGE" shall mean, with respect to any
Lender, the ratio, expressed as a percentage, of (a) the Revolving Loan
Commitment of such Lender, divided by (b) the aggregate Revolving Loan
Commitments of all of the Lenders. As of the Agreement Date, the Revolving
Commitment Percentage of each Lender is set forth on Schedule 1 to the Lender
Addendum delivered by such Lender under the caption "Revolving Commitment
Percentage".
"REVOLVING LOAN COMMITMENT" shall mean the several obligations of
certain of the Lenders to advance the sum of up to $160,000,000 to the Borrower,
on or after the Agreement Date, in accordance with their respective Revolving
Commitment
23
Percentages and as such amount may be reduced from time to time, all pursuant to
the terms hereof.
"REVOLVING LOANS" shall mean, collectively, the amounts advanced by
certain of the Lenders to the Borrower under the Revolving Loan Commitment, not
to exceed the amount of the Revolving Loan Commitment and not to include Swing
Loans.
"REVOLVING NOTES" shall mean those certain revolving promissory notes
issued by the Borrower to each of the Lenders issuing a Revolving Loan
Commitment that requests a promissory note in accordance with each such Lender's
Revolving Commitment Percentage, each one substantially in the form of EXHIBIT I
attached hereto, and any extensions, modifications, renewals or replacements of
or amendments to any of the foregoing.
"R/L DBS COMPANY" shall mean R/L DBS Company LLC, a Delaware limited
liability company.
"RNSH" shall mean Rainbow National Sports Holdings LLC, a Delaware
limited liability.
"RPP" shall mean Regional Programming Partners, a New York general
partnership.
"RRH" shall mean Rainbow Regional Holdings LLC, a Delaware limited
liability company.
"RRH I" shall mean RRH I, LLC, a Delaware limited liability company.
"RRH II" shall mean RRH II, L.L.C., a Delaware limited liability
company.
"SC-CHI" shall mean Sports Channel Chicago Associates, a New York
general partnership.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency thereof.
"SECURITY DOCUMENTS" shall mean the Borrower Pledge Agreement, the
Borrower Security Agreement, the Partnership Pledge Agreement, the CSC Holdings
Pledge Agreement, the Subsidiary Pledge Agreement, the Subsidiary Security
Agreement, the Trademark Security Agreement, any other agreement or instrument
providing Collateral for the Obligations whether now or hereafter in existence,
and any filings, instruments, agreements and documents related thereto and
providing the Administrative Agent, for the ratable benefit of the Credit
Parties, with Collateral for the Obligations.
24
"SENIOR DEBT" shall mean, as of any date without duplication, the
result of (a) Total Debt, minus (b) the aggregate principal amount of any
Authorized Debt Issuance then outstanding.
"SENIOR LEVERAGE RATIO" shall mean, on any calculation date, the ratio
of (a) Senior Debt to (b) Annualized Cash Flow.
"SERVICES AGREEMENT" shall mean, collectively, those certain Services
Agreements identified on SCHEDULE 8.11 attached hereto.
"SIX MONTH CASH FLOW" shall mean the result of (a) Annualized Cash
Flow, divided by (b) two (2).
"SOLVENT" shall mean, with respect to any Person on any date, that on
such date (a) the fair value of the property (tangible or intangible) of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the amount that will be
required to pay the probable liabilities of such Person on its debts as they
become absolute and matured will not be greater than the fair salable value of
the assets of such Person at such time, (c) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business, and (d) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to
prevailing practices in the industry in which such Person is engaged. In
computing the amount of any contingent liability at any time, it is intended
that such liability will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that might
reasonably be expected to become an actual or matured liability.
"SPORTSVISION GUARANTY" shall mean the guaranty provided by the
Borrower in respect of those certain payments to be made under the programming
rights agreement, dated as of March 4, 1999, entered into by SC-CHI, pursuant to
which SC-CHI obtained the right to broadcast certain games of the Chicago White
Sox, a Major League Baseball franchise, the Chicago Blackhawks, a National
Hockey League franchise, and the Chicago Bulls, a National Basketball
Association franchise.
"STERLING DIGITAL GROUP" shall mean, collectively, Sterling Digital
Holdings LLC, a Delaware limited liability company, Sterling Digital LLC, a
Delaware limited liability company, and their respective Subsidiaries.
"STERLING DIGITAL GUARANTY" shall mean the guaranty obligations of the
Borrower in respect of those certain Guaranties described on SCHEDULE 2 attached
hereto.
"SUBORDINATION OF INTERCOMPANY OBLIGATIONS AGREEMENT" shall mean that
certain Subordination of Intercompany Obligations Agreement, dated as of the
25
Agreement Date, among the Administrative Agent, CSC Holdings, and the Borrower,
in substantially the form of EXHIBIT J attached hereto, pursuant to which the
payment of fees under the AMC Consulting Agreement and the Services Agreement
have been subordinated to the Obligations as provided therein.
"SUBSIDIARY" shall mean, as applied to any Person, (a) any corporation
of which fifty percent (50%) or more of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right of
the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any
partnership or other Company of which fifty percent (50%) or more of the
outstanding partnership or other equity interests, is at the time owned directly
or indirectly by such Person, or by one or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person, and (b) any other
entity which is controlled or capable of being controlled by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person; PROVIDED that, in the case of the Borrower and its
Subsidiaries (other than with respect to clause (c) of the definition of
"Unrestricted Subsidiaries"), the term "Subsidiary" shall exclude the
Unrestricted Subsidiaries and the MGM Companies, except that, notwithstanding
the foregoing, (a) the Unrestricted Subsidiaries (other than the GE Subsidiaries
and any Rainbow/Fox Entity) shall be considered "Subsidiaries" solely for
purposes of Sections 5.1(h), 5.1(m), 6.6, 6.10, 7.5(d), 8.13 and 9.1(m) of this
Agreement, and (b) with respect to the definition of "Material Subsidiaries,"
the Unrestricted Subsidiaries (other than the GE Subsidiaries and any
Rainbow/Fox Entity) will be considered Material Subsidiaries to the extent such
Companies would have constituted Material Subsidiaries but for application of
the foregoing exclusion.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean that certain Subsidiary
Pledge Agreement between each Guarantor having one or more Subsidiaries (other
than Subsidiaries constituting MGM Companies) and the Administrative Agent, for
the ratable benefit of the Credit Parties, dated as of the Agreement Date, in
substantially in the form of EXHIBIT K attached hereto, and any similar pledge
agreement or any pledge agreement supplement delivered pursuant to Section 6.14
hereof, pursuant to which each such Guarantor has pledged to the Administrative
Agent, for the ratable benefit of the Credit Parties, all of the stock and other
equity interests owned by it (other than the stock or other equity interests of
any MGM Company or any Unrestricted Subsidiary).
"SUBSIDIARY SECURITY AGREEMENT" shall mean that certain Subsidiary
Security Agreement between each Guarantor and the Administrative Agent, for the
ratable benefit of the Credit Parties, dated as of the Agreement Date, in
substantially the form of EXHIBIT L attached hereto, and any similar security
agreement or any security agreement supplement delivered pursuant to
Section 6.14 hereof.
26
"SUPER-MAJORITY LENDERS" shall mean, at any time, (a) prior to the
occurrence of an Event of Default and termination of the Commitments, Lenders
the sum of whose Undrawn Commitments plus Loans then outstanding equals or
exceeds sixty-six and two-thirds percent (66-2/3%) of the sum of the Undrawn
Commitments plus Loans then outstanding for all Lenders, or (b) at any time
there exists an Event of Default hereunder, and the Commitments have been
terminated, Lenders the total of whose Loans outstanding equals or exceeds
sixty-six and two-thirds percent (66-2/3%) of the total principal amount of the
Loans then outstanding hereunder.
"SWING LOAN COMMITTED AMOUNT" shall mean $6,250,000.
"SWING LOANS" shall mean revolving loans made to the Borrower by the
Swing Loan Lender from time to time in the Swing Loan Lender's sole discretion
and for the Swing Loan Lender's account, which revolving loans shall be made in
accordance with Sections 2.1(b) and 2.8 hereof.
"SWING LOAN LENDER" shall mean any Lender or the Administrative Agent
as agreed to at any time by the Borrower and such Lender or the Administrative
Agent, in either case as designated in accordance with this Agreement. The
initial Swing Loan Lender shall be Toronto Dominion (Texas), Inc.
"SWING LOAN NOTE" shall mean that certain Swing Loan Note dated as of
the Agreement Date, in the principal amount of $6,250,000, issued by the
Borrower to the Swing Loan Lender, substantially in the form of EXHIBIT M
attached hereto, and any amendments, replacements, extensions or renewals
thereof.
"SWING LOAN REQUEST" shall have the meaning set forth in
Section 2.8(a)(i).
"SYNDICATION AGENT" shall mean Bank of America, N.A., in its capacity
as syndication agent under this Agreement.
"TAX SHARING POLICY" shall mean the policy applicable to CVC and the
Borrower, among others, with respect to the allocation of tax liabilities and
other tax-related items among CVC, CSC Holdings, the Borrower and the MGM
Companies, based principally upon the financial income, taxable income, credits
and other amounts directly related to the respective parties as set forth in
that certain Tax Sharing Policy, a copy of which as in existence on the
Agreement Date is attached hereto as SCHEDULE 3, as in effect on the Agreement
Date or as permitted to be amended hereunder.
"TAXES" shall have the meaning set forth in Section 2.10(c)(i) hereof.
"TERM B COMMITMENT PERCENTAGE" shall mean, with respect to any Lender,
the ratio, expressed as a percentage, of (a) the Term B Loan Commitment of such
Lender, divided by (b) the aggregate Term B Loan Commitments of all of the
Lenders.
27
As of the Agreement Date, the Term B Commitment Percentage of each Lender is set
forth on Schedule 1 to the Lender Addendum delivered by such Lender under the
caption "Term B Commitment Percentage".
"TERM B LOAN COMMITMENT" shall mean the several obligations of certain
of the Lenders to advance the sum of up to $140,000,000 to the Borrower on the
Agreement Date in accordance with their respective Term B Commitment
Percentages, all pursuant to the terms hereof.
"TERM B LOANS" shall mean, collectively, the amount advanced by
certain of the Lenders to the Borrower under the Term B Loan Commitment, not to
exceed the amount of the Term B Loan Commitment.
"TERM B NOTES" shall mean those certain term notes issued by the
Borrower to each of the Lenders issuing a Term B Loan Commitment that requests a
promissory note in accordance with each such Lender's Term B Commitment
Percentage, each one substantially in the form of EXHIBIT N attached hereto, and
any extensions, modifications, renewals or replacements of or amendments to any
of the foregoing.
"TOTAL DEBT" shall mean, as of any date without duplication, the sum
of (a) Rainbow Total Debt, plus (b) MGM Operating Company Total Debt.
"TOTAL LEVERAGE RATIO" shall mean, on any calculation date, the ratio
of (a) Total Debt to (b) Annualized Cash Flow.
"TRADEMARK SECURITY AGREEMENT" shall mean that certain Trademark
Security Agreement between each Rainbow Company owning any trademarks or
trademark applications and the Administrative Agent, for the ratable benefit of
the Credit Parties, dated as of the Agreement Date, substantially in the form of
EXHIBIT O attached hereto, and any similar pledge agreement or any pledge
agreement supplement delivered pursuant to Section 6.14 hereof.
"TRAILING SIX MONTH INTEREST EXPENSE" shall mean the sum of (a)
Rainbow Interest Expense, plus (ii) MGM Operating Company Interest Expense, in
each case, for the most recently completed six (6) month period.
"TRANSPONDER LEASE AGREEMENT" shall mean any agreement by and between
any of the Rainbow Companies and any other Person for the license, lease or
other agreement to use telecommunications satellites for purposes of
broadcasting the programming of such Rainbow Companies and any other agreement
related to the transmission, origination and production of such programming and
the related technical services.
28
"UNDRAWN COMMITMENTS" shall mean, collectively, the unfunded portions
of the Revolving Loan Commitment and the Term B Loan Commitment, together with
the undrawn amount of all Incremental Facility Commitments issued hereunder.
"UNRESTRICTED SUBSIDIARIES" shall mean, collectively, each of the
Companies designated as Unrestricted Subsidiaries as of the Agreement Date on
SCHEDULE 5.1(c)-3 hereto, and "UNRESTRICTED SUBSIDIARY" shall mean any one of
the foregoing Unrestricted Subsidiaries; PROVIDED, HOWEVER, that after the
Agreement Date, the Borrower may designate as additional Unrestricted
Subsidiaries (a) members of the Sterling Digital Group formed after the
Agreement Date, (b) any successor entity to R/L DBS Company, (c) any Subsidiary
of the Borrower formed after the Agreement Date so long as such Subsidiary shall
have (either individually or collectively, in the case of any holding company
Subsidiaries) a "fair market value" of $5,000,000 or less, as determined by the
Arrangers in their reasonable discretion, and (d) other Companies with the
approval of the Majority Lenders; PROVIDED FURTHER, HOWEVER, that in the event
the Guarantee of any MuchMusic Company and the Administrative Agent's Lien of
such MuchMusic Company shall be released, such MuchMusic Company (and each of
its Subsidiaries) shall constitute an Unrestricted Subsidiary for purposes of
this Agreement.
"UNUSED PERCENTAGE" shall mean, on any date, the ratio, expressed as a
percentage, of (a) the Available Revolving Loan Commitment to (b) the Revolving
Loan Commitment.
"WE" shall mean WE: Women's Entertainment LLC, a Delaware limited
liability company.
Each definition of an agreement in this Article 1 shall include such
agreement as amended, restated, supplemented or otherwise modified (and, to the
extent applicable, as renewed or extended) from time to time provided that, if
required pursuant to the terms of this Agreement, the prior written consent of
the Majority Lenders (or such other composition of Lenders as may be required
under Section 12.12 hereof) shall have been given with respect to such
amendment, restatement, supplement or other modification. Except where the
context otherwise requires, definitions imparting the singular shall include the
plural and vice versa. Except where otherwise specifically restricted, reference
to a party to a Loan Document includes that party and its successors and
assigns. An Event of Default shall "exist", "continue" or be "continuing" until
such Event of Default has been waived in writing in accordance with Section
12.12 hereof. All terms used herein which are defined in Article 9 of the
Uniform Commercial Code in effect in the State of New York on the date hereof
and which are not otherwise defined herein shall have the same meanings herein
as set forth therein.
All accounting terms used herein without definition shall be used as
defined under GAAP. In the event that changes in GAAP during the term of this
Agreement would result in the defined terms set forth in this Article 1 or the
Financial Covenants being calculated in a different manner or with different
components or
29
rendering the same not meaningful criteria for evaluating the MGM Operating
Companies' financial condition, the Borrower and the Arrangers agree to propose
to the Credit Parties, and to vote affirmatively with respect to, any amendments
to this Agreement that the Borrower and the Arrangers shall determine are
reasonably necessary to conform the defined terms set forth in this Article 1
and the Financial Covenants so that the criteria for evaluating the matters
contemplated by Sections 8.8, 8.9 and 8.10 hereof are substantially the same
criteria as were effective prior to such change in GAAP. Unless otherwise
expressly stated herein, all references to financial information and results of
the Borrower shall be determined on a consolidated basis among the Rainbow
Companies, and all references to financial information and results of the MGM
Operating Companies shall be determined on a consolidated basis among the MGM
Operating Companies.
ARTICLE 2 - LOANS.
Section 2.1 THE LOANS. Subject to the terms and conditions of, and in
reliance upon the representations and warranties made in, this Agreement and the
other Loan Documents, the Lenders agree, severally in accordance with their
respective Commitment Percentages and not jointly, to make Loans to the Borrower
in an aggregate principal amount not to exceed Three Hundred Million Dollars
($300,000,000).
(a) THE REVOLVING LOANS. The Lenders that have issued a
Revolving Loan Commitment agree, severally in accordance with their respective
Revolving Commitment Percentages and not jointly, upon the terms and subject to
the conditions of this Agreement, to lend and re-lend to the Borrower, on and
after the Agreement Date, but prior to the Initial Maturity Date, amounts which,
in the aggregate, together with the principal amount of any Swing Loans and any
L/C Obligations outstanding at any time, do not exceed the Revolving Loan
Commitment. Subject to the terms and conditions hereof and prior to the Initial
Maturity Date, Advances under the Revolving Loan Commitment may be repaid and
reborrowed from time to time on a revolving basis or may be continued or
converted pursuant to a Notice of Continuation/Conversion as provided in Section
2.2 hereof.
(b) THE SWING LOANS. Subject to the terms and conditions
hereinafter set forth, including, without limitation, Section 2.8 hereof, the
Swing Loan Lender, in its individual capacity, may in its sole discretion make
revolving loans to the Borrower (each a "SWING LOAN" and, collectively, the
"SWING LOANS") from time to time on and after the Agreement Date, but prior to
the Initial Maturity Date, for the purposes hereinafter set forth; PROVIDED,
HOWEVER, that (i) the aggregate amount of Swing Loans outstanding at any time
shall not exceed the Swing Loan Committed Amount, and (ii) the sum of Revolving
Loans, plus Swing Loans, plus L/C Obligations outstanding at any time shall not
exceed the Revolving Loan Commitment. Swing Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
30
(c) THE LETTERS OF CREDIT. Each Issuing Bank agrees, upon the
terms and subject to the conditions of this Agreement, to issue from time to
time, on and after the Agreement Date, but prior to the Initial Maturity Date,
for the account of the Borrower, Letters of Credit to such beneficiaries as
shall be designated in writing by the Borrower to such Issuing Bank, up to the
limit of the Letter of Credit Committed Amount.
(d) THE TERM B LOANS. The Lenders that have issued a Term B
Loan Commitment, severally in accordance with their respective Term B Commitment
Percentages and not jointly, upon the terms and subject to the conditions of
this Agreement, agree to lend to the Borrower on the Agreement Date an amount
equal to the Term B Loan Commitment. After the Agreement Date, Advances under
the Term B Loan Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; PROVIDED, HOWEVER,
there shall be no increase in the aggregate principal amount of the Term B Loans
outstanding at any time after the Agreement Date. Amounts repaid under the Term
B Loan Commitment may not be reborrowed.
(e) USE OF PROCEEDS. The proceeds of the Loans may be used
solely (i) to refinance the AMC Intercompany Indebtedness, (ii) to make
Acquisitions and Restricted Payments to the extent permitted under this
Agreement and to make Permitted Investments, and (iii) for working capital and
other general corporate purposes of the Rainbow Companies. The proceeds of the
Loans may not be used to fund any principal payments (whether mandatory or
optional) with respect to the Loans or any payments of Interest Expense with
respect to any of the Loans, any Interest Hedge Agreements entered into with
respect to the Loans or any Authorized Debt Issuance if the aggregate amount of
all such payments made during the term of this Agreement would exceed the
Pre-Funded Amount.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) CHOICE OF INTEREST RATE, ETC. Any Advance (i) under the
Revolving Loan Commitment (except with respect to (A) the initial Advance of the
Revolving Loans on the Agreement Date, which Advance shall be made as a Base
Rate Advance initially, (B) Swing Loans and (C) Advances in respect of
reimbursement of amounts advanced to beneficiaries under Letters of Credit,
which Advances shall in all cases be Base Rate Advances initially) shall, at the
option of the Borrower, be made as a Base Rate Advance or a Eurodollar Advance,
and (ii) under the Term B Loan Commitment (except with respect to the initial
Advance of the Term B Loans on the Agreement Date, which Advance shall be made
as a Base Rate Advance initially) shall, at the option of the Borrower, be made
as a Base Rate Advance or a Eurodollar Advance; PROVIDED, HOWEVER, that (A) if
the Borrower fails to give the Administrative Agent telephonic notice specifying
whether a Eurodollar Advance is to be repaid, continued or converted on a
Payment Date, such Eurodollar Advance shall be converted to a Base Rate
31
Advance on such Payment Date, and (B) the Borrower may not select a Eurodollar
Advance if, at the time of such selection, a Default or Event of Default has
occurred and is continuing. Eurodollar Advances shall in all cases be subject to
Article 11 hereof. Any notice given to the Administrative Agent in connection
with a requested Advance hereunder shall be given to the Administrative Agent
prior to 11:00 a.m. (New York time) in order for such Business Day to count
toward the minimum number of Business Days required.
(b) BASE RATE ADVANCES.
(i) INITIAL AND SUBSEQUENT ADVANCES. The Borrower
shall give the Administrative Agent in the case of Base Rate Advances,
irrevocable notice not later than 11:00 a.m. (New York time) on the date of the
requested Advance by telephone followed immediately by a Request for Advance.
Upon receipt of such notice from the Borrower, the Administrative Agent shall
promptly notify each Lender by telephone or telecopy of the contents thereof.
(ii) REPAYMENTS AND CONVERSIONS. The Borrower may (A)
repay or prepay a Base Rate Advance upon prior irrevocable telephonic notice to
the Administrative Agent not later than 11:00 a.m. (New York time) on the date
of repayment or prepayment, or (B) convert all or a portion of the principal
amount of a Base Rate Advance to one or more Eurodollar Advances upon prior
irrevocable written notice to the Administrative Agent not later than 11:00 a.m.
(New York time) on the date three (3) Business Days prior to such conversion in
the form of a Notice of Conversion/Continuation, or notice by telephone or
telecopy followed immediately by a Notice of Conversion/Continuation. On the
date indicated by the Borrower, such Base Rate Advance shall be so repaid or, as
applicable, converted.
(iii) MISCELLANEOUS. Notwithstanding any term or
provision of this Agreement which may be construed to the contrary, each Base
Rate Advance shall be in a principal amount of at least $1,000,000 and in
integral multiples of $500,000 in excess thereof, or the remaining amount of the
Revolving Loan Commitment.
(c) EURODOLLAR ADVANCES.
(i) INITIAL AND SUBSEQUENT ADVANCES. The Borrower
shall give the Administrative Agent, in the case of Eurodollar Advances,
irrevocable telephonic notice followed by a Request for Advance prior to 11:00
a.m. (New York time) on the date three (3) Business Days prior to the date of
the requested Advance. The Administrative Agent, whose determination shall be
conclusive, shall determine the available Eurodollar Basis and shall notify the
Borrower of such Eurodollar Basis. The Borrower shall promptly notify the
Administrative Agent by telecopy or by telephone, and shall immediately confirm
any such telephonic notice in writing, of its selection of a Eurodollar Basis
and a Eurodollar Advance Period for such Advance. Upon receipt of
32
such notice from the Borrower, the Administrative Agent shall promptly notify
each Lender by telephone or telecopy of the contents thereof.
(ii) REPAYMENTS, CONTINUATIONS AND CONVERSIONS. The
Borrower shall give the Administrative Agent irrevocable written notice in the
form of a Notice of Conversion/Continuation, or notice by telephone or telecopy
followed immediately by a Notice of Conversion/Continuation, (A) not later than
11:00 a.m. (New York time) at least three (3) Business Days prior to each
applicable Payment Date, specifying whether all or a portion of any Eurodollar
Advance outstanding on such Payment Date is to be continued in whole or in part
as a Eurodollar Advance, in which case such notice shall also specify the
Eurodollar Advance Period which the Borrower shall have selected for such
continued Eurodollar Advance, (B) not later than 11:00 a.m. (New York time) at
least three (3) Business Days prior to each applicable Payment Date, specifying
whether all or any portion of any Eurodollar Advance outstanding on such Payment
Date, is to be converted in whole or in part to a Base Rate Advance, or (C) not
later than 11:00 a.m. (New York time) on each applicable Payment Date,
specifying whether all or any portion of any Eurodollar Advance outstanding on
such Payment Date, is to be repaid and not continued or converted. Upon such
Payment Date, such Eurodollar Advance will, subject to the provisions hereof, be
so repaid, continued or converted, as applicable.
(iii) MISCELLANEOUS. Notwithstanding any term or
provision of this Agreement which may be construed to the contrary, each
Eurodollar Advance shall be in a principal amount of at least $1,000,000 and in
integral multiples of $500,000 in excess thereof, and at no time shall the
aggregate number of all Eurodollar Advances exceed twelve (12).
(d) TELEPHONE NOTICE. The failure by the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance or a Notice of
Conversion/Continuation, as applicable, shall not invalidate any notice so
given. The Administrative Agent may rely upon telephonic instructions reasonably
believed given by any Authorized Signatory of the Borrower and shall have no
obligation to inquire into the propriety of any such instructions.
(e) NOTIFICATION OF LENDERS. Upon receipt of a Request for
Advance, or a Notice of Conversion/Continuation under this Section 2.2 from the
Borrower, or a request by an Issuing Bank for reimbursement under Section 2.15
hereof, or a request or a deemed request by the Swing Loan Lender for repayment
of any outstanding Swing Loans under Section 2.8(b) hereof, the Administrative
Agent shall promptly notify each Lender by telephone or telecopy of the contents
thereof and the amount of such Lender's portion of the applicable Advance. Each
Lender shall, not later than 1:00 p.m. (New York time) on the date specified in
such notice, make available to the Administrative Agent at the Administrative
Agent's Office, or at such account as the
33
Administrative Agent shall designate, the amount of its portion of the
applicable Advance in immediately available funds.
(f) DISBURSEMENT. Prior to 3:00 p.m. (New York time) on the
date of an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in this Section 2.2 and in Article 4
hereof, disburse the amounts made available to the Administrative Agent by the
Lenders in immediately available funds by (i) transferring the amounts so made
available by wire transfer pursuant to the instructions of the Borrower, or (ii)
in the absence of such instructions, crediting the amounts so made available to
the account of the Borrower maintained with the Administrative Agent or an
Affiliate of the Administrative Agent. Unless the Administrative Agent shall
have received notice from a Lender prior to 2:00 p.m. (New York time) on the
date of any Advance that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Advance, and so long
as notice has been given as provided in Section 2.2(e) hereof, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Advance and the Administrative
Agent may, in its sole discretion and in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender agrees to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at a rate equal to
the daily average Federal Funds Rate for such period. If such Lender shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's portion of the applicable Advance for purposes of
this Agreement. If such Lender does not repay such corresponding amount
immediately upon the Administrative Agent's demand therefor, the Administrative
Agent shall notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent, together with all interest
accrued thereon at the interest rate that would have applied to such Advance had
such Lender funded its portion thereof. The failure of any Lender to fund its
portion of any Advance shall not relieve any other Lender of its obligation, if
any, hereunder to fund its respective portion of the Advance on the date of such
borrowing, but no Lender shall be responsible for any such failure of any other
Lender. In the event that, at any time when the Borrower is not in Default and
has otherwise satisfied all of the conditions to funding set forth in this
Agreement, a Lender for any reason fails or refused to fund its portion of an
Advance, then, until such time as such Lender has funded its portion of such
Advance, or all other Lenders have received payment in full (whether by
repayment or prepayment) of the principal and interest due in respect to such
advance, such non-funding Lender shall (i) have no right to vote regarding any
issue on which voting is required or advisable under this Agreement or any other
Loan Document and the calculation of Majority Lenders and Super-Majority Lenders
with respect solely to such votes shall be adjusted as if such non-funding
Lender has no Commitments and no Loans outstanding, and (ii) be entitled to
receive no
34
payments of principal, interest or fees from the Borrower in respect of such
Loans which such Lender failed to make. Nothing in this subsection shall be
deemed to prejudice any rights that the Borrower may have against any Lender as
a result of any failure by such Lender to fund its portion of any Advance.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days when the Base Rate is
determined by reference to the Prime Rate and on the basis of a year of 360 days
when the Base Rate is determined by reference to the Federal Funds Rate, in each
case for the actual number of days elapsed and shall be payable in arrears on
the last Business Day of each calendar quarter during the term of this
Agreement. Interest on Base Rate Advances then outstanding shall also be due and
payable on the date of any repayment made under Sections 2.5, 2.6 or 2.7 hereof
and on the applicable Maturity Date. Interest shall accrue and be payable on
each Base Rate Advance at the simple per annum interest rate equal to the sum of
(i) the Base Rate and (ii) the Applicable Margin in effect from time to time
with respect to Base Rate Advances pursuant to Section 2.3(f) hereof.
(b) ON EURODOLLAR ADVANCES. Interest on each Eurodollar
Advance shall be computed on the basis of a 360-day year for the actual number
of days elapsed and shall be payable in arrears (i) on the applicable Payment
Date for such Eurodollar Advance, and (ii) if the Eurodollar Advance Period for
such Eurodollar Advance exceeds three (3) months, on each three (3) month
anniversary of the making of such Eurodollar Advance. Interest on Eurodollar
Advances then outstanding shall also be due and payable on the date of any
repayment made under Sections 2.5, 2.6 or 2.7 hereof and on the applicable
Maturity Date. Interest shall accrue and be payable on each Eurodollar Advance
at the simple per annum interest rate equal to the sum of (A) the Eurodollar
Basis applicable to such Eurodollar Advance and (B) the Applicable Margin in
effect from time to time with respect to Eurodollar Advances pursuant to
Section 2.3(f) hereof.
(c) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE. If
the Borrower fails to give the Administrative Agent timely notice of its
selection of a Eurodollar Basis, or if for any reason a determination of a
Eurodollar Basis for any Eurodollar Advance is not timely concluded, the Base
Rate shall apply to such Advance and if the Borrower fails to elect to repay,
continue or convert any Eurodollar Advance then outstanding prior to the last
Payment Date applicable thereto in accordance with the provisions of Section 2.2
hereof, as applicable, the Base Rate shall apply to such Advance commencing on
and after such Payment Date.
(d) INTEREST UPON DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, the Majority Lenders shall have the option
(but shall not be required to give prior notice thereof to the Borrower,
accelerate the maturity of the Loans or exercise any other rights or remedies
hereunder in connection with the exercise
35
of this right) to charge interest on the outstanding principal balance of the
Loans at the Default Rate from the date of such Event of Default; PROVIDED,
HOWEVER, notwithstanding the foregoing, interest shall automatically accrue on
the outstanding principal balance of the Loans at the Default Rate, without any
action necessary on the part of the Majority Lenders or any other Person, from
and after the occurrence of an Event of Default under any of Sections 9.1(b),
(j) or (k) hereof. Such interest shall be payable on the earlier of demand or
the applicable Maturity Date, and shall accrue until the earlier of (i) waiver
or cure (to the satisfaction of the Majority Lenders) of the applicable Event of
Default, (ii) agreement by the Majority Lenders to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations.
(e) COMPUTATION OF INTEREST. In computing interest on any
Advance, the date of making the Advance shall be included and the date of
payment shall be excluded; PROVIDED, HOWEVER, that if an Advance is repaid on
the date that it is made, one (1) day's interest shall be due with respect to
such Advance.
(f) APPLICABLE MARGINS.
(i) ADVANCES UNDER THE REVOLVING LOAN COMMITMENT.
With respect to any Advance under the Revolving Loan Commitment (except with
respect to Swing Loans), the Applicable Margin shall be (A) on and after the
Agreement Date to and including the Adjustment Date, (x) 3.25% with respect to
any Eurodollar Advance and (y) 2.25% with respect to any Base Rate Advance, and
(B) after the Adjustment Date, the interest rate margin, based upon the Total
Leverage Ratio for the most recent calendar quarter end, expressed as a per
annum rate of interest as follows:
Then the Eurodollar Then the Base Rate
If the Total Leverage: Applicable Margin Shall Be: Applicable Margin Shall Be:
--------------------- -------------------------- --------------------------
Greater than or equal to 3.25% 2.25%
2.25 to 1.00
Less than 2.25 to 1.00 3.00% 2.00%
Any increase in the Applicable Margin shall take effect on the second (2nd)
Business Day after the performance certificate is required to be provided
pursuant to Section 7.3 hereof. Any decrease in the Applicable Margin shall take
effect on the later of (I) the second (2nd) Business Day after the performance
certificate is required to be provided pursuant to Section 7.3 hereof and (II)
the date on which the performance certificate is actually provided pursuant to
Section 7.3 hereof.
(ii) ADVANCES OF THE TERM B LOANS. With respect to
any Advance of the Term B Loans, the Applicable Margin shall be (A) 3.50% per
annum with respect to any Eurodollar Advance and (B) 2.50% per annum with
respect to any Base Rate Advance.
36
Section 2.4 FEES.
(a) FEES PAYABLE UNDER THE FEE LETTERS. The Borrower agrees to
pay such fees as are described in the Fee Letters.
(b) COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent on behalf of the Lenders, in accordance with their
respective Revolving Commitment Percentages, a commitment fee on the Available
Revolving Loan Commitment for each day from (and including) the Agreement Date
to the Initial Maturity Date, at a rate of (i) in the event that the Unused
Percentage shall be greater than or equal to fifty percent (50%), three-quarters
of one percent (0.750%) per annum and (ii) in the event that the Unused
Percentage shall be less than fifty percent (50%), one-half of one percent
(0.50%) per annum. Such commitment fees shall be computed on the basis of a year
of 365/366 days for the actual number of days elapsed, shall be payable
quarterly in arrears on the last Business Day of each quarter, commencing with
respect to the quarter ending March 31, 2003 (for the period from the Agreement
Date to such Business Day), and continuing on the last Business Day of each
successive quarter and on the Maturity Date, and shall be fully earned when due
and nonrefundable when paid.
(c) LETTER OF CREDIT FEE. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, on the last Business Day
of each calendar quarter for the calendar quarter then ending (adding any fee
applicable to dates during such calendar quarter falling after the last Business
Day of such calendar quarter to the fee payable for the immediately succeeding
calendar quarter), a fee equal to the product of (i) the Applicable Margin then
in effect with respect to Eurodollar Advances of the Revolving Loans, multiplied
by (ii) the face amount of each Letter of Credit outstanding during such
calendar quarter for such Letter of Credit's duration for such calendar quarter,
computed on the basis of a year of 365/366 days for the actual number of days
elapsed. The Administrative Agent shall remit such fee promptly following
receipt to each Lender in accordance with such Lender's Revolving Commitment
Percentage.
(d) ISSUING BANK FEE. The Borrower shall pay to each Issuing
Bank, for its own account, an issuing bank fee equal to 0.125% of the face
amount of each Letter of Credit issued by such Issuing Bank hereunder, on the
last Business Day of each calendar quarter for the calendar quarter then ending,
for each calendar quarter in which such Letter of Credit is outstanding. The
foregoing fee shall be fully earned when due and nonrefundable when paid. In the
event of any inconsistency between the terms of this Agreement and the terms of
any letter of credit reimbursement agreements or indemnification agreements
between the Borrower and any Issuing Bank with respect to the Letters of Credit
issued by such Issuing Bank hereunder, the terms of this Agreement shall
control.
Section 2.5 OPTIONAL PREPAYMENTS AND REDUCTIONS.
37
(a) PREPAYMENT OF ADVANCES UNDER THE REVOLVING LOAN
COMMITMENT. The principal amount of any Base Rate Advance under the Revolving
Loan Commitment may be prepaid in full or in part at any time, without penalty,
upon prior written notice prior to 11:00 a.m. (New York time) to the
Administrative Agent on the date of such prepayment, and the principal amount of
any Eurodollar Advance under the Revolving Loan Commitment may be prepaid prior
to the applicable Payment Date, upon telephonic notice to the Administrative
Agent (promptly confirmed in writing) prior to 11:00 a.m. (New York time) on the
date three (3) Business Days prior thereto, provided that the Borrower shall
reimburse the Lenders and the other Credit Parties, on the earlier of demand or
the Initial Maturity Date, for any loss or out-of-pocket expense incurred by the
Lenders or the other Credit Parties in connection with such prepayment as set
forth in Section 2.11 hereof. Each notice of prepayment shall be irrevocable.
Partial prepayments shall be in a principal amount of not less than $500,000 or
an integral multiple of $100,000 in excess thereof. Upon receipt of any notice
of prepayment, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender's portion of the
prepayment.
(b) PERMANENT PREPAYMENTS AND REDUCTIONS.
(i) TERMS OF PREPAYMENTS OR REDUCTIONS. Optional
permanent prepayments of principal of the Term B Loans, and permanent reductions
of the Revolving Loan Commitment hereunder, may be made by the Borrower, at any
time and from time to time, following irrevocable written notice to the
Administrative Agent prior to 11:00 a.m. (New York time) on the date three (3)
Business Days prior thereto, without premium or penalty, on a pro rata basis
among the Lenders, provided that the Borrower shall reimburse the Lenders and
the other Credit Parties, on the earlier of demand or the Initial Maturity Date
or the Final Maturity Date, as applicable, for any loss or out-of-pocket expense
incurred by the Lenders or the other Credit Parties in connection with such
reduction as set forth in Section 2.11 hereof. Each notice of prepayment or
reduction shall be irrevocable. Partial prepayments and reductions shall be in a
principal amount of not less than $500,000 or an integral multiple of $100,000
in excess thereof. Upon receipt of any notice of prepayment or reduction, the
Administrative Agent shall promptly notify each Lender of the contents thereof
by telephone or telecopy and of such Lender's portion of the prepayment or
reduction, as applicable.
(ii) APPLICATION OF PAYMENTS OR REDUCTIONS.
(A) In the event that the Borrower shall make a
prepayment of the Term B Loans, such prepayment shall be applied to permanently
reduce the Term B Loans and shall be applied to reduce, in the inverse order of
maturity, the remaining scheduled installments of principal due under the Term B
Loans as set forth in Section 2.7(b) hereof. Each prepayment hereunder shall
also be made together with accrued interest on the amount so prepaid.
38
(B) As of the date of cancellation or reduction
set forth in any notice thereof, the Revolving Loan Commitment shall be
permanently reduced to the amounts stated in the Borrower's notice for all
purposes herein, and the Borrower shall pay to the Administrative Agent, for the
benefit of the Lenders, the amount necessary to reduce the principal amount of
the Revolving Loans then outstanding to not more than the amount equal to the
result of (I) the Available Revolving Commitment as so reduced, less (II) the
aggregate principal amount of Swing Loans then outstanding, together with the
accrued interest the amount so prepaid and the commitment fee set forth in
Section 2.4(b) hereof accrued through the date of the reduction with respect to
the amount reduced.
(C) In connection with any such permanent
repayment, the Borrower shall reimburse the Administrative Agent and the
Lenders, on demand, for any loss or out-of-pocket expense actually incurred by
any of them in connection with such repayment of any Eurodollar Advances as set
forth in Section 2.11 hereof. Upon receipt of any notice of prepayment or
reduction, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender's portion of the
prepayment or the reduction, as applicable.
Section 2.6 MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS. In
addition to the reductions provided for in Section 2.7 hereof, the Borrower
shall, if required pursuant to this Section 2.6, permanently prepay the Loans as
follows:
(a) ISSUANCE OF EQUITY. If the Borrower shall issue any stock
or other equity interests for cash to any Person other than CVC or CSC Holdings,
the Borrower shall apply, on the date of its receipt thereof, one hundred
percent (100%) of the Net Cash Proceeds received by the Borrower in connection
with such issuance to prepay the Loans as set forth in Section 2.6(d) hereof. In
the event that any MuchMusic Company shall issue additional stock or equity
interests, and the Guarantee of such MuchMusic Company and the Administrative
Agent's Lien on the property and assets of such MuchMusic Company shall be
released pursuant to Section 6.14 hereof, the Borrower shall make a prepayment
of the Loans, on the date of such issuance and as set forth in Section 2.6(d)
hereof, in an amount equal to fifty percent (50%) of the aggregate value of all
consideration (cash and non-cash) received by such MuchMusic Company in
connection with such issuance.
(b) ISSUANCE OF PUBLIC DEBT. If the Borrower shall conduct any
issuance of Indebtedness For Money Borrowed (other than in connection with any
Authorized Debt Issuance or any obligations under Interest Hedge Agreements),
such issuance shall be only in exchange for cash and the Borrower shall apply,
on the date of its receipt thereof, one hundred percent (100%) of the Net Cash
Proceeds received by the Borrower in connection with such issuance to prepay the
Loans as set forth in Section 2.6(d) hereof.
39
(c) DISPOSITION OF ASSETS. If (i) any Rainbow Company shall
sell, transfer or otherwise dispose of any assets (including, without
limitation, any assets constituting capital stock, partnership interests or
other equity interests, but excluding any equity interests in the MuchMusic
Companies) or (ii) RRH I or RRH II shall sell, transfer or otherwise dispose of
any assets constituting capital stock, partnership interests or other equity
interests in RRH, in each case for cash and except as any such sale, transfer or
other disposition shall be permitted or approved under Section 8.5 hereof, the
Borrower shall apply, on the date of its receipt thereof, one hundred percent
(100%) of the Net Cash Proceeds received by any such Company in connection with
such sale, transfer or other disposition to prepay the Loans as set forth in
Section 2.6(d) hereof. If any Rainbow Company shall sell, transfer or otherwise
dispose of any stock or other equity interests in any MuchMusic Company, and the
Guarantee of such MuchMusic Company and the Administrative Agent's Lien on the
property and assets of such MuchMusic Company shall be released pursuant to
Section 6.14 hereof, the Borrower shall make a prepayment of the Loans, on the
date of such sale, transfer or other disposition and as set forth in
Section 2.6(d) hereof, in an amount equal to fifty percent (50%) of the
aggregate value of all consideration (cash and non-cash) received by such
Rainbow Company in connection with such sale, transfer or other disposition.
(d) APPLICATION OF PAYMENTS. The amount of any prepayment of
the Loans required to be made pursuant to this Section 2.6 (other than any such
prepayment required in the event of the issuance of additional equity interests,
or the sale, transfer or other disposition of any equity interests, in any
MuchMusic Company) shall be applied as follows: (i) first, to permanently reduce
the outstanding principal amount of the Term B Loans in the inverse order of
maturity, and (ii) thereafter, to prepay the outstanding principal amount of the
Revolving Loans, with a corresponding permanent reduction in the amount of the
Revolving Loan Commitment in the inverse order of scheduled reductions. The
amount of any prepayment of the Loans required to be made pursuant to this
Section 2.6 in the event of the issuance of additional equity interests, or the
sale, transfer or other disposition of any equity interests, in any MuchMusic
Company shall be applied, on a pro rata basis, to permanently reduce (A) the
outstanding principal amount of the Term B Loans in the inverse order of
maturity, and (B) the amount of the Revolving Loan Commitment in the inverse
order of scheduled reductions, with a corresponding prepayment of the
outstanding principal amount of the Revolving Loans then outstanding.
Notwithstanding anything to the contrary contained herein, (x) no prepayments of
the Revolving Loans, and corresponding reductions of the Revolving Loan
Commitment, made pursuant to this Section 2.6 in connection with any sale,
transfer or other disposition, or any issuance of equity interests, in each case
related to MuchMusic, shall cause the amount of the Revolving Loan Commitment to
be less than $100,000,000, and (y) if an Event of Default has occurred and is
continuing at the time of any prepayment required to be made pursuant to this
Section 2.6, the amount of such prepayment shall be applied to prepay, on a pro
rata basis, the Term B Loans and the Revolving Loans, without regard to the
maximum reduction amount in the Revolving Loan Commitment described in the
foregoing clause (x). Accrued interest and fees on
40
the principal amount of the Loans being prepaid and the Commitments being
reduced pursuant to this Section 2.6 to the date of such prepayment or reduction
shall be paid by the Borrower concurrently with such reduction and prepayment.
In connection with any mandatory repayment due under this Section 2.6, the
Borrower shall reimburse the Administrative Agent and the Lenders, on demand,
for any loss or out-of-pocket expense actually incurred by any of them in
connection with such repayment of any Eurodollar Advances as set forth in
Section 2.11 hereof. Notwithstanding the foregoing, the holders of the Term B
Loans shall have the right to decline any mandatory partial prepayment of the
Term B Loans, in which case the amount of such prepayment shall be applied to
prepay the Revolving Loans, with a corresponding permanent reduction in the
Revolving Loan Commitment, in the manner set forth above.
Section 2.7 REPAYMENT. The Borrower hereby promises to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lenders as follows and as and when otherwise due and
payable under the terms of this Agreement and the other Loan Documents:
(a) REVOLVING LOAN COMMITMENT. Commencing on June 30, 2005,
the Revolving Loan Commitment shall be reduced automatically and permanently on
the last Business Day of each quarter and on the Initial Maturity Date (which
reduction shall be inclusive of any reduction pursuant to Section 2.5 hereof
during such quarter) as set forth below:
Amount of Quarterly Reduction
(which shall include any
reductions made during such
quarter pursuant
Quarters Ended to Section 2.5)
-------------- -----------------------------
June 30, 2005 through March 31,
2006 $ 2,000,000
June 30, 2006 through March 31,
2007 $ 16,000,000
June 30, 2007 through Initial
Maturity Date $ 22,000,000
As of the date of each reduction of the Revolving Loan Commitment as set forth
above, the Borrower shall pay to the Administrative Agent, for the benefit of
the Lenders, the amount necessary to reduce the principal amount of the
Revolving Loans, plus Swing Loans, plus L/C Obligations, then outstanding to not
more than the amount of the Revolving Loan Commitment as so reduced, together
with accrued interest on the amount so prepaid and the commitment fee set forth
in Section 2.4(b) hereof accrued through the date of the reduction with respect
to the amount reduced. Any unpaid principal and accrued interest of the
Revolving Loans and the Swing Loans and any other outstanding
41
Obligations in respect of the Revolving Loan Commitment shall be due and payable
in full on the Initial Maturity Date.
(b) TERM B LOANS. Commencing on September 30, 2003, and at the
end of each calendar quarter thereafter, the outstanding principal balance of
the Term B Loans then outstanding shall be repaid as set forth below:
Amount of Quarterly Reduction
(which shall include any
reductions made during such
quarter pursuant
Quarters Ended to Section 2.5)
-------------- -----------------------------
September 30, 2003 through June 30,
2008 $ 350,000
September 30, 2008 through December
31, 2008 $ 44,333,333
Final Maturity Date $ 44,333,334
Any unpaid principal and accrued interest of the Term B Loans and any other
outstanding Obligations shall be due and payable in full on the Final Maturity
Date.
(c) INCREMENTAL FACILITY LOANS. Any unpaid principal and
interest of the Incremental Facility Loans and any other outstanding Obligations
under any of the Incremental Facility Commitments shall be due and payable in
full on the Incremental Facility Maturity Date applicable thereto.
(d) OVERADVANCES. In addition to the foregoing, if, at any
time, the amount of the Revolving Loans, plus Swing Loans, plus L/C Obligations,
then outstanding shall exceed the Revolving Loan Commitment, the Borrower shall
immediately make a repayment of principal in an amount equal to such excess,
which repayment shall be applied to the Revolving Loans and the Swing Loans as
set forth in Section 2.12 hereof.
(e) LETTER OF CREDIT ADVANCES AND SWING LOANS. All Base Rate
Advances made pursuant to draws under Letters of Credit and all Swing Loans
shall be deemed to be Advances under the Revolving Loan Commitment and shall be
due and payable on the Initial Maturity Date.
42
Section 2.8 SWING LOANS.
(a) SWING LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. Whenever the Borrower
desires an Advance of the Swing Loans hereunder it shall give irrevocable notice
to the Swing Loan Lender not later than 1:00 p.m. (New York time) on the date of
the requested Advance by telephone, followed immediately by a confirmation of
such request in writing in the form of EXHIBIT P hereto (a "SWING LOAN
REQUEST"). Subject to satisfaction of the conditions set forth herein, the Swing
Loan Lender shall initiate the transfer of funds representing such Advance of
the Swing Loan to the Borrower by 3:00 p.m. (New York time) on the Business Day
specified by the Borrower in the applicable Swing Loan Request.
(ii) MINIMUM AMOUNTS. Each Advance of the Swing Loans
shall be in a minimum principal amount of $500,000 and integral multiples of
$250,000, in excess thereof.
(b) REPAYMENT OF SWING LOANS. Each Advance of the Swing Loans
shall be due and payable on the earliest of (i) seven (7) days from the date of
such Advance, (ii) the date of the next Advance of the Revolving Loans, or (iii)
the Initial Maturity Date; PROVIDED, HOWEVER, the Borrower may prepay any Swing
Loan Advance prior to the date it is due upon notice to the Swing Loan Lender
not later than 1:00 p.m. (New York time) on the date of prepayment of such
Advance. If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. If, and to the extent, any Swing Loans shall be
outstanding on the date of any Advance of the Revolving Loans, such Swing Loans
shall be repaid from the proceeds of such Advance of the Revolving Loans prior
to any distribution of such proceeds to the Borrower. If, and to the extent, an
Advance of the Revolving Loans is not requested prior to earlier of (A) the
Initial Maturity Date or (B) the last day of any such seven (7) day period from
the date of any Advance of the Swing Loans, the Borrower shall be deemed to have
requested a Base Rate Loan on the Business Day immediately preceding the Initial
Maturity Date or the last day of such seven (7) day period, as applicable, in
the amount of the Swing Loans then outstanding, the proceeds of which shall be
used to repay the Swing Loan Lender for such Swing Loans. In addition, the Swing
Loan Lender may, at any time, in its sole discretion by written notice to the
Borrower and the Administrative Agent, require repayment of its Swing Loans by
way of a Revolving Loan, in which case the Borrower shall be deemed to have
requested a Base Rate Advance of the Revolving Loans in the amount of such Swing
Loans; PROVIDED, HOWEVER, that any such demand shall be deemed to have been
given one (1) Business Day prior to the Initial Maturity Date and upon the
occurrence of any Event of Default
43
described in Section 9.1(j) or 9.1(k) hereof and also upon acceleration of the
Obligations, whether on account of an Event of Default described in Section
9.1(j) or 9.1(k) hereof or any other Event of Default, in accordance with the
provisions of Section 9.2 hereof following an Event of Default (each such
Revolving Loan made on account of any such deemed request therefor as provided
herein being hereinafter referred to as a "MANDATORY BORROWING"). Each Lender
hereby irrevocably agrees to make its Revolving Commitment Percentage of such
Revolving Loans promptly upon any such request or deemed request on account of
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date, notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (II) whether any conditions
specified in Article 4 are then satisfied, (III) whether a Default or an Event
of Default then exists, (IV) failure for any such request or deemed request for
Revolving Loans to be made by the time otherwise required in Section 2.2, (V)
the date of such Mandatory Borrowing, or (VI) any reduction in the Revolving
Loan Commitment or termination of the Revolving Loan Commitment relating thereto
immediately prior to such Mandatory Borrowing or contemporaneously therewith;
PROVIDED, HOWEVER, that no Lender shall be required to make such Revolving Loans
if, at the time that the Swing Loan Lender agreed to fund any Swing Loan
Request, the Swing Loan Lender had knowledge of the existence of an Event of
Default or such Mandatory Borrowing would cause a Lender to exceed its Revolving
Loan Commitment. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation, as
a result of the commencement of any Insolvency Proceeding with respect to the
Borrower or any other obligor hereunder), then each Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swing Loan Lender such
participations in the outstanding Swing Loans as shall be necessary to cause
each such Lender to share in such Swing Loans ratably based upon its respective
Revolving Commitment Percentage (determined before giving effect to any
termination of the Revolving Loan Commitment pursuant to Section 9.2), provided
that (A) all interest payable on the Swing Loans shall be for the account of the
Swing Loan Lender until the date as of which the respective participation is
purchased, and (B) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay (to
the extent not paid by the Borrower) to the Swing Loan Lender interest on the
principal amount of participation purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred but
excluding the date of payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the Mandatory Borrowing, the
Federal Funds Rate, and thereafter at a rate equal to the Base Rate.
(c) INTEREST ON SWING LOANS. Swing Loans shall bear interest
at the simple per annum interest rate equal to the sum of (x) the Base Rate and
(y) the Applicable Margin then in effect with respect to Base Rate Advances of
the Revolving Loans, computed on the basis of a year of 365/366 days when the
Base Rate is determined by reference to the Prime Rate and on the basis of a
year of 360 days when
44
the Base Rate is determined by reference to the Federal Funds Rate, in each case
for the actual number of days elapsed; PROVIDED, HOWEVER, that (i) from and
after any failure to make any payment of principal or interest in respect of any
of the Loans hereunder when due (after giving effect to any applicable grace
period), whether at scheduled or accelerated maturity or on account of any
mandatory prepayment or (ii) while any Swing Loans in which the Lenders have
acquired participations pursuant to Section 2.8(b) hereof remain outstanding,
the principal of and, to the extent permitted by law, interest on, Swing Loans
shall bear interest, payable on demand, at the Default Rate. Interest on each
Swing Loan shall be payable in arrears on the date payment of such Swing Loan is
due pursuant to Section 2.8(b) hereof.
(d) REPORTING. Unless the Swing Loan Lender is the
Administrative Agent, the Swing Loan Lender shall provide to the Administrative
Agent, on Friday of each week and on each date the Administrative Agent notifies
the Swing Loan Lender that the Borrower has made a Request for Advance or the
Administrative Agent otherwise requests the same, an accounting for the
outstanding Swing Loans in form reasonably satisfactory to the Administrative
Agent.
(e) TERMINATION OF SWING LOANS; DESIGNATION OF SWING LOAN
LENDER. Unless a Default or an Event of Default then exists, the Swing Loan
Lender shall give the Borrower and the Administrative Agent at least seven (7)
days prior written notice before exercising its discretion herein not to make
Swing Loans. The Borrower must give ten (10) days prior written notice to the
Administrative Agent of any change in designation of the Swing Loan Lender. The
replaced Swing Loan Lender shall continue to be a "Swing Loan Lender" for
purposes of repayment of any Swing Loans made prior to such replacement and
outstanding after such replacement.
Section 2.9 NOTES; LOAN ACCOUNTS.
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein. Upon the request of any Lender, (i) a Revolving
Note shall be issued by the Borrower to the order of such Lender in accordance
with such Lender's Revolving Commitment Percentage, and (ii) a Term B Note shall
be issued by the Borrower to the order of such Lender in accordance with such
Lender's Term B Commitment Percentage. The Swing Loans shall be evidenced by the
Swing Loan Note, which Swing Loan Note shall be issued by the Borrower and
payable to the order of the Swing Loan Lender in the amount of the Swing Loan
Committed Amount. If applicable, an Incremental Facility Loan Note shall be
issued by the Borrower to the order of such Incremental Facility Lender in
accordance with its pro rata share of the Incremental Facility Commitments. Any
Notes issued by the Borrower shall be duly executed and delivered by one or more
Authorized Signatories of the Borrower
(b) Each Lender may open and maintain on its books in the name
of the Borrower a loan account with respect to the Loans and interest thereon.
Each Lender which opens such loan account or accounts shall debit the applicable
loan
45
account for the principal amount of each Advance made by it and accrued interest
thereon, and shall credit such loan account for each payment on account of
principal of or interest on the Loans. The records of each Lender with respect
to the loan accounts maintained by it shall be prima facie evidence of the Loans
and accrued interest thereon, but the failure to maintain such records shall not
impair the obligation of the Borrower to repay Indebtedness hereunder.
(c) Each Advance of the Revolving Loans from the Lenders
(other than the Swing Loan Lender) under this Agreement shall be made pro rata
by the Lenders on the basis of their respective Revolving Commitment
Percentages.
Section 2.10 MANNER OF PAYMENT.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans, commitment fees, and any
other amount owed to the Lenders and the Administrative Agent under this
Agreement or the other Loan Documents shall be made not later than 2:00 p.m.
(New York time) on the date specified for payment under this Agreement or such
other Loan Document to the Administrative Agent to an account designated by the
Administrative Agent for the account of the Lenders or the Administrative Agent,
as the case may be, in lawful money of the United States of America in
immediately available funds. Any payment received by the Administrative Agent
after 2:00 p.m. (New York time) shall be deemed received on the next Business
Day for purposes of interest and fee accrual. In the case of a payment for the
account of a Lender, the Administrative Agent will promptly thereafter
distribute the amount so received in like funds to such Lender. If the
Administrative Agent shall not have received any payment from the Borrower as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly.
(b) If any payment under this Agreement or otherwise in
respect of the Loans shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day, and such extension of time shall in such case be included in computing
interest and fees, if any, in connection with such payment.
(c) Except as otherwise provided below, any and all payments
by the Borrower to the Administrative Agent or any other Credit Party under this
Agreement or otherwise in respect of the Loans shall be made without set-off or
counterclaim or deduction whatsoever.
(i) Unless otherwise required by Applicable Law, any
and all payments by the Borrower to the Administrative Agent and the other
Credit Parties, or any of them, under this Agreement or otherwise in respect of
the Loans shall be made without any deduction or withholding for present or
future income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, excluding, however, franchise,
46
withholding, branch or other similar Taxes, duties, fees or charges imposed on
or measured by any Credit Party's net income or receipts (such non-excluded
items being called "TAXES").
(ii) If the Borrower shall be required by Applicable
Law to deduct any Taxes from or in respect of any amounts payable hereunder or
otherwise in respect of the Loans to the Administrative Agent or any other
Credit Party, (A) except as otherwise provided in this Section, the sum payable
shall be increased ("ADDITIONAL AMOUNTS") as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.10(c)), the Administrative Agent or such other Credit
Party, as the case may be, receives an amount equal to the sum it would have
received had no deductions been made, (B) the Borrower shall make such
deductions, and (C) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with Applicable
Law. Moreover, if any Taxes (which for purposes of this sentence shall include
taxes and charges imposed on or measured by net income or receipts of any Credit
Party by any jurisdiction to the extent imposed on Additional Amounts) are
directly asserted against any Credit Party with respect to any payment received
by such Credit Party hereunder, such Credit Party may pay such Taxes, and,
except as otherwise provided in this Section, the Borrower will promptly pay
such additional amount (including any penalties, interest or expenses) as is
necessary in order that the net amount received and retained by such Credit
Party after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such Credit Party would have received and
retained had no such Taxes been asserted; PROVIDED, HOWEVER, such Credit Party
shall give written notice to the Borrower, accompanied by, to the extent
provided by the relevant taxing authority, a calculation in reasonable detail of
the amount demanded and evidence of the Taxes imposed on such Credit Party,
after such Credit Party has actual knowledge of the imposition of any Taxes.
Where notice is not given to the Borrower within forty-five (45) days after the
Credit Party receives written notice of the assertion of Taxes and the Borrower
does not otherwise have notice of such assertion, the Borrower shall not be
required to pay penalties, additions to taxes, expenses, and interest accruing
on such Taxes from the date forty-five (45) days after the receipt by the Credit
Party of written notice of the assertion of such Taxes until the date that the
Borrower receives such notice. The Borrower shall furnish to such Credit Party
within forty-five (45) days (or as soon thereafter as available) after the date
the payment of any Taxes is due pursuant to Applicable Law true and correct
copies of tax receipts evidencing payment by the Borrower. Except as otherwise
provided in this Section, if the Borrower fails to pay any Taxes that it is
required to pay pursuant to the terms of this Agreement when due to the
appropriate taxing authority or fails to remit to any of the Credit Parties the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Credit Parties for any incremental Taxes, interest or penalties
that may become payable by the Credit Parties primarily as a result of any such
failure.
47
(iii) Each Lender that is not a United States person
within the meaning of Section 7701 of the Code (a "FOREIGN LENDER") shall
deliver to the Borrower and the Administrative Agent, no later than the date
hereof (or if such Foreign Lender becomes a party to this Agreement (whether by
assignment or otherwise) after the date hereof, the date upon which such Foreign
Lender becomes a party hereto), (A) two (2) complete, duly executed original IRS
Forms W-8ECI or IRS Forms W-8BEN, or any successors thereto, establishing that
such Foreign Lender is on the date of delivery thereof entitled to receive any
and all payments from the Borrower under this Agreement or otherwise in respect
of the Loans free from withholding of United States federal income tax or (B) in
the case of such Foreign Lender that is not legally entitled to deliver either
form listed in clause (b)(iii)(A), (I) a certificate of a duly authorized
officer of such Foreign Lender to the effect that such Foreign Lender is not (x)
a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (y) a "10
percent shareholder" of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code or (z) a controlled foreign corporation receiving interest from a
related person within the meaning of Section 881(c)(3)(C) of the Code (such
certificate, an "EXEMPTION CERTIFICATE") and (II) two (2) duly completed copies
of Internal Revenue Service Form W-8BEN or successor applicable form, certifying
that such Foreign Lender is entitled to an exemption from United States federal
withholding tax on payments of interest. Each Foreign Lender shall, from time to
time, deliver updated or corrected IRS Forms W-8ECI, IRS Forms W-8BEN or
Exemption Certificates, or any successors thereto, to the Borrower and the
Administrative Agent to the extent and in the manner required under United
States federal tax law. The Borrower shall not be required to pay any Additional
Amounts under Section 2.10(c)(ii) hereof to a Foreign Lender if such Foreign
Lender (I) fails to comply with the requirements of this Section 2.10(c)(iii)
hereof or, (II) fails to qualify for a complete reduction or exemption of United
States federal tax withholding for any reason other than a change in the United
States federal tax law, or the official interpretation thereof, in each case,
after the delivery of IRS Forms W-8ECI, IRS Forms W-8BEN or an Exemption
Certificate, or any successors thereto, or (III) is treated as a "conduit
entity" within the meaning of U.S. Treasury Regulations Section 1.881-3 or any
successor provision. Notwithstanding the foregoing, if at the date of an
assignment pursuant to which a Foreign Lender becomes a party to this Agreement,
the assignor was entitled to payments under Section 2.10(c)(ii) hereof, then, to
such extent, the assignee, shall not be required to deliver IRS Forms W-8ECI,
IRS Forms W-8BEN or an Exemption Certificate, or any successors thereto,
establishing a withholding rate for such Foreign Lender that is less than the
rate the assignor was subject to, and the assignee shall be entitled to receive
Additional Amounts to such extent the assignor was so entitled.
(iv) Each of the Credit Parties agrees that it will,
to the extent reasonable and without material cost or risk to it, (A) take all
actions reasonably requested by the Borrower to maintain all exemptions, if any,
available to it from United States federal withholding taxes (whether available
by treaty, statute, or existing administrative waiver) and (B) otherwise
cooperate with the Borrower to minimize any
48
amounts payable by the Borrower under this Section 2.10(c), including the
contest of any asserted tax liability.
(v) Any Credit Party that becomes aware that it is
entitled to receive a refund (whether by way of a direct payment or by offset)
in respect of Additional Amounts paid by the Borrower, which refund, would
reasonably be considered allocable to or resulting from such payment or
indemnification made pursuant to this Section 2.10, shall promptly notify the
Borrower of the availability of such refund and shall, within thirty (30) days
after the receipt of a request from the Borrower, apply for such refund with the
Borrower being responsible for any incremental costs associated with such refund
request; PROVIDED, HOWEVER, that (A) the Borrower shall not be entitled to any
damages as a result of the failure of such Credit Party to so notify the
Borrower of the availability of such refund and (B) the Borrower shall not have
the right to examine the books or records of any Credit Party. If any Credit
Party receives any such refund (as described in the preceding sentence), it
shall promptly repay the amount of such refund (together with any interest
received thereon) to the Borrower; PROVIDED, HOWEVER, that the Borrower, upon
the request of the applicable Credit Party, shall repay the amount paid over to
the Borrower in the event such Credit Party is required to repay such refund to
the applicable authority.
(vi) If the Borrower is or becomes required to pay
any Additional Amounts to a Credit Party pursuant to this Section 2.10, the
Borrower shall have the right, upon notice to the Administrative Agent and such
Credit Party to (A) prepay without penalty, on a non-pro rata basis, all or any
portion of a Loan held by such Credit Party plus all interest and Additional
Amounts owing to such Credit Party as of the date of such prepayment, (B)
require such Credit Party to use reasonable efforts to designate a different
lending office for funding or booking its Loan under this Agreement or to assign
its rights and obligations under this Agreement to another of its offices,
branches or affiliates, or (C) require such Credit Party to effect an assignment
of all of its rights and obligations under this Agreement to another Credit
Party designated by the Borrower if, in the case of clause (B) or (C) such
designation or assignment (x) would eliminate or reduce amounts payable pursuant
to this Section 2.10 in the future and (y) would not cause the imposition on
such Credit Party of any additional costs or legal or regulatory burdens deemed
by such Credit Party to be material or otherwise disadvantageous to such Credit
Party.
Section 2.11 REIMBURSEMENT. Whenever any Lender shall actually incur
any losses or out-of-pocket expenses in connection with (a) the failure by the
Borrower to convert, continue or borrow any Eurodollar Advance after having
given notice of its intention to convert, continue or borrow such Eurodollar
Advance in accordance with Section 2.2 hereof (whether by reason of the election
of the Borrower not to proceed or the non-fulfillment of any of the conditions
set forth in Article 4 hereof) other than a failure to borrow resulting from an
unavailability which occurs after notice from the Administrative Agent to the
Borrower pursuant to Section 11.1 or 11.2 hereof, (b) the
49
prepayment of any Eurodollar Advance in whole or in part (including a prepayment
pursuant to Sections 11.2 and 11.3(b) hereof), or (c) the failure by the
Borrower to prepay any Advance after notice of prepayment has been given by the
Borrower to the Administrative Agent in accordance with Section 2.5 hereof, the
Borrower agrees to pay to such Lender, upon the earlier of such Lender's demand
or the applicable Maturity Date, an amount sufficient to compensate such Lender
for all such losses and out-of-pocket expenses. Such Lender's good faith
determination of the amount of such losses and out-of-pocket expenses, absent
manifest error, shall be binding and conclusive. Upon request of the Borrower,
any Lender seeking reimbursement under this Section 2.11 shall provide a
certificate setting forth the amount to be paid to it by the Borrower hereunder
and calculations therefor.
Section 2.12 APPLICATION OF PAYMENTS.
(a) Prior to the Final Maturity Date or the acceleration of
the Loans under Section 9.2 hereof, and other than with respect to payments
required to be made pursuant to Section 2.6 hereof (which shall be applied as
set forth in Section 2.6), if some but less than all amounts due from the
Borrower are received by the Administrative Agent, the Administrative Agent will
distribute such amounts as follows: FIRST, pro rata among the Credit Parties
based on the total amount of such fees, costs and expenses, to the payment of
any fees, costs and expenses then due and payable hereunder or under any other
Loan Document; SECOND, pro rata among the Lenders based on the principal amount
of the Loans outstanding immediately prior to such payment, to any unpaid
interest then due and payable on the Loans; THIRD, pro rata among the Lenders
based on the principal amount of the Term B Loans outstanding immediately prior
to such payment, to the payment of principal then due and payable on the Term B
Loans; FOURTH, pro rata among the Lenders based on their respective Revolving
Commitment Percentages outstanding immediately prior to such payment, to the
payment of principal then due and payable on the Revolving Loans; and FIFTH, pro
rata among the Credit Parties based on the amount of such Obligations
outstanding immediately prior to such payment, to the payment of any other
Obligations not otherwise referred to in this Section 2.12(a) then due and
payable.
(b) Subsequent to the Final Maturity Date or the acceleration
of the Loans under Section 9.2 hereof, payments made to any Credit Party, or
otherwise received by any Credit Party (from realization on Collateral or
otherwise), shall be distributed as follows: FIRST, to the costs and expenses,
if any, incurred by the Credit Parties, or any of them, to the extent permitted
by Section 12.2 hereof, in the collection of such amounts under this Agreement
or any of the other Loan Documents, including, without limitation, any
reasonable costs incurred in connection with the sale or disposition of any
Collateral for the Obligations; SECOND, pro rata among the Credit Parties based
on the total amount of fees then due and payable, to any fees then due and
payable hereunder or under any other Loan Document and to any other fees then
due and payable to the Lenders under this Agreement or any other Loan Document;
THIRD, pro
50
rata among the Lenders based on the outstanding principal amount of the Loans
outstanding immediately prior to such payment, to any unpaid interest which may
have accrued on the Loans; FOURTH, pro rata among the Lenders based on the
principal amount of the Loans outstanding immediately prior to such payment, to
any unpaid principal of the loans; FIFTH, to any other Obligations not otherwise
referred to in this Section 2.12(b) until all such Obligations are paid in full;
SIXTH, pro rata among the Credit Parties based on the amount of damages
outstanding immediately prior to such payment, to damages incurred by the Credit
Parties, or any of them, by reason of any breach of this Agreement or of any
other Loan Documents; and SEVENTH, upon satisfaction in full of all Obligations,
to the Borrower or as otherwise required by law.
(c) If any Lender shall obtain any payment on any date
(whether involuntary or otherwise) on account of the Loans (excluding any Swing
Loans) made by it in excess of its ratable share of the payments made by the
Borrower to the Credit Parties on such date (in the aggregate), such that, after
giving effect thereto, such Lender's outstanding Loans (excluding any Swing
Loans) are less than such Lender's ratable share of all the Loans then
outstanding (in the aggregate) in accordance with such Lender's Commitment
Percentage, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by such other Lenders as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to each purchasing Lender the
purchase price to the extent of such recovery. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.12(b) may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation so
long as the Obligations are not increased as a result of such participation. If
the Swing Loan Lender shall receive any payment on any date on account of its
Swing Loans in excess the amount to which it is entitled in accordance with
Section 2.8(a), the Swing Loan Lender shall remit the amount of such excess to
the other Lenders as the Administrative Agent may direct in accordance with
Section 2.8(a).
Section 2.13 CAPITAL ADEQUACY. In the event that any Lender shall have
determined that a Regulatory Change has the effect of reducing the rate of
return on such Lender's capital as a consequence of its obligations hereunder to
a level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, ten (10) days after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, together with a certificate (which shall be conclusive absent manifest
error), setting forth the calculations evidencing such requested additional
amount, and the law or regulation with respect thereto and certifying that such
request is consistent with such Lender's treatment of other similar customers
having similar
51
provisions generally in their agreements with such Lender and that such request
is being made on the basis of a reasonable allocation of the costs resulting
from such law or regulation, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
Allocations shall not be deemed reasonable unless made ratably, to the extent
practicable, to all affected assets, commitments, activities or other relevant
aspects of such Lender's business, whether or not the Lender is entitled to
compensation with respect thereto. Notwithstanding the foregoing, the Borrower
shall only be obligated to compensate such Lender for any amount under this
subsection arising or occurring during (a) in the case of each such request for
compensation, any time or period commencing not more than ninety (90) days prior
to the date on which such Lender submits such request and (b) any other time or
period during which, because of the unannounced retroactive application of such
law, regulation, interpretation, request or directive, such Lender reasonably
could not have known that the resulting reduction in return might arise. Each
Lender will notify the Borrower that it is entitled to compensation pursuant to
this subsection as promptly as practicable after it determines to request such
compensation; PROVIDED, HOWEVER, that the failure to provide such notice shall
not restrict the ability of such Lender to be reimbursed under this
Section 2.13.
Section 2.14 INCREMENTAL FACILITY LOANS.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may request Incremental Facility Commitments on any Business Day;
PROVIDED, HOWEVER, that the Borrower may not request Incremental Facility
Commitments or an Incremental Facility Loan during the continuance of a Default
or Event of Default, including, without limitation, any Default or Event of
Default that would result after giving effect to any Incremental Facility Loan;
and PROVIDED FURTHER, that the Borrower may request up to two (2) Incremental
Facility Commitments (each of which commitments may be from more than one
Lender) which may be no less than $60,000,000 and no more than $120,000,000 in
the aggregate. The Incremental Facility Maturity Date applicable to any of the
Incremental Facility Loans shall be no earlier than the Final Maturity Date. In
requesting Incremental Facility Commitments, the Borrower shall offer each of
the Lenders an opportunity to provide an Incremental Facility Commitment;
PROVIDED that none of the Lenders shall be required to issue an Incremental
Facility Commitment and the decision of any Lender to issue or not issue an
Incremental Facility Commitment to the Borrower shall be at such Lender's sole
discretion after being offered such right of first refusal (and the failure to
respond to any such offer by the requested deadline shall be deemed a refusal).
Persons not then Lenders may be included as Lenders having Incremental Facility
Commitments with the written approval of the Borrower and the Administrative
Agent. The Incremental Facility Commitments (i) may be in the form of a
revolving or a term credit facility and may be structured as an institutional
tranche, (ii) must not (A) have scheduled amortization providing for principal
repayments or commitment reductions earlier than, or in an amount on a
percentage basis larger than, those dates or amounts set forth in the
amortization schedule
52
for the Term B Loans set forth herein, or (B) be secured by more or different
collateral than the Loans hereunder, and (iii) must be governed by this
Agreement and the other Loan Documents and be subject to terms and conditions
not more restrictive than those set forth herein and therein for the Loans.
(b) Prior to the effectiveness of any Incremental Facility
Commitment, the Borrower shall (i) deliver to the Administrative Agent and the
Lenders a notice (each a "NOTICE OF INCREMENTAL FACILITY COMMITMENT"), in form
and substance satisfactory to the Administrative Agent, setting forth terms and
provisions with respect to interest rates and scheduled amortization with
respect to the proposed Incremental Facility Loan and (ii) provide revised
projections to the Administrative Agent and the Lenders, which shall be in form
and substance reasonably satisfactory to the Administrative Agent and which
shall demonstrate the Borrower's ability to timely repay such Incremental
Facility Commitment and any Incremental Facility Loans thereunder and to comply
with the terms and conditions of this Agreement and the other Loan Documents.
(c) No Incremental Facility Commitment shall by itself result
in any reduction of the Revolving Loan Commitment or the Term B Loan Commitment
or of the Commitment Percentages with respect thereto of such Lender issuing
such Incremental Facility Commitment.
(d) Advances of the Incremental Facility Loans (i) shall bear
interest at the Base Rate or the Eurodollar Rate or such other reasonable rate
agreed to by the Lenders making such Incremental Facility Loans; (ii) subject to
Section 2.14(a) hereof, shall be repaid as agreed to by the Borrower and the
Lenders making such Incremental Facility Loans; (iii) shall for all purposes be
Obligations hereunder and under the Loan Documents; (iv) shall be represented by
promissory notes which set forth terms and provisions with respect to interest
rates and scheduled amortization with respect to such Incremental Facility Loans
and are in form and substance acceptable to the Administrative Agent and the
Borrower (each, an "INCREMENTAL FACILITY NOTE"), and (v) shall rank pari passu
with the Loans for purposes of Sections 2.12 and 9.2 hereof (unless the
applicable Incremental Facility Lender shall otherwise agree in writing to have
its Incremental Facility Loans be junior to the Loans).
(e) Incremental Facility Loans shall be requested by the
Borrower pursuant to a request (which shall be substantially in the form of a
Request for Advance) delivered in the same manner as a Request for Advance, but
shall be funded pro rata only by those Lenders that hold the Incremental
Facility Commitments.
(f) In the event that the interest rate applicable to any of
the Incremental Facility Loans (including, without limitation, any original
issue discount in respect of such Incremental Facility Loans) shall exceed the
interest rate applicable to the Term B Loans by more than twenty-five (25) basis
points, the Applicable Margin for the Term B Loans shall automatically be
increased such that the interest rate applicable to the
53
Term B Loans is twenty-five (25) basis points less than the interest rate
applicable to such Incremental Facility Loans without any action or consent of
the Borrower, any Arranger or any Lender.
Section 2.15 LETTERS OF CREDIT
(a) Upon receipt by the Administrative Agent of at least three
(3) Business Days written notice from the Borrower in the form of a Request for
Issuance of Letter of Credit, the Administrative Agent shall promptly forward
such notice to the Arrangers, the Issuing Bank or, if requested by the Borrower,
to another Lender agreeing to act as an Issuing Bank (and if such Lender shall
accept and countersign such Request for Issuance of Letter of Credit, such
Lender shall become the Issuing Bank with respect to such Letter of Credit), and
the applicable Issuing Bank will issue a Letter of Credit in the amount
requested subject to the terms and conditions of this Agreement and further
subject to the following: (i) after giving effect to the requested issuance, the
aggregate face amount of all Letters of Credit outstanding hereunder would not
exceed the Letter of Credit Committed Amount, and (ii) after giving effect to
the requested issuance, the aggregate amount of all L/C Obligations then
outstanding, plus the aggregate amount of Swing Loans then outstanding, plus the
aggregate amount of all Revolving Loans then outstanding shall not exceed the
Revolving Loan Commitment. No Letter of Credit shall have a maturity extending
beyond the earlier of (x) a term of one (1) year from the date of issuance or
(y) the Initial Maturity Date. Subject to the maturity limitations provided
herein and so long as no Default or Event of Default then exists or would be
caused thereby, Letters of Credit shall be renewable annually upon the request
of the Borrower and with the consent of the applicable Issuing Bank, which
consent shall not be unreasonably withheld but shall be subject to compliance
with customary letter of credit practices at the times of any proposed renewal.
Each Request for Issuance of Letter of Credit from the Borrower shall specify in
reasonable detail the documents which must be presented to draw under such
Letter of Credit, which specification shall include all documents which the
applicable Issuing Bank may reasonably require.
(b) If a Letter of Credit provides that it is automatically
renewable unless notice is given by the Issuing Bank with respect thereto that
it will not be renewed, such Issuing Bank and the Borrower shall give notice of
nonrenewal to the Administrative Agent at least ten (10) Business Days prior to
the last date on which a notice of non-renewal may be given to the beneficiary
of such Letter of Credit. The Administrative Agent shall promptly notify the
Lenders and, unless so directed by the Majority Lenders at least three (3)
Business Days prior to the last date on which a notice of non-renewal may be
given to the beneficiary of such Letter of Credit, the Issuing Bank with respect
to such Letter of Credit shall not be bound to give notice of non-renewal to the
beneficiary of such Letter of Credit.
(c) Provided that no Default or Event of Default then exists
or would be caused thereby, each Lender irrevocably authorizes each Issuing Bank
to issue,
54
reconfirm, reissue and extend each Letter of Credit issued by such Issuing Bank
in accordance with the terms of this Agreement. Each Issuing Bank hereby sells,
and each other Lender that has issued a Revolving Loan Commitment hereby
purchases, on a continuing basis, a participation and an undivided interest in
(A) the obligations of such Issuing Bank to honor any draws under the Letters of
Credit issued pursuant to this Agreement, and (B) the Indebtedness of the
Borrower to such Issuing Bank under this Agreement in respect of Letters of
Credit issued by it, such participation being in the amount of such Lender's pro
rata share of such obligations and Indebtedness based on such Lender's Revolving
Commitment Percentage, in each case without further action by any party.
(d) Upon receipt of a draw certificate from the beneficiary of
a Letter of Credit, the applicable Issuing Bank shall promptly notify the
Administrative Agent, which shall in turn notify the Borrower, the Arrangers and
each Lender that has issued a Revolving Loan Commitment, by telephone or
telecopy, of the amount of the requested draw and, in the case of each such
Lender, such Lender's portion of such draw amount as calculated in accordance
with its Revolving Commitment Percentage.
(e) The Borrower hereby irrevocably requests, and the Lenders
that have issued Revolving Loan Commitments hereby severally agree to make, a
Base Rate Advance to the Borrower (notwithstanding the minimum amount
requirements otherwise applicable to Base Rate Advances) on each day on which a
draw is made under any Letter of Credit and in the amount of such draw, and each
such Lender shall fund such Lender's share of such Base Rate Advance by payment
to the Administrative Agent in accordance with Section 2.2(e) hereof and its
Revolving Commitment Percentage, without reduction for any set-off counterclaim
of any nature whatsoever. The obligation of each such Lender to make payments to
the Administrative Agent, for the account of each Issuing Bank, in accordance
with this Section 2.15 shall be absolute and unconditional, and no such Lender
shall be relieved of its obligations to make such payments by reason of
non-compliance by any other Person with the terms of any Letter of Credit or for
any other reason other than the gross negligence or willful misconduct of the
Administrative Agent or the applicable Issuing Bank. The Administrative Agent
shall promptly remit to the applicable Issuing Bank the amounts so received from
the applicable Lenders.
(f) The Borrower agrees that any action taken or omitted to be
taken by any Issuing Bank in connection with any Letter of Credit issued by it,
except for such actions or omissions as shall constitute gross negligence or
willful misconduct on the part of such Issuing Bank or such Issuing Bank's
willful failure to pay under any such Letter of Credit after presentation to it
of documents complying with the terms of such Letter of Credit, shall be binding
on the Borrower as between the Borrower and such Issuing Bank, and shall not
result in any liability of the Issuing Bank to the Borrower. The obligation of
the Borrower to reimburse the Lenders for Advances made to reimburse any Issuing
Bank for draws under the Letters of Credit issued by it shall be
55
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances whatsoever,
including, without limitation, the following circumstances:
(i) Any lack of validity or enforceability of any
Loan Document;
(ii) Any amendment or waiver of or consent to any
departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter
of Credit or any improper acts or omissions of any beneficiary or transferee of
any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or
any right which the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or Persons for whom any such beneficiary or
any such transferee may be acting) or any Lender (other than the defense of
payment to such Lender in accordance with the terms of this Agreement) or any
other Person, whether in connection with any Letter of Credit, any transaction
contemplated by any Letter of Credit, this Agreement, any other Loan Document,
or any unrelated transaction;
(v) Any statement or any other documents presented
under any Letter of Credit proving to be insufficient, forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect whatsoever, provided that such payment shall not have constituted
gross negligence of willful misconduct of the applicable Issuing Bank;
(vi) The insolvency of any Person issuing any
documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower
and any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect
to which any Letter of Credit is issued, including any fraud by the beneficiary
or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, wireless
or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission,
insolvency or failure of business of any of the correspondents of the applicable
Issuing
56
Bank, provided that the same shall not have constituted the gross negligence or
willful misconduct of such Issuing Bank;
(xi) Any other circumstances arising from causes
beyond the control of the applicable Issuing Bank;
(xii) Payment by the applicable Issuing Bank under any
Letter of Credit against presentation of a sight draft or a certificate which
does not comply with the terms of such Letter of Credit, provided that such
payment shall not have constituted gross negligence or willful misconduct of the
Issuing Bank; and
(xiii) Any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, provided that such other
circumstances or happenings shall not have been the result of gross negligence
or wilful misconduct of the applicable Issuing Bank or any Lender.
(g) If, after the Agreement Date, any change in Applicable
Law, any change in the interpretation or administration thereof, or any change
in compliance with Applicable Law by any Issuing Bank or any other Lender as a
result of any request or directive of any governmental authority, central bank
or comparable agency (whether or not having the force of law) shall (i) impose,
modify or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special
deposit, capital adequacy, assessment or other requirements or conditions
against letters of credit issued by any Issuing Bank or against participations
by any other Lender in the Letters of Credit or (ii) impose on any Issuing Bank
or any other Lender any other condition regarding any Letter of Credit or any
participation therein, and the result of any of the foregoing in the reasonable
determination of such Issuing Bank or such Lender, as the case may be, is to
increase the cost to such Issuing Bank or such Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining any participation therein, as
the case may be, by an amount (which amount shall be reasonably determined)
deemed by such Issuing Bank or such Lender to be material, and the designation
of a different lending office will not avoid the need for (or reduce the amount
of) additional compensation, then, on the earlier of ten (10) days following the
date of demand (which demand shall be made not later than six (6) months
following such Issuing Bank's or such Lender's determination of a need for
additional compensation) by such Issuing Bank or such Lender or the Initial
Maturity Date, the Borrower shall promptly pay such Issuing Bank or such Lender,
as the case may be, such additional amount or amounts as such Issuing Bank or
such Lender, as the case may be, determines will compensate it for such
increased costs. Within sixty (60) days of such written demand by such Issuing
Bank or such Lender, the Borrower may, in its discretion, provide a replacement
bank or banks for such Issuing Bank or such Lender, which replacement bank or
banks will be subject to the approval of the Arrangers and the Majority Lenders
(which approval, in each case, will not be unreasonably withheld), and shall
take all necessary actions to transfer the rights, duties and obligations of
such
57
Issuing Bank or such Lender to such replacement bank or banks within such 60-day
period. A certificate of such Lender setting forth the amount, and in reasonable
detail the basis for such Issuing Bank's or such Lender's determination of such
amount, to be paid to such Issuing Bank or such Lender by the Borrower as a
result of any event referred to in this paragraph shall, absent manifest error,
be conclusive. Such certificate shall be delivered to the Borrower with each
written demand for payment referenced above. Each Issuing Bank and each Lender
further agree that they shall use their best efforts to give the Borrower thirty
(30) days prior notice, and in any event shall give prompt notice, of any event
referred to in this paragraph which may have the effect of materially increasing
the cost to such Issuing Bank or such Lender of issuing or maintaining the
Letter of Credit or purchasing or maintaining any participation therein.
(h) Each Lender shall be responsible for its pro rata share
(based on such Lender's Revolving Commitment Percentage) of any and all
reasonable out-of-pocket costs, expenses (including reasonable legal fees) and
disbursements which may be incurred or made by any Issuing Bank in connection
with the collection of any amounts due under, the administrative of, or the
presentation or enforcement of any rights conferred by any Letter of Credit
issued by such Issuing Bank, the Borrower's or any Guarantor's obligations to
reimburse or otherwise. In the event the Borrower shall fail to pay such
expenses of any Issuing Bank within thirty (30) days of demand for payment by
such Issuing Bank, provided that such Issuing Bank has, during such 30-day
period, made a diligent collection effort with respect to such expenses, and
provided that such costs will not result from the gross negligence or wilful
misconduct of such Issuing Bank, each Lender shall thereupon pay to such Issuing
Bank its pro rata share (based on such Lender's Revolving Commitment Percentage)
of such expenses within ten (10) days from the date of such Issuing Bank's
notice to the Lenders of the Borrower's failure to pay; provided, however, that
if the Borrower or any Guarantor shall thereafter pay such expense, such Issuing
Bank will repay to each Lender the amounts received from such Lender hereunder.
ARTICLE 3 - GUARANTEE
Section 3.1 GUARANTEE. Each of the Guarantors, jointly and severally,
hereby unconditionally guarantees to the Credit Parties and their respective
permitted successors and assigns and the subsequent holders of the Obligations
(including, without limitation, any interest on the Loans accruing after the
filing of a petition initiating any Insolvency Proceeding, whether or not such
interest accrues or is recoverable against the Borrower after the filing of such
petition for purposes of the Bankruptcy Code or is an allowed claim in such
proceeding), irrespective of the validity and enforceability of this Agreement
or the other Loan Documents or the Obligations of the Borrower or any of the
other Guarantors hereunder or thereunder, the value or sufficiency of any
Collateral or any other circumstance that might otherwise affect the liability
of a guarantor, that: (a) the principal of and interest on the Loans and all
other Obligations under this Agreement and the other Loan Documents shall be
promptly paid in full when due, whether at stated
58
maturity, by acceleration or otherwise, in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
of the Loans or any other of such Obligations, the same shall be promptly paid
in full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. The foregoing guaranty
is a guaranty of payment and not of collection. Failing payment when due of any
amount so guaranteed for whatever reason, the Guarantors will be obligated,
jointly and severally, to pay the same immediately.
Section 3.2 WAIVERS AND RELEASES. Each of the Guarantors hereby waives
notice of, and consents to, any extension of time of payment, renewals, releases
of Collateral, delays in obtaining or realizing upon or failures to obtain,
perfect, or maintain perfection of, or realize upon Collateral or other
indulgence from time to time granted by any of the Credit Parties in respect of
this Agreement or any other Loan Document. Each of the Guarantors hereby
releases the Borrower from all, and agrees not to assert or enforce (whether by
or in a legal or equitable proceeding or otherwise), any "claims" (as defined in
11 U.S.C. Section 101(4)), whether arising under Applicable Law or otherwise, to
which such Guarantors are or would be entitled by virtue of their obligations
hereunder, any payment made pursuant hereto or the exercise by the Credit
Parties of their rights with respect to any Collateral, including any such
claims to which such Guarantors may be entitled as a result of any right of
subrogation, exoneration or reimbursement. To the extent not released by such
Guarantors under this Article 3, each of the Guarantors agrees that it shall not
be entitled to any right of subrogation, exoneration, reimbursement or
contribution in respect of any Obligations guaranteed hereby. With respect to
this Agreement and the other Loan Documents, each of the Guarantors hereby
waives presentment, protest, demand of payment, notice of dishonor and all other
notices and demands whatsoever. Each of the Guarantors further agrees that, as
between such Guarantor, on the one hand, and the Credit Parties, on the other
hand, (a) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Section 9.2 hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (b) in the
event of any declaration of acceleration of such Obligations as provided in
Section 9.2 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by each of the Guarantors for purposes of this
guarantee. The obligations of the Guarantors under this Article 3 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of the Borrower is rescinded or must otherwise be restored by any
holder of any of the Obligations guaranteed hereunder, whether as a result of
any Insolvency Proceeding or otherwise, and each Guarantor agrees that it will,
jointly and severally, indemnify the Credit Parties on demand for reasonable
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by the Credit Parties in connection with such rescission or
restoration. Each Guarantor further agrees with the Borrower for the benefit of
each of its creditors (including, without limitation, the Credit Parties) that
any payment referred to in this Article 3 by a Guarantor shall constitute a
contribution of capital by
59
such Guarantor to the Borrower (or an investment in the equity capital of the
Borrower by such Guarantor).
Section 3.3 MISCELLANEOUS.
(a) Upon the bankruptcy or winding up or other distribution of
assets of the Borrower or any Material Subsidiary of the Borrower or of any
surety or guarantor of any of the Obligations of the Borrower to the Credit
Parties, the rights of the Credit Parties against the Guarantors shall not be
affected or impaired by the omission of any Credit Party to prove its claim, or
to prove its full claim, and the Administrative Agent may prove such claims as
it sees fit and may refrain from proving any claim and in its discretion may
value as it sees fit or refrain from valuing any security held by it without in
any way releasing, reducing or otherwise affecting the liability to the Credit
Parties of any Guarantor.
(b) Each of the Guarantors absolutely, unconditionally and
irrevocably waives any and all right to assert any defense, set-off,
counterclaim or cross-claim of any nature whatsoever with respect to this
Article 3 or the obligations of the Guarantors hereunder or the obligations of
any other Person or party (including, without limitation, the Borrower) relating
to this Article 3 or the obligations of any other guarantor with respect to the
Obligations in any action or proceeding brought by any Credit Party to collect
the Obligations or any portion thereof, or to enforce the obligations of the
Guarantors under this Article 3.
(c) If a claim is ever made upon any of the Credit Parties for
the repayment or recovery of any amount or amounts received by such Person in
payment of any of the Obligations and such Person repays all or part of such
amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or any of its property,
or (ii) any settlement or compromise of any such claim effected by such Person
with any such claimant, including the Borrower, then in such event the
Guarantors agree that any such judgment, decree, order, settlement or compromise
shall be binding upon the Guarantors, notwithstanding any revocation hereof or
the cancellation of any promissory note or other instrument evidencing any of
the Obligations, and the Guarantors shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.
(d) The Guarantors expressly represent and acknowledge that
any financial accommodations by the Credit Parties, or any of them, to the
Borrower, including, without limitation, the extension of the Loans, are and
will be of direct interest, benefit and advantage to the Guarantors.
(e) The Guarantors hereby agree among themselves that if any
Guarantor shall become an Excess Funding Guarantor by reason of the payment by
such Guarantor of any Obligations, each other Guarantor shall, on demand of such
Excess
60
Funding Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as determined, for
this purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment in respect of such Obligations.
The payment obligation of a Guarantor to any Excess Funding Guarantor under this
Section 3.3(e) shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Guarantor under the other provisions
of this Article 3, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all Obligations. For purposes of this Section 3.3(e), (i) "EXCESS
FUNDING GUARANTOR" shall mean, in respect of any Obligations, a Guarantor that
has paid an amount in excess of its Pro Rata Share of such Obligations, (ii)
"EXCESS PAYMENT" shall mean, in respect of any Obligations, the amount paid by
an Excess Funding Guarantor in excess of its Pro Rata Share of such Obligations,
and (iii) "PRO RATA SHARE" shall mean, for any Guarantor, the ratio (expressed
as a percentage) of (A) the amount by which the aggregate present fair saleable
value of all properties of such Guarantor (excluding any shares of stock of any
other Guarantor) exceeds the amount of all the debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder and any
obligations of any other Guarantor that have been guaranteed by such Guarantor)
to (B) the amount by which the aggregate fair saleable value of all properties
of the Borrower and all of the Guarantors exceeds the amount of all the debts
and liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of the Rainbow Companies hereunder)
of all of the Rainbow Companies, all as of the Agreement Date. If any Subsidiary
becomes a Guarantor hereunder subsequent to the Agreement Date, then for
purposes of this Section 3.3(e) such subsequent Guarantor shall be deemed to
have been a Guarantor as of the Agreement Date and the aggregate present fair
saleable value of the properties, and the amount of the debts and liabilities,
of such subsequent Guarantor as of the Agreement Date shall be deemed to be
equal to such value and amount on the date such subsequent Guarantor becomes a
Guarantor hereunder.
(f) It is the intention of each Guarantor and the Credit
Parties that each Guarantor's obligations under this Article 3 shall be, but not
in excess of, the Maximum Guaranteed Amount (as herein defined). The "Maximum
Guaranteed Amount" with respect to any Guarantor, shall mean the maximum amount
which could be paid by such Guarantor without rendering the Guaranty contained
in this Article 3 void or voidable as would otherwise be held or determined by a
court of competent jurisdiction in any insolvency proceeding involving any state
or any federal bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to the insolvency of debtors.
(g) Pursuant to Section 6.14 hereof, any new Subsidiary of the
Borrower is required to enter into this Agreement for purposes of joining in
this Guarantee by executing and delivering in favor of the Credit Parties a
Guarantee
61
Supplement. Upon the execution and delivery of a Guaranty Supplement by such new
Subsidiary, such Subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor herein. The execution and
delivery of any instrument adding an additional Guarantor hereunder shall not
require the consent of any party of this Agreement. The rights and obligations
of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor hereunder.
ARTICLE 4 - CONDITIONS PRECEDENT
Section 4.1 CONDITIONS PRECEDENT TO CLOSING. The obligation of each of
the Lenders to undertake its respective Commitments and to make the initial
Advance of the Loans hereunder is subject to the prior fulfillment of each of
the following conditions:
(a) The Administrative Agent shall have received each of the
following, in form and substance reasonably satisfactory to the Arrangers and
their counsel and to the Majority Lenders:
(i) this duly executed Agreement;
(ii) the duly executed Borrower Security Agreement,
together with evidence of the filing of appropriate UCC-1 financing statements
forms;
(iii) the duly executed Borrower's Pledge Agreement,
together with appropriate original securities certificates and undated
securities powers with respect thereto executed in blank and evidence of the
filing of appropriate UCC-1 financing statement forms;
(iv) the duly executed Partnership Pledge Agreement,
together with evidence of the filing of appropriate UCC-1 financing statement
forms;
(v) a loan certificate of the Borrower, including a
certificate of incumbency with respect to the signature of each Authorized
Signatory of the Borrower, which loan certificate shall be in substantially the
form of EXHIBIT Q attached hereto, together with appropriate attachments which
shall include, without limitation, the following items: (A) a true, complete and
correct copy of the articles of incorporation of the Borrower, certified by the
Secretary of State of Delaware, (B) a true, complete and correct copy of the
by-laws of the Borrower, (C) a copy of the resolutions of the board of directors
of the Borrower, authorizing the Borrower with respect to the borrowing
hereunder and the execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents to which it is a party, (D) certificates
of existence for the Borrower issued by the Secretary of State or similar state
official for the State of Delaware and for each state in which the Borrower is,
or is required to be, qualified to do business, and (E) a true, complete and
correct copy of any agreement in
62
effect with respect to the voting rights, ownership interests or management of
the Borrower;
(vi) the duly executed CSC Holdings Pledge Agreement,
together with appropriate original securities certificates and undated
securities powers with respect thereto executed in blank and evidence of the
filing of appropriate UCC-1 financing statement forms;
(vii) a loan certificate of CSC Holdings, including a
certificate of incumbency with respect to the signature of each Authorized
Signatory of CSC Holdings, which loan certificate shall be in substantially the
form of EXHIBIT R attached hereto, together with appropriate attachments which
shall include, without limitation, the following items: (A) a true, complete and
correct copy of the articles of incorporation of CSC Holdings, certified by the
Secretary of State of Delaware, (B) a true, complete and correct copy of the
bylaws of CSC Holdings, (C) a copy of the resolutions of the board of directors
of CSC Holdings, authorizing CSC Holdings with respect to the execution,
delivery and performance by CSC Holdings of the Loan Documents to which it is a
party, and (D) certificates of existence for CSC Holdings issued by the
Secretary of State or similar state official for the State of Delaware and for
each state in which CSC Holdings is, or is required to be, qualified to do
business;
(viii) the duly executed Subsidiary Pledge Agreement
from each Guarantor which has one or more Subsidiaries, together with
appropriate original securities certificates and undated securities powers with
respect thereto executed in blank and evidence of the filing of appropriate
UCC-1 financing statement forms;
(ix) the duly executed Subsidiary Security Agreement
from each Guarantor, together with evidence of the filing of appropriate UCC-1
financing statement forms;
(x) a loan certificate of each Guarantor, including
a certificate of incumbency with respect to the signature of each Authorized
Signatory of such Guarantor, which loan certificate shall be in substantially
the form of EXHIBIT S attached hereto, together with appropriate attachments
which shall include, without limitation, the following items: (A) a true,
complete and correct copy of the articles of incorporation, certificate of
limited partnership or certificate of organization of such Guarantor, certified
by the Secretary of State of such Guarantor's organization, (B) a true, complete
and correct copy of by-laws, partnership agreement or limited liability company
or operating agreement of such Guarantor, (C) a copy of the resolutions of the
board of directors, or other appropriate entity, of such Guarantor, authorizing
such Guarantor with respect to the execution, delivery and performance by such
Guarantor of this Agreement and the other Loan Documents to which it is a party,
(D) certificates of existence for such Guarantor issued by the Secretary of
State or similar state official for the state of such Guarantor's organization
and for each state in which such Guarantor is, or is required to be, qualified
to do business, and (E) a true, complete and correct copy of any agreement
63
in effect with respect to the voting rights, ownership interests or management
of such Guarantor;
(xi) the duly executed Fee Letters, together with
evidence of receipt of all fees due on the Agreement Date from the Borrower to
the Credit Parties in accordance therewith;
(xii) the duly executed Subordination of Intercompany
Obligations Agreement;
(xiii) the duly executed Trademark Security Agreement,
together with an appropriate filing coversheet and evidence of the filing of
appropriate UCC-1 financing statement forms;
(xiv) opinions of counsel to the Borrower, CSC
Holdings and the Guarantors addressed to each Credit Party and in form and
substance satisfactory to the Arrangers and their counsel;
(xv) a copy of the corporate organizational chart of
the Rainbow Companies, the MGM Companies and the Unrestricted Subsidiaries;
(xvi) a copy of (A) the audited consolidated balance
sheets, income statements and cash flow statements for the Rainbow Group, (B)
the audited combined balance sheets and income statements for the MGM Companies
and (C) the unaudited combining balance sheets and income statements for the MGM
Companies, in each case for the year ended December 31, 2001, and a copy of (A)
the unaudited consolidated balance sheets, income statements and cash flow
statements for the Rainbow Group, and (B) the unaudited combined balance sheets,
income statements and cash flow statements for the MGM Companies, in each case
for the quarter ended September 30, 2002;
(xvii) copies of insurance binders or certificates
covering the assets of the Rainbow Companies, and otherwise meeting the
requirements of, and to the extent required by, Section 6.5 hereof;
(xviii) the duly executed Request for Advance for the
initial Advance of the Loans;
(xix) evidence that the Borrower shall have obtained
debt ratings from both Xxxxx'x Investors Service, Inc. and Standard & Poor's
with respect to the Loans; and
(xx) evidence that the AMC Intercompany Indebtedness,
and any other Indebtedness of any of the Rainbow Companies in favor of any
Affiliate
64
(other than any Indebtedness permitted under Section 8.1 hereof), shall have
been repaid in full.
(b) All of the representations and warranties of the Rainbow
Companies under this Agreement shall be true and correct in all material
respects, both before and after giving effect to the application of the proceeds
of the initial Advance of the Loans, and the Administrative Agent shall have
received a certificate of an Authorized Signatory of the Borrower so stating.
(c) No litigation shall have been commenced against any of the
Rainbow Companies or any of the MGM Companies since December 31, 2001, which, if
such litigation could reasonably be expected to be determined adversely to any
such Company, could reasonably be expected to have a Materially Adverse Effect.
(d) There shall have been no material adverse change in the
business, assets or financial condition of the Rainbow Group and the MGM
Companies from that reflected in the financial statements provided pursuant to
Section 4.1(a)(xvi) hereof.
(e) The Arrangers shall have received the results of lien
searches against each of the Rainbow Companies from all applicable jurisdictions
which shall be reasonably satisfactory to them and their counsel.
(f) The Arrangers shall have received evidence satisfactory to
them that all conditions precedent to the consummation of the transactions
contemplated by the AMC Loan Agreement shall have been fulfilled to the
satisfaction of the AMC Credit Parties and that concurrently with the closing of
this Agreement and the transactions contemplated hereby the transactions
contemplated by the AMC Loan Agreement shall be consummated.
(g) The Administrative Agent shall have received a certificate
of an Authorized Signatory of the Borrower demonstrating, on a pro forma basis,
as of the Agreement Date, that the Senior Leverage Ratio calculated as of the
Agreement Date, based on Annualized Cash Flow as of the last day of the fiscal
quarter ending September 30, 2002, and Senior Debt after giving effect to the
initial Advance of the Loans hereunder, is less than or equal to 3.25 to 1.00.
Section 4.2 CONDITIONS PRECEDENT TO EACH ADVANCE. The obligations of
the Lenders to make each Advance (including the initial Advance hereunder) of
the Loans (including the Swing Loans) is subject to the fulfillment of each of
the following conditions immediately prior to or contemporaneously with such
Advance:
(a) The Administrative Agent, or in the case of a Swing Loan,
the Swing Loan Lender, shall have received a duly executed and completed Request
for Advance or Swing Loan Request, as applicable, signed by an Authorized
Signatory of the
65
Borrower, which Request for Advance or Swing Loan Request, as applicable, shall
(i) certify that, after giving effect to the requested Advance, no Default or
Event of Default shall then exist, (ii) certify that, as of the date of the
requested Advance and after giving effect to the application of proceeds
thereof, the representations and warranties in Section 5.1 hereof shall be true
and correct in all material respects, except to the extent any representation or
warranty is made solely as of the Agreement Date, (iii) certify that, as of the
date of the requested Advance, there shall exist no litigation commenced against
any of the Rainbow Companies or any of the MGM Companies since December 31,
2001, which, if such litigation could reasonably be expected to be determined
adversely to any such Company, could reasonably be expected to have a Materially
Adverse Effect, and (iv) provide calculations demonstrating compliance with
Sections 8.8 and 8.9 hereof before and after giving effect to the requested
Advance.
(b) There shall have occurred no event which has had or could
reasonably be expected to have a Materially Adverse Effect since the date of the
most recent audited financial statements provided to the Credit Parties.
(c) Each Request for Advance and each Swing Loan Request shall
constitute a representation and warranty by the Borrower made as of the time of
requesting such Advance that the conditions specified in this Section 4.2 have
been fulfilled as of the time of such Advance.
Section 4.3 CONDITIONS PRECEDENT TO ISSUANCE OF LETTERS OF CREDIT. The
obligation of any Issuing Bank to issue any Letter of Credit hereunder is
subject to the fulfillment of each of the following conditions immediately prior
to or contemporaneously with the issuance of such Letter of Credit:
(a) The Administrative Agent shall have received a duly
executed and completed Request for Issuance of Letter of Credit signed by an
Authorized Signatory of the Borrower, which Request for Issuance of Letter of
Credit shall (i) certify that, after giving effect to the requested Advance, no
Default or Event of Default shall then exist, (ii) certify that as of the date
of the issuance of the requested Letter of Credit and after giving effect
thereto, the representations and warranties in Section 5.1 hereof shall be true
and correct in all material respects, except to the extent and representation or
warranty is made solely as of the Agreement Date, (iii) certify that, as of the
date of the issuance of the requested Letter of Credit, there shall exist no
litigation commenced against any of the Rainbow Companies since December 31,
2001, which, if such litigation could reasonably be expected to be determined
adversely to any such Company, could reasonably be expected to have a Materially
Adverse Effect, and (iv) provide calculations demonstrating compliance with
Sections 8.8 and 8.9 hereof before and after giving effect to the issuance of
the requested Letter of Credit.
(b) There shall have occurred no event which has had or could
reasonably be expected to have a Materially Adverse Effect since the date of the
most recent audited financial statements provided to the Credit Parties.
66
(c) Each Request for Issuance of Letter of Credit shall
constitute a representation and warranty by the Borrower made as of the time of
requesting such Letter of Credit that the conditions specified in Section 4.3
have been fulfilled as of the time of issuance of such Letter of Credit.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES. The Borrower, for itself
and on behalf of its Subsidiaries, as applicable, hereby agrees, represents, and
warrants that:
(a) ORGANIZATION; POWER; QUALIFICATION. The Borrower is a
corporation duly organized and validly existing under the laws of the State of
Delaware, having CSC Holdings as its only shareholder. Each of the Guarantors is
duly organized and validly existing under the laws of the jurisdiction of its
organization. Each of the Rainbow Companies has the power and authority to own
or lease and operate its properties and to carry on its business as now being
and hereafter proposed to be conducted, and is duly qualified and authorized to
do business in each jurisdiction in which such qualification is necessary in
view of the character of its properties or the nature of its business requires
such qualification or authorization, except for qualifications and
authorizations, the lack of which, singly or in the aggregate, has not had and
is not likely to have a Materially Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY. Each of the Rainbow
Companies has all power, corporate or otherwise, and has taken all necessary
action to authorize it to execute, deliver, and perform this Agreement and each
of the other Loan Documents to which it is a party in accordance with the terms
thereof and to consummate the transactions contemplated hereby and thereby. This
Agreement and each of the other Loan Documents have been duly executed and
delivered by each of the Rainbow Companies party thereto, and each of this
Agreement and the other Loan Documents to which any Rainbow Company is a party
is a legal, valid and binding obligation of each Rainbow Company party thereto,
enforceable in accordance with its terms, subject to limitations on
enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors' rights generally and limitations on the availability of the
remedy of specific performance imposed by the application of general equity
principles.
(c) SUBSIDIARIES AND UNRESTRICTED SUBSIDIARIES. Except as
listed on SCHEDULE 5.1(c)-1 attached hereto (as amended by the Borrower after
the Agreement Date upon written notice to the Lenders from time to time to the
extent permitted hereunder), the Borrower does not have any Subsidiaries. With
respect to each of the Rainbow Companies, SCHEDULE 5.1(c)-1 also sets forth, as
of the Agreement Date, the following: (i) the direct owners of such Company and
the extent of such ownership; (ii) the state of such Company's incorporation or
organization; (iii) all jurisdictions in which such Company is qualified to do
business as a foreign corporation, limited liability company or partnership, as
the case may be; and (iv) the federal tax identification number, the state
organizational identification number (if issued by the state of such
67
Company's incorporation or organization), the address of the chief executive
office and principal place of business of such Company, and the name and
registered office of the registered agent appointed by such Company. Except as
set forth on SCHEDULE 5.1(c)-2, attached hereto (as amended by the Borrower
after the Agreement Date upon written notice to the Lenders from time to time to
the extent permitted hereunder), there are no MGM Companies. With respect to
each MGM Company, SCHEDULE 5.1(c)-2 also sets forth, as of the Agreement Date,
the following: (i) whether such MGM Company is a MGM Operating Company; (ii) the
direct owners of such MGM Company and the extent of such ownership; (iii) the
state of such MGM Company's incorporation or organization; and (iv) all
jurisdictions in which such MGM Company is qualified to do business as a foreign
corporation, limited liability company or partnership, as the case may be.
Except as set forth on SCHEDULE 5.1(c)-3 attached hereto, there are no
Unrestricted Subsidiaries. With respect to each Unrestricted Subsidiary,
SCHEDULE 5.1(c)-3 also sets forth, as of the Agreement Date, the following: (i)
the direct owners of such Unrestricted Subsidiary and the extent of such
ownership; (ii) the state of such Unrestricted Subsidiary's incorporation or
organization; and (iii) all jurisdictions in which such Unrestricted Subsidiary
is qualified to do business as a foreign corporation, limited liability company
or partnership, as the case may be.
(d) COMPLIANCE WITH LAWS, OTHER LOAN DOCUMENTS, AND
CONTEMPLATED TRANSACTIONS. The execution, delivery and performance of this
Agreement and each of the other Loan Documents in accordance with the terms and
the consummation of the transactions contemplated hereby and thereby do not and
will not (i) violate any Applicable Law, (ii) result in a breach of, or
constitute a default under the certificate or articles of incorporation, by-laws
or other governing documents, as the case may be and as amended, of any of the
Rainbow Companies or any of the MGM Companies, or under any Material MSO
Agreement, or under any indenture, agreement, or other instrument to which any
of the Rainbow Companies or any of the MGM Companies, is a party or by which it
or any of its properties may be bound, or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by any Rainbow Company except Permitted Liens;
except, with respect to items (i) and (ii) above, where such violations,
breaches or defaults, if any, singly or in the aggregate, has not had and is not
likely to have a Materially Adverse Effect.
(e) NECESSARY AUTHORIZATIONS. No approval or consent of, or
filing or registration with, any federal, state or local commission or other
regulatory authority is required in connection with (i) the execution, delivery
and performance by the Borrower of this Agreement and the other Loan Documents
to which it is a party, or (ii) the execution, delivery and performance by each
of the Guarantors of this Agreement and the other Loan Documents to which such
Guarantor is a party. All such described action required to be taken as a
condition to the execution and delivery of each of this Agreement and other Loan
Documents to which any of the Rainbow Companies is a party has been duly taken
by all such commissions and authorities or other Persons, as the
68
case may be, and all such action required to be taken as a condition to the
initial Advance of the Loans hereunder has been or will be duly taken prior to
such initial Advance.
(f) TITLE TO PROPERTIES. Each of the Rainbow Companies has
good and legal title to, or a valid leasehold interest in, all of their
respective material properties and assets free and clear of all Liens, except
Permitted Liens.
(g) COLLECTIVE BARGAINING. None of the Rainbow Companies has
entered into any collective bargaining agreement with any trade or labor union
or other employee collective bargaining agent.
(h) TAXES. All federal, state, and other tax returns of the
Borrower and each of its Subsidiaries required by law to be filed have been duly
filed, and all federal, state, and other taxes, assessments, and other
governmental charges or levies upon the Borrower, each of its Subsidiaries, and
any of their respective properties, income, profits, and assets, which are due
and payable, have been paid, except any such tax payment of which the Borrower
or such Subsidiary, as the case may be, is contesting in good faith by
appropriate proceedings, and as to which neither any Lien other than a Permitted
Lien has attached nor any foreclosure, distraint, sale, or similar proceedings
have been commenced, and except any such tax payments which the failure to pay,
singly or in the aggregate, has not had and is not likely to have a Materially
Adverse Effect. The charges, accruals, and reserves on the books of the Borrower
and each of its Subsidiaries in respect of taxes are, in the reasonable judgment
of the Borrower, adequate.
(i) FINANCIAL STATEMENTS. The Borrower has furnished, or
caused to be furnished, to the Credit Parties the financial statements required
pursuant to Section 4.1(a)(xvi) hereof, all of which are complete and correct in
all material respects and present fairly in accordance with GAAP the financial
position of the Rainbow Group as at the dates thereof, and the results of
operations for the periods ended as of such dates, subject to normal year-end
adjustments with respect to any unaudited statements. Except as disclosed in
such financial statements or in SCHEDULE 5.1(i) attached hereto, none of the
Rainbow Companies nor any of the MGM Companies had any material liabilities,
contingent or otherwise, and there are no material unrealized or anticipated
losses of any such Companies which have not heretofore been disclosed in writing
to the Credit Parties.
(j) NO ADVERSE CHANGE. Since December 31, 2001, there has
occurred no event which has had or could reasonably be expected to have a
Materially Adverse Effect.
(k) INVESTMENTS AND GUARANTIES. None of the Rainbow Companies
has made Investments in, advances to or guaranties of the obligations of any
Person, except as reflected in the financial statements referred to in Section
5.1(i) above or disclosed in SCHEDULE 5.1(k) attached hereto.
69
(l) LIABILITIES, LITIGATION, ETC. Except (i) for liabilities
incurred in the normal course of business, (ii) as disclosed or referred to in
the financial statements described in Section 5.1(i) above, or (iii) as
disclosed on SCHEDULE 5.1(l) attached hereto, none of the Rainbow Companies has
any material (individually or in the aggregate) direct or contingent
liabilities. Except as disclosed on SCHEDULE 5.1(l) attached hereto, there is no
litigation, legal or administrative proceeding, investigation, or other action
of any nature pending or, to the knowledge of the Borrower, threatened against
or affecting the any of the Rainbow Companies or any of their respective
properties which involves the possibility of any judgment or liability not fully
covered by insurance that, singly or in the aggregate, could reasonably be
expected to have a Materially Adverse Effect.
(m) ERISA. Each Plan maintained, or contributed to, by the
Borrower or any of its Subsidiaries, or any of their ERISA Affiliates is listed
on SCHEDULE 5.1(m) attached hereto. Each of such Plans is in compliance in all
material respects with their terms, ERISA and the Code. None of such Plans has a
material "accumulated funding deficiency" within the meaning of ERISA or the
Code. Neither the Borrower nor any of its Subsidiaries nor any of their
respective ERISA Affiliates has incurred any material liability to the PBGC in
connection with any such Plan. The assets of each such Plan which is subject to
Title IV of ERISA are sufficient to provide the benefits under such Plan if such
Plan were determined on an ongoing basis. No Reportable Event, for which the
thirty (30) day notice provision has not been waived in accordance with ERISA
Section 4043(a), has occurred with respect to any such Plan. No party in
interest, fiduciary, trustee or administrator of any such Plan or trust created
thereunder has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code which is not statutorily or
administratively exempt under Sections 407 or 408 of ERISA or Section 4975 of
the Code, each of which exemptions are disclosed on SCHEDULE 5.1(m)) which would
subject the Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates to a material tax on "prohibited transactions" imposed by Section
4975 of the Code; provided that this representation and warranty is based upon
the Borrower's understanding provided by Lenders that the source of the Loans
will not at any time constitute assets of any such Plan. No party in interest,
fiduciary, trustee or administrator of any such Plan or trust created thereunder
has committed a material breach of its fiduciary duty or knowingly participated
in any violation of ERISA which would subject the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates to a material penalty
under Section 502 of ERISA. Except as set forth on SCHEDULE 5.1(m), none of the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates is
a participant in or obliged to make any payment to a Multiemployer Plan. Except
as required by Sections 601 through 609 of ERISA or as disclosed on SCHEDULE
5.1(m), Section 4980(B) of the Code and applicable state law, neither the
Borrower nor any of its Subsidiaries has made any oral or written commitments to
provide post-employment health or life insurance coverage with respect to any
former or current employee. The Borrower, its Subsidiaries and their respective
ERISA Affiliates have properly classified individuals providing services to the
Borrower or any of its Subsidiaries or any of their respective ERISA Affiliates
as employees and
70
non-employees, except to the extent that a misclassification would not result in
a Materially Adverse Effect.
(n) PATENTS, TRADEMARKS, ETC. SCHEDULE 5.1(n) attached hereto
sets forth all registered trademarks and pending applications for trademarks of
each of the Rainbow Companies. Except as disclosed on SCHEDULE 5.1(n) attached
hereto (as amended by the Borrower upon written notice to the Lenders from time
to time, together with, if necessary, an amendment to the Trademark Security
Agreement reflecting the addition of any new trademarks or trademark
applications), each of the Rainbow Companies owns, possesses or has the right to
use all licenses and rights to all patents, trademarks, trademark rights, trade
names, trade name rights, service marks, and copyrights, and rights with respect
thereto, necessary to conduct its business in all material respects as now
conducted, without known conflict with any patent, trademark, trade name,
service xxxx, license or copyright of any other Person, and in each case, with
respect to patents, trademarks, trademark rights, trade names, trade name and
copyrights and licenses with respect thereto owned by the Rainbow Companies,
subject to no mortgage, pledge, lien, lease, encumbrance, charge, security
interest, title retention agreement or option other than as otherwise permitted
hereunder. Except to the extent that there is not likely to be a Materially
Adverse Effect resulting from such ineffectiveness or non-compliance, all such
licenses and rights with respect to patents, trademarks, trademark rights, trade
names, trade name rights, service marks and copyrights are in full force and
effect, and to the extent applicable, each of the Rainbow Companies is in full
compliance in all material respects with all of the provisions thereof. Except
as set forth on SCHEDULE 5.1(n) attached hereto (as amended by the Borrower upon
written notice to the Lenders from time to time), no such patent, trademark,
trademark rights, trade names, trade name rights, service marks, copyrights or
licenses is subject to any pending or, to the best of the Borrower's knowledge,
threatened attack or revocation. Except as set forth on SCHEDULE 5.1(n) attached
hereto, (i) none of the Rainbow Companies owns any patents or material
registered copyrights and (ii) the business of the Rainbow Companies is not
subject to any license issued by the FCC.
(o) COMPLIANCE WITH LAW; ABSENCE OF DEFAULT. Each of the
Rainbow Companies is in compliance with all Applicable Laws the non-compliance
with which is likely to have a Materially Adverse Effect and with all of the
provisions of its articles or certificate of incorporation and by-laws, or other
governing documents, as applicable, which would adversely affect any Rainbow
Company's ability to perform the Obligations, and no event has occurred or has
failed to occur which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes (i) a Default or (ii) a default by any of
the Rainbow Companies under any other indenture, agreement, or other instrument,
or under any Material MSO Agreement or Material Film Rights Agreement, or any
judgment, decree, or order to which any of the Rainbow Companies is a party or
by which any of the Rainbow Companies, or any of their respective properties,
may be bound, which default, judgment, decree or order could reasonably be
considered to have a Materially Adverse Effect.
71
(p) CASUALTIES; TAKING OF PROPERTIES, ETC. Since the date of
the most recent audited financial statements provided to the Credit Parties by
the Borrower, neither the business nor the properties of any of the Rainbow
Companies has been materially and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of property or cancellation of
contracts, permits or concessions by any domestic or foreign government or any
agency thereof, riot, activities of armed forces, or acts of God or of any
public enemy.
(q) ACCURACY AND COMPLETENESS OF INFORMATION. None of the
financial statements or any written statements delivered to any of the Credit
Parties pursuant to this Agreement contains, as at the date of delivery thereof,
any untrue statement of material fact nor do such financial statements, and such
written statements, taken as a whole, omit to state a material fact or any fact
necessary to make the statements contained therein not misleading. As of the
Agreement Date and as supplemented by the Borrower from time to time pursuant to
Section 7.4(f), SCHEDULE 5.1(q) attached hereto sets forth certain summary
information with respect to each Material MSO Agreement and each Material Film
Rights Agreement to which any of the Rainbow Companies is a party.
(r) COMPLIANCE WITH REGULATIONS U AND X. None of the Rainbow
Companies is engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying, and the
Borrower does not own or presently intend to acquire, any "margin security" or
"margin stock" as defined in Regulations U and X (12 C.F.R. Parts 221 and 224)
of the Board of Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the Loans will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which would constitute this
transaction a "purpose credit" within the meaning of said Regulations U and X.
Neither the Borrower nor any bank acting on its behalf has taken or will take
any action which would cause this Agreement or the Notes to violate Regulation U
or X or any other regulation of the Board of Governors of the Federal Reserve
System or to violate the Securities Exchange Act of 1934. If so requested by the
Administrative Agent, the Borrower will furnish the Administrative Agent with
(i) a statement or statements in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U of said Board of Governors and (ii)
other documents evidencing its compliance with the margin regulations,
including, without limitation, an opinion of counsel in form and substance
reasonably satisfactory to the Lenders.
(s) SOLVENCY. The Borrower is, and each of the Rainbow
Partners is, Solvent, and after giving effect to the transactions contemplated
hereby and by the Loan Documents the Borrower will be, and each of the Rainbow
Partners will be, Solvent.
72
(t) BROKER'S OR FINDER'S COMMISSIONS. No broker's or finder's
fee or commission will be payable with respect to the consummation of the
transactions contemplated by this Agreement and the other Loan Documents, and no
other similar fees or commissions will be payable by the Borrower for any other
services rendered to the Borrower ancillary to the transactions contemplated
herein.
(u) BUSINESS. The Borrower is a holding company whose assets
consist of the equity interests of the Guarantors, the MGM Companies and the
Unrestricted Subsidiaries. The business of each of the Guarantors includes
either acting as a holding company whose assets consist of the equity interests
of its Subsidiaries or producing and acquiring various types of programming and
distributing such programming to cable and other non-broadcast delivery systems
and activities directly related thereto.
(v) NAME OF BORROWER. Except as set forth on SCHEDULE 5.1(v)
attached hereto, none of the Rainbow Companies has (i) changed its name within
the five (5) year period immediately preceding the Agreement Date or (ii)
transacted business under any other name or trade name or acquired any assets
except for valid consideration.
(w) INVESTMENT COMPANY ACT. None of the Rainbow Companies is
required to register under the provisions of the Investment Company Act of 1940,
as amended, and neither the entering into or performance by the Borrower of this
Agreement nor the making of the Loans violates any provision of such Act or
requires any consent, approval, or authorization of, or registration with, any
governmental or public body or authority pursuant to any of the provisions of
such Act.
Section 5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct in all material respects, at and as of the
Agreement Date and on the date of each Advance, except to the extent any
representation or warranty is made solely as of the Agreement Date in accordance
with the terms hereof. All representations and warranties made under this
Agreement shall survive, and not be waived by, the execution hereof by the
Credit Parties, any investigation or inquiry by any of the Credit Parties or the
making of any Advance under this Agreement.
ARTICLE 6 - GENERAL COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Majority Lenders
shall otherwise consent in writing:
Section 6.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. The
Borrower will, and will cause each of the Guarantors to, (a) preserve and
maintain their respective existence, rights, licenses and privileges in their
respective jurisdictions of organization
73
and (b) qualify and remain qualified and authorized to do business in each
jurisdiction in which such qualification is necessary in view of the character
of their respective properties or in which the nature of their respective
businesses requires such qualification or authorization, except for
qualifications and authorizations, the lack of which, singly or in the
aggregate, has not had and is not likely to have a Materially Adverse Effect;
PROVIDED, HOWEVER, any of the Rainbow Companies may liquidate or dissolve, or
cause the liquidation or dissolution of, any Subsidiary of the Borrower that
holds no assets and conducts no business activities.
Section 6.2 COMPLIANCE WITH APPLICABLE LAW. The Borrower will comply,
and will cause each of the Guarantors to comply, with the requirements of all
Applicable Law, except where failure to comply has not had and is not likely to
have a Materially Adverse Effect.
Section 6.3 MAINTENANCE OF PROPERTIES. The Borrower will maintain, and
will cause each of the Guarantors to maintain, or cause to be maintained in the
ordinary course of business in good repair, working order, and condition all
properties necessary in their respective businesses (whether owned or held under
lease).
Section 6.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower (or
CVC on the Borrower's behalf) will maintain, and will cause each of the
Guarantors to maintain, or will maintain on their behalf, a system of accounting
established and administered in accordance with GAAP, and will (or CVC on behalf
of the Borrower and the Guarantors will), keep and cause each of the Guarantors
to keep adequate records and books of account in which complete entries will be
made in accordance with such accounting principles consistently applied and
reflecting all transactions required to be reflected by such accounting
principles.
Section 6.5 INSURANCE. The Borrower (or CVC on the Borrower's behalf)
will, and will cause each of the Guarantors to:
(a) maintain or cause to be maintained (i) insurance on the
assets and properties and on its operations including, but not limited to,
public liability, business interruption and fidelity coverage insurance, from
responsible insurance companies in such amounts and against such risks as shall
be reasonably acceptable to the Majority Lenders and (ii) maintain insurance
coverage comparable to that in place on the Agreement Date, taking into account
the growth of their respective businesses and operations after the Agreement
Date; and
(b) maintain insurance coverage with respect to the
Collateral, comparable to that in place on the Agreement Date (taking into
account any increase in value with respect to the Collateral) insuring against
loss or damage by fire, theft, burglary, pilferage, loss in transit, explosions
and hazards insured against by extended coverage, all premiums thereon to be
paid by the Borrower; and
74
(c) require that each insurance policy on its assets and
properties name the Administrative Agent, as administrative agent for the Credit
Parties, as additional insured and loss payee to the extent of the Obligations,
and provide for at least thirty (30) days' prior written notice to the
Administrative Agent of any default under, termination of or proposed
cancellation or nonrenewal of, such policy.
Section 6.6 PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments, and governmental charges or levies imposed upon them or upon
their respective incomes or profits or upon any properties belonging to them
prior to the date on which penalties attach thereto, and all lawful claims for
labor, materials, and supplies which, if unpaid, would become a Lien other than
a Permitted Lien upon any of their respective properties; except that no such
tax, assessment, charge, levy, or claim need be paid which is being contested in
good faith by appropriate proceedings and for which adequate reserves shall have
been set aside on the appropriate books, but only so long as such tax,
assessment, charge, levy, or claim does not become a Lien or charge other than a
Permitted Lien and no foreclosure, distraint, sale, or similar proceedings shall
have been commenced and remain unstayed for a period of thirty (30) days after
such commencement.
Section 6.7 VISITS AND INSPECTIONS. The Borrower will permit, and will
cause each of the Guarantors to permit, representatives of (a) prior to a
Default, the Arrangers upon three (3) Business Days written notice to the
Borrower, and (b) subsequent to a Default, each Credit Party, upon notice prior
to 10:00 a.m. (New York time) on such date, to (a) visit and inspect the
properties of each of the Rainbow Companies during normal business hours, (b)
inspect and make extracts from and copies of their respective books and records,
and (c) discuss with their respective principal officers its businesses, assets,
liabilities, financial positions, results of operations, and business prospects
relating to each of the Rainbow Companies.
Section 6.8 PAYMENT OF INDEBTEDNESS. The Borrower will pay, and will
cause each of the Guarantors to pay, subject to any provisions therein regarding
subordination, any and all of their respective Indebtedness For Money Borrowed
when and as the same becomes due, other than amounts duly disputed in good
faith, the non-payment of which is not likely to have a Materially Adverse
Effect.
Section 6.9 USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans solely as provided in Section 2.1(e).
Section 6.10 ERISA. The Borrower shall, and shall cause each of its
Subsidiaries to, at all times make, or cause to be made, prompt payment of all
material contributions required under the terms of their Plans and to meet the
minimum funding standards set forth in ERISA with respect to such Plans. The
Borrower shall maintain, and shall cause each of its Subsidiaries to maintain,
each of their respective Plans in
75
material compliance with the terms of such Plans and the applicable provisions
of ERISA and the Code.
Section 6.11 FURTHER ASSURANCES. The Borrower will promptly cure, or
cause to be cured, defects in the creation and issuance of any Notes and the
execution and delivery of the Loan Documents (including, without limitation,
this Agreement), resulting from any act or failure to act by any of the Rainbow
Companies or any employee or officer thereof. The Borrower at its expense will
promptly execute and deliver to the Credit Parties, or cause to be executed and
delivered to the Credit Parties, all such other and further documents,
agreements, and instruments in compliance with or for the accomplishment of the
covenants and agreements of the Borrower in the Loan Documents (including,
without limitation, this Agreement), or to correct any omissions in the Loan
Documents, or more fully to state the obligations set out herein or in any of
the Loan Documents, or to obtain any consents, all as may be necessary or
appropriate in connection therewith and as may be reasonably requested.
Section 6.12 BROKER'S CLAIMS. The Borrower hereby indemnifies and
agrees to hold each of the Credit Parties harmless from and against any and all
losses, liabilities, damages, costs and expenses which may be suffered or
incurred by the Credit Parties, or any of them, in respect of any claim, suit,
action or cause of action now or hereafter asserted by a broker or any Person
acting in a similar capacity arising from or in connection with the execution
and delivery of this Agreement or any other Loan Document or the consummation of
the transactions contemplated herein or therein.
Section 6.13 INDEMNITY. Each of the Rainbow Companies, jointly and
severally, will indemnify and hold harmless each of the Credit Parties and each
of their respective Lender Affiliates, employees, representatives, officers and
directors (collectively, the "INDEMNIFIED PARTIES") from and against any and all
claims, liabilities, losses, damages, actions, and demands by any party (other
than with respect to any claims, actions or demands made by other such
indemnified parties or any liabilities, losses or damages caused thereby)
against such Credit Party, resulting from any breach or alleged breach by any of
the Rainbow Companies of any representation or warranty made hereunder, relating
to or arising of the issuance of any Letter of Credit, or otherwise arising out
of the Commitments or the making, administration or enforcement of the Loan
Documents and the Loans, unless, with respect to any of the above, such Credit
Party is finally judicially determined to have acted or failed to act with gross
negligence or willful misconduct.
Section 6.14 COVENANTS REGARDING FORMATION OF SUBSIDIARIES,
INVESTMENTS AND ACQUISITIONS. In connection with the consummation of any
Acquisition or any Investment made by any of the Rainbow Companies (including,
without limitation, any Acquisition of, or additional Investment in, any MGM
Company), or the formation of any new Subsidiary (which, consistent with the
limitations set forth in the definition of "Subsidiary," shall not include an
Unrestricted Subsidiary for purposes of
76
this Section) of any of the Rainbow Companies, as soon as available and in any
event on or before the effective date thereof, the Borrower will, and will cause
each of the Guarantors to, provide to the Administrative Agent the following
(all of which shall be in such form and substance as shall be acceptable to the
Arrangers):
(a) a duly executed joinder and supplement to this Agreement,
substantially in the form of EXHIBIT T attached hereto (each a "GUARANTEE
SUPPLEMENT"), pursuant to which each new Subsidiary shall agree to join as a
Guarantor of the Obligations under Article 3 hereof;
(b) a duly executed supplement to the Subsidiary Security
Agreement for each new Guarantor, together with appropriate UCC-1 financing
statement forms;
(c) a loan certificate for each new Guarantor, substantially
in the form of EXHIBIT S attached hereto, together with appropriate attachments
thereto;
(d) in the case of any new Guarantor holding any issued and
outstanding shares of capital stock (or other instruments or securities
evidencing ownership) of any other Rainbow Company, a duly executed supplement
to the Subsidiary Pledge Agreement, pursuant to which such new Guarantor shall
pledge to the Administrative Agent all of such capital stock (or other
instruments or securities evidencing ownership) held by it, whether now owned or
hereafter acquired;
(e) a duly executed amendment to the Borrower Pledge Agreement
or the Subsidiary Pledge Agreement, as applicable, pursuant to which (i) all of
the issued and outstanding capital stock (or other instruments or securities
evidencing ownership) of each new Guarantor shall be pledged to the
Administrative Agent as additional Collateral for the Obligations, and (ii) all
shares of capital stock (or other instruments or securities evidencing
ownership) with respect to any Investment (including, without limitation, any
Investment made pursuant to Section 8.2(c)(i) hereof, but excluding any equity
interests in any of the MGM Companies or any of the Unrestricted Subsidiaries)
beneficially owned or held by any of the Rainbow Companies shall be pledged to
the Administrative Agent as additional Collateral for the Obligations, but only
to the extent (except with respect to any Investment made pursuant to Section
8.2(c)(i) hereof) that the pledge of any such shares or other interests in or
with respect to any Company that is not wholly-owned directly or indirectly by
the Borrower will not (A) violate the Constituent Documents applicable to such
Company (and, if the pledge of any such shares or other interests will violate
any of such Constituent Documents, such shares or other interests shall be held
by the Rainbow Companies subject to the terms and conditions of this Agreement
and the other Loan Documents) and (B) require the consent of any unaffiliated
third party (which consent the Borrower is unable to obtain after taking
reasonable steps to do so), and in the case of the foregoing clauses (i) and
(ii), together with all original securities certificates, duly executed
securities powers and appropriate UCC-1 financing statement forms; and
77
(f) all other documentation, including, without limitation,
(i) an amendment to the Trademark Security Agreement covering any additional
registered trademarks or trademark applications owned by any of the Rainbow
Companies, (ii) to the extent reasonably available, financial information with
respect to the designation of any new MGM Operating Company for the most recent
period ending immediately prior to the date of such designation, and other
financial information, to the extent available, which in the reasonable opinion
of the Arrangers and the Majority Lenders is appropriate with respect to such
designation of a new MGM Operating Company to confirm compliance with the terms
and conditions of this Agreement, and (iii) to the extent reasonably requested
by the Administrative Agent one or more opinions of counsel satisfactory to the
Administrative Agent which in the reasonable opinion of the Administrative Agent
is appropriate with respect to the Acquisition or formation of any new Guarantor
or the addition of any new Collateral as security for the Obligations.
To the extent that any MGM Company shall become wholly-owned (whether
directly or indirectly) by the Borrower at any time during the term of this
Agreement, such MGM Company shall thereupon cease to constitute a MGM Company
for purposes of this Agreement and all of the terms and conditions of this
Agreement and the other Loan Documents applicable to new Subsidiaries of the
Borrower shall thereafter be applicable to such former MGM Company, including,
without limitation, the obligation of any new Subsidiary of the Borrower to
become a Guarantor and to provide additional Collateral as security for the
Obligations (subject, in any case, to the Indebtedness and Liens outstanding in
respect of the AMC Loan Agreement). To the extent that any stock or other equity
interests in any MuchMusic Company shall be sold, transferred or otherwise
disposed of pursuant to Section 8.5(b) hereof, or any additional stock or other
equity interests in any MuchMusic Company shall be issued pursuant to Section
8.5(c) hereof, the Administrative Agent shall, upon the request of the Borrower,
release the Guarantee of such MuchMusic Company and the Lien of the
Administrative Agent in the properties and assets of such MuchMusic Company,
provided that (x) notwithstanding any provision to the contrary contained in
this Agreement and the other Loan Documents, all of the stock or other equity
interests in such MuchMusic Company which are owned by any Rainbow Company shall
continue to be pledged as collateral security for the Obligations pursuant to
the Borrower Pledge Agreement or the Subsidiary Pledge Agreement, as applicable,
(y) neither the Constituent Documents of such MuchMusic Company nor any
agreement between any Rainbow Company and the purchaser or investor, as
applicable, in such MuchMusic Company shall contain any unreasonable
restrictions, in the reasonable determination of the Arrangers, on the
Administrative Agent's ability to realize upon such Collateral, and (z) upon the
release of the Guarantee of such MuchMusic Company and the Lien of the
Administrative Agent in the properties and assets of such MuchMusic Company,
such MuchMusic Company shall constitute an Unrestricted Subsidiary and shall
cease to be a Rainbow Company for all purposes under this Agreement and the
other Loan Documents. Any document, agreement or instrument executed or issued
pursuant to this Section 6.14 shall be and constitute a "Loan Document" for
purposes of this Agreement.
78
Section 6.15 INTEREST RATE HEDGING.
(a) So long as the Total Leverage Ratio is greater than 3.25
to 1.00, the Borrower shall maintain one or more Interest Hedge Agreements which
fix or place a limit on the Borrower's interest obligations at interest rates
reasonably acceptable to the Arrangers such that, at all times, not less than
forty percent (40%) of Indebtedness For Money Borrowed of the Rainbow Companies
(excluding any net obligations in respect of Interest Hedge Agreements) shall be
hedged or at a fixed rate basis. The Borrower shall enter into such Interest
Hedge Agreements as required by this Section 6.15 within ninety (90) days after
the delivery of the initial performance certificate pursuant to Section 7.3
hereof indicating the Total Leverage Ratio exceeds 3.25 to 1.00.
(b) All obligations of the Borrower to the Credit Parties, or
any of them, or any of their respective Lender Affiliates, pursuant to any
Interest Hedge Agreement involving notional amounts which in the aggregate do
not exceed the Commitments shall rank PARI PASSU with all other Obligations and
shall be entitled to all benefits of the Guaranties provided in Article 3 and be
secured by the Security Documents.
ARTICLE 7 - INFORMATION COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Lenders shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each of the Credit Parties at their respective offices:
Section 7.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. On or
before each applicable Financial Statements Delivery Date, with respect to each
fiscal quarter of the Borrower, the following:
(a) a copy of the unaudited consolidated balance sheets, of
the Rainbow Group as at the end of the quarter then ended, and the related
unaudited consolidated statements of income, retained earnings and cash flows
for the Rainbow Group for such quarter and for the elapsed portion of the year
ended with the last day of such quarter;
(b) a copy of the unaudited consolidated balance sheets, of
the Rainbow Companies as at the end of the quarter then ended, and the related
unaudited consolidated statements of income, retained earnings and cash flows
for the Rainbow Companies for such quarter and for the elapsed portion of the
year ended with the last day of such quarter; and
(c) a copy of the unaudited combined balance sheet of the MGM
Companies as at the end of the quarter then ended, and the related unaudited
79
combined statements of income, retained earnings and cash flows for the MGM
Companies, setting forth in the case of the statements of income and retained
earnings the financial performance of the MGM Operating Companies by footnote,
for such quarter and for the elapsed portion of the year ended with the last day
of such quarter.
All of the foregoing financial statements shall set forth in comparative form
such figures for the same period for the prior fiscal year (except with respect
to the statements of cash flows of the Rainbow Companies for the fiscal year
ended December 31, 2002) and shall be certified by an Authorized Signatory of
the Borrower to, in his or her opinion, present fairly, in accordance with GAAP,
the consolidated financial position of the Rainbow Group and the Rainbow
Companies, as applicable, and the combined financial position of the MGM
Companies, in each case as at the end of such period, and the results of
operations for such period, and for the elapsed portion of the year ended with
the last day of such period, subject only to normal year-end adjustments and
except for the effect of not consolidating certain Unrestricted Subsidiaries in
the financial statements of the Rainbow Companies.
Section 7.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE
OF NO DEFAULT. On or before each applicable Financial Statements Delivery Date,
with respect to each fiscal year of the Borrower, the following:
(a) a copy of the audited consolidated balance sheets, and the
related audited consolidated statements of income, retained earnings and cash
flows, of the Rainbow Group, setting forth the financial information of the
Rainbow Group as at the end of the fiscal year then ended;
(b) a copy of the audited consolidated balance sheets, and the
related audited consolidated statements of income, retained earnings and cash
flows, of the Rainbow Companies, setting forth the financial information of the
Rainbow Companies as at the end of the fiscal year then ended; and
(c) a copy of (i) the audited combined balance sheet, and the
related audited combined statements of income, retained earnings and cash flows,
of the MGM Companies, setting forth in the case of the statements of income and
retained earnings the financial performance of the MGM Operating Companies by
footnote, as at the end of the fiscal year then ended, and (ii) the unaudited
combining balance sheet, and the related unaudited combining statements of
income, retained earnings and cash flows, of the MGM Companies, as at the end of
the fiscal year then ended.
All of the foregoing financial statements shall set forth in comparative form
such figures for the same period for the prior fiscal year and, with respect to
the audited financial statements, shall be accompanied by an opinion of KPMG
Peat Marwick or a firm of independent certified public accountants of recognized
standing selected by the Borrower and satisfactory to the Majority Lenders,
together with a statement of such accountants certifying that no Default or
Event of Default, including, without limitation, any Default
80
under Sections 8.8, 8.9 and 8.10 hereof, was detected during the examination of
the Rainbow Group or the MGM Companies and that such accountants have authorized
the Borrower to deliver such financial statements and opinion thereon to the
Credit Parties pursuant to this Agreement.
Section 7.3 PERFORMANCE CERTIFICATES. Together with the delivery of
the financial statements pursuant to Section 7.1 hereof, a certificate of an
Authorized Signatory of the Borrower, in substantially the form of EXHIBIT U
attached hereto:
(a) setting forth as at the end of such quarter or year, as
the case may be, the arithmetical calculations required to establish (i) the
Applicable Margin and (ii) whether or not the Borrower was in compliance with
the requirements of the Financial Covenants;
(b) stating that, to the best of his or her knowledge, no
Default or Event of Default has occurred as at the end of such quarter or year,
as the case may be, or, if a Default or an Event of Default has occurred,
disclosing each such Default or Event of Default and its nature, when it
occurred, whether it is continuing, and the steps being taken by the Borrower
with respect to such Default or Event of Default;
(c) setting forth a list updating the information set forth on
SCHEDULE 5.1(c)-1 with respect to the Rainbow Companies, on SCHEDULE 5.1(c)-2
with respect to the MGM Companies and on SCHEDULE 5.1(c)-3 with respect to the
Unrestricted Subsidiaries, in each case to the extent that the Borrower shall
have formed or acquired any new Subsidiaries or designated any additional
Unrestricted Subsidiaries during such quarter and to the extent that any
additional MGM Companies have been formed or acquired during such quarter;
(d) setting forth a list and description of all Investments,
Restricted Payments and Restricted Purchases made by the Rainbow Companies
during such quarter; and
(e) setting forth a list and description of, together with
applicable financial statements, if available, for any designation of any new
MGM Operating Company during the period for which such performance certificate
is being given.
81
Section 7.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by its independent public accountants regarding
any of the Rainbow Companies, including, without limitation, any management
report prepared in connection with the annual audit referred to in Section 7.2
hereof.
(b) Within sixty (60) days after the end of each fiscal year
of the Borrower, the annual budget for the Rainbow Companies and an updated
schedule of Investments and a statement of anticipated sources and uses of funds
for the Rainbow Group, in each case for the current fiscal year.
(c) Promptly after the sending thereof, copies of all material
statements, reports and other financial information relating to the Rainbow
Companies that is sent to any of the shareholders of the Borrower or CVC.
(d) Promptly after the preparation of the same, copies of all
material reports or financial information filed with any governmental agency,
department, bureau, division or other governmental authority or regulatory body,
or evidencing facts or containing information which could have a Materially
Adverse Effect.
(e) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents, or further information
regarding the business, assets, liabilities, financial position, projections or
results of operations of any of the Rainbow Companies as the Arrangers or the
Majority Lenders may reasonably request.
(f) At the time audited financial statements are required to
be provided under Section 7.2 hereof, summary information of the type set forth
in SCHEDULE 5.1(q) with respect to each Material MSO Agreement and each Material
Film Rights Agreement then in effect to which any of Rainbow Companies is a
party (noting any Material MSO Agreements or Material Film Rights Agreements
that have been either added or deleted with respect to the prior year).
Section 7.5 NOTICE OF LITIGATION AND OTHER MATTERS. Prompt notice of
the following events as to which the Borrower has received notice or otherwise
become aware thereof:
(a) The commencement of all material proceedings and
investigations by or before any governmental body and all actions and
proceedings in any court or before any arbitrator (i) against or, (ii) to the
extent known to the Borrower, in any other way relating adversely and directly
to any of the Rainbow Companies, or any of their respective properties, assets
or businesses, or which calls into question the validity of this Agreement or
any other Loan Document, except where the adverse
82
outcome of such proceeding or investigation is not likely to have a Materially
Adverse Effect;
(b) Any material adverse change with respect to the business,
assets, liabilities, financial position, or results of operations of any of the
Rainbow Companies, other than changes in the ordinary course of business which
have not had and are not likely to have a Materially Adverse Effect;
(c) Any Default or Event of Default, or any default by any of
the Rainbow Companies under any agreement (other than this Agreement) to which
any of the Rainbow Companies is party or by which any of their respective
properties is bound, or the occurrence of any other event which could have a
Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto; and
(d) The occurrence of any Reportable Event or "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) which is not statutorily or administratively exempt under Sections 407
or 408 of ERISA or Section 4975 of the Code with respect to any Plan of the
Borrower or any of its Subsidiaries or any of their respective ERISA Affiliates
or the institution or threatened institution by the PBGC of proceedings under
Section 4042 of ERISA to terminate or to partially terminate any such Plan or
the commencement or, to the Borrower's knowledge, threatened commencement of any
litigation regarding any such Plan or naming it or the trustee of any such Plan
with respect to such Plan.
ARTICLE 8 - NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Lenders shall
otherwise give their prior consent in writing:
Section 8.1 INDEBTEDNESS. The Borrower shall not, and shall not permit
any of the Guarantors to, create, assume, incur or otherwise become or remain
obligated in respect of, or permit to be outstanding any Indebtedness except:
(a) Indebtedness under this Agreement and the other Loan
Documents (including, without limitation, any Incremental Facility
Indebtedness);
(b) accounts payable, accrued expenses, customer advance
payments and other current liabilities (other than Indebtedness For Money
Borrowed) incurred in the ordinary course of business;
83
(c) Capitalized Lease Obligations of the Rainbow Companies in
an aggregate amount over the remainder of the term of such obligations not to
exceed $30,000,000 at any one time outstanding;
(d) Indebtedness with respect to Interest Hedge Agreements
having aggregate notional amounts not to exceed the Commitments, provided that
the term of any such Interest Hedge Agreement does not extend beyond the Final
Maturity Date;
(e) intercompany Indebtedness among any of the Rainbow
Companies;
(f) any Indebtedness issued in connection with an Authorized
Debt Issuance;
(g) any unsecured intercompany Indebtedness between the
Borrower and any MuchMusic Company issued to fund any prepayment of the Loans
required pursuant to Section 2.6(a) or Section 2.6(c) hereof with respect to
such MuchMusic Company, provided that such Indebtedness shall be subordinated to
the Obligations on terms and conditions the same in all material respects to the
subordination provisions set forth in the Subordination of Intercompany
Obligations Agreement; and
(h) any Accrued Tax Liabilities.
Section 8.2 INVESTMENTS. The Borrower shall not and, shall not permit
any of the Guarantors to, make any Investment, except that:
(a) the Borrower may purchase or otherwise acquire and own
Cash Equivalents;
(b) any of the Rainbow Companies may make Investments in any
of the other Rainbow Companies;
(c) so long as no Default or Event of Default then exists or
would be caused thereby and in each case subject to compliance with Section 6.14
hereof, the Rainbow Companies may do the following:
(i) make cash Investments (other than Investments in
any of the MGM Companies or in any of the GE Subsidiaries) in an aggregate
amount not to exceed during any year, together with the amount of any
Acquisitions made during such year under Section 8.5(d)(v)(B) hereof, the
Available Basket Amount applicable to such period; PROVIDED, HOWEVER, the
aggregate amount of Investments made pursuant to this Section 8.2(c)(i) in the
MSG Companies, R/L DBS Company and any other Company engaged primarily in the
direct broadcast distribution business shall not exceed $75,000,000 during the
term of this Agreement; PROVIDED FURTHER, HOWEVER, the aggregate
84
amount of Investments made pursuant to this Section 8.2(c)(i), directly or
indirectly, in CVC and CSC Holdings, together with (I) the amount of any
Investments in CVC and CSC Holdings made pursuant to Section 8.2(c)(ii) below,
(II) the amount of any Restricted Payments to CSC Holdings made pursuant to
clauses (vi) and (vii) of Sections 8.7(c) hereof, and (III) in the event the
stock or other equity interests in R/L DBS Company shall be distributed to CSC
Holdings pursuant to Section 8.7(c)(iv) hereof, the aggregate amount of
Investments made pursuant to this Section 8.2(c)(i) in R/L DBS Company on or
before the date of such distribution, shall not at any time exceed $300,000,000
during the term of this Agreement;
(ii) subject only to the limitation on Investments in
CVC and CSC Holdings set forth in the second proviso of the foregoing clause
(c)(i), make cash Investments (other than Investments in any of the GE
Subsidiaries) funded by Net Cash Proceeds received in connection with (A) the
issuance of any New Affiliated Equity or (B) any Authorized Debt Issuance, in
each case to the extent such Net Cash Proceeds are not used by the Rainbow
Companies for any other purpose;
(iii) make Investments (other than Investments in any
of the GE Subsidiaries) made solely using capital stock or other securities of
CVC;
(iv) make Investments in any of the GE Subsidiaries
funded by Net Cash Proceeds received in connection with the issuance of any New
Affiliated Equity for the sole purpose of making, and in amounts not to exceed
the amounts of, any payments due with respect to the GE Stock Monetization
Transaction; and
(v) after the sale, transfer or other disposition of
any stock or other equity interests in any MuchMusic Company and the release of
the Guarantee of such MuchMusic Company and the Administrative Agent's Lien in
the properties and assets of such MuchMusic Company, but only so long as the
Borrower shall continue to own, directly or indirectly, a portion of the stock
or other equity interests of such MuchMusic Company, make (A) cash Investments
in such MuchMusic Company in an aggregate amount not to exceed one hundred
percent (100%) of the Net Cash Proceeds received in connection with such sale,
transfer or other disposition, and (B) non-cash Investments in such MuchMusic
Company consisting of any non-cash consideration received by any Rainbow Company
in connection with the sale, transfer or other disposition of any stock or other
equity interests of such MuchMusic Company, in each case promptly following the
consummation of such sale, transfer or other disposition; and
(d) so long as no Default or Event of Default then exists or
would be caused thereby, the Rainbow Companies may make non-cash Investments
(consisting of equity interests or other assets) in any of the MGM Companies
subject to the prior approval of the Arrangers, and the Administrative Agent may
release any Guaranties and Collateral related to any such Investment upon the
Borrower's request.
85
Section 8.3 LIMITATION ON LIENS. The Borrower shall not, and shall not
permit any of the Guarantors to, create, assume, incur or permit to exist or to
be created, assumed, incurred or permitted to exist, directly or indirectly, any
Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens. Except for the agreement set forth in the
foregoing sentence, none of the Rainbow Companies shall agree with any other
Person not to xxxxx x Xxxx on any material portion of their respective assets to
secure Indebtedness.
Section 8.4 AMENDMENT AND WAIVER. The Borrower shall not, and shall
not permit any of the Guarantors to, enter into any amendment, or agree to or
accept any waiver, (a) which would materially adversely affect the rights of the
Borrower and the Credit Parties, or any of them, of any of the provisions of (i)
the Constituent Documents of any of the Rainbow Companies, (ii) the Constituent
Documents of any of the MGM Operating Companies and (iii) any Material Affiliate
Contracts, (b) which would have a Materially Adverse Effect, of any of the
provisions of any agreement between any of the Rainbow Companies, on the one
hand, and any of its Affiliates or any of the MGM Companies, on the other hand,
and (c) of any of the provisions of any of the Material Affiliate Contracts
which would (i) accelerate the payment of amounts due thereunder by more than
one (1) year and (ii) cause the aggregate amount of all accelerated payments
thereunder (together with any prior accelerated payments) to exceed $15,000,000.
Section 8.5 LIQUIDATION; DISPOSITION OR ACQUISITION OF ASSETS.
(a) The Borrower shall not, and shall not permit any of the
Guarantors to, at any time, (i) liquidate or dissolve itself (or suffer any
liquidation or dissolution) or otherwise wind up, or (ii) sell, lease, abandon,
transfer, exchange or otherwise dispose of any assets (not constituting capital
stock, partnership interests or other equity interests) or business in excess of
$5,000,000 in the aggregate during the term of this Agreement, or (iii) enter
into any merger or consolidation, except, in each case, for (x) sales,
dispositions, mergers, consolidations or exchanges by any Guarantor of its
businesses, assets or rights to or with another Rainbow Company, (y) sales or
dispositions in the ordinary course of business by any of the Rainbow Companies
of obsolete or worn-out property or other property reasonably determined by the
management of the disposing Company to be not used or useful in its business,
and (z) Investments in any of the MGM Companies permitted by Section 8.2(d).
(b) The Borrower shall not, and shall not permit any of the
Guarantors, RRH I or RRH II to, sell, lease, abandon, transfer, exchange or
otherwise dispose of any assets constituting capital stock, partnership
interests or other equity interests of any of RRH I, RRH II, RRH, RAH, RNSH, any
member of the Sterling Digital Group or any other Company constituting a
Material Subsidiary, unless in any such case the Arrangers shall have provided
their prior written consent to such transaction, except that (i) the Borrower
may dispose of its interest in R/L DBS Company, and (ii) the Rainbow Companies
may dispose of all or a portion of their equity
86
interests in each of the MuchMusic Companies to a non-Affiliate, subject to
compliance with Section 2.6(c) and Section 6.14 hereof, but only to the extent
that upon consummation of any such transaction the applicable MuchMusic
Companies shall cease to be Rainbow Companies for purposes of this Agreement, in
each case without the consent of the Arrangers.
(c) The Borrower shall not, and shall not permit any of the
Guarantors to, at any time, issue any capital stock, partnership interests or
other equity interests in any of the Rainbow Companies, except for (i) the
issuance of capital stock, partnership interests or other equity interests in
the Borrower in connection with the issuance of any New Affiliated Equity, (ii)
with the consent of the Arrangers and subject to compliance with Section 6.14
hereof, any MuchMusic Company may issue additional equity interests in itself to
a non-Affiliate, and (iii) notwithstanding the foregoing clause (ii), to the
extent that upon consummation of any such issuance the applicable MuchMusic
Company shall cease to be a Rainbow Company for purposes of this Agreement, such
MuchMusic Company may issue additional equity interest in itself to a
non-Affiliate subject to compliance with Section 2.6(a) and Section 6.14 hereof.
(d) The Borrower shall not, and shall not permit any of the
Guarantors to, at any time, acquire assets, property, stock or the business of
any other Person except for (i) Capital Expenditures in the ordinary course of
business of the applicable Rainbow Companies, (ii) purchases of assets in the
ordinary course of business of the applicable Rainbow Companies, (iii) Film
Rights Agreements, (iv) Permitted Investments, and (v) so long as no Default or
Event of Default then exists or would be caused thereby and subject to
compliance with Section 6.14 hereof, (A) Acquisitions consummated solely in
exchange for capital stock of CVC, (B) Acquisitions in an aggregate amount not
to exceed during any year, together with the amount of any Investments made
under Section 8.2(c)(i) hereof during such year, the Available Basket Amount
applicable to such period, and (C) Acquisitions funded by Net Cash Proceeds
received in connection with (I) the issuance of any New Affiliated Equity or
(II) any Authorized Debt Issuance, in each case to the extent such Net Cash
Proceeds are not used by the Rainbow Companies for any other purpose.
Section 8.6 LIMITATION ON GUARANTIES. The Borrower shall not, and
shall not permit any of the Guarantors to, at any time guarantee, or assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) under any Loan Document, (b)
obligations under agreements to indemnify Persons who have issued bid or
performance bonds or letters of credit issued in lieu of such bonds in the
ordinary course of business of such Rainbow Company securing performance by any
Rainbow Company of activities otherwise permissible hereunder, (c) a guaranty by
endorsement of negotiable instruments for collection in the ordinary course of
business, (d) the guaranty obligations of the Borrower arising in respect of the
Cubs Guaranty and the Sportsvision Guaranty, so long as (i) such obligations do
not exceed in the aggregate $450,000,000 at any time during the term of
87
this Agreement without the prior written consent of the Arrangers, (ii) such
obligations are unsecured, (iii) the terms of the Cubs Guaranty and the
Sportsvision Guaranty, and the programming rights agreements underlying such
Guaranties, do not provide for acceleration of the obligations thereunder, and
(iv) none of the terms of the Cubs Guaranty and the Sportsvision Guaranty, and
the programming rights agreements underlying such Guaranties, shall be amended
or modified during the term of this Agreement, without the prior written consent
of the Arrangers, if the effect of such amendment or modification would be to
increase the amount of the Borrower's obligations under either the Cubs Guaranty
or the Sportsvision Guaranty, (e) the Sterling Digital Guaranty, (f) Guaranties
constituting Investments permitted to be made pursuant to Section 8.2(c), and
(g) those Guaranties described on SCHEDULE 8.6 attached hereto (as such schedule
may be amended by the Borrower from time to time), undertaken in the ordinary
course of business of the Rainbow Companies, including, without limitation,
Guaranties issued for purposes of securing (i) programming or transponder
rights, (ii) production, sports team and product related arrangements, (iii)
affiliation agreements, (iv) advertising representation agreements, marketing
and service arrangements, or (v) real estate leases, and extensions,
replacements and modifications of the foregoing, PROVIDED that the aggregate
amount of all such Guaranties under this Section 8.6(g) at any time outstanding
does not exceed $25,000,000.
Section 8.7 RESTRICTED PAYMENTS AND PURCHASES. The Borrower shall not,
and shall not permit any of the Guarantors to, directly or indirectly, declare
or make any Restricted Payment or Restricted Purchase, except that (a) the
Guarantors may make Restricted Payments to the Borrower, (b) the Borrower may
make payments in respect of Employee Stock Incentive Expense, and (c) so long as
no Default or Event of Default then exists or would be caused thereby, the
Borrower may (i) pay to CVC and CSC Holdings amounts due in respect of the
Accrued Tax Liabilities under, and in accordance with, the Tax Sharing Policy,
(ii) make regularly scheduled payments of interest in respect of Indebtedness
outstanding in connection with an Authorized Debt Issuance, (iii) make
Restricted Payments, subject to the Subordination of Intercompany Obligations
Agreement, for reimbursement of services to the extent set forth the Services
Agreement, (iv) distribute the stock or other equity interests owned by the
Borrower in R/L DBS Company, or any Net Cash Proceeds received by the Borrower
in connection with any sale of R/L DBS Company, to CSC Holdings, (v) distribute
the stock or other equity interests owned by the Borrower in any MSG Company to
CSC Holdings, (vi) make cash distributions to CSC Holdings in an aggregate
amount not to exceed $75,000,000 during the term of this Agreement, and (vii)
make cash distributions to CSC Holdings funded by the Net Cash Proceeds received
in connection with any Authorized Debt Issuance concurrently with the closing of
such Authorized Debt Issuance to the extent such Net Cash Proceeds are not used
by the Rainbow Companies for any other purpose; PROVIDED, HOWEVER, the aggregate
amount of cash distributions made to CSC Holdings pursuant to the foregoing
clauses (vi) and (vii), together with (I) the aggregate amount of Investments
made in CVC and CSC Holdings pursuant to Section 8.2(c) hereof and (II) in the
event the stock or other equity interests in R/L DBS Company shall be
distributed to CSC
88
Holdings pursuant to the foregoing clause (iv), the aggregate amount of
Investments made pursuant to Section 8.2(c)(i) hereof in R/L DBS Company on or
before the date of such distribution, shall not at any time exceed $300,000,000
during the term of this Agreement.
Section 8.8 TOTAL LEVERAGE RATIO. The Borrower shall not permit, (a)
as of the end of any fiscal quarter or (b) as of the date of any Advance
increasing the Obligations hereunder, the Total Leverage Ratio (after giving
effect to such Advance, if applicable) to exceed the applicable ratio for
calculation dates during the periods set forth below:
Period Ratio
------ -----
Agreement Date through September 30, 2004 5.50 to 1.00
October 1, 2004 through March 31, 2005 5.25 to 1.00
April 1, 2005 through September 30, 2005 4.75 to 1.00
October 1, 2005 through March 31, 2006 4.50 to 1.00
April 1, 2006 and thereafter 4.25 to 1.00
Section 8.9 SENIOR LEVERAGE RATIO. The Borrower shall not permit, (a)
commencing on March 31, 2003, as of the end of any fiscal quarter, or (b) as of
the date of any Advance increasing the Obligations hereunder, the Senior
Leverage Ratio (after giving effect to such Advance, if applicable) to exceed
the applicable ratio for calculation dates during the periods set forth below:
Period Ratio
------ -----
Agreement Date through March 31, 2005 3.25 to 1.00
April 1, 2005 through September 30, 2005 3.00 to 1.00
October 1, 2005 through March 31, 2006 2.50 to 1.00
April 1, 2006 through September 30, 2006 2.25 to 1.00
October 1, 2006 and thereafter 2.00 to 1.00
Section 8.10 INTEREST COVERAGE RATIO. Commencing on March 31, 2003,
the Borrower shall not permit, as of the end of any fiscal quarter ending during
the term of this Agreement, the Interest Coverage Ratio to be less than 3.00 to
1.00.
89
Section 8.11 AFFILIATE TRANSACTIONS. The Borrower shall not, and shall
not permit any of the Guarantors to, at any time engage in or amend any
transaction with any Affiliate or any MGM Company, or make an assignment or
other transfer of any of its assets to any Affiliate or any MGM Company, on
terms less advantageous to such Rainbow Company than would be the case if such
transaction had been effected with a non-Affiliate, in each case other than as
set forth on SCHEDULE 8.11 attached hereto or as otherwise permitted under this
Agreement.
Section 8.12 REAL ESTATE. None of the Rainbow Companies shall
purchase, or become obligated to purchase, real estate in an amount in excess of
$10,000,000 in the aggregate during the term of this Agreement.
Section 8.13 ERISA LIABILITIES. The Borrower shall not fail, and shall
cause each of its Subsidiaries not to fail, to make all material contributions
in accordance with the terms of their respective Plans and to meet all of the
applicable minimum funding requirements of ERISA and the Code, and, to the
extent that the assets of such Plans would be less than an amount sufficient to
provide all accrued benefits payable under such Plans determined on an ongoing
basis, shall make the maximum deductible contributions allowable under the Code.
Neither the Borrower nor any of its Subsidiaries shall incur any material
withdrawal liability with respect to any Multiemployer Plan. Neither the
Borrower nor any of its Subsidiaries shall make any commitment to provide
post-employment health or life insurance benefits, except as required by Section
601 through 609 of ERISA, Section 4980(B) of the Code and applicable state law,
nor terminate any Plan if its termination would reasonably be expected to have a
Materially Adverse Effect.
Section 8.14 SALES AND LEASEBACKS. None of the Rainbow Companies will
enter into any arrangement, directly or indirectly, with any Person whereby any
such Rainbow Company shall sell or transfer any property, real or personal,
whether now owned or hereafter acquired, and whereby any such Rainbow Company
shall then or thereafter rent or lease as lessee such property or any part
thereof or other property which any such Rainbow Company intends to use for
substantially the same purpose or purposes as the property sold or transferred,
unless in each case, the sale or transfer of such property is permitted by
Section 8.5 hereof.
Section 8.15 NEGATIVE PLEDGE. The Borrower shall not, and shall not
permit any of the Guarantors to, directly or indirectly, enter into any
agreement (other than the Loan Documents) with any Person that prohibits or
restricts or limits the ability of any such Rainbow Company to create, incur,
pledge or suffer to exist any Lien upon any of its respective assets, or
restricts the ability of any Guarantor to make Restricted Payments to the
Borrower.
ARTICLE 9 - DEFAULT
90
Section 9.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
shall prove incorrect or misleading in any material respect when made or deemed
to have been made;
(b) The Borrower shall default (i) in the payment of any
interest and fees payable hereunder or under the other Loan Documents and such
Default shall not have been cured by payment of such overdue amounts in full
within five (5) days from the date such payment became due, or (ii) in the
payment of any principal of the Loans when due hereunder or under the other Loan
Documents;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Article 8;
(d) There shall occur any Default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or as
otherwise provided in Section 9.1 of this Agreement), which shall not be cured
to the Majority Lenders' satisfaction within the applicable cure period, if any,
provided for in such Loan Document;
(e) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 9.1, and such Default shall
not be cured to the Majority Lenders' satisfaction within a period of thirty
(30) days from the occurrence of such default;
(f) CSC Holdings shall, at any time, cease to own and vote,
directly or indirectly, one hundred percent (100%) of the outstanding capital
stock of the Borrower;
(g) The Borrower shall, at any time, cease to own and vote
directly or indirectly one hundred percent (100%) of the capital stock,
partnership interests or other equity interests of each of the Guarantors
(except to the extent that the capital stock, partnership interests or other
equity interests of any such Guarantor are permitted to be transferred to any
MGM Company, or otherwise disposed of, pursuant to the terms and conditions of
this Agreement);
91
(h) CVC and the Xxxxx Family Interests, collectively and in
the aggregate, shall cease to own, directly or indirectly, at least fifty and
one-tenth percent (50.1%) of the outstanding capital stock of the Borrower;
(i) CVC or Xxxxx shall, at any time, cease to have management
control over the business and operations of the Rainbow Companies;
(j) There shall be entered a decree or order for relief in
respect of the Borrower, any of its Material Subsidiaries, CSC Holdings or CVC
under the Bankruptcy Code, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or similar official of the Borrower, any of
its Material Subsidiaries, CSC Holdings or CVC, or of any substantial part of
their respective properties, or ordering the winding-up or liquidation of the
affairs of any of the Borrower, any of its Material Subsidiaries, CSC Holdings
or CVC, or an involuntary petition shall be filed against any of the Borrower,
any of its Material Subsidiaries, CSC Holdings or CVC and a temporary stay
entered, and (i) such petition and stay shall not be diligently contested, or
(ii) any such petition and stay shall continue undismissed for a period of
thirty (30) consecutive days;
(k) The Borrower, any of its Material Subsidiaries, CSC
Holdings or CVC shall file a petition, answer, or consent seeking relief under
the Bankruptcy Code, or the Borrower, any of its Material Subsidiaries, CSC
Holdings or CVC shall consent to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment or taking of possession of
a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of the Borrower, any of its Material Subsidiaries, CSC Holdings
or CVC, or of any substantial part of their respective properties, or the
Borrower, any of its Material Subsidiaries, CSC Holdings or CVC shall fail
generally to pay their respective debts as they become due, or the Borrower, any
of its Material Subsidiaries, CSC Holdings or CVC shall take any action in
furtherance of any such action;
(l) A final judgment shall be entered by any court against any
of the Rainbow Companies for the payment of money which exceeds $5,000,000, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of any of the Rainbow Companies which, together with all other
property of any of the Rainbow Companies subject to other such process, exceeds
in value $5,000,000 in the aggregate, and if, within thirty (30) days after the
entry, issue, or levy thereof, such judgment, warrant, or process shall not have
been paid or discharged or stayed pending appeal, or if, after the expiration of
any such stay, such judgment, warrant, or process shall not have been paid or
discharged;
(m) There shall be at any time (i) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA or in Section 412 of the Code)
with respect to any Plan maintained by the Borrower or any of its Subsidiaries,
or to which the Borrower or any of its Subsidiaries, has any material
liabilities, or any trust created
92
thereunder, or (ii) a trustee appointed by a United States District Court to
administer any such Plan under Section 4042 of ERISA, or (iii) proceedings
instituted by the PBGC to terminate any such Plan under Section 4042 of ERISA,
or (iv) incurred by the Borrower or any of its Subsidiaries any liability to the
PBGC in connection with the distress termination of any such Plan under Section
4041(c) of ERISA; or any fiduciary of, or party in interest to, any Plan or
trust created under any Plan of the Borrower or any of its Subsidiaries shall
engage in a "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject the Borrower or any of
its Subsidiaries to a tax on "prohibited transactions" imposed by Section 4975
of the Code, or (v) any fiduciary of, or party in interest to, any Plan or trust
created under any Plan of the Borrower or any of its Subsidiaries shall engage
in a breach of fiduciary responsibility or knowingly participate in any
violation of ERISA; or any Plan of the Borrower or any of its Subsidiaries which
is intended to qualify under Section 401(a) of the Code shall have its
application for or a favorable IRS determination with respect to the
qualification requirements under such section of the Code denied by the IRS, or
have the IRS revoke its previously issued determination; and in each case, such
event or condition, together with other such events or conditions, if any, would
subject the Borrower and its Subsidiaries to any tax, liability or penalty in
excess of $5,000,000 in the aggregate;
(n) There shall occur any default under any material
indenture, agreement, or instrument evidencing Indebtedness For Money Borrowed
of any of the Rainbow Companies (including, without limitation, any Authorized
Debt Issuance);
(o) There shall occur any default or event of default under
the AMC Loan Agreement;
(p) All or any portion of any Loan Document shall at any time
and for any reason be declared to be null and void or otherwise unenforceable by
a court of competent jurisdiction in a suit with respect to such Loan Document,
or a proceeding shall be commenced by any governmental authority having
jurisdiction over any of the Rainbow Companies involving a legitimate dispute or
a proceeding shall be commenced by any of the Rainbow Companies, in either case
seeking to establish the invalidity or unenforceability of any Loan Document
(exclusive of questions of interpretation of any provision thereof), or any of
the Rainbow Companies shall deny that it has any liability or obligation for the
payment of principal or interest purported to be created under any Loan
Document;
(q) There shall occur a default by any of the Rainbow
Companies (if such default is not cured or waived within any applicable grace
period) under any Material MSO Agreement, which default would have a Materially
Adverse Effect; or
(r) There shall exist any default under, or any cancellation
of (without a contemporaneous replacement, or if interim substitute arrangements
have been
93
made with respect thereto, replacement within forty-five (45) days, of), any
Transponder Lease Agreement if such default is not cured within any applicable
cure period and if such default or cancellation, as applicable, would have a
Materially Adverse Effect.
Section 9.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in
Sections 9.1(j) or 9.1(k) hereof, the Administrative Agent, at the direction of
the Majority Lenders, shall (i) terminate the Commitments and any obligations of
the Swing Loan Lender to advance the Swing Loan Committed Amount hereunder and
(ii) declare the principal of and interest on the Loans and all other
Obligations to be forthwith due and payable without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the other Loan Documents to the contrary
notwithstanding, or both.
(b) Upon the occurrence and continuance of an Event of Default
specified in Sections 9.1(j) or 9.1(k) hereof, such principal, interest, and
other obligations shall thereupon and concurrently therewith become due and
payable, and the Commitments shall forthwith terminate and any obligations of
the Swing Loan Lender to advance the Swing Loan Committed Amount shall forthwith
terminate, all without any action by the Credit Parties or the Majority Lenders
and without presentment, demand, protest, or other notice of any kind, all of
which are expressly waived, anything in this Agreement or in the other Loan
Documents to the contrary notwithstanding.
(c) With respect to any outstanding Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
any acceleration of the Obligations (other than obligations with respect to
Interest Hedge Agreements) pursuant to this Section 9.2, the Borrower shall
promptly upon demand by any Issuing Bank deposit in an account of such Issuing
Bank for the benefit of such Issuing Bank an amount equal to the aggregate
undrawn and unexpired amount of each outstanding Letter of Credit issued by such
Issuing Bank, which cash will be held by such Issuing Bank and applied to the
payment of drafts drawn under such Letters of Credit and the unused portion
thereof after such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other Obligations hereunder in the
manner set forth in Section 2.12(b) hereof.
(d) The Arrangers and the Administrative Agent, with the
concurrence of the Majority Lenders, shall exercise all of the post-default
rights granted to it and to them under the Loan Documents or under Applicable
Law.
(e) The rights and remedies of the Arrangers and the
Administrative Agent and the Lenders hereunder shall be cumulative, and not
exclusive.
ARTICLE 10 - THE AGENTS
94
Section 10.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its Commitments and Loans irrevocably to
appoint and authorize, each of the Agents to take such actions as its agent on
its behalf and to exercise such powers hereunder and under the Security
Documents as are delegated by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto and as may be provided by any Loan
Document. Any action taken by any of the Agents under this Agreement or any Loan
Document shall be taken for itself and for the ratable benefit of each of the
other Credit Parties, except as may be otherwise expressly provided in this
Agreement or in any other Loan Document. None of the Agents nor any of their
respective Lender Affiliates, directors, officers, employees, or agents shall be
liable for any action taken or omitted to be taken by any of them hereunder or
in connection herewith, except for its or their own gross negligence or willful
misconduct. Neither the Syndication Agent nor any of the Co-Documentation Agents
shall have any obligations under this Agreement in such capacity.
Section 10.2 DELEGATION OF DUTIES. The Agents may execute any of their
respective duties under the Loan Documents by or through agents or attorneys
selected by them, respectively, using reasonable care and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. None of the
Agents shall be responsible to any of the Lenders for the negligence or
misconduct of any agents or attorneys selected by any of them, respectively,
with reasonable care.
Section 10.3 INTEREST HOLDERS. The Agents may treat each Lender, or
the Person designated in the last notice filed with the Administrative Agent
under this Section 10.3, as the holder of all of the interests of such Lender in
its Commitments and its Loans until written notice of transfer, signed by such
Lender (or the Person designated in the last notice filed with the
Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 10.4 CONSULTATION WITH COUNSEL. Each of the Agents may consult
with legal counsel selected by it and shall not be liable for any action taken
or suffered by it in good faith in reliance thereon.
Section 10.5 DOCUMENTS. None of the Agents shall be under any duty to
examine, inquire into, or pass upon the validity, effectiveness, or genuineness
of this Agreement or any instrument, document, or communication furnished
pursuant hereto or in connection herewith, and each of the Agents shall be
entitled to assume that they are valid, effective, and genuine, have been signed
or sent by the proper parties, and are what they purport to be.
Section 10.6 SECURITY DOCUMENTS. The Administrative Agent, as
administrative agent hereunder and under the Security Documents, is hereby
authorized to act on behalf of the Credit Parties, in its own capacity and
through other agents and
95
sub-agents appointed by it with due care, under the Security Documents and to
file UCC-1 financing statement forms in connection therewith, provided that,
unless otherwise expressly provided in this Agreement, the Administrative Agent
shall not agree to the release of any Collateral except in compliance with
Section 12.12 hereof. In connection with its role as secured party with respect
to the Collateral hereunder, the Administrative Agent shall act as
administrative agent, for itself and for the benefit of the Credit Parties, and
such role as administrative agent shall be disclosed on all appropriate
accounts, certificates, filings, mortgages, and other collateral documentation.
Section 10.7 ARRANGERS AND AFFILIATES. With respect to the Commitments
and the Loans, any Lender which is a Lender Affiliate of any Agent shall have
the same rights and powers hereunder as any other Lender, and each Agent and its
respective Lender Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Lender
Affiliates of, or Persons doing business with, the Borrower, as if it were not
affiliated with such Agent and without any obligation to account therefor.
Section 10.8 RESPONSIBILITY OF THE AGENTS. The duties and obligations
of the Agents under this Agreement are only those expressly set forth in this
Agreement. Each of the Agents shall be entitled to assume that no Default or
Event of Default has occurred and is continuing unless it has actual knowledge,
or has been notified by the Borrower, of such fact, or has been notified by a
Lender that such Lender considers that a Default or an Event of Default has
occurred and is continuing, and such Lender shall specify in detail the nature
thereof in writing. None of the Agents shall be liable to any of the Lenders
hereunder for any action taken or omitted to be taken except for its own gross
negligence or willful misconduct. The Administrative Agent shall provide each
Lender with copies of such documents received from the Borrower as such Lender
may reasonably request.
96
Section 10.9 ACTION BY AGENTS.
(a) Except for action requiring the approval of the Majority
Lenders, the Super-Majority Lenders or all of the Lenders, as the case may be,
each Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or actions which it may
be able to take under or in respect of, this Agreement, unless such Agent shall
have been instructed by the Majority Lenders, the Super-Majority Lenders or all
the Lenders, as the case may be, to exercise or refrain from exercising such
rights or to take or refrain from taking such action, provided that such Agent
shall not exercise any rights under Section 9.2(a) of this Agreement without the
request of the Majority Lenders. None of the Agents shall incur any liability
under or in respect of this Agreement with respect to anything which it may do
or refrain from doing in the reasonable exercise of its judgment or which may
seem to it to be necessary or desirable in the circumstances, except for its own
gross negligence or willful misconduct.
(b) None of the Agents shall be liable to the Lenders, or any
of them, in acting or refraining from acting under this Agreement in accordance
with the instructions of the Majority Lenders, the Super-Majority Lenders or all
the Lenders, as the case may be, and any action taken or failure to act pursuant
to such instructions shall be binding on all Lenders.
Section 10.10 NOTICE OF DEFAULT OR EVENT OF DEFAULT. In the event that
any of the Credit Parties shall acquire actual knowledge, or shall have been
notified in writing, of any Default or Event of Default, such Credit Party shall
promptly notify the other Credit Parties, and each Agent shall take such action
and assert such rights under this Agreement as the Majority Lenders shall
request in writing, and none of the Agents shall be subject to any liability by
reason of its acting pursuant to any such request. If the Majority Lenders shall
fail to request an Agent to take action or to assert rights under this Agreement
in respect of any Default or Event of Default within ten (10) days after their
receipt of the notice of any Default or Event of Default from any Credit Party,
or shall request inconsistent action with respect to such Default or Event of
Default, such Agent may, but shall not be required to, take such action and
assert such rights (other than rights under Article 9 hereof) as it deems in its
discretion to be advisable for the protection of the Lenders, except that, if
the Majority Lenders have instructed such Agent not to take such action or
assert such right, in no event shall such Agent act contrary to such
instructions.
Section 10.11 RESPONSIBILITY DISCLAIMED. None of the Agents shall be
under any liability or responsibility whatsoever as such:
(a) To the Borrower or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
Lender or Lenders of any of its or their obligations under this Agreement;
97
(b) To any Lender or Lenders, as a consequence of any failure
or delay in performance by, or any breach by, the Borrower or any other obligor
of any of its obligations under this Agreement or any of the other Loan
Documents; or
(c) To any Lender or Lenders for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any of the other Loan Documents, or any other document contemplated
by this Agreement, or for the validity, effectiveness, enforceability, or
sufficiency of this Agreement, any of the other Loan Documents, or any other
document contemplated by this Agreement.
Section 10.12 INDEMNIFICATION. Each of the Lenders agrees to indemnify
each of the Agents in their respective capacities as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata according to their respective Commitment Percentages, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including fees and expenses of
experts, agents, consultants and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against such
Agent in any way relating to or arising out of this Agreement, any of the other
Loan Documents, or any other document contemplated by this Agreement or any
action taken or omitted by such Agent under this Agreement, any of the other
Loan Documents, or any other document contemplated by this Agreement, except
that no Lender shall be liable to such Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from the gross negligence or willful
misconduct of such Agent.
Section 10.13 CREDIT DECISION. Each Lender represents and warrants to
each other and to each Agent that:
(a) In making its decision to enter into this Agreement and to
make Advances, it has independently taken whatever steps it considers necessary
to evaluate the financial condition and affairs of the Borrower and that it has
made an independent credit judgment, and that it has not relied upon information
provided by any Agent; and
(b) So long as any portion of the Loans remains outstanding,
it will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower.
Section 10.14 SUCCESSOR AGENTS. Subject to the appointment and
acceptance of a successor Agent (which shall be any Lender or a Lender Affiliate
or a commercial lender organized under the laws of the United States of America
or any political subdivision thereof which has a combined capital and reserves
in excess of $250,000,000) as provided below, any Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time for cause
98
by the Majority Lenders. Upon any such resignation or removal, the Majority
Lenders shall have the right to appoint, subject to such Lender's consent in its
sole discretion, a successor Agent from among the Lenders or the Lender
Affiliates. If no successor Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be any Lender or a Lender
Affiliate or a commercial bank organized under the laws of the United States of
America or any political subdivision thereof which has combined capital and
reserves in excess of $250,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties,
and obligations of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 10.14
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as an Agent.
ARTICLE 11 - CHANGE IN CIRCUMSTANCES
AFFECTING EURODOLLAR ADVANCES
Section 11.1 EURODOLLAR BASIS DETERMINATION INADEQUATE OR UNFAIR.
Notwithstanding anything contained herein which may be construed to the
contrary, if with respect to any proposed Eurodollar Advance for any Eurodollar
Advance Period, the Administrative Agent determines after consultation with the
Lenders that deposits in Dollars (in the applicable amount) are not being
offered to each of the Lenders in the relevant market for such Eurodollar
Advance Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the Lenders, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such situation no longer
exist, the obligations of the Lenders to make Eurodollar Advances shall be
suspended.
Section 11.2 ILLEGALITY. If any Applicable Law, or any change therein,
or any interpretation or change in interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, shall make it
unlawful or impossible for any Lender to make, maintain or fund its Eurodollar
Advances, such Lender shall so notify the Administrative Agent, and the
Administrative Agent shall forthwith give notice thereof to the other Lenders
and the Borrower. Before giving any notice to the Administrative Agent pursuant
to this Section 11.2, such Lender shall designate a different lending office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender. Upon
receipt of such notice, notwithstanding anything contained in Article 2 hereof,
the Borrower shall
99
repay in full the then outstanding principal amount of each Eurodollar Advance
of such Lender so affected, together with accrued interest thereon, either (a)
on the last day of the then current Eurodollar Advance Period applicable to such
Advance if such Lender may lawfully continue to maintain and fund such
Eurodollar Advance to such day or (b) immediately if such Lender may not
lawfully continue to fund and maintain such Eurodollar Advance to such day.
Concurrently with repaying each Eurodollar Advance of such Lender,
notwithstanding anything contained in Article 2 or Article 4 hereof, the
Borrower shall borrow a Base Rate Advance from such Lender, and such Lender
shall make such Base Rate Advance in an amount such that the outstanding
principal amount of the Loans held by such Lender shall equal the outstanding
principal amount of such Loans immediately prior to such repayment.
Section 11.3 INCREASED COSTS AND TAXES.
(a) If any Regulatory Change:
(i) Shall subject any Lender to any tax, duty or
other charge with respect to its obligation to make Eurodollar Advances, or its
Eurodollar Advances, or shall change the basis of taxation of payments to any
Lender of the principal of or interest on its Eurodollar Advances or in respect
of any other amounts due under this Agreement in respect of its Eurodollar
Advances or its obligation to make Eurodollar Advances (except for changes in
the rate of tax on the overall net income of such Lender imposed by the
jurisdiction in which such Lender's principal executive office is located); or
(ii) Shall impose, modify, or deem applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System, but excluding any included in an applicable
Eurodollar Reserve Percentage), special deposit, assessment or other requirement
or condition against assets of, deposits with or for the account of, or
commitments or credit extended by any Lender, or shall impose on any Lender or
the eurodollar interbank borrowing market any other condition affecting such
Lender's obligation to make such Eurodollar Advances or its Eurodollar Advances;
and the result of any of the foregoing is to increase the cost to such
Lender of making, converting into, continuing or maintaining any such Eurodollar
Advances, or to reduce the amount of any sum received or receivable by such
Lender under this Agreement or in respect of its Loans, then, in any such case,
on the earlier of demand by such Lender or the applicable Maturity Date, the
Borrower agrees to pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased costs. Each Lender requesting
compensation will promptly notify the Borrower and the Administrative Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 11.3 and will
designate a different lending office if such designation will avoid the need
for, or
100
reduce the amount of, such compensation and will not, in the sole judgment of
such Lender, be otherwise disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under
this Section 11.3 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods. If any Lender demands compensation under this
Section 11.3, the Borrower may at any time, upon at least five (5) Business Days
prior notice to such Lender, prepay in full the then outstanding Eurodollar
Advances of such Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.11 hereof.
Concurrently with prepaying such Eurodollar Advances, the Borrower shall borrow
a Base Rate Advance from such Lender, and such Lender shall make such Base Rate
Advance in an amount such that the outstanding principal amount of the Loans
held by such Lender shall equal the outstanding principal amount of such Loans
immediately prior to such prepayment.
Section 11.4 EFFECT ON OTHER ADVANCES. If notice has been given
pursuant to Section 11.1, 11.2 or 11.3 hereof suspending the obligation of any
Lender to make Eurodollar Advances, or requiring Eurodollar Advances of any
Lender to be repaid or prepaid, then, unless and until such Lender notifies the
Borrower that the circumstances giving rise to such repayment no longer apply,
all Advances which would otherwise be made by such Lender as Eurodollar Rate
Advances shall be made instead as Base Rate Advances.
ARTICLE 12 - MISCELLANEOUS
Section 12.1 NOTICES.
(a) Unless otherwise specifically provided herein, all notices
and other communications under this Agreement shall be in writing and shall be
deemed to have been given three (3) days after deposit in the mail, designated
as certified mail, return receipt requested, postage-prepaid, or one (1) day
after being entrusted to a reputable commercial overnight delivery service, or
when sent by telecopy addressed to the party to which such notice is directed at
its address determined as provided in this Section 12.1 All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to the Borrower, to it at:
Rainbow Media Holdings, Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attn: President
Telecopy No.: (000) 000-0000
101
with copies to:
Rainbow Media Holdings, Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attn: General Counsel
Telecopy No.: (000) 000-0000
and
Rainbow Media Holdings, Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attn: Senior Vice President - Finance
Telecopy No.: (000) 000-0000
and
Cablevision Systems Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
(ii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Manager, Syndications and Credit
Administration
Telecopy No.: (000) 000-0000
with a copy to:
TD Securities (USA) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx Xxxxxxx, Director
Telecopy No.: (000) 000-0000
and
102
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
(iii) If to any Arranger, to each of them at:
TD Securities (USA) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx Xxxxxxx, Director
Telecopy No.: (000) 000-0000
and
Banc of America Securities LLC
c/o Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx, Managing Director
Telecopy No.: (000) 000-0000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
(iv) If to the Lenders, to them at the addresses set
forth beside their names on the Lender Addendum with respect thereto or in an
Assignment and Assumption Agreement.
(b) Copies shall be provided to Persons other than parties
hereto only in the case of notices under Article 7 hereof.
(c) Any party hereto may change the address to which notices
shall be directed under this Section 12.1 by giving ten (10) days' written
notice of such change to the other parties.
103
Section 12.2 EXPENSES. The Borrower agrees to promptly pay:
(a) All reasonable out-of-pocket expenses of the Arrangers and
the Administrative Agent on the Agreement Date in connection with the
preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents executed on the Agreement Date, the transactions
contemplated hereunder and thereunder, and the making of the initial Advance
hereunder, including, but not limited to, the reasonable fees and disbursements
of counsel for the Administrative Agent;
(b) All reasonable out-of-pocket expenses of the Arrangers and
the Administrative Agent in connection with the preparation and negotiation of
any waiver, modification, amendment, or consent by the Lenders relating to this
Agreement or the other Loan Documents whether or not executed, including, but
not limited to, the reasonable fees and disbursements of counsel for the
Administrative Agent;
(c) All reasonable out-of-pocket expenses of the Arrangers and
the Administrative Agent in connection with the syndication of the Loans; and
(d) From and after the occurrence of an Event of Default, all
reasonable out-of-pocket costs and expenses of the Agents and the Lenders in
respect of such Event of Default, irrespective of whether suit or other
proceeding has commenced in respect thereto, which shall include reasonable fees
and out-of-pocket expenses of counsel for the Agents and the Lenders, and the
reasonable fees and out-of-pocket expenses of any experts, agents, or
consultants engaged by the Agents and the Lenders.
Section 12.3 WAIVERS. The rights, remedies, powers and privileges of
the Credit Parties under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights, remedies, powers or privileges which
they would otherwise have. No failure or delay by the Credit Parties or the
Majority Lenders, or any of them, in exercising any right, remedy, power or
privilege shall operate as a waiver thereof. The Credit Parties expressly
reserve the right to require strict compliance with the terms of this Agreement
in connection with any funding of a request for an Advance. In the event the
Lenders decide to fund a request for an Advance at a time when the Borrower is
not in strict compliance with the terms of this Agreement, such decision by the
Lenders shall not be deemed to constitute an undertaking by the Lenders to fund
any further requests for Advances or preclude the Lenders from exercising any
rights available to the Lenders under the Loan Documents or at law or equity.
Any waiver or indulgence granted by the Credit Parties or the Majority Lenders,
or any of them, shall not constitute a modification of this Agreement, except to
the extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Credit Parties or the Majority Lenders, or any of them,
at variance with the terms of the Agreement such as to require further notice of
their intent to require strict adherence to the terms of the Agreement in the
future.
104
Section 12.4 SET-OFF. In addition to any rights and remedies now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, after the applicable Maturity Date (whether by acceleration or
otherwise), the Lenders and any Lender Affiliates are hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set-off and
to appropriate and apply any and all deposits (general or special, time or
demand, provisional or final, including, but not limited to, Indebtedness
evidenced by certificates of deposit, in each case whether matured or unmatured)
and any other Indebtedness at any time held or owing by the Lenders or such
Lender Affiliate to or for the credit or the account of any of the Rainbow
Companies, against and on account of the obligations and liabilities of any of
the Rainbow Companies to the Lenders under this Agreement and any other Loan
Document, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not (a) the Lenders shall have made any demand
hereunder or (b) the Lenders shall have declared the principal of and interest
on the Loans and other amounts due hereunder to be due and payable as permitted
by Section 9.2 hereof and although said obligations and liabilities, or any of
them, shall be contingent or unmatured. Any sums obtained by any Lender or any
Lender Affiliate shall be subject to the application of payments provisions of
Article 2 hereof. Upon direction by the Administrative Agent, with the consent
of the Majority Lenders, after the applicable Maturity Date (whether by
acceleration or otherwise), each Lender and each Lender Affiliate holding
deposits of any of the Rainbow Companies shall exercise its set-off rights as so
directed.
Section 12.5 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder or under the other Loan Documents without the prior
written consent of each of the Lenders.
(b) Each of the Lenders (other than the Swing Loan Lender with
respect to the Swing Loans) may at any time enter into assignment agreements or
participations with respect to its interest hereunder and under the other Loan
Documents with one or more Eligible Assignees, provided that (x) such Lender
shall concurrently transfer to the proposed assignee or participant a pro rata
share of its corresponding commitments and loans under the AMC Loan Agreement,
(y) any such assignment, together with the concurrent assignment under the AMC
Loan Agreement related thereto, shall be in an aggregate amount, with respect to
each assignment or series of related assignments, of (A) in the case of any
assignment of the Term B Loans, not less than $500,000, and (B) in the case of
any assignment of the Revolving Loans and Revolving Loan Commitments, not less
than $5,000,000 (in the case of each of the foregoing clauses (A) and (B),
unless such assignment is to another Lender or an assignment of all of the
assigning Lender's rights and obligations hereunder), and (z) after giving
effect to any assignment or series of related assignments, the aggregate amount
of the assigning
105
Lender's Loans and Commitments under this Agreement, together with such Lender's
corresponding loans and commitments under the AMC Loan Agreement, shall (A) in
the case of any assignment of the Term B Loans, not be less than $500,000, and
(B) in the case of any assignment of the Revolving Loans and Revolving Loan
Commitments, not be less than $5,000,000 (in the case of each of the foregoing
clauses (A) and (B), unless such assignment is an assignment of all of the
assigning Lender's rights and obligations hereunder). All of the foregoing
assignments and participations shall be subject to the following:
(i) Except for (A) assignments made to any Federal
Reserve Bank or which are otherwise permitted under Section 12.5(d) below and
(B) assignments made between any Lender and any Lender Affiliate of such Lender
or to another Lender or a Lender Affiliate of another Lender or to an Approved
Fund, no assignment shall be made or sold without the consent of the
Administrative Agent, which consent shall not be unreasonably withheld or
delayed and, if no Default or Event of Default then exists, the consent of the
Borrower, which consent shall not be unreasonably withheld or delayed.
(ii) Any Person purchasing a participation or an
assignment of the Loans from any Lender shall be required to represent and
warrant that its purchase shall not constitute a "prohibited transaction" (as
defined in Section 5.1(m) hereof).
(iii) The Borrower and the Credit Parties agree that
assignments permitted hereunder (including the assignment of any Advance or
portion thereof) may be made with all voting rights, and shall be made pursuant
to an Assignment and Assumption Agreement which shall be delivered to the
Administrative Agent. An administrative fee of $3,500 with respect to each
Assignment and Assumption Agreement delivered hereunder shall be payable to the
Administrative Agent by the assigning Lender at the time of any assignment
hereunder. The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain a copy of each Assignment and Assumption
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of and
interest on the Loans owing to, each Lender pursuant to the terms of this
Agreement from time to time (the "REGISTER"). No assignments shall be effective
hereunder until the Loans and Commitments set forth in the Assignment and
Assumption Agreement are recorded in the Register by the Administrative Agent.
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lender shall treat each Person whose name is
recorded in the Register pursuant to the terms of this Agreement as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.
(iv) No participation agreement shall confer any
rights under this Agreement or any other Loan Document to any purchaser thereof,
or relieve any issuing Lender from any of its obligations under this Agreement,
and all actions
106
hereunder shall be conducted as if no such participation had been granted;
PROVIDED, HOWEVER, that any participation agreement may confer on the
participant the right to approve or disapprove changes in the interest rate and
principal amount, fees and the applicable Maturity Date.
(v) Each Lender agrees to provide the Administrative
Agent and the Borrower with prompt written notice of any assignments of its
interests hereunder.
(vi) No assignment, participation or other transfer
of any rights hereunder shall be effected that would result in any interest
requiring registration under the Securities Act of 1933, as amended, or
qualification under any state securities law.
(vii) No such assignment, participation or transfer of
any rights hereunder may be made to any bank or other financial institution (A)
with respect to which a receiver or conservator (including, without limitation,
the Federal Deposit Insurance Corporation or the Office of Thrift Supervision)
has been appointed or (B) that has failed to meet any of the capital
requirements of its primary regulator or insurer.
(viii) If applicable, each Foreign Lender shall, and
shall cause each of its assignees that becomes a Foreign Lender to provide to
the Administrative Agent on or prior to the Agreement Date or the effective date
of any assignment, as the case may be, all appropriate Internal Revenue Service
forms required to be delivered by such Foreign Lender pursuant to Section
2.10(c)(iii) hereof.
(c) Except as specifically set forth in Section 12.5(b)
hereof, nothing in this Agreement, expressed or implied, is intended to or shall
confer on any Person other than the respective parties hereto and thereto and
their successors and assignees permitted hereunder and thereunder any benefit or
any legal or equitable right, remedy or other claim under this Agreement.
(d) Notwithstanding anything contained herein to the contrary,
any Lender may, without the consent of the Administrative Agent or the Borrower,
at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement and the Notes, if any, issued to such Lender to
secure obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank or its trustee in
support of its obligations thereto; PROVIDED, HOWEVER, that no such pledge
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(e) An assigning Lender shall retain such indemnification and
expense reimbursement rights to which such Lender was entitled pursuant to this
Agreement to the effective date of the assignment of its rights hereunder.
107
Section 12.6 COUNTERPARTS. This Agreement and each of the other Loan
Documents may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts shall together
constitute but one and the same instrument. In proving this Agreement or any
other Loan Document in any judicial proceedings, it shall not be necessary to
produce or account for more than one such counterpart signed by the party
against whom such enforcement is sought. Any signatures delivered by a party by
facsimile transmission shall be deemed an original signature hereto.
Section 12.7 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTION 327(b) OF THE NEW YORK CIVIL
PRACTICE LAWS AND RULES AND WITHOUT REFERENCE TO THE CONFLICT OR CHOICE OF LAW
PRINCIPLES THEREOF EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST UNDER THE LOAN DOCUMENTS, OR REMEDIES UNDER THE LOAN
DOCUMENTS, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 12.8 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 12.9 HEADINGS. Headings and footnotes used in this Agreement
are for convenience only and shall not be used in connection with the
interpretation of any provision hereof.
Section 12.10 INTEREST.
(a) In no event shall the amount of interest due or payable
hereunder or otherwise in respect of the Loans exceed the maximum rate of
interest allowed by Applicable Law, and in the event any such payment is
inadvertently made by any Rainbow Company or is inadvertently received by any
Lender, then such excess sum shall be credited as a payment of principal, unless
such Rainbow Company shall notify such Lender in writing that it elects to have
such excess sum returned forthwith. It is the express intent hereof that the
Rainbow Companies not pay and the Lenders not receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may legally be paid by
the Rainbow Companies under Applicable Law.
(b) Notwithstanding the use by the Lenders of the Prime Rate,
the Eurodollar Rate and the Federal Funds Rate as reference rates for the
determination of
108
interest on the Loans, the Lenders shall be under no obligation to obtain funds
from any particular source in order to charge interest to the Borrower at
interest rates tied to such reference rates.
Section 12.11 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement and the other Loan Documents embody the entire agreement
and understanding among the parties hereto and thereto and supersede all prior
agreements, understandings, and conversations relating to the subject matter
hereof and thereof.
Section 12.12 AMENDMENT AND WAIVER. Neither this Agreement nor any
Loan Document (other than any Interest Hedge Agreement), nor any term or
provision hereof or thereof, may be amended or waived orally, but only by an
instrument in writing signed by the Majority Lenders (or, in the case of
Security Documents executed by the Administrative Agent, signed by the
Administrative Agent and approved by the Majority Lenders) and, in the case of
an amendment, also by the Borrower, except that (a) any decrease (other than pro
rata) or increase in the amount of the Commitments of any Lender shall require
the consent of such Lender, (b) any issuance of an Incremental Facility
Commitment shall require only the consent of the Incremental Facility Lenders,
the Borrower and the Administrative Agent, (c) any amendment of Section 12.5(b)
hereof shall require the consent of the Super-Majority Lenders, and (d) in the
event of (i) any postponement in the scheduled time as set forth in Section 2.7
hereof for the payment of, or any reduction of, any scheduled payments of
principal or the rate of interest or fees due hereunder or any extension of the
Initial Maturity Date or the Final Maturity Date, (ii) any change in the
Applicable Margin as set forth in Section 2.3(f) hereof, (iii) any release or
impairment of any Collateral or Guaranties relating, directly or indirectly, to
any MGM Operating Company, (iv) any release of the Borrower from the Obligations
or any release or impairment of substantially all of the other Collateral or
Guaranties issued in favor of the Administrative Agent (other than in connection
with a disposition permitted under Section 8.5(a) or (b) hereof, or in
connection with the issuance of additional equity interests in any MuchMusic
Company permitted under Section 8.5(c) hereof, or in connection with Investments
in the MGM Companies permitted under Section 8.2(d) hereof, in each case which
may be released (except for the pledge of any equity interests in such MuchMusic
Company owned by any Rainbow Company) by the Administrative Agent without
additional consent), (v) any waiver of any Event of Default due to the failure
by the Borrower to pay any sum due hereunder, (vi) except in connection with the
implementation of the Incremental Facility Indebtedness to the extent necessary
to accord the various types of Incremental Facility Loans treatment similar to
the treatment accorded Loans of a similar type thereunder, any change to the
application of payments made to the Administrative Agent and the other Credit
Parties described in Sections 2.6(d), 2.12(a) and 2.12(b) hereof, or any change
in the sharing of payment procedures described in Section 2.12(c) hereof, (vii)
any amendment of the definition of "MGM Operating Companies" or (viii) any
amendment of this Section 12.12 or of the definition of "Majority Lenders" or
"Super-Majority Lenders" or of any provision of this Agreement which refers to
"Majority Lenders" or "Super-Majority Lenders" if the effect
109
thereof would be to amend the definition of "Majority Lenders" or
"Super-Majority Lenders," as the case may be, as used in such provision, any
amendment or waiver may be made only by an instrument in writing signed by each
of the Lenders and, in the case of an amendment, also by the Borrower; PROVIDED,
HOWEVER, notwithstanding anything to the contrary contained herein, any
amendment of Section 2.14 or any other term or provision of this Agreement or
any other Loan Document (other than any Interest Hedge Agreement) required in
connection with the implementation of the Incremental Facility Indebtedness
shall require only the consent of the Majority Lenders and the Borrower.
Section 12.13 OTHER RELATIONSHIPS. No relationship created hereunder
or under any other Loan Document shall in any way affect the ability of any of
the Credit Parties to enter into or maintain business relationships with the
Borrower or any of its Lender Affiliates beyond the relationships specifically
contemplated by this Agreement and the other Loan Documents.
Section 12.14 CONFIDENTIALITY. The parties hereto shall preserve in a
confidential manner all information received from any other party pursuant to
the Loan Documents and the transactions contemplated thereunder, and shall not
disclose such information except to any Agent, any Lender or any Persons with
which a confidential relationship is maintained (including designated agents,
legal counsel, accountants and regulators), or where required by law.
Section 12.15 LIABILITY OF PARTNERS, MEMBERS AND OTHER PERSONS.
Notwithstanding anything else in this Agreement to the contrary, the parties
hereto expressly agree that no partner, member, officer, director or other
holder of an ownership interest of or in the Borrower, any Subsidiary of the
Borrower, CSC Holdings or CVC, or any partnership, limited liability company,
corporation or other entity which is a partner, member, stockholder or holder of
an ownership interest of or in the Borrower, any Subsidiary of the Borrower, CSC
Holdings or CVC shall have any personal or individual liability or
responsibility in respect of Obligations of the Borrower, any Subsidiary of the
Borrower, CSC Holdings or CVC pursuant to this Agreement or any other Loan
Document solely by reason of his or her status as such partner, member, officer,
director, stockholder or holder.
Section 12.16 SURVIVAL. The provisions of this Agreement set forth in
(a) Sections 2.10(c)(ii), 2.11, 6.12, 6.13, 10.11 and 11.3 hereof and (b) to the
extent that any Obligations shall remain outstanding, Article 3 hereof, in each
case, shall survive any termination or expiration of this Agreement.
Section 12.17 DELIVERY OF LENDER ADDENDA. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
ARTICLE 13 - WAIVER OF JURY TRIAL
110
Section 13.1 WAIVER OF JURY TRIAL. EACH OF THE RAINBOW COMPANIES AND
EACH OF THE CREDIT PARTIES HEREBY AGREES TO WAIVE THE RIGHT TO A TRIAL BY JURY
IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH ANY OF THE
RAINBOW COMPANIES, ANY OF THE CREDIT PARTIES, OR ANY OF THEIR RESPECTIVE
SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY
OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS AND THE
RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION 13.1.
Section 13.2 CONSENT TO JURISDICTION. EACH OF THE RAINBOW COMPANIES
AND EACH OF THE CREDIT PARTIES HEREBY AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND EACH CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN
SECTION 12.1. EACH OF THE RAINBOW COMPANIES HEREBY WAIVES ANY OBJECTIONS THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF SUCH SUIT OR ANY SUCH COURT OR THAT
SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
111
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as of
the day and year first above written.
BORROWER: RAINBOW MEDIA HOLDINGS, INC.
By:
-----------------------------
Name:
--------------------------
Title:
-------------------------
GUARANTORS: --------------------------------
By:
-----------------------------
Name:
---------------------------
Title:
-------------------------
