EXHIBIT 10.36
EXECUTION VERSION
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LOAN AGREEMENT
AMONG
AMERICAN MOVIE CLASSICS COMPANY,
THE INDEPENDENT FILM CHANNEL LLC
AND
WE: WOMEN'S ENTERTAINMENT LLC, AS BORROWERS;
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
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TABLE OF CONTENTS
(continued)
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ARTICLE 1 - DEFINITIONS.........................................................................2
ARTICLE 2 - LOANS..............................................................................25
Section 2.1 The Loans...................................................................25
Section 2.2 Manner of Borrowing and Disbursement........................................26
Section 2.3 Interest....................................................................29
Section 2.4 Fees........................................................................30
Section 2.5 Optional Prepayments and Reductions.........................................31
Section 2.6 Mandatory Prepayments.......................................................32
Section 2.7 Repayment...................................................................32
Section 2.8 Swing Loans.................................................................33
Section 2.9 Notes; Loan Accounts........................................................36
Section 2.10 Manner of Payment...........................................................36
Section 2.11 Reimbursement...............................................................40
Section 2.12 Application of Payments.....................................................40
Section 2.13 Capital Adequacy............................................................41
Section 2.14 Incremental Facility Loans..................................................42
Section 2.15 All Obligations to Constitute Joint and Several Obligations.................44
Section 2.16 Maximum Borrower Liability..................................................44
ARTICLE 3 - GUARANTEE..........................................................................46
Section 3.1 Guarantee...................................................................46
Section 3.2 Waivers and Releases........................................................47
Section 3.3 Miscellaneous...............................................................48
ARTICLE 4 - CONDITIONS PRECEDENT...............................................................49
Section 4.1 Conditions Precedent to Closing.............................................49
Section 4.2 Conditions Precedent to Each Advance........................................53
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES.....................................................53
Section 5.1 Representations and Warranties..............................................53
Section 5.2 Survival of Representations and Warranties, etc.............................59
ARTICLE 6 - GENERAL COVENANTS..................................................................59
I
TABLE OF CONTENTS
(continued)
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Section 6.1 Preservation of Existence and Similar Matters...............................59
Section 6.2 Compliance with Applicable Law..............................................60
Section 6.3 Maintenance of Properties...................................................60
Section 6.4 Accounting Methods and Financial Records....................................60
Section 6.5 Insurance...................................................................60
Section 6.6 Payment of Taxes and Claims.................................................61
Section 6.7 Visits and Inspections......................................................61
Section 6.8 Payment of Indebtedness.....................................................61
Section 6.9 Use of Proceeds.............................................................61
Section 6.10 ERISA.......................................................................61
Section 6.11 Further Assurances..........................................................61
Section 6.12 Broker's Claims.............................................................62
Section 6.13 Indemnity...................................................................62
Section 6.14 Covenants Regarding Formation of Subsidiaries,
Investments and Acquisitions................................................62
ARTICLE 7 - INFORMATION COVENANTS..............................................................64
Section 7.1 Quarterly Financial Statements and Information..............................64
Section 7.2 Annual Financial Statements and Information; Certificate of No Default......64
Section 7.3 Performance Certificates....................................................65
Section 7.4 Copies of Other Reports.....................................................65
Section 7.5 Notice of Litigation and Other Matters......................................66
ARTICLE 8 - NEGATIVE COVENANTS.................................................................67
Section 8.1 Indebtedness................................................................67
Section 8.2 Investments.................................................................67
Section 8.3 Limitation on Liens.........................................................68
Section 8.4 Amendment and Waiver........................................................68
Section 8.5 Liquidation; Disposition or Acquisition of Assets...........................68
Section 8.6 Limitation on Guaranties....................................................69
Section 8.7 Restricted Payments and Purchases...........................................69
II
TABLE OF CONTENTS
(continued)
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Section 8.8 Leverage Ratio..............................................................70
Section 8.9 Interest Coverage Ratio.....................................................70
Section 8.10 Debt Service Ratio..........................................................70
Section 8.11 Affiliate Transactions......................................................70
Section 8.12 Real Estate.................................................................70
Section 8.13 ERISA Liabilities...........................................................70
Section 8.14 Sales and Leasebacks........................................................70
Section 8.15 Negative Pledge.............................................................71
ARTICLE 9 - DEFAULT............................................................................71
Section 9.1 Events of Default...........................................................71
Section 9.2 Remedies....................................................................74
ARTICLE 10 - THE AGENTS.........................................................................74
Section 10.1 Appointment and Authorization...............................................74
Section 10.2 Delegation of Duties........................................................75
Section 10.3 Interest Holders............................................................75
Section 10.4 Consultation with Counsel...................................................75
Section 10.5 Documents...................................................................75
Section 10.6 Security Documents..........................................................75
Section 10.7 Arrangers and Affiliates....................................................76
Section 10.8 Responsibility of the Agents................................................76
Section 10.9 Action by Agents............................................................76
Section 10.10 Notice of Default or Event of Default.......................................76
Section 10.11 Responsibility Disclaimed...................................................77
Section 10.12 Indemnification.............................................................77
Section 10.13 Credit Decision.............................................................78
Section 10.14 Successor Agents............................................................78
ARTICLE 11 - CHANGE IN CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES..............................78
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair.........................78
Section 11.2 Illegality..................................................................79
III
TABLE OF CONTENTS
(continued)
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Section 11.3 Increased Costs and Taxes...................................................79
Section 11.4 Effect On Other Advances....................................................80
ARTICLE 12 - MISCELLANEOUS......................................................................81
Section 12.1 Notices.....................................................................81
Section 12.2 Expenses....................................................................83
Section 12.3 Waivers.....................................................................83
Section 12.4 Set-Off.....................................................................84
Section 12.5 Assignment..................................................................84
Section 12.6 Counterparts................................................................87
Section 12.7 Governing Law...............................................................87
Section 12.8 Severability................................................................87
Section 12.9 Headings....................................................................87
Section 12.10 Interest....................................................................87
Section 12.11 Entire Agreement............................................................88
Section 12.12 Amendment and Waiver........................................................88
Section 12.13 Other Relationships.........................................................89
Section 12.14 Confidentiality.............................................................89
Section 12.15 Liability of Partners, Members and Other Persons............................89
Section 12.16 Survival....................................................................89
ARTICLE 13 - WAIVER OF JURY TRIAL...............................................................89
Section 13.1 Waiver of Jury Trial........................................................89
Section 13.2 Consent to Jurisdiction.....................................................90
IV
LOAN AGREEMENT
AMONG
AMERICAN MOVIE CLASSICS COMPANY,
THE INDEPENDENT FILM CHANNEL LLC
AND
WE: WOMEN'S ENTERTAINMENT LLC, AS BORROWERS;
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 Borrowers 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 Borrower Parties which would generally be comparable to those payments
that would have resulted if the Borrowers had filed separate tax returns.
"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 Borrower Party of or with any other
Person, such that, in any such case, such Person shall become consolidated with
such Borrower Party 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
PAGE 2
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.
"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 any of the
Borrowers 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. 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
Syndication Agent, the Co-Documentation Agents 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 PARTNERS" shall mean, collectively, American Movie Classics
Holding Corporation, a
New York corporation, AMC II Holding Corporation, a
Delaware corporation, and "AMC PARTNER" shall mean any one of the foregoing AMC
Partners.
"ANNUALIZED CASH FLOW" shall mean, as of any calculation date for the
MGM Operating Companies on a consolidated basis, (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.
"ANNUALIZED INTEREST EXPENSE" shall mean the product of (a) Interest
Expense for the most recently completed two (2) fiscal quarters, times (b) two
(2).
PAGE 3
"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 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 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 $50,000,000 in the aggregate
during the term of this Agreement.
"AVAILABLE FILM RIGHTS ADD-BACK" shall mean, with respect to any
period, (a) $75,000,000 minus (b) the aggregate amount of any Available Film
Rights Add-Backs used by the Borrowers to calculate Excess Film Rights Payments
with respect to any prior periods.
"AVAILABLE REVOLVING LOAN COMMITMENT" shall mean, as of any date, the
excess of (a) the Revolving Loan Commitment, over (b) the aggregate amount of
Revolving Loans outstanding on such date.
"AVOIDANCE PROVISIONS" shall have the meaning ascribed thereto in
Section 2.16(a) hereof.
"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.
PAGE 4
"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 a 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.
"BORROWERS" shall mean, collectively, AMC, IFC and WE, and "BORROWER"
shall mean any one of the foregoing Borrowers.
"BORROWER PARTIES" shall mean, collectively, the Borrowers and the
Guarantors, and "BORROWER PARTY" shall mean any one of the foregoing Borrower
Parties.
"BORROWER PLEDGE AGREEMENT" shall mean that certain Pledge Agreement
among the Borrowers and the Administrative Agent, dated as of the Agreement
Date, in substantially the form of EXHIBIT B attached hereto, pursuant to which
the Borrowers have pledged to the Administrative Agent, for the ratable benefit
of the Credit Parties, all of the stock and other equity interests owned
directly by each of them to secure the Obligations.
"BORROWER SECURITY AGREEMENT" shall mean that certain Security
Agreement among the Borrowers and the Administrative Agent, dated as of the
Agreement Date, in substantially the form of EXHIBIT C attached hereto.
"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).
"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:
PAGE 5
(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-" better from Standard &
Poor's, as the Borrowers 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
(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 Agents.
"COLLATERAL" shall mean any assets in which any Credit Party may have
a security interest pursuant to any Security Document.
"COMMITMENT PERCENTAGES" 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 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.
PAGE 6
"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).
"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 WE during the applicable year and reimbursement of the costs and
expenses incurred by CSC Holdings in connection with the consulting services.
"CONTRIBUTING BORROWER" shall have the meaning ascribed thereto in
Section 2.16(c) hereof.
"CREDIT PARTIES" shall mean, collectively, the Administrative Agent,
the Co-Documentation Agents, the Syndication Agent, the Arrangers, the Lenders,
the Swing Loan Lender and the Incremental Facility Lenders.
"CSC HOLDINGS" shall mean CSC Holdings, Inc., a Delaware corporation.
"CVC" shall mean Cablevision Systems Corporation, a Delaware
corporation.
"DEBT SERVICE" shall mean, as of any date of determination, for the
MGM Operating Companies on a consolidated basis, the sum of (a) Annualized
Interest Expense, (b) cash taxes paid during the most recently completed twelve
(12) calendar month period, (c) Mandatory Commitment Reductions during the
immediately succeeding twelve (12) calendar month period, (d) scheduled payments
of the Term B Loans pursuant to Section 2.7 hereof during the immediately
succeeding twelve (12) calendar month period, (e) scheduled payments under
Capitalized Lease Obligations during the immediately succeeding twelve (12)
calendar month period, (f) Excess Film Rights Payments during the immediately
succeeding twelve (12) calendar month period, and (g) Deferred Carriage Fees
applicable to the immediately succeeding twelve (12) calendar month period.
"DEBT SERVICE RATIO" shall mean, on any calculation date, the ratio of
(a) Annualized Cash Flow to (b) Debt Service.
PAGE 7
"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%).
"DEFERRED CARRIAGE FEES" shall mean the amortization of expenditures
of the MGM Operating Companies made in respect of launch support payments under
carriage agreements, which expenditures shall, at all times, be amortized in
accordance with GAAP.
"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 any of the Borrowers
or any of their respective Affiliates) approved by the Administrative Agent and,
unless a Default has occurred and is continuing, the Borrowers (such approval of
the Administrative Agent and the Borrowers 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 Parties
within the meaning of Section 414 of the Code.
"EURODOLLAR ADVANCE" shall mean an Advance (other than a Swing Loan)
which a 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 applicable
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
PAGE 8
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 Borrowers under Section 2.7 hereof; PROVIDED
FURTHER, HOWEVER, a Borrower may not select a Eurodollar Advance Period in
excess of six (6) months unless the Administrative Agent has notified the
Borrowers 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.
"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 a 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.
PAGE 9
"EXCESS FILM RIGHTS PAYMENTS" shall mean, for any period, the excess,
if any, of (a) cash payments in respect of film rights over (b) Film Rights
Amortization; PROVIDED, HOWEVER, that, at the Borrowers' option, such excess may
be reduced to not less than zero (0) by all or any portion of the Available Film
Rights Add-Back.
"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.
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of
New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three (3) federal
funds brokers of recognized standing selected by the Administrative Agent.
"FEE LETTERS" shall mean those certain Fee Letters by and among the
Borrowers 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 Borrower Parties 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
as 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 Borrowers 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, the date which is sixty-five (65) days after the last day of
each quarter in each fiscal year of the Borrowers, and (b) with respect to the
delivery of annual financial statements and
PAGE 10
information pursuant to Section 7.2 hereof, the date which is one hundred twenty
(120) days after the end of each fiscal year of the Borrowers; PROVIDED,
HOWEVER, in the event the SEC shall reduce the time period during which the
Borrowers may file their quarterly or annual financial statements with the SEC,
the sixty-five (65) day and one hundred twenty (120) day time periods set forth
in this definition shall be reduced by a like number of days.
"FOREIGN LENDER" shall have the meaning set forth in Section
2.10(c)(iii) hereof.
"FUND" shall mean any Person (other than any of the Borrowers or any
of their respective Affiliates) that is (or will be) primarily engaged in
making, purchasing, holding or otherwise investing in commercial loan and
similar extensions of credit in the ordinary course of business.
"FUNDING BORROWER" shall have the meaning ascribed thereto in Section
2.16(c) hereof.
"GAAP" shall mean generally accepted accounting principles in the
United States, as in effect from time to time, consistently applied.
"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 any of the Borrowers.
"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 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.
PAGE 11
"IFC PARTNER" shall mean IFC Holding Corporation, a Delaware
corporation.
"INCREMENTAL FACILITY COMMITMENT" shall mean the commitment of any of
the Incremental Facility Lenders to make Incremental Facility Loans to the
Borrowers in accordance with Section 2.14 hereof. The Borrowers may obtain
Incremental Facility Commitments on a joint and several basis 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 any of the Borrowers 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 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
PAGE 12
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 any of the Borrower Parties, 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 any capital contributions to, loans to,
repurchase agreements with or investments in securities of, or Guaranties issued
for the benefit of, a Person (including, without limitation, any Affiliates of
the Borrower Parties), but in any case shall not include any Acquisition.
"LENDER ADDENDUM" shall mean, with respect to any initial Lender, a
Lender Addendum, substantially in the form of EXHIBIT D attached hereto, to be
executed and delivered by such Lender on the Agreement Date as provided in
Section 12.17 hereof.
PAGE 13
"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 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.
"LEVERAGE RATIO" shall mean, on any calculation date, the ratio of (a)
Total Debt to (b) Annualized Cash Flow.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment, or other encumbrance of any kind in
respect of such property, whether or not xxxxxx, vested, or perfected.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Fee
Letters, the Security Documents, the Subordination of Fees Agreement, all
documents executed in connection with the Incremental Facility Loans, all
Requests for Advance, all documents executed by any of the Borrower Parties
pursuant to Section 6.14 hereof, 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 hereunder, 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.
"MANAGING PARTNERS" shall mean (a) with respect to AMC, American Movie
Classics Holding Corporation, a
New York corporation, and (b) with respect to
IFC, IFC Holding Corporation, a Delaware corporation.
"MANDATORY BORROWING" shall have the meaning given thereto in Section
2.8(b) hereof.
PAGE 14
"MANDATORY COMMITMENT REDUCTIONS" shall mean, as of any calculation
date, the excess, if any, of (a) the aggregate principal amount of the Revolving
Loans and the Swing Loans outstanding at the beginning of the period being
measured, over (b) the lowest amount of the Revolving Loan Commitment during the
period being measured.
"MATERIAL AFFILIATE CONTRACTS" shall mean, collectively, (a) the
Consulting Agreement, (b) the Services Agreement, (c) the Tax Sharing Policy and
(d) each agreement between any of the Borrower Parties with any of its
Affiliates identified on SCHEDULE 1 attached hereto.
"MATERIAL FILM RIGHTS AGREEMENTS" shall mean any Film Rights Agreement
of any Borrower Party pursuant to which such Borrower Party is obligated to make
payments of $10,000,000 or more in the aggregate.
"MATERIAL MSO AGREEMENT" shall mean any MSO Agreement covering
1,000,000 or more subscribers.
"MATERIALLY ADVERSE EFFECT" shall mean any materially adverse effect
upon the business, assets, financial condition or results of operations of the
Borrower Parties, taken as a whole on a consolidated basis in accordance with
GAAP, or upon the ability of the Borrower Parties, 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, in the event that, on or before September
1, 2005, (a) MGM's option to put to RMHI the equity interest in AMC and IFC held
by the MGM Partner shall not have been terminated or extended until at least ten
(10) days after the Final Maturity Date, or (b) RMHI and the Rainbow Partners
shall not have entered into an agreement, in form and substance reasonably
satisfactory to the Arrangers, in favor of the Credit Parties providing that
RMHI and the Rainbow Partners will satisfy the MGM put solely in capital stock
of CVC, each of the foregoing Maturity Dates shall be accelerated to November 1,
2005.
"MAXIMUM BORROWER LIABILITY" shall have the meaning ascribed thereto
in Section 2.16(a) hereof.
"MGM" shall mean Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation.
"MGM OPERATING COMPANIES" shall mean all Borrower Parties which are
designated as of the Agreement Date as MGM Operating Companies on SCHEDULE
5.1(c) hereto, 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 Borrowers may designate
additional Borrower Parties as MGM Operating Companies after the Agreement Date,
upon five (5) Business Days' prior written notice to the Administrative Agent;
PROVIDED FURTHER,
PAGE 15
HOWEVER, that notwithstanding the foregoing, (x) none of the Borrowers shall
cease to be MGM Operating Companies without the consent of all of the Lenders,
and (y) no other 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.
"MAXIMUM GUARANTEED AMOUNT" shall have the meaning ascribed thereto in
Article 3 hereof.
"MGM PARTNER" shall mean MGM Networks, U.S., Inc., a Delaware
corporation.
"MSO AGREEMENT" shall mean any agreement between any Borrower Party
and a cable television operator pursuant to which such operator agrees, among
other things, to distribute and exhibit to its subscribers programming of such
Borrower Party.
"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 the Borrower Parties.
"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 required to be paid
on the closing of such transaction, (ii) any attorneys fees incurred by such
Person in connection with such transaction, and (iii) cash taxes related to the
transaction to the extent payable by such Person.
"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 RMHI,
CVC, CSC Holdings, MGM, any affiliate of any of them or any other Person
satisfactory to the Majority Lenders into AMC or IFC 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.
PAGE 16
"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 E 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 Borrowers 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, 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
any of the Borrowers or any other obligor of any obligation, covenant or
undertaking with respect to this Agreement or any other Loan Document.
"OTHER DEBTOR RELIEF LAW" shall have the meaning ascribed thereto in
Section 2.16(a) hereof.
"PARTNERSHIP PLEDGE AGREEMENT" shall mean that certain Partnership
Pledge Agreement among RMHI, 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 F attached hereto, pursuant to which RMHI
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, which
pledge shall be subordinated to a Lien on such Collateral in favor of the
Rainbow Credit Parties.
"PAYING AFFILIATED BASIC SUBSCRIBERS" shall mean any Person which is a
subscriber carried and paid for pursuant to (a) any MSO Agreement existing on
the Agreement Date or arising after the Agreement Date or (b) any such MSO
Agreement which expires or has expired, provided that negotiations are
continuing in good faith to renew or extend such expired MSO Agreement and
following the expiration of such MSO Agreement, the programming of the Borrower
Parties continues to be exhibited, distributed and paid for by the applicable
pay television distributor under its existing terms or under terms no less
favorable to the Borrower Parties than such existing terms.
"PAYMENT DATE" shall mean the last day of each Eurodollar Advance
Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
PAGE 17
"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 Rainbow Credit Parties on the rights of
RMHI 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 senior 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, distrait, 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;
(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.
PAGE 18
"PLAN" shall mean, with respect to the Borrower Parties, an employee
benefit plan within the meaning of Section 3(3) of ERISA sponsored or maintained
by or contributed to by any of the Borrower Parties for the benefit of employees
of such Borrower Parties, as the case may be, but excluding any Multiemployer
Plan.
"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.
"RAINBOW CREDIT PARTIES" shall mean "Credit Parties" as such term is
defined in the Rainbow
Loan Agreement.
"RAINBOW
LOAN AGREEMENT" shall mean that certain
Loan Agreement dated
as of the Agreement Date among RMHI, as borrower, 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 Rainbow Credit Parties party thereto.
"RAINBOW PARTNERS" shall mean, collectively, the AMC Partners and the
IFC Partner, and "RAINBOW PARTNER" shall mean any one of the foregoing Rainbow
Partners.
"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.
"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 a Borrower requesting an Advance (other than a Swing
Loan) hereunder, which certificate shall be in substantially the form of EXHIBIT
G attached hereto.
PAGE 19
"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 Borrower Parties, (b) any
payment of consulting or management fees, or any interest thereon, by any of the
Borrower Parties to CVC, CSC Holdings or to any other Affiliate of the Borrower
Parties, or to any other Person, including, without limitation, payments under
the Consulting Agreement or the Services Agreement, and (c) any payment of
amounts due in respect of Accrued Tax Liabilities pursuant to the Tax Sharing
Policy.
"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 Borrower Parties, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock or other securities of any of the Borrower Parties.
"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 $40,000,000 to the Borrowers,
on or after the Agreement Date, in accordance with their respective Revolving
Commitment 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 Borrowers 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 Borrowers, on a joint and several basis, 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 H attached hereto, and any extensions,
modifications, renewals or replacements of or amendments to any of the
foregoing.
"RMHI" shall mean Rainbow Media Holdings, Inc., a Delaware
corporation.
"SEC" shall mean the United States Securities and Exchange Commission.
PAGE 20
"SECURITY DOCUMENTS" shall mean the Borrower Pledge Agreement, the
Borrower Security Agreement, the Partnership 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.
"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.
"SUBORDINATION OF FEES AGREEMENT" shall mean that certain
Subordination of Fees Agreement, dated as of the Agreement Date, among the
Administrative Agent, CSC Holdings, AMC, WE and any other affiliate of CSC
Holdings that is a party to the Consulting Agreement or the Services Agreement,
pursuant to which the payment of fees and reimbursement of expenses under the
Consulting Agreement and the Services Agreement have been subordinated to the
Obligations as provided therein, which shall be in substantially the form of
EXHIBIT I attached hereto.
"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
PAGE 21
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.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean that certain Subsidiary
Pledge Agreement between each Guarantor having one or more Subsidiaries 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 J 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.
"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 K attached hereto, and any similar security
agreement or any security agreement supplement delivered pursuant to Section
6.14 hereof.
"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 $2,500,000.
"SWING LOANS" shall mean revolving loans made to the Borrowers 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 Borrowers 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 $2,500,000, issued by the
Borrowers, on a joint and several basis, to the Swing Loan Lender, substantially
in the form of EXHIBIT L 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) hereof.
PAGE 22
"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, CSC
Holdings, RMHI and the Borrowers, among others, with respect to the allocation
of tax liabilities and other tax-related items among CVC, CSC Holdings, RMHI and
the Borrowers, based principally upon the financial income, taxable income,
credits and other amounts directly related to the respective parties as set
forth in the Tax Sharing Policy, a copy of which as in existence on the
Agreement Date is attached hereto as SCHEDULE 2, 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. 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 $35,000,000 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 Borrowers 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
Borrowers, on a joint and several basis, 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 M 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, with
respect to the MGM Operating Companies on a consolidated basis (a) all
outstanding Indebtedness For Money Borrowed, (b) all obligations Guaranteed by
the MGM Operating Companies in respect of Indebtedness for Money Borrowed, (c)
all Capitalized Lease Obligations (other than obligations under Film Rights
Agreements), and (d) all Accrued Tax Liabilities.
"TRADEMARK SECURITY AGREEMENT" shall mean that certain Trademark
Security Agreement between each Borrower Party 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 N attached hereto,
PAGE 23
and any similar pledge agreement or any pledge agreement supplement delivered
pursuant to Section 6.14 hereof.
"TRAILING SIX MONTH INTEREST EXPENSE" shall mean Interest Expense for
the MGM Operating Companies on a consolidated basis for the most recently
completed six (6) month period.
"TRANSPONDER LEASE AGREEMENT" shall mean any agreement by and between
any of the Borrower Parties and any other Person for the license, lease or other
agreement to use telecommunications satellites for purposes of broadcasting the
programming of such Borrower Parties and any other agreement related to the
transmission, origination and production of such programming and the related
technical services.
"UNDRAWN COMMITMENTS" shall mean, collectively, the undrawn amount of
the Revolving Loan Commitment and the Term B Loan Commitment, together with the
undrawn amount of all Incremental Facility Commitments.
"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 rendering the same not meaningful criteria for evaluating the MGM
Operating Companies, financial condition, the Borrowers and the Arrangers agree
to propose to the Credit Parties, and to vote affirmatively with respect to, any
amendments to this
PAGE 24
Agreement that the Borrowers 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 MGM Operating
Companies shall be determined on a consolidated basis.
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
Borrowers in an aggregate principal amount not to exceed Seventy-Five Million
Dollars ($75,000,000).
(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 Borrowers, 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
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 Borrowers (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 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.
(c) 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 Borrowers 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
PAGE 25
at any time after the Agreement Date. Amounts repaid under the Term B Loan
Commitment may not be reborrowed.
(d) USE OF PROCEEDS. The proceeds of the Loans may be used
solely (i) to make Restricted Payments to the Rainbow Partners and the MGM
Partner to the extent permitted under this Agreement, (ii) to make Permitted
Investments and Acquisitions to the extent permitted under this Agreement, and
(iii) for working capital and other general corporate purposes of the Borrower
Parties.
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 and (B) Swing Loans) shall, at the option of the
Borrowers, 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 Borrowers, be made as a
Base Rate Advance or a Eurodollar Advance; PROVIDED, HOWEVER, that (A) if the
Borrowers fail 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 Advance
on such Payment Date, and (B) the Borrowers 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. A 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, the Administrative Agent shall promptly notify each
Lender by telephone or telecopy of the contents thereof.
(ii) REPAYMENTS AND CONVERSIONS. A 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
PAGE 26
Notice of Conversion/Continuation. On the date indicated by the applicable
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. A 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
applicable Borrower of such Eurodollar Basis. A 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 such
notice, the Administrative Agent shall promptly notify each Lender by telephone
or telecopy of the contents thereof.
(ii) REPAYMENTS, CONTINUATIONS AND CONVERSIONS. A
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 such 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).
PAGE 27
(d) TELEPHONE NOTICE. The failure by a 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 a 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 a
Borrower, 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 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
requesting such Advance, or (ii) in the absence of such instructions, crediting
the amounts so made available to the account of the Borrowers 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 Borrowers 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 Borrowers 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 Borrowers, and the Borrowers
shall immediately pay such corresponding amount to the Administrative Agent, on
a joint and several basis, 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
PAGE 28
for any such failure of any other Lender. In the event that, at any time when
the Borrowers are not in Default and have 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 payments of principal, interest
or fees from the Borrowers in respect of such Loans which such Lender failed to
make. Nothing in this subsection shall be deemed to prejudice any rights that
the Borrowers 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
a 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 a Borrower fails to elect to repay, continue or
convert any Eurodollar Advance then
PAGE 29
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 Borrowers,
accelerate the maturity of the Loans or exercise any other rights or remedies
hereunder in connection with the exercise of this right) to charge interest on
the outstanding principal balance of the Loans at the Default Rate from the date
of such Event of Default; 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) 2.75% with respect
to any Eurodollar Advance and (B) 1.75% with respect to any Base Rate Advance.
(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.
Section 2.4 FEES.
(a) FEES PAYABLE UNDER THE FEE LETTERS. The Borrowers,
jointly and severally, agree to pay such fees as are described in the Fee
Letters.
(b) COMMITMENT FEE. The Borrowers, jointly and severally,
agree to pay to the Administrative Agent on behalf of the Lenders, in accordance
with their respective Commitment Percentages, a commitment fee on the Available
Revolving Loan Commitment for each day from (and including) the Agreement Date
to the Maturity Date, at a rate of (i) in the event that the Unused Percentage
shall be greater than or equal to fifty percent (50%), five-eighths of one
percent (0.625%) per annum and (ii) in the event that the Unused Percentage
shall be less than fifty percent (50%), three-eighths of
PAGE 30
one percent (0.375%) 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 and the
Maturity Date, 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 shall be fully earned when due
and nonrefundable when paid.
Section 2.5 OPTIONAL PREPAYMENTS AND REDUCTIONS.
(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 Borrowers shall,
jointly and severally, 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 Borrowers, 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 Borrowers shall jointly and severally
reimburse the Lenders and the other Credit Parties, on the earlier of demand or
the applicable Maturity Date 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.
PAGE 31
(A) In the event that the Borrowers 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.
(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 Borrowers' notice for all
purposes herein, and the Borrowers shall pay to the Administrative Agent, for
the benefit of the Lenders, on a joint and several basis, 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 Borrowers shall jointly and severally 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 PREPAYMENTS. In addition to the repayments
provided for in Section 2.7 hereof, if at any time the aggregate principal
amount of Revolving Loans and Swing Loans outstanding shall exceed the Revolving
Loan Commitment for any reason whatsoever, the Borrowers shall, jointly and
severally, immediately make a payment of the Revolving Loans in the amount of
such excess, together with accrued interest on the amount so prepaid.
Section 2.7 REPAYMENT. The Borrowers hereby, jointly and severally,
promise 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:
PAGE 32
QUARTERS ENDED
Amount of Quarterly Reduction (which shall include any reductions made during
such quarter pursuant
to Section 2.5)
June 30, 2005 through March 31, 2006 $ 500,000
June 30, 2006 through March 31, 2007 $ 4,000,000
June 30, 2007 through Initial Maturity Date $ 5,500,000
As of the date of each reduction of the Revolving Loan Commitment as set forth
above, the Borrowers shall, jointly and severally, 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, 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 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:
QUARTERS ENDED
Amount of Quarterly Reduction (which shall include any reductions made during
such quarter
pursuant
to Section 2.5)
September 30, 2003 through June 30, 2008 $ 87,500
PAGE 33
September 30, 2008 through December 31, 2008 $ 11,083,333
Final Maturity Date $ 11,083,334
Any unpaid principal and accrued interest of the Term B Loans and any other
outstanding Obligations (other than any outstanding Obligations under any of the
Incremental Facility Commitments) 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.
Section 2.8 SWING LOANS.
(a) SWING LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. Whenever the Borrowers
desire an Advance of the Swing Loans hereunder a Borrower 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 O 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 to the Borrowers by 3:00 p.m. (New York time) on the Business Day
specified 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 Borrowers 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 a Borrower, the Borrowers 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 Borrowers. If, and to the extent, an
PAGE 34
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 Borrowers 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 Borrowers and the Administrative Agent, require repayment
of its Swing Loans by way of a Revolving Loan, in which case the Borrowers 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 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 any of the Borrowers
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 Borrowers 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
PAGE 35
purchasing Lender shall be required to pay (to the extent not paid by the
Borrowers) 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 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 Borrowers have 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.
PAGE 36
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 Borrowers, on a joint and several basis,
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 Borrowers,
on a joint and several basis, 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 Borrowers,
on a joint and several basis, and payable to the order of the Swing Loan Lender
in the amount of the Swing Loan Committed Amount. If applicable, Incremental
Facility Loan Notes shall be issued by the Borrowers, on a joint and several
basis, to the order of each Incremental Facility Lender in accordance with such
Incremental Facility Lender's pro rata share of the Incremental Facility
Commitments. Any Notes issued by the Borrowers shall be duly executed and
delivered by Authorized Signatories of each of the Borrowers.
(b) Each Lender may open and maintain on its books in the
name of the Borrowers 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 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 joint and several obligation of the Borrowers 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 Borrowers
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, the Notes 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 Borrowers as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly.
PAGE 37
(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 Borrowers 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 Borrowers 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, 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 any of the Borrowers 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 applicable Borrower shall
make such deductions, and (C) the applicable 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 Borrowers, jointly
and severally, 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 Borrowers,
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 Borrowers
within forty-five (45) days after the Credit Party receives written notice of
the assertion of Taxes and the
PAGE 38
Borrowers do not otherwise have notice of such assertion, the Borrowers 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 Borrowers receive such notice. The Borrowers 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 any of the Borrowers.
Except as otherwise provided in this Section, if any of the Borrowers 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
Borrowers shall, jointly and severally, 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.
(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 Borrowers 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 Borrowers 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 a 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 Borrowers and the
Administrative Agent to the extent and in the manner required under United
States federal tax law. The Borrowers 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
PAGE 39
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 Borrowers 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 Borrowers to minimize any amounts payable by the
Borrowers 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 Borrowers, 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
Borrowers of the availability of such refund and shall, within thirty (30) days
after the receipt of a request from the Borrowers, apply for such refund with
the Borrowers being responsible for any incremental costs associated with such
refund request; PROVIDED, HOWEVER, that (A) none of the Borrowers shall be
entitled to any damages as a result of the failure of such Credit Party to so
notify the Borrowers of the availability of such refund and (B) none of the
Borrowers shall 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 Borrowers; PROVIDED, HOWEVER, that
the Borrowers, upon the request of the applicable Credit Party, shall, jointly
and severally, repay the amount paid over to the Borrowers in the event such
Credit Party is required to repay such refund to the applicable authority.
(vi) If the Borrowers are or become required to pay
any Additional Amounts to a Credit Party pursuant to this Section 2.10, the
Borrowers 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 Borrowers 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.
PAGE 40
Section 2.11 REIMBURSEMENT. Whenever any Lender shall actually incur
any losses or out-of-pocket expenses in connection with (a) the failure by a
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 a 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
Borrowers pursuant to Section 11.1 or 11.2 hereof, (b) the 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 Borrowers to prepay
any Advance after notice of prepayment has been given by a Borrower to the
Administrative Agent in accordance with Section 2.5 hereof, the Borrowers,
jointly and severally, agree 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 Borrowers, any Lender seeking reimbursement under this Section 2.11 shall
provide a certificate setting forth the amount to be paid to it by the Borrowers
hereunder and calculations therefor.
Section 2.12 APPLICATION OF PAYMENTS.
(a) Prior to the Final Maturity Date or any 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 respectively), 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; FOURTH, 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; FIFTH, 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 SIXTH, 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 any
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,
PAGE 41
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 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 Borrowers 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 Borrowers agree 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 Borrowers 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
Borrowers (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
PAGE 42
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 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 Borrowers shall, jointly and
severally, 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 Borrowers 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 Borrowers
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 Borrowers may request Incremental Facility Commitments on any Business Day;
PROVIDED, HOWEVER, that the Borrowers 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 Borrowers may request one (1) Incremental
Facility Commitment (which commitment may be from more than one Lender) which
may be no more than $35,000,000 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 Borrowers 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
Borrowers 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 Borrowers 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 for the Term B Loans set forth herein, or
(B) be secured by more or different collateral than the Loans hereunder,
PAGE 43
(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, and (iv) must be issued, on a pro rata basis,
concurrently with an incremental facility commitment under the RMHI
Loan
Agreement.
(b) Prior to the effectiveness of any Incremental Facility
Commitment, the Borrowers 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 Borrowers' 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 on a joint and several basis
as agreed to by the Borrowers 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 Borrowers (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
Borrowers 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 Term B Loans is
twenty-five (25) basis points less than the interest rate applicable to
PAGE 44
such Incremental Facility Loans without any action or consent of any Borrower,
any Arranger or any Lender.
Section 2.15 ALL OBLIGATIONS TO CONSTITUTE JOINT AND SEVERAL
OBLIGATIONS.
(a) All Obligations shall constitute joint and several
obligations of the Borrowers and shall be secured by the Administrative Agent's
security interest (on behalf of the Credit Parties) and Lien upon all of the
Collateral, and by all other security interests and Liens heretofore, now or at
any time hereafter granted by any of the Borrowers to the Administrative Agent
and the other Credit Parties, to the extent provided in the Security Documents
under which such Lien arises. Each Borrower expressly represents and
acknowledges that (i) with respect to this Agreement, it is part of a common
enterprise with the other Borrowers and (ii) any financial accommodations by the
Credit Parties to any Borrower hereunder and under the other Loan Documents are
and will be of direct and indirect interest, benefit and advantage to all
Borrowers. Each Borrower acknowledges that any Request for Advance, Notice of
Conversion/Continuation or other notice given by any of the Borrowers to the
Administrative Agent or any other Credit Party shall bind all Borrowers, and
that any notice given by the Administrative Agent or any other Credit Party to
any Borrower shall be effective with respect to all Borrowers. Each Borrower
acknowledges its liability without regard to which Borrower actually may have
directly received the proceeds of any of the Loans or other extensions of credit
hereunder or the manner in which the Administrative Agent or any of the other
Credit Parties accounts for such Loans or other extensions of credit on its
books and records, and further acknowledges that the Credit Parties are relying
on the joint and several liability of the Borrowers in extending the Loans and
other financial accommodations hereunder.
(b) Each Borrower represents that, except as provided in
Section 2.16 hereof, it has not waived or modified any subrogation and
contribution rights to which it may be entitled from and against any other
Borrower to the extent it is required to pay to the Credit Parties any amount in
excess of the Loans advanced hereunder directly to it.
Section 2.16 MAXIMUM BORROWER LIABILITY.
(a) It is the intent of the Borrowers and the Credit Parties
and any other Person holding any of the Obligations that each Borrower's maximum
obligations hereunder (such Borrower's "MAXIMUM BORROWER LIABILITY") in any case
or proceeding referred to below (but only in such a case or proceeding) shall
not be in excess of:
(i) in a case or proceeding commenced by or against
such Borrower under the Bankruptcy Code on or within one (1) year from the date
on which any of the Obligations of such Borrower are incurred, the maximum
amount that would not otherwise cause the obligations of such Borrower hereunder
(or any other obligations of such Borrower to the Credit Parties and any other
Person holding any of the Obligations) to be avoidable or unenforceable against
such Borrower under (A)
PAGE 45
Section 548 of the Bankruptcy Code or (B) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
such Borrower under the Bankruptcy Code subsequent to one (1) year from the date
on which any of the Obligations of such Borrower are incurred, the maximum
amount that would not otherwise cause the obligations of such Borrower hereunder
(or any other obligations of such Borrower to the Credit Parties and any other
Person holding any of the Obligations) to be avoidable or unenforceable against
such Borrower under any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding by virtue of Section 544 of
the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against
such Borrower under any law, statute or regulation other than the Bankruptcy
Code relating to dissolution, liquidation, conservatorship, bankruptcy,
moratorium, readjustment of debt, compromise, rearrangement, receivership,
insolvency, reorganization or similar debtor relief from time to time in effect
affecting the rights of creditors generally (collectively, "OTHER DEBTOR RELIEF
LAW"), the maximum amount that would not otherwise cause the obligations of such
Borrower hereunder (or any other obligations of such Borrower to the Credit
Parties and any other Person holding any of the Obligations) to be avoidable or
unenforceable against such Borrower under such Other Debtor Relief Law,
including, without limitation, any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding. (The
substantive state or federal laws under which the possible avoidance or
unenforceability of the obligations of any Borrower hereunder (or any other
obligations of such Borrower to the Credit Parties and any other Person holding
any of the Obligations) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "AVOIDANCE PROVISIONS").
(b) To the extent set forth in Section 2.16(a), but only to
the extent that the Obligations of any Borrower incurred hereunder would
otherwise be subject to avoidance under any Avoidance Provisions, then the
obligations of such Borrower hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the Obligations of such Borrower
hereunder (or any other obligations of such Borrower to the Credit Parties or
any other Person holding any of the Obligations), as so reduced, to be subject
to avoidance under such Avoidance Provisions. The reduction effected by this
Section 2.16(b) is intended solely to preserve the rights hereunder of the
Credit Parties and any other Person holding any of the Obligations to the
maximum extent that would not cause the obligations of the Borrowers hereunder
to be subject to avoidance under any Avoidance Provisions, and none of the
Borrowers nor any other Person shall have any right, defense, offset, or claim
under this Section 2.16(b) as against the Credit Parties or any other Person
holding any of the Obligations that would not otherwise be available to such
Person under the Avoidance Provisions.
(c) In the event any Borrower (the "FUNDING BORROWER") shall
make any payment or payments under this Agreement or shall suffer any loss as a
result
PAGE 46
of any realization upon any Collateral granted by it to secure its obligations
hereunder, the other Borrowers (collectively, the "CONTRIBUTING BORROWER")
shall, jointly and severally, contribute to the Funding Borrower an amount equal
to such payment or payments made, or losses suffered, by the Funding Borrower
determined as of the date on which such payment or loss was made multiplied by
the ratio of (i) the Maximum Borrower Liability of the Contributing Borrower
(without giving effect to any right to receive any contribution or other
obligation to make any contribution hereunder), to (ii) the aggregate Maximum
Borrower Liability of all Borrowers (including the Funding Borrower) hereunder
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder). Nothing in this Section 2.16(d) shall affect any
Borrower's joint and several liability to the Credit Parties for the entire
amount of its Obligations. Each Borrower covenants and agrees that its right to
receive any contribution hereunder from the Contributing Borrower shall be
subordinate and junior in right of payment to all of the Obligations.
(d) No Borrower will exercise any rights which it may
acquire by way of subrogation hereunder or under any other Loan Document or at
law by any payment made hereunder or otherwise, nor shall any Borrower seek or
be entitled to seek any contribution or reimbursement from the any other
Borrower in respect of payments made by such Borrower hereunder or under any
other Loan Document, until all amounts owing on account of the Obligations are
indefeasibly paid in full in cash and the Commitments are terminated. If any
amounts shall be paid to any Borrower on account of such subrogation or
contribution rights at any time when all of the Obligations shall not have been
indefeasibly paid in full in cash, such amount shall be held by such Borrower in
trust for the Credit Parties, segregated from other funds of such Borrower, and
shall, forthwith upon receipt by such Borrower, be turned over to the
Administrative Agent in the exact form received by such Borrower (duly endorsed
by such Borrower to the Administrative Agent, if required), to be applied
against the Obligations, whether matured or unmatured, as provided for herein.
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 any 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 any of the
Borrower Parties 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 of the Borrower Parties to the Credit Parties under this
Agreement and the other Loan Documents shall be promptly paid in full when due,
whether at stated 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
PAGE 47
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 each of the Borrowers 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 Borrowers 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 Borrowers for the benefit of
each of their respective 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 such Guarantor to such Borrower (or an
investment in the equity capital of such Borrower by such Guarantor).
PAGE 48
Section 3.3 MISCELLANEOUS.
(a) Upon the bankruptcy or winding up or other distribution
of assets of any Borrower Party or of any surety or guarantor of any of the
Obligations of the Borrowers 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, any 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 any 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
Borrowers, 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 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
PAGE 49
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 all of the
Borrower Parties exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower Parties hereunder) of all of the Borrower
Parties, 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 proceed involving any state or
any federal bankrtupcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to insolvency of debtors.
(g) Pursuant to Section 6.14 hereof, any new Subsidiary of a
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 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
PAGE 50
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) a loan certificate of each Borrower, including a
certificate of incumbency with respect to the signature of each Authorized
Signatory of such Borrower, which loan certificate shall be in substantially the
form of EXHIBIT P attached hereto, together with appropriate attachments which
shall include, without limitation, the following items: (A) true, complete and
correct copies of the Constituent Documents of such Borrower, (B) a true,
complete and correct copy of the Consulting Agreement, (C) a copy of the
partnership or limited liability company resolutions of such Borrower,
authorizing such Borrower with respect to the borrowing hereunder and the
execution, delivery and performance by such Borrower of this Agreement and the
other Loan Documents to which it is a party, and (D) certificates of existence
for such Borrower issued by the Secretary of State or similar state official for
the State of such Borrower's organization and for each state in which such
Borrower is, or is required to be, qualified to do business;
(v) the duly executed Partnership Pledge Agreement,
together with evidence of the filing of appropriate UCC-1 financing statement
forms;
(vi) a loan certificate of each Rainbow Partner,
including a certificate of incumbency with respect to the signature of each
Authorized Signatory of such Rainbow Partner, 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 such Rainbow
Partner, certified by the Secretary of State of such Rainbow Partner's
incorporation, (B) a true, complete and correct copy of the bylaws of such
Rainbow Partner, (C) a copy of the resolutions of the board of directors of such
Rainbow Partner, authorizing such Rainbow Partner with respect to the execution,
delivery and performance by such Rainbow Partner of the Loan Documents to which
it is a party, and (D) certificates of existence for such Rainbow Partner issued
by the Secretary of State or similar state official for the State of such
Rainbow Partner's
PAGE 51
incorporation, and for each state in which such Rainbow Partner is, or is
required to be, qualified to do business;
(vii) a loan certificate of RMHI, including a
certificate of incumbency with respect to the signature of each Authorized
Signatory of RMHI, 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 RMHI, certified by the
Secretary of State of Delaware, (B) a true, complete and correct copy of the
bylaws of RMHI, (C) a copy of the resolutions of the board of directors of RMHI,
authorizing RMHI with respect to the execution, delivery and performance by RMHI
of the Loan Documents to which it is a party, and (D) certificates of existence
for RMHI issued by the Secretary of State or similar state official for the
State of Delaware and for each state in which RMHI is, or is required to be,
qualified to do business;
(viii) the duly executed Subsidiary Security Agreement
from each Guarantor, together with evidence of the filing appropriate UCC-1
financing statement forms;
(ix) a 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 in
effect with respect to the voting rights, ownership interests or management of
such Guarantor;
(x) the duly executed Trademark Security Agreement,
together with an appropriate filing coversheet and evidence of the filing of
appropriate UCC-1 financing statement forms;
(xi) the duly executed Fee Letters, together with
evidence of receipt of all fees due on the Agreement Date from the Borrowers to
the Credit Parties in accordance therewith;
PAGE 52
(xii) opinions of counsel to the Borrowers, RMHI, the
Rainbow Partners and the Guarantors addressed to each Credit Party and in form
and substance reasonably satisfactory to the Arrangers and their counsel;
(xiii) a copy of the organizational chart of the
Borrowers and their respective Subsidiaries;
(xiv) a copy of (A) the audited combined balance
sheets, income statements and cash flow statements for the Borrower Parties and
(B) the unaudited combining balance sheets and income statements for the
Borrower Parties, in each case for the year ended December 31, 2001, and a copy
of the unaudited combined balance sheets, income statements and cash flow
statements for the Borrower Parties for the quarter ended September 30, 2002;
(xv) the duly executed Subordination of Fees
Agreement;
(xvi) copies of insurance binders or certificates
covering the assets of the Borrower Parties, and otherwise meeting the
requirements of, and to the extent required by, Section 6.5 hereof; and
(xvii) evidence that the Borrowers shall have obtained
debt ratings from both Xxxxx'x Investors Service, Inc. and Standard & Poor's
with respect to the Loans.
(b) All of the representations and warranties of the
Borrower Parties under this Agreement shall be true and correct in all material
respects, and the Administrative Agent shall have received a certificate of an
Authorized Signatory of each of the Borrowers so stating.
(c) No litigation shall have been commenced against any of
the Borrower Parties since December 31, 2001, which, if such litigation could
reasonably be expected to be determined adversely to such Borrower Parties,
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 Borrower Parties from that
reflected in the audited financial statements, provided pursuant to Section
4.1(a)(xiv) hereof.
(e) The Arrangers shall have received the results of lien
searches against each of the Borrower Parties from all applicable jurisdictions
which shall be reasonably satisfactory to them and their counsel.
(f) The Administrative Agent shall have received a
certificate of an Authorized Signatory of each of the Borrowers demonstrating,
on a pro forma basis, as of the Agreement Date, that the Leverage Ratio
calculated as of the Agreement Date, based on Annualized Cash Flow as of the
last day of the fiscal quarter ending September
PAGE 53
30, 2002, and Total Debt after giving effect to the initial Advance of the Loans
hereunder, is less than or equal to 2.00 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 a 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 Borrower Parties since December 31,
2001, which, if such litigation could reasonably be expected to be determined
adversely to such Borrower Parties, could reasonably be expected to have a
Materially Adverse Effect, and (iv) provide calculations demonstrating the
Borrowers' compliance with Section 8.8 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;
and
(c) Each Request for Advance and each Swing Loan Request
shall constitute a representation and warranty by the Borrowers 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.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES. Each of the Borrowers,
for itself and on behalf of the Guarantors, hereby agrees, represents, and
warrants that:
(a) ORGANIZATION; POWER; QUALIFICATION. AMC is a general
partnership duly organized and validly existing under the laws of the State of
New York, having the AMC Partners and the MGM Partner as its only partners. IFC
is a limited liability company duly organized and validly existing under the
laws of the State of Delaware, having the IFC Partner and the MGM Partner as its
only members. WE is a limited liability company duly organized and validly
existing under the laws of the State of Delaware, having AMC as its only member.
The Managing Partners are the only managing partners or members, as applicable,
of AMC and IFC. Each of the Guarantors is duly organized and validly existing
under the laws of the jurisdiction of its
PAGE 54
organization. Each of the Borrower Parties 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 Borrower
Parties 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 Borrower Parties party thereto, and each of this
Agreement and the other Loan Documents to which any Borrower Party is a party is
a legal, valid and binding obligation of each Borrower Party 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. Except as listed on SCHEDULE 5.1(c)
attached hereto (as amended by the Borrowers after the Agreement Date upon
written notice to the Lenders from time to time to the extent permitted
hereunder), none of the Borrowers has any Subsidiaries. With respect to each of
the Borrower Parties, SCHEDULE 5.1(c) also sets forth, as of the Agreement Date,
the following: (i) whether such Borrower Party is a MGM Operating Company; (ii)
the direct owners of such Borrower Party and the extent of such ownership; (iii)
the state of such Borrower Party's incorporation or organization; (iv) all
jurisdictions in which such Borrower Party is qualified to do business as a
foreign corporation, limited liability company or partnership, as the case may
be; and (v) the federal tax identification number, the state organizational
identification number (if issued by the state of such Borrower Party's
incorporation or organization), the address of the chief executive office and
principal place of business of such Borrower Party, and the name and registered
office of the registered agent appointed by such Borrower Party.
(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
Borrower Parties, or under any Material MSO Agreement, or under any indenture,
agreement, or other instrument to which any of the Borrower Parties 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 of the Borrower Parties except
Permitted Liens; except, with respect to items (i) and (ii) above, where such
violations,
PAGE 55
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 any Borrower of this Agreement and the other Loan Documents
to which any Borrower is a party, or (ii) the execution, delivery and
performance by any Guarantor of this Agreement and the other Loan Documents to
which any 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 Borrower Party is a party has been duly taken by all
such commissions and authorities or other Persons, as the 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 Borrower Parties 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 Borrower Parties 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 each
of the Borrower Parties 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 each Borrower Party, and any of its respective properties,
income, profits, and assets, which are due and payable, have been paid, except
any such tax payment of which such Borrower Party 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 each of the
Borrower Parties in respect of taxes are, in the reasonable judgment of the
Borrowers, adequate.
(i) FINANCIAL STATEMENTS. The Borrowers have furnished, or
caused to be furnished, to the Credit Parties the financial statements required
pursuant to Section 4.1(a)(xiv), all of which are complete and correct in all
material respects and present fairly in accordance with GAAP the financial
position of the Borrower Parties 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 such unaudited statements. Except as disclosed in
such financial statements or in SCHEDULE 5.1(i) attached hereto, none of the
Borrower Parties had any material liabilities, contingent or otherwise, and
there are no material unrealized or anticipated losses of any of the Borrower
Parties which have not heretofore been disclosed in writing to the Credit
Parties.
PAGE 56
(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 Borrower Parties
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.
(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(1) attached hereto, none of the Borrower Parties 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 any of the Borrowers, threatened
against or affecting any of the Borrower Parties 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 any
of the Borrower Parties 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. None of the Borrower Parties 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 any of the
Borrower Parties 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 Borrowers' 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 any of the Borrower Parties 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 Parties nor 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
PAGE 57
Code and applicable state law, none of the Borrower Parties 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 Parties and the
ERISA Affiliates have properly classified individuals providing services to any
of the Borrower Parties or ERISA Affiliates as employees and 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 Borrower Parties. Except as disclosed on SCHEDULE
5.1(n) attached hereto (as amended by the Borrowers 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 Borrower Parties 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 Borrower
Parties, 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 Borrower Parties 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
Borrowers 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
Borrowers' knowledge, threatened attack or revocation. Except as set forth on
SCHEDULE 5.1(n) attached hereto, (i) none of the Borrower Parties owns any
patents or material registered copyrights and (ii) the business of the Borrower
Parties is not subject to any license issued by the FCC.
(o) COMPLIANCE WITH LAW; ABSENCE OF DEFAULT. Each of the
Borrower Parties 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 Borrower
Party'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
Borrower Party 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 such Borrower Party is a party or by which
such Borrower Party, or any of its properties, may be bound, which default,
judgment, decree or order could reasonably be considered to have a Materially
Adverse Effect.
PAGE 58
(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 Borrower
Parties 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 Borrowers 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 Film Rights Agreement and each
Material MSO Agreement to which any of the Borrower Parties is a party.
(r) COMPLIANCE WITH REGULATIONS U AND X. None of the
Borrower Parties is engaged principally or as one of its important activities in
the business of extending credit for the purpose of purchasing or carrying, and
none of the Borrowers owns or presently intends 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. None of the Borrowers nor any bank acting on its or their
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 Borrowers 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. Each of the Borrowers is, and each of the
Rainbow Partners is, Solvent, and after giving effect to the transactions
contemplated hereby and by the Loan Documents, each of the Borrowers will be,
and each of the Rainbow Partners will be, Solvent.
PAGE 59
(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 any of the Borrowers
for any other services rendered to any or all of the Borrowers ancillary to the
transactions contemplated herein.
(u) BUSINESS. The business of the Borrower Parties includes
producing and acquiring various types of programming and distributing such
programming to cable and other non-broadcast delivery systems.
(v) NAME OF BORROWERS. Except as set forth on SCHEDULE
5.1(v) attached hereto, none of the Borrower Parties has (i) changed its name
within the five (5) year period immediately preceding the Agreement Date nor
(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 Borrower Parties is
required to register under the provisions of the Investment Company Act of 1940,
as amended, and neither the entering into or performance by any of the Borrowers
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
Borrowers 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. Each
of the Borrowers 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 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 Borrower Parties
may liquidate or
PAGE 60
dissolve, or cause the liquidation or dissolution of, any Subsidiary of any of
the Borrowers that holds no assets and conducts no business activities.
Section 6.2 COMPLIANCE WITH APPLICABLE LAW. Each of the
Borrowers 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. Each of the Borrowers
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. Each of the
Borrowers 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, 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. Each of the Borrowers 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, jointly and severally, by the Borrowers; and
(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. Each of the Borrowers will
pay and discharge, and will cause each of the Guarantors 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
PAGE 61
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. Each of the Borrowers 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 Borrowers, 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 Borrower Parties 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 their respective
businesses, assets, liabilities, financial positions, results of operations, and
business prospects relating to each of the Borrower Parties.
Section 6.8 PAYMENT OF INDEBTEDNESS. Each of the Borrowers 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 Borrowers will use the proceeds of
the Loans solely as provided in Section 2.1(d).
Section 6.10 ERISA. Each of the Borrowers shall, and shall cause
each of the Guarantors 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. Each of the Borrowers shall maintain, and shall cause each of the
Guarantors to maintain, each of their respective Plans in material compliance
with the terms of such Plans and the applicable provisions of ERISA and the
Code.
Section 6.11 FURTHER ASSURANCES. Each of the Borrowers 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 Borrower Parties or any employee or officer thereof. Each of the Borrowers
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 Borrowers 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
PAGE 62
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 Borrowers hereby, jointly and
severally, indemnify and agree 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 Borrower Parties, 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 Borrower Parties of any representation or warranty made hereunder 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 Borrower Parties, or the
formation of any new Subsidiary of any of the Borrower Parties, as soon as
available and in any event on or before the effective date thereof, the
Borrowers 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
PAGE 63
ownership) of any other Borrower Party, 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) hereof) beneficially owned or held by
any of the Borrower Parties 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) 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 a Borrower Party 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 Borrower Parties
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 Borrowers are 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
(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 Borrower
Parties, (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.
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.
ARTICLE 7 - INFORMATION COVENANTS
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So long as any of the Obligations is outstanding and unpaid or the
Borrowers have 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 Borrowers 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 Borrowers, a copy of the unaudited combined balance sheet
of the Borrower Parties as at the end of such quarter, and the related unaudited
combined statements of income, retained earnings and cash flows for the Borrower
Parties, setting forth, in the case of the statements of income, 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, which
financial statements shall set forth in comparative form such figures for the
same period for the prior fiscal year and shall be certified by an Authorized
Signatory of each of the Borrowers to, in his or her opinion, present fairly, in
accordance with GAAP, the financial position of the Borrower Parties, on a
combined basis, as at the end of such period, and the results of operations for
such period, and for the elapsed portion of the year ended with the last day of
such period, subject only to normal year-end adjustments.
Section 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 Borrowers, a copy of (a)
the audited combined balance sheet, and the related audited combined statements
of income, retained earnings and cash flows, of the Borrower Parties as at the
end of the fiscal year then ended, and (b) the unaudited combining balance
sheet, and the related unaudited combining statements of income, retained
earnings and cash flows, of the Borrower Parties as at the end of the fiscal
year then ended, which financial statements shall set forth in comparative form
such figures for the same period for the prior fiscal year and shall be
accompanied by an opinion of KPMG Peat Marwick or a firm of independent
certified public accountants of recognized standing selected by the Borrowers
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 under Sections 8.8, 8.9 and 8.10 hereof, was detected
during the examination of the Borrower Parties and that such accountants have
authorized the Borrowers 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 each the Borrowers, 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 whether or
not the Borrowers were in compliance with the requirements of the Financial
Covenants;
PAGE 65
(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 Borrowers
with respect to such Default or Event of Default;
(c) setting forth a list updating the information set forth
on SCHEDULE 5.1(c) with respect to the Borrower Parties to the extent that any
of the Borrowers shall have formed or acquired any new Subsidiaries or
designated any new MGM Operating Companies during such quarter;
(d) setting forth a list and description of all Investments,
Restricted Payments and Restricted Purchases made by any of the Borrower Parties
during such quarter; and
(e) setting forth a list and description of, together with
applicable financial statements, if available, for any Acquisition, formation or
designation of any new MGM Operating Company during the period for which such
performance certificate is being given.
Section 7.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to any of the Borrowers by its independent public accountants
regarding any of the Borrower Parties, 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 Borrowers, the annual budget for the Borrower Parties for the current
fiscal year.
(c) Promptly after the sending thereof, copies of all
material statements, reports and other financial information relating to the
Borrower Parties that is sent to any of the Rainbow Partners or the MGM Partner
or any of the shareholders of RMHI 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 the Borrower Parties 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
PAGE 66
Agreement then in effect to which any of the Borrower Parties is a party (noting
any such Material MSO Agreements or Material Film Rights Agreements that have
been either added or deleted with respect to the prior year).
(g) At the time audited financial statements are required to
be provided under Section 7.2 hereof, a written summary detailing any changes
with respect to the relative ownership interests held by the Rainbow Partners
and the MGM Partner in each of AMC and IFC.
Section 7.5 NOTICE OF LITIGATION AND OTHER MATTERS. Prompt notice of
the following events as to which any 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 any Borrower, in any other way relating adversely and directly
to any of the Borrower Parties, 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 outcome of such proceeding or
investigation is not likely to have a Materially Adverse Effect;
(b) The commencement of any proceeding by or before any
governmental body and all actions and proceedings in any court or before any
arbitrator with respect to the ownership or use of "American Movie Classics";
(c) Any notice of termination, partial termination or
expiration of any MSO Agreement which results in a reduction of fifteen percent
(15%) or more of the number of Paying Affiliated Basic Subscribers of the
Borrower Parties in the aggregate during any calendar quarter when added to all
other terminations or expirations during such quarter;
(d) Any material adverse change with respect to the
business, assets, liabilities, financial position, or results of operations of
any of the Borrower Parties, other than changes in the ordinary course of
business which have not had and are not likely to have a Materially Adverse
Effect;
(e) Any Default or Event of Default, or any default by any
of the Borrower Parties under any agreement (other than this Agreement) to which
any of the Borrower Parties 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
(f) 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 any of
the Borrower Parties or any of their respective ERISA Affiliates or the
institution or threatened
PAGE 67
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 any
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
Borrowers have 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. None of the Borrowers shall, and the
Borrowers 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;
(c) Capitalized Lease Obligations of the Borrower Parties 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) intercompany Indebtedness among any of the Borrower
Parties; and
(e) any Accrued Tax Liabilities.
Section 8.2 INVESTMENTS. None of the Borrowers shall, and the
Borrowers shall not permit any of the Guarantors to, make any Investment, except
that:
(a) the Borrowers may purchase or otherwise acquire and own
Cash Equivalents;
(b) any of the Borrower Parties may make Investments in any
of the other Borrower Parties; and
(c) 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, the
Borrower Parties may (i) make cash Investments in an aggregate amount not to
exceed, together with the amount of any Acquisitions made under Section
8.5(c)(v)(B) hereof, the Available Basket Amount, (ii) make cash Investments
funded by Net Cash Proceeds received in connection with the issuance of any New
Affiliated Equity to the extent such
PAGE 68
Net Cash Proceeds are not used by the Borrower Parties for any other purpose,
and (iii) make Investments made solely with capital stock of CVC.
Section 8.3 LIMITATION ON LIENS. None of the Borrowers shall, and
the Borrowers 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 Borrower Parties
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. None of the Borrowers shall, and
the Borrowers 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 Borrowers and the Credit Parties, or any of
them, of any of the provisions of, (i) the Constituent Documents of AMC and IFC
(including, without limitation, any amendment which would effectively accelerate
the exercise of MGM's put right thereunder or limit the option of RMHI and the
Rainbow Partners to satisfy such put right, in their sole discretion, with
shares of capital stock of CVC), (ii) the Constituent Documents of WE or any of
the Guarantors 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 Borrower Parties, on the one hand, and any of its Affiliates, 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) None of the Borrowers shall, and the Borrowers 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
(including, without limitation, any 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 any other Borrower Party and (y) sales or dispositions in the
ordinary course of business by any of the Borrower Parties 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.
(b) None of the Borrowers shall, and the Borrowers 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 Borrower Parties,
except, so long as no Default or Event of Default then exists or would be caused
thereby, for the issuance of additional
PAGE 69
partnership interests in either AMC or IFC in connection with the issuance of
any New Affiliated Equity.
(c) None of Borrowers shall, and the Borrowers 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 such Borrower Party's business, (ii) purchases of assets in
the ordinary course of such Borrower Party's business, (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, together
with the amount of any Investments made under Section 8.2(c)(i) hereof, the
Available Basket Amount, and (C) Acquisitions funded by Net Cash Proceeds
received in connection with the issuance of any New Affiliated Equity to the
extent such Net Cash Proceeds are not used by the Borrower Parties for any other
purpose.
Section 8.6 LIMITATION ON GUARANTIES. None of the Borrowers shall,
and the Borrowers 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 Borrower Party securing
performance by any Borrower Party of activities otherwise permissible hereunder,
(c) a guaranty by endorsement of negotiable instruments for collection in the
ordinary course of business, and (d) those Guaranties described on SCHEDULE 8.6
attached hereto (as such schedule may be amended by the Borrowers from time to
time), undertaken in the ordinary course of business of the Borrower Parties,
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 subsection
8.6(d) at any time outstanding does not exceed $20,000,000.
Section 8.7 RESTRICTED PAYMENTS AND PURCHASES. None of the Borrowers
shall, and the Borrowers 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 Borrowers,
(b) the Borrowers 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 Borrowers may (i) make Restricted Payments, subject to
the terms of the Subordination of Fees Agreement, for payment of fees under the
Consulting Agreement and for reimbursement of services to the extent set forth
in the Services Agreement, (ii) make Restricted Payments to the Rainbow Partners
and the MGM Partner in accordance with their pro rata share of the partnership
interests in AMC and IFC, and (iii) pay to RMHI, CSC Holdings or CVC amounts due
in respect of Accrued Tax Liabilities pursuant to, and in accordance with, the
Tax Sharing Policy.
PAGE 70
Section 8.8 LEVERAGE RATIO. The Borrowers 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 Leverage Ratio
(after giving effect to such Advance, if applicable), to exceed 2.00 to 1.00.
Section 8.9 INTEREST COVERAGE RATIO. Commencing on March 31, 2003,
the Borrowers 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
3.50 to 1.00.
Section 8.10 DEBT SERVICE RATIO. Commencing on March 31, 2003, the
Borrowers shall not permit, as of the end of any fiscal quarter ending during
the term of this Agreement, the Debt Service Ratio to be less than 2.00 to 1.00.
Section 8.11 AFFILIATE TRANSACTIONS. None of the Borrowers shall, and
the Borrowers shall not permit any of the Guarantors to, at any time engage in
or amend any transaction with an Affiliate, or make an assignment or other
transfer of any of its assets to any Affiliate, on terms less advantageous to
such Borrower Party 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 Borrower Parties 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. None of the Borrowers shall fail, and
the Borrowers shall not permit any of the Guarantors 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. None of the Borrower Parties shall incur any material
withdrawal liability with respect to any Multiemployer Plan. None of the
Borrower Parties 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 Borrower Parties will
enter into any arrangement, directly or indirectly, with any Person whereby any
Borrower Party shall sell or transfer any property, real or personal, whether
now owned or hereafter acquired, and whereby any Borrower Party shall then or
thereafter rent or lease as lessee such property or any part thereof or other
property which any Borrower Party 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.
PAGE 71
Section 8.15 NEGATIVE PLEDGE. None of the Borrowers shall, and the
Borrowers 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 Borrower Party 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 its parent
Company.
ARTICLE 9 - DEFAULT
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 Borrowers 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) Any of the Borrower Parties 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) Any of the Borrower Parties 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) The Rainbow Partners shall, at any time, cease to own
and vote, directly or indirectly, at least eighty percent (80%) of the
partnership interests of each of AMC and IFC, or the Managing Partners shall, at
any time, cease to have management control over the business and operations of
the Borrower Parties, or any Person other than RMHI, the Rainbow Partners or a
direct or wholly-owned Subsidiary of the Rainbow Partners shall obtain the legal
or contractual right to own, or to cause the transfer of the ownership of, all
or any portion of the eighty percent (80%) of the
PAGE 72
partnership interests of each of AMC and IFC held by the Rainbow Partners on the
Agreement Date, without regard to any required approval of any other Person;
(g) Any of the Borrowers 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 its Subsidiaries
(except to the extent that (i) the capital stock, partnership interests or other
equity interests of any such Subsidiary are permitted to be disposed of and (ii)
any such Subsidiary is permitted to issue any additional capital stock,
partnership interests or other equity interests, in each case, pursuant to the
terms and conditions of this Agreement);
(h) Subject to subsection (i) below, the aggregate number of
Paying Affiliated Basic Subscribers of the Borrower Parties shall at any time be
less than seventy-five percent (75%) of the aggregate number of such Paying
Affiliated Basic Subscribers as of December 31, 2002, if such loss of Paying
Basic Affiliated Subscribers would have a Materially Adverse Effect and if such
loss of Paying Affiliated Basic Subsidiaries is not cured by the creation of new
Paying Affiliated Basic Subscribers of the Borrower Parties within sixty (60)
days after the occurrence thereof;
(i) The aggregate number of Paying Affiliated Basic
Subscribers of the Borrower Parties shall at any time be less than seventy
percent (70%) of the aggregate number of such Paying Affiliated Basic
Subscribers as of December 31, 2002, if such loss of Paying Affiliated Basic
Subscribers would have a Materially Adverse Effect;
(j) There shall be entered a decree or order for relief in
respect of any of the Rainbow Partners or any of the Borrower Parties under the
Bankruptcy Code, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or similar official of any of the Rainbow Partners or
any of the Borrower Parties, or of any substantial part of their respective
properties, or ordering the winding-up or liquidation of the affairs of any of
the Rainbow Partners or any of the Borrower Parties, or an involuntary petition
shall be filed against any of the Rainbow Partners or any of the Borrower
Parties 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) Any of the Rainbow Partners or any of the Borrower
Parties shall file a petition, answer, or consent seeking relief under the
Bankruptcy Code, or any of the Rainbow Partners or any of the Borrower Parties
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 any of the Rainbow Partners or any of the Borrower Parties, or of
any substantial part of their respective properties, or any of the Rainbow
Partners or any of the Borrower Parties shall fail generally to pay their
respective debts as they become due, or any of the Rainbow Partners or any of
the Borrower Parties shall take any action in furtherance of any such action;
PAGE 73
(l) A final judgment shall be entered by any court against
any of the Borrower Parties 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 Borrower Parties which, together with all
other property of the Borrower Parties 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 any of the Borrower Parties, or to which
any of the Borrower Parties, has any material liabilities, or any trust created
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 any of the Borrower Parties 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 any of the Borrower Parties 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 any of the Borrower Parties 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 any of the Borrower Parties shall engage in a breach of fiduciary
responsibility or knowingly participate in any violation of ERISA; or any Plan
of any of the Borrower Parties 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 Parties 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 Borrower Parties;
(o) All or any portion of any Loan Document shall at any
time and for any reason be declared to be null and void by a court of competent
jurisdiction in a suit with respect to such Loan Document or otherwise
unenforceable, or a proceeding shall be commenced by any governmental authority
having jurisdiction over any of the Borrower Parties in either case, involving a
legitimate dispute or a proceeding shall be commenced by any of the Borrower
Parties, seeking to establish the invalidity or unenforceability of any Loan
Documents (exclusive of questions of interpretation of any provision thereof),
or any of the Borrower Parties shall deny that it has any liability or
obligation for the payment of principal or interest purported to be created
under any Loan Document;
PAGE 74
(p) There shall occur a default by any of the Borrower
Parties (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
(q) There shall exist any default under, or any cancellation
of (without a contemporaneous replacement, or if interim substitute arrangements
have been 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 (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 (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) 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.
(d) 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
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
PAGE 75
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 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 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.
PAGE 76
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 any Borrower or any Lender
Affiliates of, or Persons doing business with, any 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 Borrowers, 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 Borrowers as such Lender
may reasonably request.
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
PAGE 77
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 any 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;
(b) To any Lender or Lenders, as a consequence of any
failure or delay in performance by, or any breach by, any 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 Borrowers and without limiting the obligation of the Borrowers
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:
PAGE 78
(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 Borrowers 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 Borrowers.
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 Borrowers and may be
removed at any time for cause 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 Affiliates 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 Borrowers and the Lenders, whereupon until the Administrative Agent notifies
the Borrowers that the circumstances giving rise to such situation no longer
exist, the obligations of the Lenders to make Eurodollar Advances shall be
suspended.
PAGE 79
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 Borrowers. 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 Borrowers shall, jointly and severally, 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 Borrowers 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;
PAGE 80
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 otherwise in respect of its Loans, then, in any
such case, on the earlier of demand by such Lender or the applicable Maturity
Date, the Borrowers, jointly and severally, agree 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 Borrowers
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 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 Borrowers 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 Borrowers 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
Borrowers 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
PAGE 81
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 Borrowers, to each of them at:
American Movie Classics Company
The Independent Film Channel, LLC
WE: Women's Entertainment, LLC
c/o Rainbow Media Holdings, Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attn: President
Telecopy No.: (000) 000-0000
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
PAGE 82
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
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
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.
PAGE 83
(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.
Section 12.2 EXPENSES. The Borrowers, jointly and severally,
agree 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 Borrowers are
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
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Agreement such as to require further notice of their intent to require strict
adherence to the terms of the Agreement in the future.
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 each
of the Borrowers at any time or from time to time, without notice to such
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 Borrower Parties, against and on account of the obligations and liabilities
of the Borrower Parties, or any of them, 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, each
Lender and each Lender Affiliate holding deposits of any of the Borrower Parties
shall exercise its set-off rights as so directed.
Section 12.5 ASSIGNMENT.
(a) None of the Borrowers may 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 Rainbow
Loan Agreement, (y) any such assignment, together with the concurrent assignment
under the Rainbow
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 the 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
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amount of the assigning Lender's Loans and Commitments under this Agreement,
together with such Lender's corresponding loans and commitments under the RMHI
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
Borrowers, 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 Borrowers 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 Borrowers, 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 Borrowers, 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 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
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approve or disapprove changes in the interest rate and principal amount, fees
and the applicable Maturity Dates.
(v) Each Lender agrees to provide the Administrative
Agent and the Borrowers 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
under the Notes 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.
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
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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 Borrower Party or is inadvertently received by any
Lender, then such excess sum shall be credited as a payment of principal, unless
such Borrower Party shall notify such Lender in writing that it elects to have
such excess sum returned forthwith. It is the express intent hereof that the
Borrower Parties 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 Borrower Parties 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 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
Borrowers 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
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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, 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 Borrowers, except that (a) any
decrease (other than pro rata) or increase in the amount of the Commitment 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 Borrowers 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 of a Borrower form the Obligations or any
release or impairment of any Collateral or Guaranties relating, directly or
indirectly, to any MGM Operating Company, (iv) 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, which may be released 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 Section 2.12(a) hereof, or any change in
the sharing of payment procedures described in Section 2.12(b) hereof, (vii) any
amendment of the definition of "MGM Operating Companies" or (viii) any amendment
of this Section 12.12 or of the definitions 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 thereof would be to
amend the definition of "Majority Lenders" or "Super-Majority Lenders" 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 Borrowers; 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 required in connection with the
implementation of the Incremental Facility Indebtedness shall require only the
consent of the Majority Lenders and the Borrowers.
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 any of
the Borrowers or any
PAGE 89
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 any Borrower Party, RMHI, 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 any Borrower Party, RMHI, CSC Holdings or CVC shall have any
personal or individual liability or responsibility in respect of Obligations of
any Borrower Party, RMHI, 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 Borrowers and the
Administrative Agent.
ARTICLE 13 - WAIVER OF JURY TRIAL
Section 13.1 WAIVER OF JURY TRIAL. EACH OF THE BORROWER PARTIES AND
EACH OF THE CREDIT PARTIES HEREBY AGREE 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
BORROWER PARTIES, 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, ANY OF THE NOTES 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 BORROWER PARTIES
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
PAGE 90
EACH CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 12.1. EACH OF THE BORROWER PARTIES 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.
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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.
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