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HSN, INC.
$275,000,000
CREDIT AGREEMENT
dated as of
May 1, 1997
LTCB Trust Company
and
The Bank of New York Company, Inc.,
as Co-Documentation Agents
CHASE SECURITIES INC.
AS ARRANGER
THE CHASE MANHATTAN BANK
AS ADMINISTRATIVE AGENT
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CREDIT AGREEMENT
Dated as of May 1, 1997
among
HSN, INC.,
as Borrower,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
LTCB TRUST COMPANY
and
THE BANK OF NEW YORK COMPANY, INC.,
as Co-Documentation Agents,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Accounting Matters
SECTION 1.01. Certain Defined Terms............................................. 2
SECTION 1.02. Terms Generally; Certain Accounting
Matters........................................................ 19
ARTICLE II
Credits
SECTION 2.01. Commitments....................................................... 20
SECTION 2.02. Loans............................................................. 20
SECTION 2.03. Borrowing Procedure............................................... 21
SECTION 2.04. Termination and Reduction of
Commitments.................................................... 22
SECTION 2.05. Fees.............................................................. 23
SECTION 2.06. Lending Offices................................................... 24
SECTION 2.07. Several Obligations; Remedies
Independent.................................................... 24
SECTION 2.08. Evidence of Debt.................................................. 25
SECTION 2.09. Prepayments....................................................... 25
SECTION 2.10. Conversion and Continuation of
Borrowings..................................................... 26
SECTION 2.11. Letters of Credit................................................. 27
ARTICLE III
Payments of Principal and Interest
SECTION 3.01. Repayment of Loans................................................ 33
SECTION 3.02. Interest.......................................................... 33
ARTICLE IV
Payments; Pro Rata Treatment; Computations, etc.
SECTION 4.01. Payments.......................................................... 35
SECTION 4.02. Pro Rata Treatment................................................ 36
SECTION 4.03. Non-Receipt of Funds by the
Administrative Agent........................................... 36
SECTION 4.04. Sharing of Payments, etc.......................................... 37
ARTICLE V
Yield Protection and Illegality
SECTION 5.01. Additional Costs.................................................. 38
SECTION 5.02. Alternate Rate of Interest........................................ 40
4
SECTION 5.03. Illegality........................................................ 41
SECTION 5.04. Compensation...................................................... 41
SECTION 5.05. Taxes............................................................. 42
ARTICLE VI
Guarantee
SECTION 6.01. Unconditional Guarantee........................................... 43
SECTION 6.02. Validity.......................................................... 43
SECTION 6.03. Waivers........................................................... 44
SECTION 6.04. Subordination and Subrogation..................................... 44
SECTION 6.05. Acceleration...................................................... 45
SECTION 6.06. Reinstatement..................................................... 45
ARTICLE VII
Conditions Precedent
SECTION 7.01. Initial Credit Event.............................................. 46
SECTION 7.02. Initial and Subsequent Credit Events.............................. 47
ARTICLE VIII
Representations and Warranties
SECTION 8.01. Corporate Existence............................................... 48
SECTION 8.02. Financial Condition............................................... 48
SECTION 8.03. Litigation........................................................ 49
SECTION 8.04. No Breach or Default, etc......................................... 49
SECTION 8.05. Corporate Action.................................................. 49
SECTION 8.06. Approvals......................................................... 49
SECTION 8.07. Use of Loans...................................................... 50
SECTION 8.08. ERISA............................................................. 50
SECTION 8.09. Taxes............................................................. 50
SECTION 8.10. Credit Agreements................................................. 50
SECTION 8.11. Ownership of Assets............................................... 50
SECTION 8.12. Status of Obligations............................................. 51
SECTION 8.13. Investment Company Act; Public
Utility Holding Company Act.................................... 51
SECTION 8.14. Environmental Matters............................................. 51
SECTION 8.15. FCC Matters....................................................... 51
SECTION 8.16. Labor Matters..................................................... 52
SECTION 8.17. Solvency.......................................................... 52
ARTICLE IX
Covenants of the Borrower and the Guarantors
SECTION 9.01. Financial Statements; Reports and
Other Information.............................................. 53
SECTION 9.02. Litigation........................................................ 56
SECTION 9.03. Corporate Existence, etc.......................................... 56
SECTION 9.04. Payment of Obligations............................................ 57
SECTION 9.05. Liens............................................................. 57
SECTION 9.06. Sale and Lease-Back Transactions.................................. 59
SECTION 9.07. Indebtedness...................................................... 60
SECTION 9.08. Ranking .......................................................... 61
SECTION 9.09. Business; Fiscal Year ............................................ 61
SECTION 9.10. Transactions with Affiliates ..................................... 62
SECTION 9.11. Interest Coverage Test............................................ 62
SECTION 9.12. Total Debt Ratio ................................................. 62
SECTION 9.13. Interest Rate Protection
Agreement .................................................... 62
SECTION 9.14. Mergers and Sale of Assets........................................ 62
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SECTION 9.15. Dispositions of Assets ........................................... 63
SECTION 9.16. Restricted Payments; Restrictions
on Ability of Subsidiaries to
Pay Dividends ................................................. 64
SECTION 9.17. Restricted Investments............................................ 65
SECTION 9.18. Acquisitions...................................................... 67
SECTION 9.19. Use of Proceeds .................................................. 68
SECTION 9.20. Certain Agreements................................................ 68
SECTION 9.21. Compliance with Laws.............................................. 68
SECTION 9.22. Further Assurances................................................ 68
SECTION 9.23. Ownership of the Guarantors; Additional
Guarantors .................................................... 68
SECTION 9.24. Notification of Incurrence of Debt................................ 69
ARTICLE X
Events of Default
ARTICLE XI
The Administrative Agent
ARTICLE XII
Miscellaneous
SECTION 12.01. Waiver............................................................ 77
SECTION 12.02. Notices........................................................... 77
SECTION 12.03. Expenses, etc..................................................... 78
SECTION 12.04. Amendments, etc................................................... 79
SECTION 12.05. Successors and Assigns............................................ 80
SECTION 12.06. Assignments and Participation..................................... 80
SECTION 12.07. Confidentiality................................................... 81
SECTION 12.08. Survival.......................................................... 82
SECTION 12.09. Captions.......................................................... 82
SECTION 12.10. Counterparts...................................................... 82
SECTION 12.11. Governing Law..................................................... 82
SECTION 12.12. Jurisdiction; Waiver of Jury Trial................................ 82
SECTION 12.13. Severability...................................................... 83
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Schedule 1.01(a) Lenders and Commitments
Schedule 1.01(b) Description of Credit Card Program
Schedule 1.01(c) Form of Calculation of Financial Ratios
Schedule 1.01(d) Material Subsidiaries
Schedule 8.10 Credit Agreements
Schedule 9.05 Liens
Schedule 9.07 Indebtedness
Schedule 9.17 Investments
EXHIBIT A Form of Assignment and Acceptance
EXHIBIT B Form of Promissory Note
EXHIBIT C Form of Opinion of Counsel to the Credit Parties
EXHIBIT D Form of Total Debt Ratio Notice
EXHIBIT E Form of Compliance Certificate
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CREDIT AGREEMENT dated as of May 1, 1997,
among HSN, INC., a Delaware corporation formerly
known as Silver King Communications, Inc. (the
"Borrower"), each of the Guarantors (as defined in
Article I), each of the Lenders (as defined in
Article I), LTCB TRUST COMPANY and THE BANK OF NEW
YORK COMPANY, INC., as co-documentation agents (in
such capacity, the "Co-Documentation Agents"), and
THE CHASE MANHATTAN BANK, as administrative agent
for the Lenders (in such capacity, the
"Administrative Agent").
WHEREAS, the Borrower, as guarantor, and SKTV, Inc. ("SKTV"),
as borrower, are parties to a Credit Agreement dated as of August 1, 1994 (as
amended from time to time, the "SKC Credit Agreement");
WHEREAS, Home Shopping Network, Inc. ("Home Shopping"), Home
Shopping Club, Inc. and HSN Realty, Inc. are parties to a Credit Agreement
dated as of August 2, 1996 (as amended from time to time, the "Home Shopping
Credit Agreement" and, together with the SKC Credit Agreement, the "Existing
Credit Agreements");
WHEREAS, on December 20, 1996, a wholly owned subsidiary of
the Borrower merged with and into Home Shopping (the "Home Shopping Merger"),
with the result that Home Shopping became an 80.1% owned Subsidiary of the
Borrower;
WHEREAS, on December 19, 1996, Savoy Pictures Entertainment,
Inc. ("Savoy") merged with and into Silver King Communications, Inc. (the
"Savoy Merger" and, together with the Home Shopping Merger and all transactions
related to the Savoy
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Merger and the Home Shopping Merger, the "Mergers"), with the
result that Savoy became a Wholly Owned Subsidiary of the
Borrower;
WHEREAS, the Borrower has requested that the credit
facilities under the Existing Credit Agreements be refinanced by this
Agreement;
WHEREAS, the Lenders are willing to make loans to the
Borrower in an aggregate principal amount not exceeding $275,000,000 at any one
time outstanding upon the terms and conditions hereof;
WHEREAS, the Borrower has also requested the Issuing Bank (as
defined in Article I) to issue letters of credit in an aggregate face amount at
any one time outstanding not in excess of $35,000,000; and
WHEREAS, the Issuing Bank is willing to issue letters of
credit to the Borrower and each Lender is willing to take an irrevocable and
unconditional pro rata participation in each letter of credit, the Borrower's
obligations in respect of each letter of credit to be guaranteed by the
Guarantors, in an aggregate face amount at any one time outstanding not in
excess of $35,000,000 upon the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Definitions and Accounting Matters
SECTION 1.01. Certain Defined Terms. As used herein, the
following terms shall have the following meanings:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
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"ABR Loan" shall mean any Loan bearing interest at the
Alternate Base Rate in accordance with the provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate in effect for such Interest Period multiplied by (b) the Statutory Reserve
Rate.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean, with respect to any Person, any other
Person (other than a Wholly Owned Subsidiary of such Person), directly or
indirectly through one or more intermediaries, controlling, controlled by, or
under direct or indirect common control with, such Person. A Person shall be
deemed to control another Person if such Person (A) is an officer or director
of such other Person, (B) possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise, or (C) directly or indirectly owns or controls 10% or more of such
other Person's capital stock. "Controlling" and "controlled" shall have
meanings correlative to "control".
"Alternate Base Rate" shall mean, for any day, a rate per
annum equal to the greatest of (a) the Prime Rate in effect on such day, (b)
the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Lending Office" shall mean, for each Lender and
for each type of Loan, the Lending Office of such Lender (or of an affiliate of
such Lender) designated for such type of Loan on the signature pages hereof or
such other office of such Lender (or of an Affiliate of such Lender) as such
Lender may from time to time specify to the Administrative Agent and the
Borrower as the office by which its Loans of such type are to be made and
maintained.
"Applicable Margin" shall mean, with respect to any
Eurodollar Loan, any ABR Loan or the Commitment Fees, as the case may be, the
applicable percentage set forth in its appropriate
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table below under the caption "Eurodollar Spread", "ABR Spread" or "Commitment
Fee Percentage", as the case may be, based upon the Total Debt Ratio as set
forth in the Total Debt Ratio Notice most recently delivered under Section
9.01(g) (which Notice shall, subject to Section 3.02(e), be effective on the
date of the Administrative Agent's receipt thereof in accordance with Section
12.02):
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Commitment
Eurodollar Fee
Total Debt Ratio Spread ABR Spread Percentage
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Less than 1.50 to
1.00 .375% 0% .125%
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Greater than or equal
to 1.50 to 1.00, but
less than 2.00 to
1.00 .500% 0% .150%
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Greater than or equal
to 2.00 to 1.00, but
less than 3.00 to 1.00 .625% 0% .1875%
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Greater than or equal
to 3.00 to 1.00, but
less than 3.50 to 1.00 .750% 0% .225%
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Greater than or equal
to 3.50 to 1.00, but
less than 4.00 to
1.00 .875% 0% .250%
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Greater than or equal
to 4.00 to 1.00 1.00% 0% .250%
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"Assessment Rate" shall mean, for any day, the annual
assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as "well-capitalized" and within supervisory subgroup
"B" (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor thereto) for insurance by such Corporation (or
such successor) of time deposits made in dollars at the offices of such member
in the United States; provided that if, as a result of any change in any law,
rule or regulation, it is no longer possible to determine the Assessment Rate
as aforesaid, then the Assessment Rate shall be such annual rate as shall be
determined by the Administrative Agent to be representative of the cost to the
Lenders of such insurance.
"Asset Sale" shall mean any sale or other disposition
(including any sale and leaseback) by the Borrower or any of its Subsidiaries
of any asset or assets, other than (i) any sale or other disposition of
inventory in the ordinary course of
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business, (ii) any sale or other disposition of obsolete assets in the ordinary
course of business, (iii) any sale or other disposition of movie rights in the
ordinary course of business, (iv) any sale or disposition of SKTV programming
rights in the ordinary course of business on an arm's-length basis, (v) any
sale or disposition of SKTV or any of its Subsidiaries or by SKTV of all or
substantially all of its or its Subsidiaries' television broadcast stations;
provided that any sale or disposition of SKTV or any of its subsidiaries or all
or substantially all of its Subsidiaries' television broadcast stations, in
whole or in part, shall constitute an "Asset Sale" to the extent of any cash
consideration thereof, and provided further that, in the case of any asset that
is acquired by a Person that becomes a Subsidiary, the Administrative Agent
shall have received satisfactory written instruments, in form and substance
satisfactory to the Administrative Agent, by which such Person becomes a Credit
Party to this Agreement (unless it cannot legally do so) or (vi) any sale or
disposition of Xxxx Research, Inc., Internet Shopping Network, Inc., The
National Registry Inc. or Body by Jake.
"Asset Swap" shall mean (a) any direct exchange of SKTV or
any of its Subsidiaries or by SKTV or any of its Subsidiaries of assets
including (without limitation) one or more of its television broadcast stations
for assets including (without limitation) one or more television broadcast
stations or (b) any series of transactions involving a sale by SKTV or any of
its Subsidiaries of assets including (without limitation) one or more of its
television broadcast stations combined with (independently or in conjunction
with) the acquisition by SKTV or any of its Subsidiaries of assets including
(without limitation) one or more television broadcast stations; provided that:
(i) prior to consummating any such transaction (and prior to
consummating the first of any series of such transactions) the
Borrower shall notify the Administrative Agent of all television
broadcast stations known at the time of notice to be exchanged, sold
or acquired in connection with such transactions and the material
terms of such transactions;
(ii) within 12 months after consummating the first of any
series of such transactions, the Borrower shall deliver to the
Administrative Agent copies of detailed summaries of (or, if publicly
filed, copies of) executed contracts with respect to all other
transactions involved in such series of transactions exceeding in the
aggregate $10,000,000;
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(iii) all transactions involved in any such series of
transactions shall be consummated within the later of (x) 18 months
after consummation of the first transaction in such series and (y) the
date on which all applications to the FCC shall have been acted upon
and any FCC action thereon shall have become final and no longer
subject to any administrative or judicial review, unless any executed
contract described in clause (ii) above has been canceled or
terminated or the transactions contemplated by such contract will not
be consummated; and
(iv) in the case of the acquiror of such assets becoming a
Subsidiary, the Borrower will cause such acquiror to execute and
deliver to the Administrative Agent a written instrument, in form and
substance reasonably satisfactory to the Administrative Agent, by
which such acquiror becomes a Credit Party to this Agreement (unless
it cannot legally do so).
If all transactions in a series of transactions intended to qualify as an Asset
Swap are not consummated within the relevant period described in clause (iii)
above after the first such related transaction, then none of such transactions
shall be considered to be part of an Asset Swap (except to the extent that the
completed transactions alone would constitute an Asset Swap).
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit A or such other form as shall be
approved by the Administrative Agent.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of
the United States, 11 U.S.C. ss. 101 et seq., as amended from time to time
"Base CD Rate" shall mean the sum of (a) the Three-Month
Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America (or any successor thereto).
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest Period is in
effect.
"Borrowing Request" shall mean a request by the Borrower for
a Borrowing in accordance with Section 2.03.
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"Business Day" shall mean any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
or required by law to remain closed; provided that when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the London interbank
market.
"Capital Expenditures" shall mean, for any period, all
amounts that would, in accordance with GAAP, be set forth as "capital
expenditures" on the consolidated financial statement of the Borrower and its
consolidated Subsidiaries for such period.
"Capital Lease" shall mean any lease or other contractual
arrangement which under GAAP has been or should be recorded as a capital lease.
"Change of Control" shall be deemed to have occurred if:
(a) Xxxxx Xxxxxx, TCI, Liberty or any combination thereof
shall fail to maintain Voting Control of the Borrower;
(b) on or after the date on which Xxxxx Xxxxxx fails to
maintain Voting Control of the Borrower, any Person or group (other
than Xxxx X. Xxxxxx) shall acquire, directly or indirectly,
beneficially or of record, more than 50% of the voting power of TCI
or, if TCI has spun-off Liberty, more than 50% of the voting power of
Liberty (it being understood that TCI may only spin-off Liberty (or
any part thereof) to the shareholders of TCI (which must include Xxxx
X. Xxxxxx or, in the event of his death or incapacitation, must
include his heirs or estate);
(c) any change of control (or similar event, however
denominated) with respect to the Borrower or any Subsidiary of the
Borrower shall occur (unless otherwise waived) under and as defined in
any indenture or agreement in respect to indebtedness to which the
Borrower or any Subsidiary of the Borrower is a party if as a result
of such change of control or similar event the Borrower or any
Subsidiary of the Borrower is required to prepay, repurchase, redeem
or defease such indebtedness; or
(d) any Person or group other than Xxxxx Xxxxxx, TCI, or
Liberty shall acquire all or substantially all of the assets of the
Borrower.
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For purposes of this definition (i) "Voting Control" of the Borrower shall mean
(x) control, directly or indirectly through Wholly Owned Subsidiaries, of at
least 51% of the aggregate voting power of the Borrower and (y) the ability to
elect a majority of the seats of the board of directors of the Borrower, (ii) a
percentage of the "voting power" of any person shall mean the voting power
(through ownership of shares, beneficially or of record, by contract or
otherwise) representing at least such percentage of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of such
person and (iii) "group" shall mean a group within the meaning of Rule 13d-5 of
the Securities Exchange Act of 1934, as amended from time to time.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, with respect to any Lender, the
amount set forth opposite such Lender's name on Schedule 1.01(a) as the same
may be terminated or reduced from time to time pursuant to Section 2.04 or
reduced or increased from time to time pursuant to one or more assignments
under Section 12.06.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Core Business" shall mean any of the businesses in which the
Borrower is engaged on the date of this Agreement (including without limitation
SKTV broadcast programming, as it may change from time to time, and third-party
fulfillment business and natural extensions thereof such as teleservices and
information services).
"Credit Exposure" shall mean, with respect to any Lender at
any time, the sum of the outstanding principal amount of all outstanding Loans
of such Lender and its L/C Exposure.
"Credit Parties" shall mean the Borrower and the Guarantors.
"Default" shall mean an Event of Default or any event or
condition which with notice or lapse of time or both would constitute an Event
of Default.
"Dollars" and "$" shall mean lawful money of the United
States of America.
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"EBITDA" shall mean, for any period, the sum of the following
for the Borrower and its Subsidiaries (including the Guarantors, but excluding
the SF Broadcasting Companies for each Fiscal Year and Savoy for Fiscal 1996)
on a consolidated basis:
(a) operating profit of such Persons for such period; plus
(b) (to the extent already deducted in arriving at operating
profit) depreciation and amortization expense for such Persons for
such period; plus
(c) (to the extent already deducted in arriving at operating
profit) non-cash compensation expense related to the Borrower's
executive stock award program and the Borrower's equity participation
plan and other non-cash compensation expense related to the issuance
of shares of the Borrower or stock options thereof to the Borrower's
officers, directors or employees; minus
(d) (to the extent already included in arriving at operating
profit) purchase accounting adjustments as reflected in the Borrower's
consolidated financial statements;
as shown on the consolidated financial statements, including the notes thereto,
of the Borrower and its consolidated Subsidiaries (excluding the SF
Broadcasting Companies in each Fiscal Year and Savoy for Fiscal 1996) for such
period. EBITDA for the four-Fiscal Quarter period ended December 31, 1996 is as
set forth in Schedule 1.01(c).
"Effective Date" shall mean the date on which this Agreement
shall have been executed and delivered by each of the parties provision for
whose signature has been made on the signature pages hereof and each of the
conditions precedent set forth in Section 7.01 has been satisfied.
"Environmental Law" shall have the meaning assigned to such
term in Section 8.14.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as any Credit Party or is under
common control (within the
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meaning of Section 414(c) of the Code) with any Credit Party, or, solely for
purposes of Section 412 of the Code, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to that
term in Article X.
"FCC" shall mean the Federal Communications Commission of the
United States of America and any successor agency or Governmental Authority.
"FCC Licenses" shall mean all licenses, permits and
authorizations issued, granted or assigned by the FCC to the Borrower or any of
its Subsidiaries in connection with any of the stations owned by the Borrower
or any of its Subsidiaries.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Fees" shall mean the Commitment Fees, the L/C Participation
Fees and the Fronting Fees.
"Financial Officer" shall mean the chief financial officer,
the principal accounting officer, treasurer or controller of the Borrower.
"Fiscal Quarter" shall mean, a period of three consecutive
calendar months commencing on any January 1, April 1, July 1 and October 1 in
any Fiscal Year.
"Fiscal Year" shall mean, for any Credit Party or Subsidiary,
the 12 consecutive calendar months' period commencing
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on January 1 of each calendar year and ending on December 31 of such calendar
year; and "Fiscal 1996", "Fiscal 1997", and any other year so designated shall
mean the Fiscal Year ending on December 31 of the indicated calendar year.
"Fronting Fee" shall have the meaning assigned to such term
in Section 2.05(c).
"Form 10-K" shall mean the Form 10-K of the Borrower for the
year ended December 31, 1996.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, consistently applied, as in effect (unless
otherwise specified in this Agreement) from time to time.
"Governmental Authority" shall mean the government of the
United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guaranteed Program" shall have the meaning assigned to that
term in Schedule 1.01(b).
"Guarantor" shall mean each Person listed on the signature
pages hereof as a Guarantor, and any other Person that becomes a Credit Party
to this Agreement pursuant to Section 9.23(b) or in connection with an Asset
Swap, and "Guarantors" shall mean all such entities, collectively.
"Hedging Agreements" shall mean any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement entered into by the Borrower or any of its Subsidiaries.
"Indebtedness" shall mean, for any Person (but without
duplication):
(a all indebtedness and other obligations of such Person for
borrowed money or for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of
business and not overdue by more than 180 days), including all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
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(b all obligations of such Person under Hedging Agreements;
(c the stated amount of all letters of credit (including the
Letters of Credit) issued for the account of such Person and (without
duplication) all drafts drawn thereunder, and the aggregate face
amount of all banker's acceptances as to which such Person is
obligated;
(d all obligations of such Person under any Capital Leases;
(e all obligations of such Person in connection with employee
benefit or similar plans;
(f all obligations of such Person in respect of guarantees,
whether direct or indirect (including agreements to "keep well" or
otherwise ensure a creditor against loss) with respect to any
indebtedness or other obligation of any other Person of the type
described in any of clauses (a) through (e) above;
(g all indebtedness or other obligations referred to in any
of clauses (a) through (f) above secured by any Lien upon property
owned by such Person, whether or not such Person is liable on any such
obligation; and
(h all obligations of Credit Parties or Subsidiaries under
the Program, to the extent they exceed, in the aggregate for all such
Persons, $3,000,000.
"Interest Expense" shall mean, for any period, all interest
expense of the Borrower and its consolidated Subsidiaries (other than SF
Broadcasting Companies) for such period, other than (i) interest expense
recorded as a result of purchase accounting adjustments, (ii) non-cash interest
expense with respect to the refinancing of the Existing Credit Agreements and
the Second Amended and Restated Credit Agreement of Home Shopping dated as of
August 30, 1994, and (iii) interest expense with respect to Savoy (other than
interest expense with respect to Savoy's 7% Convertible Subordinated Debentures
due July 1, 2003), in each case determined in accordance with GAAP.
"Interest Payment Date" shall mean, (a) with respect to any
ABR Loan, the last day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing
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with an Interest Period of more than three months' duration, the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period.
"Interest Period" shall mean with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect; provided, however, that
(a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless,
in the case of a Eurodollar Borrowing only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (b) any Interest Period pertaining
to a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Investment" shall mean, for any Person, (a) the acquisition
(whether for cash, property, services or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
or obligations of any other Person or any agreement to make any such
acquisition (including any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such short
sale); (b) the making of any deposit with, or advance, or loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person, but excluding any such
advance, loan or other extension of credit to customers of the Borrower or to
customers of the Borrower's Subsidiaries having a term not exceeding 90 days
arising in the ordinary course of business); (c) the entering into any
guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such person; or (d) the entering
into any Hedging Agreement.
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"Issuing Bank" shall mean The Chase Manhattan Bank, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.11(i).
"L/C Commitment" shall mean the commitment of the Issuing
Bank to issue Letters of Credit pursuant to Section 2.11.
"L/C Disbursement" shall mean a payment made by the Issuing
Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all L/C Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The L/C Exposure of
any Lender at any time shall be its Pro Rata Percentage of the total L/C
Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.05(b).
"Lenders" shall mean (a) the financial institutions listed on
Schedule 1.01(a) (other than any such financial institution that has ceased to
be a party hereto pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto pursuant to an Assignment
and Acceptance.
"Letter of Credit" shall mean any letter of credit issued by
the Issuing Bank pursuant to Section 2.11.
"Liberty" shall mean Liberty Media Corporation, a Delaware
corporation.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not so available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000
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and for a maturity comparable to such Interest Period are offered to the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset or other
property, (a) any mortgage, deed of trust, lien, pledge, hypothecation, charge,
security interest or encumbrance of any kind in respect of such asset or
property, any agreement to grant any of the foregoing with respect to such
asset or property, and the filing of a financing statement or similar recording
in any jurisdiction with respect to such asset or property, (b) the interest of
a vendor or a lessor under any conditional sale agreement, Capital Lease or
title retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset or property,
(c) any account receivable transferred by it with recourse (including any such
transfer subject to a holdback or similar arrangement that effectively imposes
the risk of collectibility on the transferor) and (d) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"Loan Documents" shall mean this Agreement, the Notes, the
Letters of Credit, the letter of credit applications and each amendment,
supplement, modification, consent or waiver of, to or in respect of any of the
foregoing.
"Loans" shall mean the loans provided for by Section 2.01.
Each Loan shall be a Eurodollar Loan or an ABR Loan.
"Majority Lenders" shall mean at any time Lenders having
Credit Exposures and unused Commitments representing at least 51% of the Total
Commitment.
"Margin Stock" shall have the meaning assigned to such term
in Regulation U.
"Material Adverse Effect" shall mean material adverse effect
on (a) the business, operations or financial condition of the Borrower and the
Subsidiaries taken as a whole or (b) the ability of any Credit Party to perform
any of its Obligations under any of the Loan Documents.
"Material Subsidiary" shall mean, at any time, a Subsidiary
the book value of whose tangible assets at such time exceeds 10% of the book
value of the total tangible assets of the
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Borrower and its Subsidiaries (on a consolidated basis), which as of the date
of this Agreement are as listed on Schedule 1.01(d).
"Material Subsidiary Group" shall mean, at any time, a group
of any two or more Subsidiaries which at such time has a combined aggregate
book value of tangible assets in excess of 10% of the book value of the total
tangible assets of the Borrower and its Subsidiaries (on a consolidated basis).
"Maturity Date" shall mean the fifth anniversary of the
Effective Date.
"Mergers" shall have the meaning assigned to such term in the
fourth paragraph of the preamble.
"Multiemployer Plan" shall mean a plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Cash Proceeds" shall mean in connection with any sale or
other disposition of any asset or any settlement by, or receipt of payment in
respect of, any property or casualty insurance claim or condemnation award in
respect thereof, the cash proceeds (including any cash payments received by way
of deferred payment of principal pursuant to a note or installment receivable
or purchase price adjustment receivable or otherwise, but only as and when
received) of such sale, settlement or payment, net of reasonable and documented
attorneys' fees, accountants' fees, investment banking fees, amounts required
to be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such sale, insurance
claim or condemnation award in respect thereof, any amounts required to be
escrowed or reserved by the Borrower or its Subsidiaries with respect to
liabilities retained by the Borrower or its Subsidiaries in connection with
such sale or disposition, including any indemnification or purchase price
adjustments (provided that if and to the extent any such amounts are released
to the Borrower or any of its Subsidiaries from escrow or such reserve, such
amounts will be treated as Net Cash Proceeds) and other customary fees and
other costs and expenses actually incurred in connection therewith and net of
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any tax sharing arrangements).
"Non-Material Subsidiary" shall mean, at any time, a
Subsidiary that is not a Material Subsidiary.
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"Notes" shall mean the promissory notes provided for by
Section 2.08.
"1996 Financial Statements" shall mean the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries (including the
Guarantors) as at December 31, 1996, and the related consolidated statements of
income, retained earnings and changes in financial position of the Borrower and
its consolidated Subsidiaries (including the Guarantor) for the Fiscal Year
ended on such date, audited and accompanied by an unqualified opinion of Ernst
& Young LLP, independent auditors.
"1996 Pro Forma Financial Statements" shall mean the pro
forma combined statements of income of the Borrower and its consolidated
Subsidiaries (including the Guarantors) for Fiscal 1996 prepared giving effect
to the Mergers as if the Mergers had occurred on January 1, 1996, but excluding
the Savoy motion picture business, as set forth in the Form 10-K.
"Obligations" shall mean all obligations and liabilities of
the Borrower to the Administrative Agent, the Issuing Bank and the Lenders (or
any of the foregoing) now or in the future existing under or in connection with
any Loan Document or any related document (as any Loan Document or document may
from time to time be respectively amended, modified, substituted, extended or
renewed), direct or indirect, absolute or contingent, due or to become due, now
or hereafter existing, including (a) the payment of any principal of and
interest on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set forth for prepayment or otherwise, and the payment
of any fees, expenses or other amounts under any Loan Document, (b) each
payment required to be made by the Borrower under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of L/C Disbursements, interest thereon and the obligations to
provide cash collateral in respect of any Letter of Credit and (c) all
obligations of the Borrower, monetary or otherwise, under each Hedging
Agreement entered into with a Lender or its Affiliates.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company,
association, partnership, trust, joint venture, unincorporated organization,
limited liability company, Governmental Authority or other entity.
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"Plan" shall mean an employee benefit or other plan
established or maintained by the Borrower or any ERISA Affiliate and which is
covered by Title IV of ERISA or Section 412 of the Code, other than a
Multiemployer Plan.
"Post-Default Rate" shall mean a rate per annum, during the
period commencing on the date on which any Obligation is not paid in cash in
full when due (whether at stated maturity, by acceleration or otherwise) and
ending on the date on which all such overdue Obligations are paid in cash in
full, equal to a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the sum of the Alternate Base
Rate plus 2.00% per annum.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City. Each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective.
"Program" shall have the meaning assigned to that term in
Schedule 1.01(b).
"Pro Rata Percentage" shall mean, with respect to any Lender,
the percentage of the Total Commitment represented by such Lenders's
Commitment. If the Commitments have terminated or expired, the Pro Rata
Percentage shall be determined based upon the Commitments most recently in
effect, giving effect to any subsequent assignments pursuant to Section 12.06.
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulatory Change" shall mean, with respect to any Lender,
any change after the date of this Agreement in United States Federal, state or
foreign law or regulations (including
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Regulation D) or the adoption or making 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, state or foreign law or regulations (whether
or not having the force of law) by any court or Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law).
"Securitization" shall mean the transfer or pledge of assets
or interests in assets of the Borrower or any of its Subsidiaries to a trust,
partnership, corporation or other entity, which transfer or pledge is funded by
Indebtedness of such entity that is non-recourse to the Borrower and its
Subsidiaries (other than such entity) in whole or in part by the issuance of
instruments or securities that are paid principally from the cash flow derived
from such assets or interests in assets.
"SEC Report" shall mean, with respect to any Person, any
document filed at any time with the Securities and Exchange Commission (or any
successor thereto) by or on behalf of such Person and available to the public.
"SFB Credit Agreement" shall mean the Credit Agreement dated
as of June 30, 1995, as amended from time to time, among the SF Broadcasting
Companies, as borrowers, the "Lenders" (as defined therein), The Chase
Manhattan Bank, as administrative agent and collateral agent, First Union
National Bank of North Carolina, as managing agent, and The Bank of New York,
Fleet Bank, N.A. and Banque Paribas as co-agents.
"SF Broadcasting Companies" shall mean Savoy Stations, Inc.
and its Subsidiaries.
"Secured Parties" shall mean (a) the Lenders, (b) the
Administrative Agent, (c) the Issuing Bank and (d) the successors and assigns
of the foregoing.
"Short-Term Debt" shall mean, for any Person, all
Indebtedness of such Person which would be short-term debt, whether direct or
contingent, under GAAP as in effect on the date of this Agreement.
"Special Program" shall have the meaning assigned to that
term in Schedule 1.01(b).
"Statutory Reserve Rate" shall mean a fraction (expressed as
a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the
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aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board and any other banking authority, domestic or foreign, to which the
Administrative Agent or any Lender (including any branch, Affiliate, or other
fronting office making or holding a Loan) is subject for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute a eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Debentures" shall mean (i) Home Shopping's
5-7/8% Convertible Subordinated Debentures due March 1, 2006, and (ii) Savoy's
7% Convertible Subordinated Debentures due July 1, 2003, in each case as
amended or supplemented prior to the date hereof.
"Subordinated Indebtedness" shall mean Indebtedness for
borrowed money of the Borrower (i) no portion of the principal of which is
required to be repaid, repurchased, defeased or reacquired by the Borrower or
its Affiliates at any time prior to the date that is 60 days after the Maturity
Date, (ii) all payments in respect of which are fully subordinated to the prior
payment of the Obligations and (iii) the terms of which (including the
subordination terms) have been approved in writing by the Administrative Agent
and the Majority Lenders prior to the issuance thereof.
"Subsidiary" shall mean any corporation, partnership or other
Person (a) of which at least a majority of the outstanding shares of capital
stock or other ownership interests ordinarily having, in the absence of
contingencies, by the terms thereof voting power to elect a majority of the
board of directors, (b) that is at the time any determination is made directly
or indirectly owned or controlled by any Credit Party or by the Borrower and/or
any Guarantor, and in any event shall include the Guarantors and their
respective subsidiaries or (c) any of the SF Broadcasting Companies.
"TCI" shall mean Tele-Communications, Inc., a Delaware
corporation.
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"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate is not
so reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day is not a Business Day, on the next
preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.
"Total Commitment" shall mean, at any time, the aggregate
amount of the Commitments, as in effect at such time.
"Total Debt" shall mean, for any Person at any time, all
Indebtedness of such Person and its subsidiaries (excluding the SF Broadcasting
Companies) at such time (including all long-term senior and subordinated
Indebtedness, all Short-Term Debt, the stated amount of all letters of credit
(including the Letters of Credit) issued for the account of such Person and
(without duplication) all unreimbursed draws thereunder), as shown on the
consolidated quarterly or annual financial statements, including the notes
thereto, of the Borrower delivered for such period pursuant to Section 9.01 or
referred to in Section 8.02). Total Debt of the Borrower and its consolidated
Subsidiaries as at the end of the four-Fiscal Quarter period ended December 31,
1996, is as set forth on Schedule 1.01(c).
"Total Debt Ratio" shall mean, at any time, the ratio of (a)
Total Debt of the Borrower and its consolidated Subsidiaries (excluding the SF
Broadcasting Companies) as at the end of the Borrower's four-Fiscal Quarter
period most recently ended as of such time, to (b) EBITDA for the same period,
as shown in the Total Debt Ratio Notice for such period.
"Total Debt Ratio Notice" shall mean each notice provided for
in Section 7.01(f) or Section 9.01(g).
"Type", when used in respect of any Loan or Borrowing, shall
refer to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
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"Wholly Owned Subsidiary" shall mean any Person of which all
of such ownership interests, other than directors' qualifying shares, are so
owned or controlled.
SECTION 1.02. Terms Generally, Certain Accounting Matters.
(a) The definitions in Section 1.01 shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise (i) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (iii) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (v) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
(b) Unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (c) below,
all financial statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent on behalf of itself and
the Lenders hereunder shall be prepared in accordance with GAAP applied on a
basis consistent with those used in the preparation of the latest financial
statements furnished to the Lenders hereunder after the date hereof (or, prior
to the delivery of the first financial statements furnished to the Lenders
hereunder, used in the preparation of the audited financial statements referred
to in Section 8.02). All calculations made for the purposes of determining
compliance with the terms of Sections 9.11, 9.12, 9.13, 9.14, 9.16, 9.17 and
9.18 shall, except as otherwise expressly provided herein, be made by
application of GAAP applied on a basis consistent with those used in the
preparation of the annual or quarterly financial statements then most recently
furnished to the Lenders pursuant
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to Section 9.01 (or referred to in Section 8.02) unless (i) the Borrower shall
have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority Lenders shall so
object in writing within 30 days after delivery of such financial statements,
in either of which cases such calculations shall be made on a basis consistent
with those used in the preparation of the most recent financial statements as
to which such objection shall not have been made.
(c) The Borrower shall deliver to the Administrative Agent,
with sufficient copies for delivery to the Lenders, contemporaneously with
delivery of any annual or quarterly financial statement under Section 9.01 a
description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the most recently preceding annual or quarterly financial
statements as to which no objection shall have been made in accordance with the
last sentence of subsection (b) above, and reasonable estimates of the
difference between such statements arising as a consequence thereof.
ARTICLE II
Credits
SECTION 2.01. Commitments. Each Lender severally agrees, on
the terms and subject to the conditions of this Agreement and relying upon the
representations and warranties herein set forth, to make Loans to the Borrower
from time to time during the period from and including the date hereof to but
not including the earlier of the Maturity Date and the termination of the
Commitment of such Lender in accordance with the terms hereof in an aggregate
principal amount at any time outstanding that will not result in (a) the
aggregate Credit Exposure exceeding the Total Commitment then in effect or (b)
such Lender's Credit Exposure exceeding such Lender's Commitment. Subject to
the terms and conditions of this Agreement, during such period the Borrower may
borrow, pay or repay and reborrow Loans.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments. The Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1,000,000 and
not less than $5,000,000 or (ii) equal to the remaining available balance of
the applicable Commitments.
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(b) Subject to Sections 5.02 and 5.03, each Borrowing shall
be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request pursuant to Section 2.03. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement. Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than 15 Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds to such account set forth in Section 4.01(a) or to such other
account in New York City as the Administrative Agent may designate not later
than 12:00 noon, New York City time, and the Administrative Agent shall by 3:00
p.m., New York City time, credit the amounts so received to an account in the
name of the Borrower, maintained with the Administrative Agent and designated
by the Borrower in the applicable Borrowing Request or, if a Borrowing shall
not occur on such date because any condition precedent herein specified shall
not have been met, return the amounts so received to the respective Lenders.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Eurodollar Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date. The Interest Payment Date for any ABR Borrowing shall in no event extend
beyond the Maturity Date.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing, the Borrower shall hand deliver or telecopy (or request by
telephone, which telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy) to the Administrative Agent a
duly completed Borrowing Request (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
10:00 a.m., New York City time, one Business Day before a proposed Borrowing.
Each Borrowing Request shall be irrevocable, shall be signed by or on behalf of
the Borrower and shall specify the following information:
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(i) whether the Borrowing then being requested is to be a Eurodollar Borrowing
or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business
Day); (iii) the number and location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing
is to be a Eurodollar Borrowing, the Interest Period with respect thereto;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the requirements
set forth in Section 2.02 and this Section. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration. The Administrative
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 (and the contents thereof), and of each Lender's portion of the
requested Borrowing.
SECTION 2.04. Termination And Reduction Of Commitments. (a)
The Commitments shall be automatically terminated on the Maturity Date if not
terminated earlier pursuant to the terms of this Agreement.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Commitments; provided, however, that (i) each partial reduction of
the Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $5,000,000 and (ii) no such termination or reduction shall be made
(A) which would reduce the Total Commitment to an amount that is less than
aggregate Credit Exposure at the time or (B) which would reduce any Lender's
Commitment to an amount that is less than such Lender's Credit Exposure.
(c) If the Borrower or any of its Subsidiaries shall receive
Net Cash Proceeds from any Asset Sale, an amount equal to 50% of the Net Cash
Proceeds in excess of $10,000,000 therefrom shall be applied within five days
of the date of receipt of the Net Cash Proceeds to reduce permanently the
Commitments and, to the extent required by Section 2.09, shall be applied to
prepay Borrowings; provided that no such reduction pursuant to this subsection
needs to be made until the aggregate Net Cash Proceeds required to be applied
pursuant to this subsection to reduce Commitments and not yet so applied equals
or exceeds $10,000,000
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at which time the aggregate Net Cash Proceeds in excess of $10,000,000 required
to be applied pursuant to this subsection to reduce Commitments and not yet so
applied shall be so applied to reduce the Commitments. Notwithstanding the
foregoing, no reduction in the Commitments shall be required under this
subsection with respect to an Asset Sale that constitutes part of Asset Swap;
provided that (i) if the aggregate Net Cash Proceeds, if any, received by the
Borrower and its Subsidiaries in connection with any Asset Swap exceeds the
aggregate amount of any cash consideration paid by the Borrower and its
Subsidiaries in connection therewith, then a reduction shall be required under
this subsection in an amount equal to 50% of such excess Net Cash Proceeds, and
(ii) if the Borrower or any Subsidiary consummates one or more Asset Sales that
are intended to constitute part of an Asset Swap and such Asset Swap is not
completed within the time required in order for such Asset Sale to qualify as
part as an Asset Swap (as provided in the definition of the term "Asset Swap")
then a reduction shall be required under this subsection with respect to the
Net Cash Proceeds of such Asset Sale less, if applicable, the amount of cash
consideration paid by the Borrower and its Subsidiaries in connection with
acquisitions, if any, intended to constitute part of such Asset Swap that were
effected in time to qualify as part of such Asset Swap. Subject to the
provision to the first sentence of this subsection, any reduction required
pursuant to clause (i) above shall be made on or within two Business Days after
completion of the applicable Asset Swap and any reduction required pursuant to
clause (ii) above shall be made on the expiration date of the period of time
allowed to complete the applicable Asset Swap. Notwithstanding anything to the
contrary set forth in this Agreement, the amount of Net Cash Proceeds from any
Asset Sale by Savoy of some or all of any of its Subsidiaries' assets pursuant
to paragraph (d) of Section 9.15 shall be equal to the lesser of (i) 100% of
the Net Cash Proceeds received by the Borrower or any of its Subsidiaries
(including Savoy Stations Inc. but excluding the remaining SF Broadcasting
Companies) from such Asset Sale and (ii) the pro rata value of all investments
and Investments made by the Borrower or any of its Subsidiaries (including
Savoy Stations Inc., but excluding the remaining SF Broadcasting Companies) in
any such Subsidiary, on a cumulative basis, from the Effective Date through the
date of such Asset Sale (it being understood that for purposes of this
sentence, "Net Cash Proceeds" shall exclude any Indebtedness repaid under the
SFB Credit Agreement). For purposes of this subsection, any Net Cash Proceeds
received by Savoy Stations Inc. shall include any Net Cash Proceeds received by
any SF Broadcasting Companies that are transferred to Savoy Stations Inc. in
the form of a dividend or otherwise.
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Concurrently with any Asset Sale which will cause a reduction
in Commitments pursuant to this subsection (or upon the expiration of the
period of time during which such Asset Sale could have been part of an intended
Asset Swap, as applicable), the Borrower shall deliver to the Administrative
Agent and each Lender a written notice of such sale and the calculation of the
Net Cash Proceeds of such sale.
(d) Each reduction in the Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Administrative Agent for the account of the
applicable Lenders, on the date of each termination, the Commitment Fees on the
amount of the Commitments so terminated accrued to but excluding the date of
such termination.
SECTION 2.05. Fees. (a) Commitment Fee. The Borrower agrees
to pay to each Lender, through the Administrative Agent, on the last day of
March, June, September and December of each year and on each date on which the
Commitment of such Lender shall expire or be terminated as provided herein, a
commitment fee (a "Commitment Fee") equal to the applicable Commitment Fee
Percentage (as set forth in the definition of Applicable Margin) per annum on
the average daily unused amount of the Commitment of such Lender during the
preceding Fiscal Quarter (or other period commencing with the date hereof or
ending with the Maturity Date or the date on which the Commitments of such
Lender shall expire or be terminated). The Administrative Agent shall calculate
the aggregate amount of Commitment Fees in respect of such Fiscal Quarter (or
shorter period) by applying the applicable Commitment Fee Percentage in effect
on each day during such period to the average daily unused amount of the
Commitments on each such day. All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The
Commitment Fee due to each Lender shall commence to accrue on the date hereof
and shall cease to accrue on the date on which the Commitment of such Lender
shall be terminated as provided herein.
(b) L/C Participation Fee. The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December of each year and on each date on which the Commitment of
such Lender shall expire or be terminated as provided herein, a fee (the "L/C
Participation Fee") calculated on such Lender's Pro Rata Percentage of the
average daily aggregate undrawn amount of all outstanding Letters of Credit
during the preceding Fiscal Quarter (or shorter period commencing with the
Effective Date and ending with the Maturity Date or the date on which all
Letters of Credit have been canceled or have expired and the Commitments shall
have been
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terminated) at a rate equal to (i) in the case of trade Letters of
Credit (x) 1/4 of 1% per annum if the Total Debt Ratio is less than 3:1 and (y)
40% of the Applicable Margin for Eurodollar Loans if the Total Debt Ratio is
greater than or equal to 3:1 and (ii) in the case of standby Letters of Credit,
the Applicable Margin for Eurodollar Loans. All L/C Participation Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.
(c) Fronting Fee, etc. The Borrower agrees to pay to the
Issuing Bank a fronting fee (the "Fronting Fee"), and the customary issuance,
amendment, administrative and drawing fees, as agreed upon in writing by the
Borrower and the Issuing Bank.
All Fees and all other fees agreed upon by the Borrower and
the Administrative Agent or the Issuing Bank shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders. Once paid, none of the Fees or other
fees shall be refundable under any circumstances.
SECTION 2.06. Lending Offices. The Loans made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
SECTION 2.07. Several Obligations; Remedies Independent. The
failure of any Lender to make any Loan to be made by it on the date specified
therefor shall not in itself relieve any other Lender of its obligation to make
its Loan on such date, but no Lender shall be responsible for the failure of
any other Lender to make a Loan required to be made by such other Lender. The
amounts payable by any Credit Party at any time hereunder and under any other
Loan Document to each Lender shall be a separate and independent debt and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement and the other Loan Documents, and it shall not be necessary for any
other Lender, the Administrative Agent or the Issuing Bank to consent to, or be
joined as an additional party in, any proceedings for such purposes.
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SECTION 2.08. Evidence of Debt. (a) The Loans made by each
Lender shall be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit B, dated the date of this Agreement, payable
to the order of such Lender in a principal amount equal to the amount of its
Commitment and otherwise duly completed. Each Loan made by each Lender, and all
payments and prepayments made on account of the principal thereof and interest
thereon, and all conversions of such Loans, shall be recorded by such Lender in
accordance with its usual practice and, prior to any transfer of the Note held
by it, endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that no failure by any Lender to make such
recording or endorsement (or any error in such recording or endorsement) shall
affect the obligations of any Credit Party under this Agreement or any other
Loan Document to such Lender or the holder of such Note.
(b) Each Lender shall be entitled to have its Note subdivided
or reissued in connection with an assignment of all or any portion of its
Commitment, Loans and Note pursuant to Section 12.06(b).
(c) The Administrative Agent shall maintain accounts in which
it will record (i) the amount of each Loan made hereunder, the Type thereof,
the Interest Period applicable thereto and all conversions of such Loans, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder from any Credit Party and
each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligations of the
Borrower to repay the Loans in accordance with their terms or the obligations
of any Guarantor to repay its guarantee obligations in accordance with their
terms.
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SECTION 2.09. Prepayments. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, (i) in the case of a Eurodollar Borrowing, upon at least three Business
Days' prior written or telecopy notice to the Administrative Agent before 11:00
a.m., New York City time or (ii) in the case of an ABR Borrowing, upon at least
one Business Day's prior written or telecopy notice to the Administrative Agent
before 10:00 a.m., New York City time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000.
(b) In the event of any termination of all the Commitments,
the Borrower shall repay or prepay all its outstanding Borrowings on the date
of such termination. In the event of any partial reduction of the Commitments
pursuant to this Section 2.09 or Section 2.04, then (i) at or prior to the
effective date of such reduction or termination, the Administrative Agent shall
notify the Borrower and the Lenders of the Credit Exposure after giving effect
thereto and (ii) if the aggregate Credit Exposure would exceed the Total
Commitment after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Borrowings in an amount sufficient to eliminate such excess.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein.
(d) All prepayments under this Section 2.09 shall be subject
to Section 5.04, but otherwise without premium or penalty. All prepayments
under this Section 2.09 shall be accompanied by accrued interest on the
principal amount being prepaid to the date of payment.
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SECTION 2.10. Conversion and Continuation of Borrowings. (a)
The Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (i) not later than 10:00 a.m., New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (ii) not later than 11:00 a.m., New York City time, three
Business Days prior to conversion or continuation, to convert any ABR Borrowing
into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing for an additional Interest Period, and (c) not later than
11:00 a.m., New York City time, three Business Days prior to conversion, to
convert the Interest Period with respect to any Eurodollar Borrowing to another
permissible Interest Period, subject in each case to the following:
(A) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(B) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and 2.02(b) regarding the principal amount and maximum number of
Borrowings of the relevant Type;
(C) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the
new Loan of such Lender resulting from such conversion and reducing
the Loan (or portion thereof) of such Lender being converted by an
equivalent principal amount; accrued interest on any Eurodollar Loan
(or portion thereof) being converted shall be paid by the Borrower at
the time of conversion;
(D) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 5.04;
(E) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or, except
during the month prior to the termination of the Commitments and
subject to availability, continued as a Eurodollar Borrowing; and
(F) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by
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reason of the immediately preceding clause shall be automatically
converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing; and
(G) after the occurrence and during the continuance of an
Event of Default, no outstanding Loan may be continued as or converted
into a Eurodollar Loan.
(b) Each notice pursuant to this Section 2.10 shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
amount of the Borrowing that the Borrower requests be converted or continued,
(ii) whether such Borrowing is to be converted to or continued as a Eurodollar
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Borrower shall be deemed to have selected an Interest Period of
one month's duration. The Administrative Agent shall promptly advise the
Lenders of any notice given pursuant to this Section 2.10 (and the contents
thereof) and of each Lender's portion of any converted or continued Borrowing.
If the Borrower shall not have given notice in accordance with this Section
2.10 to continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as an ABR Borrowing.
SECTION 2.11. Letters of Credit. (a) General. The Borrower may
request the issuance of a Letter of Credit for its own account, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time while the Commitments remain in effect. The Issuing
Bank agrees, subject to the terms and conditions set forth herein, to issue
Letters of Credit requested by the Borrower in an aggregate amount at any time
outstanding not to exceed the lesser of (i) $35,000,000 minus the aggregate
amount at any time outstanding of letters of credit issued pursuant to
subparagraph (h) of Section 9.07 and (ii) the amount of the Total Commitments
minus the amount of the Credit Exposure. This Section shall not be construed to
impose an obligation upon the Issuing Bank to issue any Letter of Credit that
is inconsistent with the terms and conditions of this Agreement. In the event
of any inconsistency between the terms and conditions of this Agreement
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and the terms and conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into by the Borrower
with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. In order to request the issuance of a Letter of Credit (or
the amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter
of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
below), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (A) the L/C Exposure
shall not exceed $35,000,000 minus the aggregate amount at any time outstanding
of letters of credit issued pursuant to subparagraph (h) of Section 9.07 and
(B) the aggregate Credit Exposure shall not exceed the Total Commitment. Upon
request of any Lender, the Administrative Agent shall provide to such Lender
the amount and expiration date of any outstanding Letter of Credit and the
amount of the L/C Exposure.
(c) Expiration Date. Each Letter of Credit shall expire at
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date, unless such Letter of
Credit expires by its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit (or
any amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each such Lender hereby acquires from
the
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Issuing Bank, a participation in such Letter of Credit and any related Letter
of Credit application equal to such Lender's Pro Rata Percentage from time to
time of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Pro Rata Percentage of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) below, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension (provided that such amendment, renewal or
extension complies with this Section 2.11) of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such L/C Disbursement by paying to the Administrative Agent, for the account of
the Issuing Bank, an amount equal to such L/C Disbursement not later than 5:00
p.m., New York City time, on the date that such L/C Disbursement is made or, if
the Borrower shall not have received notice of such L/C Disbursement prior to
12:00 noon, New York City time, on the Business Day immediately following the
day that the Borrower receives such notice. If the Borrower shall fail to pay
any amount required to be paid under this paragraph on or prior to the time
specified in the preceding sentence, then (i) such unpaid amount shall bear
interest, for each day from and including the date specified for payment of
such L/C Disbursement in the preceding sentence, to but excluding the date of
payment, at a rate per annum equal to the interest rate applicable to overdue
ABR Loans pursuant to Section 3.02(c), (ii) the Administrative Agent shall
promptly notify the Issuing Bank and the Lenders thereof, (iii) each Lender
shall comply with its obligation under paragraph (d) above by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02(c) shall apply,
mutatis mutandis, to the payment obligations of the Lenders) and (iv) the
Administrative Agent shall promptly pay to the Issuing Bank amounts so received
by it from the Lenders. The Administrative Agent shall promptly pay to the
Issuing Bank any amounts received by it from the Borrower
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pursuant to this paragraph prior to the time that any Lender makes any payment
pursuant to paragraph (d) above; any such amounts received by the
Administrative Agent thereafter shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made such payments and to
the Issuing Bank, as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any L/C
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such L/C Disbursement.
(f) Obligations Absolute. The Borrower's obligations to
reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any other Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any other
Loan Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate
thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank, the
Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit;
(vi) any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
facsimile or otherwise; and
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(vii) any other act or omission to act or delay of any kind
of the Issuing Bank, the Lenders, the Administrative Agent or any
other Person or any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge
of the Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and unconditional obligation
of the Borrower hereunder to reimburse L/C Disbursements will not be excused by
the gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. It is understood that the Issuing Bank may accept documents that
appear on their face to be in substantial compliance with the terms of such
Letter of Credit, without responsibility for further investigation, regardless
of any notice or information to the contrary and, may make payment upon
presentation of documents that appear on their face to be in substantial
compliance with the terms of such Letter of Credit; provided that the Issuing
Bank shall have the right in its sole discretion to decline to accept such
documents and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit. In making any payment under
any Letter of Credit, the Issuing Bank's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary thereunder
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in substantial compliance with the
terms of such Letter of Credit, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect shall, in each case, be deemed not to constitute wilful misconduct or
gross negligence of the Issuing Bank.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall also as
promptly as possible give telephonic notification, confirmed by telecopy, to
the Administrative Agent and the Borrower of such demand for payment and
whether the Issuing Bank has made or will make an L/C Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such L/C Disbursement. The Administrative Agent
shall promptly give each Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement, then, unless the Borrower shall reimburse such L/C Disbursement
in full on the date such L/C Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such L/C
Disbursement is made to but excluding the date that the Borrower reimburses
such L/C Disbursement, at the rate per annum then applicable to ABR Loans;
provided that, if the Borrower fails to reimburse such L/C Disbursement when
due pursuant to paragraph (e) of this Section, then Section 3.02(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Resignation of Issuing Bank. The Issuing Bank may resign
at any time by giving 60 days' prior written notice to the Administrative
Agent, the Lenders and the Borrower. Subject to the next succeeding paragraph,
upon the acceptance of any appointment as the Issuing Bank hereunder by a
successor Issuing Bank, such successor shall succeed to and become vested with
all the interests, rights and obligations of the retiring Issuing Bank and the
retiring Issuing Bank shall be discharged from its obligations to amend, renew
or extend existing Letters of Credit or to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective, the
Borrower shall pay all accrued and unpaid fees owed to the Issuing Bank
pursuant to Sections 2.05(b) and (c). The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by a written
agreement entered into by such successor, and, from and after the effective
date of such agreement, (i) such successor Issuing Bank shall have all the
rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall
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be deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of a Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of a Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit amended, renewed, extended or
issued by it prior to such resignation or removal, but shall not be required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, the Borrower shall, on the Business Day it receives
notice from the Administrative Agent or the Majority Lenders (or, if the
maturity of the Loans has been accelerated, Lenders with L/C Exposure
representing greater than 50% of the total L/C Exposure) demanding the deposit
of cash collateral pursuant to this paragraph, deposit in an account with the
Administrative Agent, for the benefit of the Lenders, an amount in cash equal
to 105% of the L/C Exposure as of such date; provided that such deposit shall
become due and payable automatically, without demand or other notice of any
kind, upon any Event of Default with respect to the Borrower described in
clause (e), (f) or (g) of Article X. The Borrower hereby grants to the
Administrative Agent, for the benefit of the Secured Parties, a first priority
security interest in such cash, account and proceeds thereof, as additional
security to the payment of the Obligations. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account and any
balances therein. Other than any interest earned on the investment of such
deposits in cash or cash equivalents, which investments shall be made at the
option and sole discretion of the Administrative Agent, such deposits shall not
bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) be applied by the
Administrative Agent to reimburse the Issuing Banks for L/C Disbursements from
time to time for which they shall not have been reimbursed in accordance with
paragraph (e) above, (ii) be held for the satisfaction of the portion of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with L/C Exposure representing greater than 50% of the total
L/C Exposure), be applied to satisfy the Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence and continuance of an Event of Default, such amount
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(to the extent not applied as aforesaid) shall be returned to the persons
depositing the same within three Business Days after all Events of Default have
been cured or waived.
(k) Termination or Reduction of L/C Commitment. The Borrower
may permanently terminate, or from time to time in part permanently reduce, the
L/C Commitment, in each case upon at least one Business Day's prior written or
telecopy irrevocable notice to the Administrative Agent and the Issuing Bank;
provided that, after giving effect to such termination or reduction, the
aggregate L/C Commitment shall not be less than the L/C Exposure at such time.
ARTICLE III
Payments of Principal and Interest
SECTION 3.01. Repayment of Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the principal amount then outstanding of all Loans of such Lender
on the Maturity Date.
SECTION 3.02. Interest. The Borrower shall pay to the
Administrative Agent for account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period commencing on
the date of such Loan to but excluding the date such Loan shall be paid in
full, at the following rates per annum and at the following times:
(a) Subject to the provisions of clause (c) below, during
such periods as such Borrowing is a Eurodollar Borrowing, for each
Interest Period relating thereto, the Adjusted LIBO Rate (computed on
the basis of the actual number of days elapsed over a year of 360
days) for such Borrowing for such Interest Period plus the Applicable
Margin in effect for each day during such Interest Period.
(b) Subject to the provisions of clause (c) below, during
such periods as such Borrowing is an ABR Borrowing, the Alternate Base
Rate (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, for periods during
which the Alternate Base Rate is determined by reference to the Prime
Rate and 360 days for other periods) plus the Applicable Margin in
effect for each day during such Borrowing.
(c) Notwithstanding the foregoing, at any time during the
period commencing on the date on which any Obligation is
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not paid in cash in full when due (whether at stated maturity, by
acceleration or otherwise) and ending on the date on which all such
overdue Obligations are paid in cash in full, the Borrower shall pay
to the Administrative Agent for account of each Lender interest on the
principal of all Loans and (to the fullest extent permitted by law) on
any unpaid interest or any other amount payable by the Borrower
hereunder or under any other Loan Document held by such Lender at the
Post-Default Rate.
(d) Accrued interest on each Loan shall be payable (i) on
each Interest Payment Date for such Loan and (ii) in any case, on the
date on which any principal amount thereof is paid or prepaid or
converted to a Loan of another type on the portion thereof being so
paid, prepaid or converted, except that interest on any principal,
interest or other amount payable at the Post-Default Rate shall be
payable from time to time on demand. The applicable Alternate Base
Rate or Adjusted LIBO Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive
absent manifest error.
(e) If the Borrower shall fail to timely deliver a Total Debt
Ratio Notice in respect of any four-Fiscal Quarter period in
accordance with Section 9.01(g), and it transpires that the Total Debt
Ratio has changed from that which was in effect with respect to the
previous four-Fiscal Quarter period such that any interest rate or
Commitment Fee hereunder would increase, the Borrower agrees that the
interest rate on the Loans shall, by operation of the definition of
Applicable Margin, automatically increase on the date such Total Debt
Ratio Notice is duly given in accordance with Section 12.02. In
addition, (i) such increase shall be retroactive to the date on which
such Total Debt Ratio Notice should have been delivered in accordance
with Section 9.01(g) and (ii) the incremental interest for the
retroactive period shall be payable on the next date on which interest
is payable under the Loan Documents (or, if no further interest or
Commitment Fee is payable, immediately on demand by the Administrative
Agent or any Lender). If the Borrower shall fail to timely deliver a
Total Debt Ratio Notice in respect of any four-Fiscal Quarter period,
and it transpires that the Total Debt Ratio has changed from that
which was in effect with respect to the previous four-Fiscal Quarter
period such that any interest rate or Commitment Fee hereunder would
decrease, then such decrease shall be effective from the date on which
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such Total Debt Ratio Notice is received by the Administrative Agent,
and shall have no retroactive effect.
(f) No provision of this Agreement, any other Loan Document
or any other document delivered in connection herewith or with either
thereof and no transaction contemplated hereby or thereby shall be
construed or shall operate so as to require any Credit Party or any
other Person liable for payment of any of the Obligations to pay
interest in an amount or at a rate greater than the maximum allowed
from time to time by applicable law. Should any interest or other
charges paid by any Credit Party or any such other Person under any
such document result in a computation or earning of interest in excess
of the maximum rate of interest permitted under applicable law in
effect while such interest is being earned, then such excess shall be
and hereby is waived by each Lender and all such excess shall be
automatically credited against and in reduction of the principal
balance of such amounts payable under such documents and any portion
of such excess received by any Lender shall be paid over by such
Lender to such Credit Party or such other Person, as the case may be,
it being the intent of the parties hereto that under no circumstances
shall the Credit Party or such other Person be required to pay
interest in excess of the maximum rate allowed by such applicable law.
ARTICLE IV
Payments; Pro Rata Treatment; Computations, etc.
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SECTION 4.01. Payments. (a) Except to the extent otherwise
provided herein, all payments of Obligations shall be made in Dollars, in
immediately available funds and without set-off, counterclaim, defense or
deduction of any kind, to the Administrative Agent at account name: HSN, Inc.,
Clearing account number 000-0-00000, maintained by the Administrative Agent,
care of Loan and Agency Services Group, at its offices at One Chase Xxxxxxxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such other account or at such
other place or in such other manner as the Administrative Agent may notify the
Borrower and the Lenders from time to time), not later than 11:00 a.m., New
York City time, on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Any Lender for whose account any such
payment is to be made may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary deposit account
of any Credit Party with such Lender or any affiliate of such Lender (with
subsequent notice to any Credit Party; provided that such Lender's failure to
give such notice shall not affect the validity of such debit). The appropriate
Credit Party shall at the time of making a payment under this Agreement or any
other Loan Document specify to the Administrative Agent (i) the account from
which the payment funds will be transmitted and the manner and approximate time
of such transmission and (ii) the Loans or other amounts payable by such Credit
Party hereunder to which such payment shall be applied, and in the event that
it shall have failed to specify, or if an Event of Default shall have occurred
and be continuing, the Administrative Agent may distribute such payment to the
Lenders in such manner as it or the Majority Lenders may deem appropriate,
subject to Section 4.02.
(b) Each payment received by the Administrative Agent under
this Agreement or any other Loan Document for account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan in respect of which such
payment is made.
(c) If the due date of any payment (including principal of or
interest on any Borrowing or any Fees or any other fees or other amounts) to be
made hereunder or under any other Loan Document would otherwise fall on a day
which is not a Business Day, such date shall be extended to the next succeeding
Business Day (and such extension of time shall in such case be included in the
computation of interest, Fees or other fees, if applicable, unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such date shall be changed to the next
preceding Business Day).
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SECTION 4.02. Pro Rata Treatment. (a) Except to the extent
otherwise provided herein:
(i) each Borrowing from the Lenders under Section 2.01 shall
be made from the Lenders, each payment of Commitment Fee under Section
2.05 shall be made for account of the Lenders and each termination or
reduction of the amount of the Commitments under Section 2.04 shall be
applied to the Commitments of the Lenders, pro rata according to the
amounts of their respective unused Commitments;
(ii) each conversion of Loans of a particular Type (other
than conversions provided for by Section 5.01) shall be made pro rata
among the Lenders holding Loans of such Type according to the
respective principal amounts of such Loans held by such Lenders; and
(iii) each payment and prepayment by the Borrower of
principal of or interest on Loans of a particular type shall be made
to the Administrative Agent for account of the Lenders holding Loans
of such Type pro rata in accordance with the respective unpaid
principal amounts of such Loans held by such Lenders.
(b) Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender's percentage of such Borrowing to the next
higher or lower whole dollar amount.
SECTION 4.03. Non-Receipt of Funds by The Administrative
Agent. Unless the Administrative Agent shall have been notified by a Lender or
any Credit Party prior to the date on which such Lender or Credit Party is
scheduled to make payment to the Administrative Agent of (in the case of a
Lender) the proceeds of a Loan to be made by it hereunder or (in the case of
any Credit Party) a payment to the Administrative Agent for account of one or
more of the Lenders hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that it does not
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient or recipients on such date
and, if such Lender or such Credit Party, as the case may be, has not in fact
made the Required Payment to the Administrative Agent, the recipient of such
payment shall, on demand, repay to the Administrative Agent the amount so made
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available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at (a) in the case of the Borrower, the interest rate applicable at the
time to the Loans comprising such Borrowing and (b) in the case of such Lender,
the Federal Funds Effective Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
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SECTION 4.04. Sharing of Payments, etc. Each Credit Party
agrees that, in addition to (and without limitation of) any right of setoff,
bankers' lien or counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option, to offset balances held by it in ordinary deposit
accounts of any Credit Party at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans,
or any other amount payable to such Lender hereunder, which is not paid when
due (regardless of whether such balances are then due any Credit Party), in
which case it shall promptly notify the relevant Credit Party and the
Administrative Agent thereof; provided that such Lender's failure to give such
notice shall not affect the validity thereof. Each Lender agrees that, if any
Lender shall obtain payment of any principal of or interest on any Loan or L/C
Exposure made by it to the Borrower, or any other amount payable to such
Lender, under this Agreement through the exercise of any right of setoff,
banker's lien or counterclaim or similar right, and, as a result of such
voluntary or involuntary payment, such Lender shall have received a greater
percentage of the principal, interest or such other amount then due hereunder
by the Borrower to such Lender than the percentage received by any other
Lenders, it shall be deemed simultaneously to have purchased at face value from
such other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Loans and L/C Exposure made by other
Lenders (or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such excess payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid principal and/or
interest on the Loans held by each of the Lenders or such other amount due to
the Lenders hereunder. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or
otherwise) if such payment is rescinded or must otherwise be restored. Each
Credit Party agrees that any Lender so purchasing a participation (or direct
interest) in the Loans and L/C Exposure made by other Lenders (or in interest
due thereon, as the case may be) may exercise all rights of setoff, bankers'
lien, counterclaim or similar rights with respect to such participation as
fully as if such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Credit Party. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 4.04 applies,
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such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this Section 4.04 to share in the benefits of any recovery on
such secured claim.
ARTICLE V
Yield Protection and Illegality
SECTION 5.01. Additional Costs. (a) The Borrower shall pay
directly to each Lender or the Issuing Bank, as the case may be, upon demand
from time to time such amounts as the Issuing Bank or such Lender or its
holding company, as the case may be, may determine to be necessary to
compensate it for any costs which the Issuing Bank or such Lender or such
holding company, as the case may be, determines are attributable to its
issuing, maintaining or participating in any Letter of Credit or its making or
maintaining of any Eurodollar Loans to the Borrower or its obligation to make
any Eurodollar Loans to the Borrower hereunder, or any reduction in any amount
receivable by the Issuing Bank or Lender hereunder in respect of any of such
Loans or Letters of Credit or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which (i) changes the basis of taxation of
any amounts payable to the Issuing Bank or such Lender or such holding company,
as the case may be, by any Credit Party under this Agreement or any other Loan
Document in respect of any of such Loans (other than changes in respect of
taxes imposed on the overall net income of such Lender or of its Applicable
Lending Office for any of such Loans by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office) or Letters of
Credit; or (ii) imposes, modifies or deems applicable any reserve, special
deposit, minimum capital, capital ratio or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, the Issuing Bank or such Lender, as the case may be, (including
any of such Loans or Letters of Credit or any deposits referred to in the
definition of "LIBO Rate"), or the Commitment of such Lender; or (iii) imposes
any other condition affecting this Agreement or any other Loan Document (or any
of such extensions of credit or liabilities) or the Commitments.
(b) Without limiting the effect of the provisions of Section
5.01(a), in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
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Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender so elects by
notice to the Borrower, the obligation of such Lender to make, and to convert
ABR Loans into, Eurodollar Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (and all Eurodollar Loans held by such
Lender shall be automatically converted into ABR Loans at the end of the then
current Interest Period for each of them, or on such earlier date as such
Lender may specify in writing as being the last permissible date for such
prepayment under applicable law, rules or regulations).
(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Borrower shall pay to the
Issuing Bank and to each Lender and to their holding companies from time to
time on request such amounts as the Issuing Bank or such Lender or such holding
company, as the case may be, may determine to be necessary to compensate the
Issuing Bank or such Lender or such holding company, as the case may be, for
any costs which it determines are attributable to the maintenance by the
Issuing Bank or such Lender or such holding company (or any Applicable Lending
Office), as the case may be, pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law)
of any Governmental Authority, of capital in respect of the Issuing Bank's or
such Lender's Commitment (such compensation to include an amount equal to any
reduction of the rate of return on assets or equity of the Issuing Bank or such
Lender (or any Applicable Lending Office) to a level below that which the
Issuing Bank or such Lender (or any Applicable Lending Office) could have
achieved but for such law, regulation, interpretation, directive or request).
(d) Determinations and allocations by the Issuing Bank and
any Lender for purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to Section 5.01(a) or (b), or of the effect of capital
maintained pursuant to Section 5.01(c), on its costs or rate of return of
maintaining Loans or Letters of Credit or its obligation to make Loans, or
Letters of Credit, or to participate in Letters of Credit, or on amounts
receivable by it in respect of Loans or Letters of Credit, and of the amounts
required to compensate such Lender under this Section 5.01, shall be conclusive
absent manifest error.
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(f) A certificate of a Lender or the Issuing Bank, as the
case may be, setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company as specified in paragraph
(a), (b) or (c) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate delivered by it within five days after its receipt of the same.
Notwithstanding the foregoing, no Lender or the Issuing Bank shall have the
right to collect payments from the Borrower pursuant to paragraph (c) of this
Section 5.01 unless it is the policy of the Issuing Bank or such Lender, as the
case may be, at the time of such collection, to collect similar payments from
other borrowers (if any) who are similarly situated as the Borrower, including
with respect to credit standing, in connection with credit facilities similar
to those made available pursuant to this Agreement, where the documents
governing such credit facilities establish the right of such Lender to collect
such payments.
(g) Failure or delay on the part of the Issuing Bank or any
Lender to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital shall not constitute a
waiver of the Issuing Bank's or such Lender's right to demand such
compensation. The protection of this Section shall be available to the Issuing
Bank and each Lender regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition that shall have occurred or been imposed.
(h) If any Lender requests compensation under this Section,
then the Borrower may request such Lender to use reasonable efforts to transfer
its Commitments or Loans to another Applicable Lending Office of such Lender if
such transfer would avoid the need for or mitigate the amount of any
compensation under this Section, but no Lender shall be required to make such
transfer if such Lender determines in its sole discretion that such Lender
would suffer any legal, economic or regulatory disadvantage.
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SECTION 5.02. Alternate Rate of Interest. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of any
interest rate for any Eurodollar Borrowing for any Interest Period therefor:
(a) the Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the
deposits referred to in the definition of "LIBO Rate" are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for such Loans as provided
herein; or
(b) the Administrative Agent or any Lender determines (which
determination shall be conclusive), and so notifies the Administrative
Agent, that the rates of interest referred to in the definition of
"LIBO Rate" upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined do not
adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loans for such Interest Period; or
(c) the Administrative Agent determines (which determination
shall be inclusive) that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate;
then the Administrative Agent shall, as soon as practicable, give the Borrower
notice thereof, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans or to convert
ABR Loans into Eurodollar Loans and the Borrower shall, on the last day or days
of the then current Interest Period or Periods for the outstanding Eurodollar
Loans, either repay such Loans as provided in Section 3.01 or convert such
Loans into ABR Loans in accordance with Section 2.10. If any Lender notifies
the Administrative Agent pursuant to clause (b) of this Section, then the
Borrower may request such Lender to use reasonable efforts to transfer its
Commitments or Loans to another Applicable Lending Office of such Lender if
such transfer would avoid the need for or mitigate the matter described in
clause (b) of this Section, but no Lender shall be required to make such
transfer if such Lender determines in its sole discretion that such Lender
would suffer any legal, economic or regulatory disadvantage.
SECTION 5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans hereunder, then such Lender shall promptly notify the
Administrative Agent and
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the Borrower and such Lender's obligation to make Eurodollar Loans shall be
suspended until such time (prior to the termination of the Commitment pursuant
to the terms of this Agreement) as such Lender may again make and maintain
Eurodollar Loans and such Lender's outstanding Eurodollar Loans shall be
automatically converted into ABR Loans, as such Lender may select, at the end
of the then current Interest Period for each of them, or on such earlier date
as such Lender may specify in writing as being the last permissible date for
such prepayment under applicable laws, rules or regulations.
SECTION 5.04. Compensation. The Borrower shall pay to each
Lender, upon the request of such Lender through the Administrative Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense (including costs arising
from premature termination of such Lender's obligations under any Hedging
Agreement) which such Lender determines are attributable to:
(a) any payment, prepayment or conversion of a Loan for any
reason (including the acceleration of the Loans pursuant to Article X)
on a date other than the last day of an Interest Period for such Loan;
or
(b) any failure by the Borrower for any reason (including the
failure of any of the conditions precedent specified in Article VII to
be satisfied) to borrow or convert into a Eurodollar Loan on the date
for such borrowing or conversion specified in the relevant Borrowing
Request given pursuant to Section 2.03 or notice of conversion given
pursuant to Section 2.10.
Such Lender shall deliver to the Borrower, promptly upon such request, a
certificate setting forth in reasonable detail the basis for calculation of
such amounts, the contents of such certificate being, in the absence of
manifest error therein, conclusive evidence of such amounts; provided that the
failure of such Lender to deliver such certificate shall in no way affect such
Lender's rights to such compensation. The failure of any Lender to request the
compensation provided for in this Section 5.04 in any instance shall not affect
such rights of such Lender in any other instance or of any other such Lender in
any instance.
SECTION 5.05. Taxes. All payments of Obligations (as used in
this Section 5.05, "Payments") shall be made free and clear of, and without
deduction by reason of, any and all taxes, duties, assessments, withholdings,
retentions or other similar charges whatsoever imposed, levied, collected,
withheld or
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assessed by any jurisdiction or any agency or taxing authority thereof or
therein (as used in this Section 5.05, "Taxes"), all of which shall be paid by
the Borrower for its own account not later than the date when due. If the
Borrower is required by law to deduct or withhold any Taxes from any Payment,
the Borrower shall: (a) make such deduction or withholding; (b) pay the amount
so deducted or withheld to the appropriate taxing authority not later than the
date when due (irrespective of the rate of such deduction or withholding); (c)
deliver to such Lender, promptly and in any event within 30 days after the date
on which such Taxes become due, original tax receipts and other evidence
satisfactory to such Lender of the payment when due of the full amount of such
Taxes; and (d) pay to the respective Lender, forthwith upon any request by such
Lender therefor from time to time, such additional amounts as may be necessary
so that such Lender receives, free and clear of all Taxes, the full amount of
such Payment stated to be due under this Agreement or the Notes as if no such
deduction or withholding had been made.
Each Lender that is not organized under the laws of the
United States or of any political subdivision thereof agrees that it will
deliver to the Borrower on the date of its initial Loan and thereafter as may
be required from time to time by applicable law or regulation United States
Internal Revenue Service Form 4224 or 1001 (or any successor form) or such
other form as from time to time may be required to demonstrate that payments
made by the Borrower to such Lender under this Agreement or such Note either
are exempt from United States Federal withholding taxes or are payable at a
reduced rate (if any) specified in any applicable tax treaty or convention,
except where such a Lender is unable to do so by reason of a change in law
occurring after the date when such a Lender became a party to this Agreement.
Each Lender agrees to use reasonable efforts to transfer its
Commitment or Loans to another Applicable Lending Office of such Lender if such
transfer would avoid the need for or mitigate the amount of any deduction or
withholding of Taxes on payments of interest to such Lender under this
Agreement thereafter, but no Lender shall be required to make such transfer if
such Lender determines in its sole discretion that such Lender would suffer any
legal, economic or regulatory disadvantage.
Without limiting the survival of any other provisions of this
Agreement or the Notes, the obligations of the Borrower under this Section,
Section 5.01 and Section 5.04 shall survive the repayment of the Loans and the
Notes.
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ARTICLE VI
Guarantee
SECTION 6.01. Unconditional Guarantee. For valuable
consideration, receipt of which is hereby acknowledged, and to induce the
Lenders to make Loans to the Borrower and to induce the Issuing Bank to issue
Letters of Credit, each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees the payment to the Administrative
Agent, the Issuing Bank and each of the Lenders, as a primary obligor and not
as a surety, of the Obligations, and, in the case of any extension of time of
payment, in whole or in part, the payment of all such Obligations in cash in
full when due (whether at stated maturity, by acceleration or otherwise) in
accordance with the terms hereof or of any such extension. Each of the
Guarantors hereby agrees that the Obligations may be extended or renewed in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee obligations hereunder notwithstanding any such
extension or renewal of any Obligation. Each of the Guarantors hereby
unconditionally agrees that upon default in the payment when due (whether at
stated maturity, by acceleration or otherwise) of any of such principal,
interest or other amounts, the Guarantors shall forthwith pay and perform the
same in Dollars, at the time, in the place and in the manner provided for such
payment in this Agreement, the Notes or other applicable document.
SECTION 6.02. Validity. Each of the Guarantors hereby agrees
that the guarantee provided by this Article VI is a continuing guarantee of
payment and not merely of collection, that it is a primary, independent
obligation of each of the Guarantors and that each Guarantor's obligations
hereunder shall be joint and several, absolute, unconditional and irrevocable,
irrespective of (a) any invalidity, illegality, irregularity or
unenforceability of, or defect in or any change in, any Loan Document or any
other document referred to herein or therein, (b) any rescission, amendment,
modification or waiver of any term or condition of any Loan Document or any
such other document, or any waiver or consent by the Administrative Agent, the
Issuing Bank or any Lender to any departure from the terms hereof or thereof,
(c) any sale, exchange, release, surrender, realization upon or other dealings
with any security or guarantee for any of the obligations guaranteed hereby
(whether now or hereafter granted), (d) any settlement or compromise of such
obligations, (e) the absence of any action by the Administrative Agent, the
Issuing Agent or any Lender to assert any claim or demand or to enforce any of
such Obligations against the Borrower or any Guarantor, (f) the recovery of any
judgment against the Borrower
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or any other Person, or any action to enforce the same, (g) the recovery of any
claim under any other guarantee of or security for such obligations or under
any applicable insurance, or (h) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor or surety
(other than full and strict compliance with and satisfaction of such
liabilities).
SECTION 6.03. Waivers. Each of the Guarantors hereby waives
any right to require that any resort be had by any Lender to any balance of any
deposit account or credit on the books of any Lender in favor of any Borrower
or any other Person, notice of acceptance of the guarantee provided by this
Article VI, notice of the extension of any credit or financial accommodation,
notice of the making of any Loan or the incurrence of any other Obligations,
demand of payment, filing of claims with a court in the event of bankruptcy of
the Borrower or any other Person, any right to require a proceeding or the
filing of a claim first against the Borrower, any other guarantor, any other
Person, any letter of credit, or any security for any of the Obligations,
presentment, protest, notice of default, dishonor or nonpayment and any other
notice and all demands whatsoever. Each of the Guarantors hereby further waives
all setoffs and counterclaims against the Borrower, the Administrative Agent,
the Issuing Bank and each of the Lenders.
SECTION 6.04. Subordination and Subrogation. Each of the
Guarantors hereby subordinates all present and future claims, now held or
hereafter acquired, against the Borrower as a creditor or contributor of
capital, or otherwise, to the prior and final payment in cash in full to the
Lenders of all of the Obligations. If, without reference to the provisions of
this Section 6.04, any of the Guarantors would at any time be or become
entitled to receive any payment on account of any claim against the Borrower,
whether in insolvency, bankruptcy, liquidation or reorganization proceedings,
or otherwise, such Guarantor shall and does hereby irrevocably direct that all
such payments shall be made directly to the Administrative Agent on account of
the Lenders until all Obligations shall be paid in cash in full. Should any of
the Guarantors receive any such payment, such Guarantor shall receive such
amount in trust for the Administrative Agent, for the benefit of the Lenders,
and shall immediately pay over to the Administrative Agent such amount as
provided in the preceding sentence.
Anything contained in this Article VI to the contrary
notwithstanding, the obligations of each of the Guarantors hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would
not render its obligations here-
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under subject to avoidance as a fraudulent transfer or conveyance under Section
548 of the Bankruptcy Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving
effect to all other liabilities of such Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Guarantor in respect of intercompany
indebtedness to the Borrower or other Affiliates of the Borrower to the extent
that such indebtedness would be discharged in an amount equal to the amount
paid by such Guarantor hereunder) and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation or contribution of such Guarantor pursuant
to (a) applicable law or (b) any agreement providing for an equitable
allocation among such Guarantor and other Affiliates of Borrower of obligations
arising under guaranties by such parties.
Each of the Guarantors further agrees that any rights of
subrogation such Guarantor may have against the Borrower, and any rights of
contribution such Guarantor may have against Borrower, and any rights of
contribution such Guarantor may have against any other Guarantor or any other
guarantor of the Obligations hereunder, shall be junior and subordinate to any
rights the Administrative Agent, the Issuing Bank or the Lenders may have
against any other Guarantor or any such other guarantor. Each of the Guarantors
further agrees that it shall not be entitled to enforce or receive any payments
arising out of, or based upon, such right of subrogation until all amounts then
due and payable by the Borrower hereunder or under any other Loan Document
shall have been paid in full in cash.
SECTION 6.05. Acceleration. Each of the Guarantors agrees
that, as between the Borrower on the one hand, and the Administrative Agent,
the Issuing Bank and the Lenders, on the other hand, the obligations of the
Borrower guaranteed under this Article VI may be declared to be forthwith due
and payable, or may be deemed automatically to have been accelerated, as
provided in Article X for purposes of this Article VI, notwithstanding any
stay, injunction or other prohibition (whether in a bankruptcy proceeding
affecting the Borrower or otherwise) preventing such declaration as against the
Borrower and that, in the event of such declaration or automatic acceleration,
such obligations (whether or not due and payable by the Borrower) shall
forthwith become due and payable by such Guarantor for purposes of this Article
VI.
SECTION 6.6 Reinstatement. Each of the Guarantors covenants
that the guarantee provided by this Article VI will not
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be discharged except by complete and final payment of all of the Obligations
and all obligations of the Guarantors arising out of this guarantee. In the
event that any payment is made by the Borrower hereunder or by any of the
Guarantors under this guarantee, and is thereafter required to be rescinded or
otherwise restored or paid over to the Borrower, such Guarantor or any other
Person (whether upon the insolvency or bankruptcy of the Borrower or any
Guarantor or otherwise), each Guarantor's obligations hereunder shall
immediately and automatically be reinstated as though such payment had not been
made.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Initial Credit Event. . The occurrence of the
Effective Date and the obligation of the Lenders to make the initial Loans and
of the Issuing Bank to issue Letters of Credit hereunder are subject to the
receipt by the Administrative Agent, on or before the date hereof, of each of
the following documents, each of which shall be satisfactory in form and
substance to the Administrative Agent and the Issuing Bank:
(a) Certified copies of the certificate of incorporation and
bylaws of each Credit Party and all corporate action and, if
necessary, stockholder action taken by each Credit Party approving
this Agreement and the other Loan Documents and borrowings by the
Borrower hereunder and the guarantee by the Guarantors hereunder
(including a certificate setting forth the resolutions of the Boards
of Directors of each Credit Party adopted in respect of the
transactions contemplated hereby and thereby);
(b) A certificate of each Credit Party in respect of each of
the officers (i) who is authorized to sign this Agreement and the
other Loan Documents on its behalf and (ii) who will, until replaced
by another officer or officers duly authorized for that purpose, act
as its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement,
the other Loan Documents and the transactions contemplated hereby and
thereby. The Administrative Agent, the Issuing Bank and the Lenders
may conclusively rely on such certificate until such person receives
notice in writing from the applicable Credit Party to the contrary;
(c) Certificates, as of a recent date, from the appropriate
authorities for each jurisdiction in which the
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Credit Parties are incorporated or qualified to do business, as to the
good standing of each Credit Party in each such jurisdiction;
(d) A certificate of a senior officer of each Credit Party to
the effect set forth in the first sentence of Section 7.02;
(e) An opinion of Xxxxx X. Xxxxxxxxx, General Counsel and
Xxxxxxxxx X Xxxxxx, Senior Counsel, of HSN, Inc. and counsel for the
Credit Parties, substantially in the form of Exhibit C;
(f) The Total Debt Ratio Notice for the Borrower's
four-Fiscal Quarter period ended December 31, 1996 (or, if the initial
Loans hereunder are made more than 60 days after the end of any
succeeding Fiscal Quarter, for the four-Fiscal Quarter period ended as
of the end of the most recent such succeeding Fiscal Quarter);
(g) The Notes dated the date hereof and duly executed and
delivered by the Borrower to the order of each Lender and otherwise
appropriately completed, bearing the executed guarantee of the
Guarantors;
(h) Counterparts of this Agreement which, when taken
together, bear the signatures of all the parties hereto;
(i) (x) Financial projections for Fiscal Years 1997-2002 of
the Borrower and its consolidated Subsidiaries (including the
Guarantors, but excluding the SF Broadcasting Companies), (y) the 1996
Financial Statements and (z) the 1996 Pro Forma Financial Statements;
(j) Evidence satisfactory to the Administrative Agent that
the commitments under the Existing Credit Agreements have been
terminated, all loans thereunder have been repaid or terminated in
full, all accrued interest, fees and other amounts payable thereunder
have been paid in full and all Liens on collateral thereunder have
been released; and
(k) Such other documents as the Administrative Agent or any
Lender may reasonably request including all requisite governmental
approvals and filings, if any.
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SECTION 7.02. Initial and Subsequent Credit Events. The
obligation of the Lenders to make each Loan to the Borrower (including the
initial Loans), and of the Issuing Bank to issue Letters of Credit, and the
occurrence of the Effective Date shall be subject to the further conditions
that, as of the date of the making of such Loans and the issuance of such
Letters of Credit and after giving effect thereto (and also as of the Effective
Date):
(a) the Administrative Agent shall have received a Borrowing
Request as required by Section 2.03 or, in the case of the Issuance of
a Letter of Credit, receipt by the Issuing Bank and Administrative
Agent of a notice requesting the issuance of such Letter of Credit as
required by Section 2.11;
(b) no Default or Event of Default shall have occurred and be
continuing;
(c) the representations and warranties made by each Credit
Party in Article VIII, in the other Loan Documents and in any other
certificate or other document delivered in connection herewith or
therewith shall be true in all material respects on and as of the date
of the making of such Loans (and the Effective Date) with the same
force and effect as if made on and as of such date (including that
there shall have occurred no Material Adverse Effect since December
31, 1996, except as disclosed in any SEC report of the Borrower
delivered to the Lenders prior to the date hereof);
(d) the Borrower shall be in compliance with the financial
covenants in this Agreement both before and immediately after the
making of such Loan or the issuance of such Letter of Credit on a pro
forma basis; and
(e) all Fees and expenses then payable pursuant to Sections
2.05 and 12.03 and all other fees theretofore agreed between the
Borrower and the Administrative Agent or the Issuing Bank shall have
been paid.
Each Borrowing made pursuant to Section 2.02 and each issuance of a Letter of
Credit made pursuant to Section 2.11 shall constitute a certification by each
Credit Party as to the circumstances specified in paragraphs (b), (c) and (d)
above (both as of the date of such notice and, unless any Credit Party
otherwise notifies the Administrative Agent prior to the date of such Borrowing
or issuance of a Letter of Credit, as of the date of such credit event).
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ARTICLE VIII
Representations and Warranties
Each of the Credit Parties represents and warrants to the
Administrative Agent, the Issuing Bank and the Lenders that:
SECTION 8.01. Corporate Existence. Each Credit Party and
each of the other Material Subsidiaries (a) is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation; (b)
has all requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry
on its business as presently conducted, and conducts its business in
compliance with the requirements set forth in Section 9.03; and (c) is
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure
so to qualify would have a Material Adverse Effect.
SECTION 8.02. Financial Condition. The 1996 Financial
Statements, which have been heretofore furnished to the Administrative Agent
and each of the Lenders, are complete and correct and fairly present the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries (including the Guarantors) as at such date and the consolidated
results of their operations for Fiscal 1996, all in accordance with GAAP
applied on a consistent basis. The 1996 Pro Forma Financial Statements, which
have been heretofore furnished to the Administrative Agent and each of the
Lenders, are correct and fairly present the consolidated financial condition of
the Borrower and its consolidated Subsidiaries (including the Guarantors) on a
pro forma basis. The 1996 Pro Forma Financial Statements have been prepared in
good faith by the Borrower, based on assumptions believed by the senior
management of the Borrower to be reasonable at the time made. Neither the
Borrower nor any of its consolidated Subsidiaries (including the Guarantors)
had on such date any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or
provided for in such balance sheet as at such date. Since December 31, 1996,
there has been no Material Adverse Effect except as disclosed in any SEC Report
delivered to the Lenders prior to the date hereof.
SECTION 8.03. Litigation. Except as heretofore disclosed to
the Lenders in writing or in any SEC Report of the
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Borrower delivered to the Lenders prior to the date hereof, there is no action,
proceeding or investigation by or before any court or any arbitral,
governmental or regulatory authority or agency, pending or (to the knowledge of
any Credit Party) threatened against any such Credit Party or any Subsidiary of
any thereof as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could have a Material Adverse
Effect.
SECTION 8.04. No Breach of Default, etc. Neither the
execution and delivery of each of the Loan Documents, nor the consummation of
each Merger, nor the consummation of the transactions contemplated hereby and
thereby, nor the compliance by any Credit Party with the terms and provisions
hereof or thereof will (a) conflict with or result in a breach of, or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase
or redemption of any obligation under, or require any consent or vote of any
Person under, the certificate of incorporation or bylaws of any Credit Party,
or any agreement or instrument to which any Credit Party or any Subsidiary of
any thereof is a party (including employment and affiliation agreements) or to
which it is subject, (b) violate any applicable law, regulation, order, writ,
injunction or decree of any court or Governmental Authority, or (c) constitute
a default or result in the imposition of any Lien on any of the assets,
revenues or other properties of any Credit Party or any Subsidiary of any
thereof under any such agreement or instrument.
SECTION 8.05. Corporate Action. The consummation of each
Merger, the execution, delivery and performance by each Credit Party of each of
the Loan Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, are within the scope of its
corporate powers, and have been duly authorized by all necessary corporate
action on the part of each of them. This Agreement constitutes, and each of the
other Loan Documents, when duly executed and delivered by each Credit Party
thereto will constitute, the legal, valid and binding obligation of each such
Credit Party, enforceable against each of them, in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability affecting the enforcement of creditors' rights and (b)
the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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SECTION 8.06. Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the consummation of any
Merger, except such as have been obtained or made and are in full force and
effect, or for the execution, delivery of performance by any Credit Party of
any of the Loan Documents or for the validity or enforceability hereof or
thereof, or for the consummation of the transactions contemplated hereby and
thereby.
SECTION 8.07. Use of Loans. Neither any Credit Party nor any
Subsidiary of any of them is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock (within
the meaning of Regulation G, T, U or X of the Board) and no part of the
proceeds of any Loan or any Letter of Credit will be used to buy or carry any
margin stock.
SECTION 8.08. ERISA. Each Credit Party and the ERISA
Affiliates have fulfilled its obligations under the minimum funding standards
of ERISA and the Code with respect to each Plan, are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code and have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan.
SECTION 8.09. Taxes. Each Credit Party and the Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by it and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by any Credit
Party or any Subsidiary. The charges, accruals and reserves on the books of the
Credit Parties and the Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of each Credit Party, adequate.
SECTION 8.10. Credit Agreements. Schedule 8.10 hereto and
all SEC Reports of the Borrower delivered to the Lenders prior to the date
hereof completely and correctly disclose each credit agreement, loan agreement,
indenture, purchase agreement, guarantee or other arrangement providing for or
otherwise relating to any extension of credit or commitment for any extension
of credit (other than pursuant to any letter of credit excepted from the
definition of Indebtedness herein under paragraph (c) thereof) to, or guarantee
by, any Credit Party or any other Material Subsidiary the aggregate principal
or face amount of which equals or exceeds (or may equal or exceed) $10,000,000
and accurately describes the aggregate principal or
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face amount outstanding and which may become outstanding under each thereof.
SECTION 8.11. Ownership of Assets. Each Credit Party and each
other Material Subsidiary has good and marketable title to all assets reflected
on the audited consolidated balance sheet as of December 31, 1996, referred to
in Section 8.02, subject to:
(a) no Liens other than such Liens as are listed on Schedule
9.05, and on any date hereafter, additional Liens permitted by Section
9.05 and either (i) listed in notes to the financial statements
delivered pursuant to Section 9.01(a) or (b) or (ii) otherwise
communicated to the Lenders in writing, and
(b) on any date hereafter, dispositions permitted by Section
9.15 and reflected in the financial statements, including any notes
thereto, delivered pursuant to Section 9.01(a) or (b).
SECTION 8.12. Status of Obligations. The obligations of
each Credit Party under this Agreement and the Notes and the Letters of Credit
rank and will rank at least pari passu in all respects with all other senior
Indebtedness of each Credit Party, except for Indebtedness that is senior
solely by operation of applicable law, and except that Indebtedness of each
Credit Party secured as permitted by Section 9.05 ranks senior in right of
security with respect to the collateral therefor. The obligations of each
Guarantor (including each Guarantor's guarantee obligations) under the Loan
Documents are "senior debt" and "senior indebtedness" within the meaning of any
indenture (including the indentures relating to the Subordinated Debentures) or
instrument to which the Guarantor is a party relating to subordinated debt, and
the Administrative Agent and the Lenders are entitled to the benefits of the
subordination provisions relating thereto.
SECTION 8.13. Investment Company Act; Public Utility Holding
Company Act. (a) Neither the Borrower nor any Guarantor is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(b) Neither the Borrower nor any Guarantor is a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 8.14. Environmental Matters. To the best of the
knowledge of each Credit Party, all operations and conditions at or in the
premises in which each Credit Party conducts its
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business comply in all material respects with all Federal, state and local
laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements relating to environmental matters,
pollution, waste disposal or industrial hygiene including such laws, rules,
regulations, codes, ordinances, orders, devices, judgments, injunctions,
notices or binding agreements relating to asbestos (collectively,
"Environmental Laws"). None of the operations of any Credit Party is subject to
any judicial or administrative proceeding alleging the violation of or
liability under any Environmental Law.
SECTION 8.15. FCC Matters. The Borrower and its Subsidiaries
have all licenses, consents and approvals from the FCC, other applicable
Governmental Authorities and other third parties necessary or advisable to
authorize the Borrower and its Subsidiaries to consummate the Mergers, to own
and operate the businesses of the Borrower and its Subsidiaries and to conduct
their operations as contemplated by their business plan, all of which are in
full force and effect, and no action has been taken by the FCC or any other
person or threatened by any competent authority to challenge any such license,
consent or approval or that would otherwise restrain, prevent or otherwise
impose material adverse conditions on the financings contemplated hereby or in
the business, operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole.
SECTION 8.16. Labor Matters. There are no strikes, lockouts or
slowdowns against any Credit Party or any Subsidiary pending or, to the
knowledge of any Credit Party, threatened. There are no pending (or to the
knowledge of any Credit Party) threatened action, proceeding or investigation
by or before any court or any arbitral, governmental or regulatory authority or
agency against any Credit Party in connection with the Fair Labor Standards Act
or any other applicable Federal, state, local or foreign law dealing with such
matters which, if adversely determined, could have a Material Adverse Effect.
All payments due from any Credit Party or any Subsidiary, or for which any
claim may be made against any Credit Party or any Subsidiary, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of such Credit Party or Subsidiary
through the end of the most recent fiscal quarter of such Credit Party or
Subsidiary as to which financial statements have been delivered to the Lenders.
The consummation of the Mergers and the transactions contemplated hereby or by
the other Loan Documents will not give rise to any right of termination or
right of renegotiation on the part of any union under any collective bargaining
agreement to which any Credit Party or Subsidiary is bound.
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SECTION 8.17. Solvency. Immediately after the consummation
of the Mergers and of the transactions contemplated hereby or by the other Loan
Documents to occur on the Effective Date and immediately following the making
of each Loan and issuing of each Letter of Credit made on the Effective Date
and after giving effect to the application of the proceeds of such Loans and
Letters of Credit, (i) the fair value of the assets of the Borrower and its
consolidated Subsidiaries (including the Guarantors), at a fair valuation, will
exceed its debts and liabilities, subordinated, contingent or otherwise; (ii)
the present fair saleable value of the property of the Borrower and its
consolidated Subsidiaries (including the Guarantors) will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) the Borrower and its
consolidated Subsidiaries (including the Guarantors) do not intend to incur and
do not believe it will incur debts and liabilities, subordinated, contingent or
otherwise, beyond its ability to pay such debts and liabilities as they become
absolute and matured; and (iv) the Borrower and its consolidated Subsidiaries
(including the Guarantors) will not have unreasonably small capital with which
to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date.
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ARTICLE IX
Covenants of the Borrower and the Guarantors
Each Credit Party agrees that, so long as any of the
Commitments are in effect and until payment in full of all Obligations:
SECTION 9.01. Financial Statements; Reports and Other
Information. The Borrower shall deliver to the Administrative Agent, with
sufficient copies for each of the Lenders, and the Issuing Bank:
(a) as soon as available and in any event within 60 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, unaudited consolidated statements of
income, retained earnings and changes in financial position of the
Borrower and its consolidated Subsidiaries (including the Guarantors)
for such period and for the period from the beginning of such Fiscal
Year to the end of such period, and the related consolidated balance
sheet as at the end of such period, setting forth in each case in
comparative form the corresponding figures for the corresponding
period in the preceding Fiscal Year (it being understood that the
figures for any Fiscal Quarter in Fiscal 1996 shall be based on the
1996 Pro Forma Financial Statements), accompanied by a certificate of
a Financial Officer of the Borrower, which certificate shall state
that such financial statements fairly present the consolidated
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries in accordance with GAAP, consistently
applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments);
(b) as soon as available and in any event within 120 days
after the end of each Fiscal Year of the Borrower, audited
consolidated statements of income, retained earnings and changes in
financial position of the Borrower and its consolidated Subsidiaries
(including the Guarantors) for such year and the related consolidated
balance sheet as at the end of such year, setting forth in each case
in comparative form the corresponding figures for the preceding Fiscal
Year (it being understood that the figures for Fiscal 1996 shall be
based on the 1996 Pro Forma Financial Statements), and accompanied by
an opinion thereon of Ernst & Young LLP or any other independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements fairly present the
consolidated financial condition and results of
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operations of the Borrower and its consolidated Subsidiaries
(including the Guarantors) as at the end of, and for, such Fiscal
Year, and a certificate of a Financial Officer of the Borrower that,
in examining the financial condition of the Borrower and its
Subsidiaries for such Fiscal Year, he or she obtained no knowledge,
except as specifically stated, of any Default arising from the breach
of the covenants provided for in Sections 9.04, 9.07, 9.11, 9.12,
9.13, 9.14, 9.16, 9.17 and 9.18;
(c) promptly upon their becoming available, copies of all
registration statements and regular SEC Reports, if any, which the
Borrower shall have filed with the Securities and Exchange Commission
(or any governmental agency substituted therefor) or any national
securities exchange;
(d) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(e) as soon as possible, and in any event within ten days
after any Credit Party knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by a
Financial Officer of the relevant Credit Party setting forth details
respecting such event or condition and the action, if any, which such
Credit Party or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with
or given to PBGC by any Credit Party or an ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in Section 4043
of ERISA and the regulations issued thereunder, with respect
to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of Section 412
of the Code or Section 302 of ERISA shall be a reportable
event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of
any Plan;
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(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Borrower or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by any
Credit Party or any ERISA Affiliate under Title IV of ERISA
from a Multiemployer Plan, or the receipt by any Credit Party
or any ERISA Affiliate of notice from a Multiemployer Plan
that is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary
of any Multiemployer Plan against any Credit Party or any
ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days;
(f) promptly after any Credit Party knows or has reason to
know that (i) any Default or any Event of Default has occurred, a
notice of such Default or Event of Default, describing the same in
reasonable detail and the corrective action taken or proposed to be
taken with respect thereto or (ii) any development that, in the
opinion of the Borrower's senior management, could reasonably be
expected to result in a Material Adverse Effect has occurred;
(g) not later than (i) 60 days after the last day of each of
the first three Fiscal Quarters of each of the Borrower's Fiscal Years
and (ii) 120 days after the last Fiscal Quarter of each such Fiscal
Year, a notice, executed by a Financial Officer of the Borrower and
its consolidated Subsidiaries (including the Guarantors),
substantially in the form of Exhibit D (the "Total Debt Ratio
Notice"), setting forth the Total Debt Ratio for the four-Fiscal
Quarter period ended on the last day of such Fiscal Quarter, which
notice shall set forth calculations and computations in sufficient
detail to show the amount and nature of each of the components of the
Total Debt Ratio for such four-Fiscal Quarter period; provided that in
the case of the Total Debt Ratio Notice delivered with respect to each
Fiscal Quarter specified in clause (i) above, the Borrower shall (if
the final form of either of such Notices is not yet available) deliver
such Notice in a preliminary form
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within 60 days of the end of such Fiscal Quarter setting forth all
matters required by this paragraph (g) to be included in the final
form thereof as accurately as shall be possible based upon information
available to the Borrower at such time;
(h) as soon as available and in any event within 10 days
after preparation thereof, a detailed annual budget of the Borrower
and its consolidated Subsidiaries (including the Guarantors) for each
Fiscal Year commencing with Fiscal Year 1998, which budget has been
prepared in good faith based upon assumptions believed by the
Borrower's senior management to be reasonable; and
(i) from time to time such other information regarding the
business, operations or financial condition of the Borrower or any of
the Subsidiaries (including any Plan or Multiemployer Plan and any
reports or other information required to be filed under ERISA) as the
Administrative Agent, the Issuing Bank or any Lender may reasonably
request through the Administrative Agent.
Each Credit Party will furnish to the Administrative Agent, with sufficient
copies for the Lenders and the Issuing Bank, at the time it furnishes each set
of financial statements pursuant to paragraph (a) or (b) above, a certificate
of a Financial Officer of the Credit Parties, substantially in the form of
Exhibit E (i) to the effect that, to the best of his or her knowledge, after
full inquiry, no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail and the
corrective action taken or proposed to be taken with respect thereto), (ii)
setting forth in reasonable detail the computations necessary to determine
whether the Credit Parties are in compliance with Sections 9.11 and 9.12 as at
the end of the respective Fiscal Quarter or Fiscal Year, (iii) certifying that
the Credit Parties are in compliance with Sections 9.13, 9.14, 9.16. 9.17 and
9.18, (iv) setting forth additions to the list of Subsidiaries that are
Material Subsidiaries contained in the certificate most recently delivered
pursuant to this provision and containing either (A) a representation that all
other Subsidiaries combined do not constitute a Material Subsidiary Group as at
such date or (B) a representation that all other Subsidiaries do constitute a
Material Subsidiary Group as at such date and identifying any such Subsidiary
whose aggregate book value of tangible assets exceeds $10,000,000 as at such
date and (v) setting forth in reasonable detail the computations necessary to
determine whether any "Fundamental Matters" No. 2 (as such term is defined in
the Stockholders Agreement dated as of August 25, 1996, by and
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between Xxxxx Xxxxxx and Liberty, and attached as Appendix I to Home Shopping's
Proxy Statement dated November 20, 1996) shall have occurred and is continuing.
In addition, each Credit Party hereby agrees to furnish the Administrative
Agent and the Issuing Bank with an updated notice with respect to the
information specified in clause (ii) of the preceding sentence upon the
occurrence of any event either that has resulted or could result in a
Subsidiary becoming a Material Subsidiary or a group of Subsidiaries becoming a
Material Subsidiary Group or that could make the representation contained in
the most recently delivered certificate furnished pursuant to this Section 9.01
no longer accurate.
SECTI0N 9.02. Litigation. Without limiting the obligations of
the Borrower under Section 9.01(i), each Credit Party shall promptly give to
each Lender notice of any threat or notice of intention of any person to file
or commence any court or arbitral proceedings or investigations, or proceedings
or investigations before any governmental or regulatory authority or agency,
affecting any Credit Party or any Subsidiary as to which there is a reasonable
probability of an adverse determination and which, if adversely determined,
could have a Material Adverse Effect.
SECTION 9.03. Corporate Existence, etc. Each Credit Party
will, and will cause each of its respective Subsidiaries (but in the case of
clauses (a), (d) and (e) of this Section 9.03, only those Subsidiaries which
are Material Subsidiaries) to:
(a) except as permitted by Section 9.14, preserve and
maintain its corporate existence and all of its material rights,
privileges, licenses and franchises;
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of Governmental Authorities if failure
to comply with such requirements would have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance
with GAAP;
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(d) maintain all of its properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;
(e) keep proper books of record and account in which full,
true and correct entries in conformity with GAAP and all requirements
of law are made of all dealings and transactions in relation to its
business and activities and upon request by the Administrative Agent
permit representatives of any Lender or the Administrative Agent or
the Issuing Bank, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect its properties,
and to discuss its business and financial condition with its officers,
all to the extent reasonably requested by such person; and
(f) keep insured by financially sound and reputable insurers
all property of a character usually insured by corporations engaged in
the same or similar business similarly situated against loss or damage
of the kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried by
such corporations.
SECTION 9.04. Payment of Obligations. Without limiting the
obligations of the Credit Parties under Section 9.03, each Credit Party will,
and will cause each of its respective Subsidiaries to, pay and discharge at or
before the date when due, all of their respective material obligations and
other liabilities, including tax and pension liabilities, except where such
obligations or liabilities are being contested in good faith and by appropriate
proceedings, and maintain, in accordance with GAAP, appropriate reserves for
the accrual of all of the foregoing.
SECTION 9.05. Liens. Neither the Borrower nor any Guarantor
will, nor will any of them permit any of their respective Subsidiaries to,
create, incur, assume or suffer to exist any Lien on any asset, revenue or
other property now or hereafter owned or acquired by it (including the assets
and capital stock acquired as permitted by Sections 9.17 and 9.18) except:
(a) Liens existing on the Effective Date securing
Indebtedness outstanding on the Effective Date and identified in
Schedule 9.05;
(b) any purchase money security interest hereafter created on
any property of any Credit Party or such
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Subsidiary securing Indebtedness incurred solely for the purpose of
financing all or a portion of the purchase price of such property;
provided that: (i) such Lien (A) is created within six months of the
acquisition of such property, (B) extends to no other property and (C)
secures no other Indebtedness; (ii) the principal amount of
Indebtedness secured by such Lien shall at no time exceed the lesser
of (A) the cost to such Person of the property subject thereto and (B)
the fair value of such property (as determined in good faith by the
Board of Directors of such Person) at the time of the acquisition
thereof; (iii) such Lien does not extend to or in any way encumber any
inventory of any Guarantor purchased in the ordinary course of
business; and (iv) the aggregate principal amount of all Indebtedness
secured by all such Liens shall not exceed at any time $15,000,000
less the aggregate principal amount of all Indebtedness secured by
Liens permitted under Section 9.05(j);
(c) carriers', warehousemen's, mechanics', materialmen's and
repairmen's liens arising in the ordinary course of business of any
Credit Party or such Subsidiary and not overdue for a period of more
than 30 days or which are being contested in good faith and by
appropriate proceedings;
(d) Liens in favor of consignors against inventory being sold
on consignment in the ordinary course of business by any Credit Party
or any Subsidiary;
(e) Liens created in substitution for any Liens permitted by
paragraphs (a) and (b) of this Section 9.05; provided that (i) any
such newly-created Lien does not extend to any other or additional
property and (ii) if permitted by such paragraph (a) or (b), does not
secure any other (or additional principal amount of) Indebtedness;
(f) Liens existing on assets at the time of acquisition
thereof or of a Subsidiary owning such assets and not incurred in
anticipation of or in connection with such acquisition;
(g) operating leases and Capital Leases, to the extent the
same would constitute Liens, pursuant to which any Credit Party or its
Subsidiary is lessee, and incurred by such Person in the ordinary
course of its business;
(h) Liens on property of the Borrower or its Subsidiaries
which secure Indebtedness under letters of credit having an aggregate
principal amount not exceeding at any
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time $35,000,000; provided that such Liens shall be limited to the
related merchandise (and not a general Lien on all assets of the
Borrower or its Subsidiaries);
(i) Liens arising in connection with a Securitization in an
amount not exceeding $200,000,000 of sold receivables outstanding,
limited to the accounts receivable of the Borrower or its Subsidiaries
sold or transferred and interests therein or in any trust or similar
entity utilized to effect such Securitization which secure
Indebtedness that are non-recourse to the Borrower and its
Subsidiaries other than to such trust or similar entity (and subject
to (x) an average advance rate of 80% or higher and (y) the seller's
retained residual interest in such account receivables not exceeding
$40,000,000 at any time); and
(j) in addition to Liens otherwise permitted by this Section
9.05, Liens on property of any Credit Party or any of its Subsidiaries
(i) which secure Indebtedness (other than any Hedging Agreement)
having an aggregate principal amount not exceeding at any time
$15,000,000 less the aggregate principal amount of all Indebtedness
secured by Liens permitted under Section 9.05(b) and (ii) each of
which shall be limited to specified items of collateral (and not a
general Lien on all assets of such Person) having a book value not
greater than 150% of the aggregate principal amount of the
Indebtedness secured by such Lien;
provided, however, that all capital stock of all Subsidiaries will in any event
be maintained free and clear of all Liens whatsoever, except for the Lien
created pursuant to the SFB Credit Agreement.
It is understood and agreed that the grant of security
interests described in clauses (i), (ii), (iii), (v) and (vi) of paragraph 6 of
Schedule 1.01(b), to the extent that such security interests relate to the same
property that is "sold" by the Borrower under the Program, as described in
paragraph 1 of said Schedule, will not constitute a lien on assets of the
Borrower or its Subsidiaries for the purposes of this Section 9.05.
SECTION 9.06. Sale and Lease-Back Trasaction. Neither the
Borrower nor any Guarantor will, nor will any of them permit any of its
Subsidiaries to, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being
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sold or transferred, except for any such arrangement or arrangements having an
aggregate principal amount not exceeding at any time $5,000,000.
SECTION 9.07. Indebtness. The Borrower shall not, and shall
not permit any of its Subsidiaries to, incur or assume any Indebtedness
whatsoever except for:
(a) (i) Indebtedness, not under this Agreement, outstanding
on the Effective Date as described in Schedule 9.07, but not any
extension, renewal, refinancing or replacement thereof and (ii)
Indebtedness under the SFB Credit Agreement and any extension,
renewal, refinancing or replacement thereof that does not increase the
outstanding principal amount thereof and that is under terms no less
favorable to the SF Broadcasting Companies;
(b) Loans to the Borrower under this Agreement;
(c) Indebtedness owed to the Borrower;
(d) Capital Leases;
(e) Indebtedness of a Guarantor under this Agreement;
(f) the joint and several liability of the Borrower, HSC and
the other "Participating Subsidiaries" identified in Schedule 1.01(b)
under the Program arising in the context of customary credit card
chargebacks, as described in paragraph 4 of said Schedule, for
accounts that are sold without recourse;
(g) the joint and several liability of the Borrower, HSC and
such other "Participating Subsidiaries" for the obligations under the
Special Program and the Guaranteed Program, but only if and for so
long as the Borrower causes the Special Program and the Guaranteed
Program at all times to comply with the requirements of Section
9.05(j) (including the $15,000,000 and 150% tests set forth therein);
(h) Indebtedness incurred in connection with the Letters of
Credit issued pursuant to Section 2.11 and letters of credit; provided
that the sum of the L/C Exposure together with the aggregate amount of
letters of credit at any time outstanding, without duplication, shall
not exceed $35,000,000 in the aggregate.
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(i) Indebtedness incurred in connection with interest rate
protection agreements to the extent required by Section 9.13;
(j) Indebtedness (other than Indebtedness permitted by
subsection (l) of this Section) incurred, issued, assumed or acquired
in connection with an acquisition permitted by Section 9.18 in an
aggregate amount not in excess of $100,000,000; provided that
Indebtedness permitted under this subsection (j) together with
Subordinated Indebtedness permitted under subsection (k) below shall
not exceed $125,000,000 in the aggregate;
(k) Subordinated Indebtedness not in excess of $100,000,000;
provided that Subordinated Indebtedness permitted under this
subsection (k) together with Indebtedness permitted under subsection
(j) above shall not exceed $125,000,000 in the aggregate; and
(l) Indebtedness that is (i) assumed or acquired in
connection with an acquisition permitted by subsection (b) of Section
9.18 and (ii) is non-recourse to the Borrower or its Subsidiaries
(other than the acquired Person).
SECTION 9.08. Ranking. (a) Each Credit Party will cause its
obligations under this Agreement, the Notes, the Letters of Credit and each
other document now or hereafter entered into with respect hereto or thereto to
rank at least pari passu in right of payment and of security with all other
senior Indebtedness of such Credit Party, except that Indebtedness secured by
any Lien permitted by Section 9.05 may rank senior in right of security with
respect to the collateral subject to such Lien. Without limiting the generality
of the foregoing, the Borrower and each Guarantor covenants, and will take all
steps necessary to assure, that its obligations under this Agreement will at
all times constitute "Senior Indebtedness" or "Senior Debt" (or any other
defined term intended to describe senior indebtedness) as defined in, and for
all purposes of, any indenture or other instrument relating to each such
party's subordinated debt (and will be entitled to the benefits of the
subordination provisions relating thereto).
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(b) Each Credit Party will cooperate with the Administrative
Agent, the Issuing Bank and the Lenders and will execute such further
instruments and documents as any such person may reasonably request to carry
out the intentions of this Section. Without limiting the generality of the
foregoing, if any Credit Party hereafter issues or otherwise incurs any
Subordinated Indebtedness (other than the Subordinated Debentures), each of
them will execute and cause to be executed such further documents as the
Administrative Agent, the Issuing Bank or any Lender may reasonably request to
ensure that the obligations of the Credit Parties under this Agreement, the
Notes and the Letters of Credit at all times rank senior to such Subordinated
Indebtedness.
(c) Nothing in this Section shall be construed so as to limit
the ability of such Credit Party to incur any Indebtedness (consistent with
paragraphs (a) and (b) above and otherwise permitted by this Agreement) on a
basis pari passu with its Indebtedness under this Agreement, the Notes and the
Letters of Credit.
SECTION 9.09. Business; Fiscal Year. Neither the Borrower nor
any Guarantor will make any material change in the nature of its Core Business
from that in which it is engaged on the date of this Agreement. No Credit Party
will change its fiscal year from that currently in effect on the date hereof,
as set forth in the definition of "Fiscal Year".
SECTION 9.10. Transactions with Affiliates Neither the
Borrower nor any Guarantor will, and none of them will permit any of its
respective Subsidiaries to, enter into or be a party to any transaction
(including any merger, consolidation or sale of substantially all assets
otherwise permitted by Section 9.14) with any Affiliate of any Credit Party,
except upon fair and reasonable terms no less favorable to such Credit Party or
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of such Credit Party.
SECTION 9.11. Interest Coverage Test. The Borrower will at
all times maintain the ratio of EBITDA on a consolidated basis for the
four-Fiscal Quarter period most recently ended at such time to Interest Expense
on a consolidated basis for the four-Fiscal Quarter period most recently ended
at such time to be not less than 2.50 to 1.00; provided that EBITDA for the
periods ended March 31, 1996, June 30, 1996, September 30, 1996 and December
31, 1996 shall be determined on a pro forma basis based on the 1996 Pro Forma
Financial Statements.
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SECTION 9.12. Total Debt Ratio. The Borrower will at all
times maintain the Total Debt Ratio on a consolidated basis for the four-Fiscal
Quarter period most recently ended at such time to be less than (i) 4.50 to
1.00 when determined in respect of any such four-Fiscal Quarter period ending
on or before December 31, 1997, and (ii) 4.00 to 1.00 when determined in
respect of any such four-Fiscal Quarter period ending thereafter; provided that
EBITDA for the periods ended March 31, 1996, June 30, 1996, September 30, 1996
and December 31, 1996 shall be determined on a pro forma basis based on the
1996 Pro Forma Financial Statements.
SECTION 9.13. Interest Rate Protection Agreement. At any
time when the Adjusted LIBO Rate is equal to at least 8%, the Borrower shall
enter promptly into an interest rate protection agreement or agreements in form
and substance reasonably satisfactory to the Administrative Agent covering an
aggregate notional principal amount equal to the lesser of (a) $100,000,000 and
(b) the aggregate principal amount of Loans outstanding at any such time.
SECTION 9.14. Mergers and Sale of Assets. Neither the
Borrower nor any Guarantor will, and none of them will permit any other
Material Subsidiary or Subsidiaries constituting a Material Subsidiary Group
to,
(a) consolidate or merge with or into any other Person,
except that a Guarantor or a Wholly Owned Subsidiary of the Borrower
or a Guarantor may merge with or consolidate into (i) the Borrower or
a Guarantor (provided that the Borrower or such Guarantor, as the case
may be, shall be the survivor of such merger or consolidation) or (ii)
another Wholly Owned Subsidiary of the Borrower or a Guarantor; or
(b) except as specifically permitted by Section 9.15, sell,
assign, convey, lease, sublet, transfer or otherwise dispose of all or
substantially all of its assets to any Person, whether in a single
transaction or in a series of related transactions, except that a
Wholly Owned Subsidiary (other than the Guarantors) of the Borrower or
a Guarantor may sell, assign, convey, lease, sublet, transfer or
otherwise dispose of all or substantially all of its assets to the
Borrower or to another Wholly Owned Subsidiary of the Borrower or a
Guarantor;
provided, however, that none of the foregoing transactions shall be permitted
if a Default or an Event of Default has occurred and
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is continuing or would result from the consummation of any such transaction.
It is understood and agreed that any consolidation, merger,
sale, assignment, conveyance, letting, subletting, transfer or other
disposition of all or substantially all of the assets of a Non-Material
Subsidiary shall be permitted under this Section, so long as such Non-Material
Subsidiary, together with all other Non-Material Subsidiaries (other than
Non-Material Subsidiaries permitted to be sold or exchanged pursuant to Section
9.15(d)) with respect to which there has been, since the date hereof, a
consolidation, merger, sale, assignment, conveyance, letting, subletting,
transfer or other disposition of all or substantially all of its assets, would
not (in the absence of such transactions) constitute a Material Subsidiary
Group.
SECTION 9.15. Dispositions of Assets. Neither the Borrower
nor any Guarantor will, and none of them will permit any other Material
Subsidiary to, sell, assign, convey, lease, sublet, transfer, swap, exchange or
otherwise dispose of any of the assets, business or other properties of any
Credit Party or any such Material Subsidiary to any Person, whether in a single
transaction or in a series of related transactions, except for:
(a) sales of inventory (but not of accounts receivable) in
the ordinary course of business of such Credit Party or any such
Subsidiary;
(b) dispositions of assets in the ordinary course of business
in arm's-length transactions by such Credit Party or any such
Subsidiary to the extent such assets either are no longer used or
useful to such Credit Party or such Subsidiary or are promptly
replaced by other assets of at least equal usefulness;
(c) any such disposition by any Credit Party or any Wholly
Owned Subsidiary to any Credit Party or any Wholly Owned Subsidiary,
as the case may be; provided, however, that the Credit Parties shall
maintain their respective assets and operations substantially in
accordance with their respective assets and operations as of the date
hereof, and that in the case of any such disposition by any Credit
Party to a Wholly Owned Subsidiary, each Credit Party agrees that such
disposition shall be in the ordinary course of business consistent
with past practice and shall be accomplished upon fair and reasonable
terms to such Credit Party;
(d) (i) sales or Asset Swaps of SKTV or any of its
Subsidiaries or by SKTV of all or substantially all of its
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or its Subsidiaries' television broadcast stations, on an arm's-length
basis for at least fair consideration; provided that such sale or
Asset Swap shall constitute an "Asset Sale" to the extent of any cash
consideration thereof, and provided further that, in the case of the
acquiror of such stations becoming a Subsidiary, the Administrative
Agent shall have received a written instrument, in form and substance
satisfactory to the Administrative Agent, by which such acquiror
becomes a Credit Party to this Agreement (unless it cannot legally do
so) or (ii) sales by Savoy of some or all of its Subsidiaries' or
Affiliates' assets on an arm's length basis for at least fair
consideration; and in each case described in clause (i) and (ii) above
subject to the following conditions:
(x) no Default or Event of Default shall have
occurred and be continuing, both before and immediately after
the making of such sale or Asset Swap; and
(y) the Borrower shall be in compliance with
Sections 9.11, 9.12, 9.13, 9.14, 9.16, 9.17 and 9.18 both
before and immediately after the making of such sale or Asset
Swap on both a historical and a pro forma basis.
(e) sales by the Borrower or any Material Subsidiary of the
shares of capital stock of (i) Xxxx Research, Inc., Internet Shopping
Network, Inc., The National Registry Inc. or Body By Jake on an
arm's-length basis for at least fair consideration or (ii) any
Non-Material Subsidiary (other than Xxxx Research, Inc., Internet
Shopping Network, Inc. and the SF Broadcasting Companies), on an
arm's-length basis for at least fair consideration, so long as such
Non-Material Subsidiary, together with all other Non-Material
Subsidiaries (other than Xxxx Research, Inc., Internet Shopping
Network, Inc. and the SF Broadcasting Companies) with respect to which
there has been, since the date of this Agreement, such a sale or
exchange of shares, would not (had such sales not been made)
constitute a Material Subsidiary Group;
(f) sales of movie rights in the ordinary course of business;
(g) sales of SKTV programming rights in the ordinary course
of business on an arm's-length basis; and
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(h) non-recourse sales of receivables described in Schedule
1.01(b), if transacted in accordance with paragraph 1 thereof, or pursuant to
Section 9.05(i).
SECTION 9.16. Restricted Payments; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) The Borrower shall not, and shall not
permit any of its Subsidiaries to, (i) repurchase, redeem or otherwise acquire
any of the shares of capital stock of the Borrower or any Subsidiary (other
than any repurchases, redemptions or acquisitions of shares of capital stock of
the Borrower which, on a cumulative basis, are not in excess of $50,000,000 in
the aggregate); (ii) declare or make, or agree to pay or make, directly or
indirectly, any dividend or other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a contribution thereof,
with respect to any shares of any class of capital stock of the Borrower or any
such Subsidiary, except that any Wholly Owned Subsidiary may declare and pay
dividends and make other distributions with respect to its capital stock to any
other Wholly Owned Subsidiaries or to the Borrower, or (iii) make any optional
payment or prepayment on or redemption or acquisition of any Indebtedness of
the Borrower or any Subsidiary other than (w) the repurchase in the open market
of up to $40,000,000 in the aggregate of Subordinated Debentures, (x) the
conversion of the Subordinated Debentures into common equity of the Borrower
pursuant to the terms thereof by any holder thereof (other than the issuer
thereof) or, in the case of a forced conversion by the issuer thereof, on or
after March 1, 1998, and (y) subject to Section 9.18, prepayment of up to
$150,000,000 of Indebtedness acquired in connection with an acquisition
permitted by Section 9.18 and (z) subject to Section 9.17, prepayment of up to
$20,000,000 of Indebtedness outstanding under the SF Broadcasting Credit
Agreement; provided, that any repurchase, conversion or prepayment set forth in
subclauses (w), (x), (y) or (z) is subject to the following conditions:
(i) no Default or Event of Default shall have
occurred and be continuing, both before and immediately after
the making of such repurchase, conversion or prepayment; and
(ii) the Borrower shall be in compliance with
Sections 9.11, 9.12, 9.13, 9.14, 9.16, 9.17 and 9.18 both
before and immediately after the making of such repurchase,
conversion or prepayment on both a historical and a pro forma
basis.
(b) The Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly, create or otherwise cause
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or suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary (including any Guarantor) to (i) pay any
dividends or make any other distributions on its capital stock or any other
interest or (ii) make or repay any loans or advances to the Borrower or to the
parent of such Subsidiary.
SECTION 9.17. Restricted Investments. Neither the Borrower
nor any Guarantor will, nor will any of them permit any of its Subsidiaries to,
make any Investments, except for:
(a) (i) Investments in the capital stock of any Guarantor,
any Wholly Owned Subsidiaries of the Borrower existing as of the
Effective Date and identified on Schedule 9.17 or any Subsidiary of
Home Shopping (of which the Borrower owns or controls, directly or
indirectly, at least 80% of the ordinary voting power) existing as of
the Effective Date and identified on Schedule 9.17, or (ii)
Investments in the capital stock of any other Wholly Owned Subsidiary
of the Borrower created after the Effective Date to be solely engaged
in a Core Business; provided that the aggregate principal amount of
such Investments referred to in clause (ii) above together with such
investments referred to in paragraph (e) below shall not exceed
$50,000,000;
(b) loans or advances made by the Borrower to any Wholly
Owned Subsidiary and made by any Subsidiary to the Borrower or any
Wholly Owned Subsidiary;
(c) Investments in interest rate protection agreements to the
extent required by Section 9.13;
(d) Investments in (i) commercial paper rated A-1 or the
equivalent thereof by Standard and Poor's Ratings Group or P-1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case
maturing within six months after the date of acquisition thereof, (ii)
debt securities issued by any corporation incorporated in the United
States of America or any state thereof that has a short-term credit
rating of at least A-1 or the equivalent thereof by Standard and
Poor's Ratings Group or P-1 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. and in each case maturing within six months
after the date of acquisition thereof, (iii) eurodollar time deposits,
certificates of deposit and bankers' acceptance with maturities of six
months or less from the date of acquisition, and overnight bank
deposits, in each case, with any Lender or with any domestic
commercial bank having capital and surplus in excess of
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$100,000,000, (iv) tax exempt securities rated MIG-1 or the equivalent
thereof by Xxxxx'x Investors Service, Inc. with maturities of six
months or less from the date of acquisition and (v) securities issued
or fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than
six months from the date of acquisition; and
(e) investments made after the date hereof in any joint
venture, partnership or any other entity solely engaged or to be
solely engaged in a Core Business (other than Investments otherwise
permitted by clause (i) of subparagraph (a) above or subparagraph (b),
(c) or (d) above), in an aggregate principal amount for all such
investments (together with Investments referred to in clause (ii) of
subparagraph (a) above) not in excess of $50,000,000 (provided that
any investments in the SF Broadcasting Companies shall not, subject to
Section 9.16(a)(iii)(z), exceed $20,000,000 in the aggregate);
provided, however, that any such investments are subject to the
following conditions:
(i) no Default or Event of Default shall have
occurred and be continuing, both before and immediately after
the making of such investment; and
(ii) the Borrower shall be in compliance with
Sections 9.11, 9.12, 9.13, 9.14, 9.16, 9.17 and 9.18 both
before and immediately after the making of such investment on
both a historical and a pro forma basis.
It is understood and agreed that any acquisitions made
pursuant to clause (a) of Section 9.18 will not constitute an Investment for
purposes of clauses (a)(ii) and (e) of this Section.
SECTION 9.18. Acquisitions. Neither the Borrower nor any
Guarantor will, nor will any of them permit any of its Subsidiaries to,
purchase, lease or otherwise acquire (in one or in a series of transactions)
(whether for cash, property, services or assumption or acquisition of debt) any
assets or properties, or any class of capital stock, of any other Person
outside the ordinary course of business, except for
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(a) any non-hostile acquisition (i.e., any acquisition that
is neither subject to an unsolicited tender offer that is subject to
the provisions of the Xxxxxxxx Act nor subject to any unsolicited
merger offer not approved by the board of directors of the target
company at the time of the initial public announcement thereof) for
consideration consisting in whole or part of cash or non-cash
consideration, in which the aggregate consideration thereof paid or
delivered by the Borrower or any Guarantor (including the fair market
value of any non-cash consideration (other than (x) any Indebtedness
incurred, issued, assumed or acquired pursuant to Section 9.07(j) and
(y) any capital stock of the Borrower any Guarantor or any of its
respective Subsidiaries) issued as part of such consideration) shall
not exceed $150,000,000 in the aggregate; provided, however, that any
such acquisitions are subject to the following conditions:
(i) in the case of any assumed or acquired
Indebtedness, such Indebtedness shall only be secured by
Liens permitted under Section 9.05(f);
(ii) no Default or Event of Default shall have
occurred and be continuing, both before and immediately after
the making of such acquisition; and
(iii) the Borrower shall be in compliance with
Sections 9.11, 9.12, 9.13, 9.14, 9.16, 9.17 and 9.18 both
before and immediately after the making of such acquisition
on both an historical and a pro forma basis (including for
purposes of such pro forma calculation the positive and
negative cash flows of such acquired corporation); and
(b) any acquisition for consideration consisting solely of
capital stock of the Borrower, any Guarantor or any of their
Subsidiaries, provided that the conditions set forth in clauses
(a)(i), (ii) and (iii) above are satisfied with respect to such
acquisition; and
(c) any acquisition consented to in writing by the Majority
Lenders.
It is understood and agreed that any Investments made
pursuant to clauses (a)(ii) or (e) of Section 9.17 will not constitute an
acquisition for purposes of clause (a) of this Section.
SECTION 9.19. Use of Proceeds. The Borrower shall use (a) the
proceeds of the Loans solely (i) for its general cor-
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porate purposes (including to fund its working capital needs and Capital
Expenditures), (ii) for the purposes of financing non-hostile acquisitions only
as permitted by Section 9.18(a), (iii) for the purposes of financing limited
stock and debt repurchases only as permitted by Section 9.16 and (iv) for the
purposes of repaying on the Effective Date all indebtedness and other
obligations under the Existing Credit Agreements outstanding on the Effective
Date, and (b) the Letters of Credit solely for its general corporate purposes,
and in each case in compliance with all applicable legal and regulatory
requirements, including Regulations G, T, U and X of the Board, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and
in each case the regulations thereunder. Neither the Administrative Agent or
the Issuing Bank nor any Lender shall have any responsibility for any use of
the proceeds of the Loans or the Letters of Credit.
SECTION 9.20. Certain Agreements. Neither the Borrower nor
any Guarantor will amend, modify, terminate or waive, nor will any of them
permit any of its Subsidiaries to agree to any amendment, modification,
termination or waiver of any material agreement of any such person (including
the Subordinated Debentures) if such amendment, modification, termination or
waiver would reasonably be expected to have a Material Adverse Effect.
SECTION 9.21. Compliance with Laws. Each Credit Party and
each Subsidiary thereof will comply with all applicable laws, rules and
regulations, and all orders (including ERISA, margin regulations and
Environmental Laws) of any Governmental Authority applicable to it or any of
its property, business, operations or transactions to the extent noncompliance
could reasonably be expected to result in (a) a Material Adverse Effect or (b)
a Default or an Event of Default.
SECTION 9.22. Further Assurances. The Borrower will, in
connection with (i) a sale or exchange under, and subject to the terms of,
Section 9.15(d), and (ii) an acquisition under, and subject to the terms of,
Section 9.18, cause in each case any such acquired corporation to execute a
written instrument, in form and substance satisfactory to the Administrative
Agent, by which the acquiror becomes a party to this Agreement.
SECTION 9.23. Ownership of the Guarantors; Additional
Guarantors. (a) The Borrower agrees at all times to own, both beneficially and
of record and free and clear of all Liens, and control 100% of the capital
shares of each Guarantor (other than Home Shopping and its subsidiaries, of
which the Borrower owns or controls, directly or indirectly, at least 80% of
the ordinary
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voting power); provided, that the Borrower may make any sale or disposition of
any capital stock of SKTV or any of its Subsidiaries, subject to the terms of
clause (iv) of the definition of Asset Sale and paragraph (c) of Section 2.04.
(b) Promptly upon any Subsidiary holding a low power
television license acquiring a full power television license, the Borrower will
cause such Subsidiary to execute and deliver to the Administrative Agent (1) a
written instrument, in form and substance reasonably satisfactory to the
Administrative Agent, by which such Subsidiary shall become a Credit Party to
this Agreement and (2) an opinion of counsel, reasonably satisfactory to the
Administrative Agent, substantially in the form of Exhibit C.
SECTION 9.24. Notification of Incurrence of Debt. Prior to
the incurrence by the Borrower or any of its Subsidiaries of Indebtedness
(other than Indebtedness under this Agreement), or upon obtaining commitments
for Indebtedness, in each case as permitted by Section 9.07, the Borrower shall
deliver notice to the Administrative Agent and the Lenders, certifying, on the
basis of its financial statements for the four Fiscal Quarters most recently
ended, the Borrower's compliance with the financial covenants under this
Agreement both before and immediately after the incurrence of such Indebtedness
or commitment therefor.
ARTICLE X
Events of Default
If one or more of the following events (herein called "Events
of Default" shall occur and be continuing:
(a) (i) any Credit Party shall fail to pay the principal of
any Loan or shall fail to make any reimbursement with respect to any
L/C Disbursement when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise; or (ii) any Credit
Party shall fail to pay any interest on any Loan or L/C Disbursement
or any fee or other amount payable by it hereunder (other than an
amount referred to in clause (a) above) more than two Business Days
after the date when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise; or
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(b) (i) any Credit Party or any Subsidiary shall default in
the payment when due (after giving effect to all applicable grace
periods provided for in the documents relating to such Indebtedness,
without regard to any waiver thereof) of any amount of principal of or
interest on or any other amount payable in connection with any of its
Indebtedness not specified in clause (a) above in an aggregate
principal amount of $5,000,000 or more; or (ii) other than any event
described in clause (iii) of this paragraph (b), any event specified
in any note, agreement, indenture or other document evidencing or
relating to any such Indebtedness shall occur if (after giving effect
to all applicable grace periods provided for in the documents relating
to such Indebtedness, without regard to any waiver thereof) the effect
of such event is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due prior to its stated
maturity; or (iii) any change of control (or similar event, however
denominated) with respect to the Borrower or any Subsidiary of the
Borrower shall occur (unless otherwise waived) under and as defined in
any indenture or agreement in respect to Indebtedness to which the
Borrower or any Subsidiary of the Borrower is a party if as a result
of such change of control or similar event the Borrower or any
Subsidiary of the Borrower is required to prepay, repurchase, redeem
or defease such Indebtedness; or
(c) any representation, warranty or certification made or
deemed made herein or in any other Loan Document by any Credit Party,
or any certificate furnished to any Lender, the Administrative Agent
or the Issuing Bank pursuant to the provisions hereof or the other
Loan Documents, shall prove to have been false or misleading as of the
time made or deemed made or furnished in any material respect and, if
the Credit Parties and the Majority Lenders agree that the effects of
such false or misleading representation, warranty or certification are
curable, such effects shall not have been cured to the satisfaction of
the Majority Lenders within 10 days after the earlier of (x) the date
on which any Credit Party obtained knowledge that such representation,
warranty or certification was so false or misleading or (y) the date
of notice by the Administrative Agent or the Issuing Bank to the
relevant Credit Party that such representation, warranty or
certification was so false or misleading; or
(d) any Credit Party shall default in the performance of any
of its obligations under Article IX (other than under
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any of Sections 9.01(a), 9.01(b), 9.01(c), 9.01(d), 9.01(g), 9.01(h),
9.02, 9.03(b), 9.03(c), 9.04 and, so long as the Indebtedness
incurred or to be incurred (or commitments thereof) shall not exceed
$2,500,000, 9.24; or any Credit Party shall default in the performance
of any of its other obligations in this Agreement or any other Loan
Document, including any of Sections 9.01(a), 9.01(b), 9.01(c),
9.01(d), 9.01(g), 9.01(h), 9.02, 9.03(b), 9.03(c), 9.04 and, so long
as the Indebtedness incurred or to be incurred (or commitments
thereof) shall not exceed $2,500,000, 9.24 (not governed by any
other provision in this Article X), and such default shall continue
unremedied for a period of 10 days after the earlier of (x) the date
on which any Credit Party obtained knowledge of such default or (y)
the date of notice by the Administrative Agent to the relevant Credit
Party of the occurrence of such default; or
(e) any Credit Party, any Material Subsidiary or Subsidiaries
constituting a Material Subsidiary Group shall admit in writing
its inability to, or be generally unable to, pay its debts as such
debts become due; or
(f) any Credit Party, any Material Subsidiary or Subsidiaries
constituting a Material Subsidiary Group shall (i) apply for or
consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its assets, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, creditor or debtor rights, winding-up, or
composition or readjustment of debts, (v) take any corporate action
for the purpose of effecting any of the foregoing; provided that an
event specified in clauses (i) through (v) above shall be deemed to
have occurred (whether at one time or cumulatively over a period of
time after the date hereof) with respect to a Material Subsidiary
Group at the time when such an event shall have occurred with respect
to all Subsidiaries constituting such Material Subsidiary Group; or
(g) a proceeding or case shall be commenced, without the
application or consent of any Credit Party, any Material Subsidiary or
all Subsidiaries constituting a Material Subsidiary Group in any court
of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, including the filing of an involuntary
petition under the
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Bankruptcy Code, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Credit Party or Subsidiary
or of all or any substantial part of its assets, or (iii) similar
relief in respect of such Credit Party or Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, creditor or debtor
rights, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment
or decree approving or ordering any of the foregoing shall be entered
and shall not be vacated or dismissed within 60 days; or an order for
relief against such Credit Party or Subsidiary shall be entered in an
involuntary case under any applicable bankruptcy code; provided that
an event specified in clauses (i) through (iii) above or the preceding
subclause shall be deemed to have occurred with respect to a Material
Subsidiary Group at the time when such an event shall have occurred
(whether at one time or cumulatively over a period of time after the
date hereof) with respect to all Subsidiaries constituting such
Material Subsidiary Group; or
(h) a judgment or judgments for the payment of money in
excess of $1,000,000 in the aggregate shall be rendered by a court or
courts against any Credit Party and/or any of its Subsidiaries and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof (or, if later, by the
date on which such judgment specified that payment is due), and the
relevant Credit Party or Subsidiary shall not, within said period of
30 days (or by such later date on which payment is due, as aforesaid),
or such longer period during which execution of the same shall have
been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(i) an event or condition specified in Section 9.01(e) shall
occur or exist with respect to any Plan or Multiemployer Plan and, as
a result of such event or condition, together with all other such
events or conditions, any Credit Party or any ERISA Affiliate shall
incur or in the opinion of the Majority Lenders shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC
(or any combination of the foregoing) which is, in the determination
of the Majority Lenders, material in relation to the consolidated
financial position of the Borrower and its consolidated Subsidiaries;
or
(j) there shall occur a Change of Control; or
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(k) any material provision of Article VI of this Agreement
shall cease, for any reason, to be in full force and effect, or shall
be asserted by any Person, for any reason other than a change in
applicable law, not to be enforceable and of the same effect and
priority purported to be created thereby;
(l) (i) Any FCC License applicable to any full power
television broadcast station owned by the Borrower or any of its
Subsidiaries shall be canceled, terminated, rescinded, annulled,
forfeited, suspended or revoked, shall fail to be renewed or shall no
longer be in full force and effect other than any FCC License that is
replaced with new authorizations for digital facilities (ii) the
Borrower or any Subsidiary shall for any other reason fail to have all
authorizations, permits, licenses and approvals material to the
continued operation of its full power television broadcast stations as
presently operated, (iii) in any renewal or revocation proceeding
involving any FCC License, any administrative law judge of the FCC (or
successor to the functions of an administrative law judge of the FCC)
shall have issued an initial decision to the effect that the Borrower
or any of its Subsidiaries lacks the qualifications to hold any FCC
License, and such initial decision shall not have been timely appealed
or shall otherwise have become an order that is final and no longer
subject to further administrative or judicial review or such
administrative law judge or successor shall issue a favorable
determination on such matter, which determination shall subsequently
be reversed on appeal or (iv) any full power television broadcast
station shall fail for any period to maintain any broadcast signal or
shall fail for any period to maintain any broadcast signal without
either material interference or requiring the use of any equipment
other than ordinary consumer television antennae and receivers by
households aggregating at least 80% of the households normally able to
receive such station's broadcast signal without either material
interference or the use of any equipment other than ordinary consumer
television antennae and receivers; and in the case of clause (i),
(ii), (iii) or (iv), such occurrence could reasonably be expected to
result in a Material Adverse Effect;
THEREUPON: (A) in the case of an Event of Default other than one referred to in
clause (e), (f) or (g) of this Article X, the Administrative Agent, with the
consent of the Majority Lenders, may and, upon request of the Majority Lenders,
shall, by notice to the Borrower, terminate the Commitments and/or declare
the
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principal amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Borrower and the Guarantors hereunder and
under any other Loan Documents to be forthwith due and payable, whereupon such
amounts shall be immediately due and payable without presentment, demand,
diligence, protest or other formalities of any kind, all of which are hereby
expressly waived by the Credit Parties; and (B) in the case of the occurrence
of an Event of Default referred to in clause (e), (f) or (g) of this Article X,
the Commitments shall be automatically terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Borrower and the Guarantors hereunder and under any other Loan
Documents shall become automatically immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Credit Parties.
ARTICLE XI
The Administrative Agent
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In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as
Administrative Agent on behalf of the Lenders. Each of the Lenders, the Issuing
Bank and each assignee of any such Lender or the Issuing Bank hereby
irrevocably authorizes the Administrative Agent to take such actions on behalf
of such Lender or assignee and to exercise such powers as are specifically
delegated to the Administrative Agent by the terms and provisions hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Administrative Agent and its directors,
officers, employees or agents shall have no responsibilities except those
expressly set forth in this Agreement and the other Loan Documents and shall
not by reason of this Agreement or any other Loan Documents be a trustee or
other fiduciary for any Lender. The Administrative Agent is hereby expressly
authorized by the Lenders, without hereby limiting any implied authority, (a)
to receive on behalf of the Lenders all payments of principal of and interest
on the Loans and all other amounts due to the Lenders hereunder, and promptly
to distribute to each Lender its proper share of each payment so received; (b)
to give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices and financial statements
delivered by the Borrower or any other Credit Party pursuant to this Agreement
or the other Loan Documents as received by the Administrative Agent. Without
limiting the generality of the foregoing, the Administrative Agent is hereby
expressly authorized to execute any and all documents (including releases) with
respect to the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken or
omitted by any of them except for its or his own gross negligence or wilful
misconduct, or be responsible for any recital, statement, warranty or
representation herein or in any other Loan Document or the contents of any
certificate or other document delivered in connection herewith or therewith, or
be required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower or any other Credit Party of any of the terms,
conditions, covenants or agreements contained in any Loan Document. The
Administrative Agent shall not be responsible to the Lenders for the due
execution, genuineness, sufficiency, value, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents or any other
certificates, instruments or agreements referred to or
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provided for herein or therein. The Administrative Agent shall in all cases be
fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Majority Lenders (or, in the case of any
waiver, amendment, supplement or modification requiring the prior written
consent of all Lenders, by all Lenders) and, except as otherwise specifically
provided herein, such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders. The Administrative Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any notice,
instrument, document or other communication believed by it in good faith to be
genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower or any other
Credit Party on account of the failure of or delay in performance or breach by
any Lender of any of its obligations hereunder or to any Lender on account of
the failure of or delay in performance or breach by any other Lender or the
Borrower or any other Credit Party of any of their respective obligations
hereunder or under any other Loan Document or in connection herewith or
therewith. The Administrative Agent may execute any and all duties hereunder by
or through agents or employees and shall be entitled to rely upon the advice of
legal counsel, independent accountants and other experts selected by it with
respect to all matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the advice of such
counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be taken
by it pursuant to the provisions of this Agreement unless it shall be requested
in writing to do so by the Majority Lenders (or, in the case of any waiver,
amendment, supplement or modification requiring the prior written consent of
all Lenders, by all Lenders).
The Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the nonpayment of
principal of or interest on Loans or of Fees) unless the Administrative Agent
has received notice from a Lender or the Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Lenders (and the
Administrative Agent shall give each Lender prompt notice of each such
nonpayment). The Administrative Agent shall (subject to this Article XI and
Section 12.04) take such action with respect to such Default as
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shall be directed by the Majority Lenders (or, in the case of any waiver,
amendment, supplement or modification requiring the prior written consent of
all Lenders, by all Lenders); provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time upon delivery of 30 days' prior written notice to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders and the Borrower
shall have the right to appoint a successor from among the Lenders. If no
successor shall have been so appointed by the Majority Lenders and the Borrower
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a Lender with an office in New York, New
York, having a combined capital and surplus of at least $500,000,000, or an
Affiliate of any such Lender. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After the
Administrative Agent's resignation hereunder, the provisions of this Article
and Section 12.03 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
Administrative Agent.
With respect to the Loans made by it hereunder, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the Administrative
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent.
The Administrative Agent acts initially through its office
designated on the signature pages hereof, but may transfer its functions as
Administrative Agent to any other office, branch or Affiliate of such Agent at
any time by giving prompt, subsequent written notice to each of the other
parties to this Agreement.
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Each Lender agrees (a) to reimburse the Administrative Agent,
on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including protective advances for insurance, taxes or
other amounts advanced by the Administrative Agent to preserve or protect the
interests of the Lenders, as well as counsel fees and compensation of agents
and employees paid for services rendered on behalf of the Lenders, that shall
not have been reimbursed by the Borrower or any Guarantor and (b) to indemnify
and hold harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as the Administrative Agent or any of them in any
way relating to or arising out of this Agreement or any other Loan Document or
any other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or any other action taken or omitted by it or any of
them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Borrower or any other Credit Party;
provided that no Lender shall be liable to the Administrative Agent or any such
other indemnified person for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements which are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
wilful misconduct of the Administrative Agent or any of its directors,
officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the
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Borrower or any Guarantor of this Agreement or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower, any Guarantor or any of their respective Subsidiaries. Except for
notices, reports and other documents and information expressly required to be
furnished by the Administrative Agent hereunder, the Administrative Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Administrative Agent or any of its respective Affiliates.
Each of the parties to this Agreement hereby acknowledges
that the Co-Documentation Agents and the Co-Agents do not have any obligations
in their capacity as such under this Agreement or any other Loan Document and
that none of them nor any of its directors, officers, agents or employees shall
have any liability hereunder or thereunder.
ARTICLE XII
Miscellaneous
SECTION 12.01. Waiver. No failure on the part of the
Administrative Agent, the Issuing Bank or any Lender to exercise, no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement or any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege under this Agreement or any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
SECTION 12.02. Notices. All notices and other communications
provided for herein (including any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telecopy, telegraph,
cable or in writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof or; as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telex or telecopier (with
receipt confirmed either mechanically or in writing by a person at the office of
the recipient), personally delivered or, in the case of
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a mailed notice, upon receipt, in each case given or addressed as aforesaid.
SECTION 12.03. Expenses, etc. (a) The Credit Parties jointly
and severally agree to pay or reimburse each of the Lenders and the
Administrative Agent and the Issuing Bank for paying:
(i) all costs and expenses of the Administrative Agent and
the Issuing Bank (including the reasonable fees and expenses of all
special counsel to the Administrative Agent, the Issuing Bank and the
Lenders, in connection with the syndication of the credit facilities
provided herein, the preparation, negotiation, execution and delivery
of this Agreement, the other Loan Documents and any related documents)
in connection with the administration of this Agreement, the other
Loan Documents and any related documents and the making of the initial
Loans hereunder and any amendment, modification or waiver of any of
the terms of this Agreement, any other Loan Documents or any related
documents (whether or not any such amendment, modification or waiver
is signed or becomes effective); and
(ii) all reasonable costs and expenses of each Lender, the
Administrative Agent and the Issuing Bank (including reasonable
counsels' fees and expenses) in connection with the enforcement of
this Agreement or any other Loan Documents and the protection of the
rights of each Lender, the Administrative Agent and the Issuing Bank
against any Credit Party or any of their respective assets;
(iii) all transfer, stamp, documentary and other similar
taxes, assessments or charges (including penalties and interest), if
any, levied by any governmental or revenue authority in respect of
this Agreement, the other Loan Documents or any other document
referred to herein.
(b) The Borrower agrees to indemnify the Administrative
Agent, the Issuing Bank and each Lender, each Affiliate of any of the foregoing
persons and each of their respective directors, officers, employees,
representatives, agents and advisors (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
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96
parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby and
thereby, (ii) the use of the proceeds of the Loans and the Letters of Credit,
or (iii) any claim, litigation, investigation or proceeding (including any
threatened litigation or other proceeding) relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 12.03 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement or the other Loan Documents, the consummation of the
transactions contemplated hereby or thereby, the repayment of any of the Loans
or Letters of Credit, the expiration of the Commitments, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative
Agent, the Issuing Bank or any Lender. All amounts due under this Section 12.03
shall be payable on written demand therefor accompanied by a reasonably
detailed description of the amounts due and the circumstances giving rise
thereto.
SECTION 12.04. Amendments, etc. Neither this Agreement nor
any other Loan Documents nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the prior written consent of the Majority Lenders, the
Administrative Agent and the Borrower may, from time to time, enter into
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or any of the other Loan Documents or
changing in any manner the rights of the Lenders or the Issuing Bank or of any
Credit Party hereunder or thereunder or waiving, on such terms and conditions
as the Administrative Agent (with the consent of the Majority Lenders) may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (a) extend the maturity of any Note or the Maturity Date or
extend the expiry date of any Letter of Credit beyond the Maturity Date, or
reduce the rate or extend the time of payment of interest thereon or on any L/C
Disbursement, or reduce or extend the time of payment of any fee payable to the
Lenders
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97
hereunder, or reduce the principal amount of any Loan or any L/C Disbursement,
or increase the amount of any Lender's Commitment, or release any Guarantor
from any of its obligations hereunder (or any future guarantor that executes a
guarantee substantially in the form of Article VI), or amend, modify or waive
any provision of this subsection, or reduce the percentage specified in the
definition of "Majority Lenders" in Section 1.01 or the percentage of the
Lenders otherwise required to take actions under this Agreement, or any of the
other Loan Documents, or consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under this Agreement or any of the
other Loan Documents or release any Credit Party, in each case without the
prior written consent of all the Lenders, or (b) amend, modify or waive any
provision of Article XI without the prior written consent of the Administrative
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Credit
Parties, the Lenders, the Administrative Agent, the Issuing Bank and all future
holders of the Notes. In the case of any waiver, the Credit Parties, the
Lenders, the Administrative Agent and the Issuing Bank shall be restored to
their former position and rights hereunder and under the outstanding Notes and
the Letters of Credit, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right subsequent
thereon.
SECTION 12.05. SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
SECTION 12.06. ASSIGNMENTS AND PARTICIPATION. (a) Neither
the Borrower nor any Guarantor may assign its rights or obligations hereunder
or under any other Loan Document without the prior consent of all of the
Lenders and the Administrative Agent and the Issuing Bank.
(b) Any Lender may assign any of its Loans, its Note or its
Commitment to (i) a Lender or an Affiliate of a Lender without the prior
consent of the Borrower, the Administrative Agent, the Issuing Bank or any
Lender or (ii) any other Person subject to the prior written consent of each of
the Borrower (so long as no Default or Event of Default shall have occurred and
is continuing) and the Administrative Agent, which consent shall not be
unreasonably withheld; provided that (x) partial assignments (being assignments
of less than the entire amount of a Lender's Commitment and Loans) to any
Person other than another Lender or an office, branch or affiliate of the
assigning Lender shall be in a principal amount of not less than $5,000,000,
(y) any such
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98
assignment shall be made pursuant to an Assignment and Acceptance to be
delivered to the Administrative Agent and (z) the assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon (A) written notice to the Borrower and the Administrative
Agent of an assignment, identifying in detail reasonably satisfactory to the
Administrative Agent the assignee Lender and the amount of the assignor
Lender's Commitment and Loans assigned, and (B) payment by the assignor or the
assignee to the Administrative Agent, for the Administrative Agent's own
account, of a recordation fee of $3,500, the assignee shall have, as of the
date of effectiveness of such assignment and to the extent of such assignment,
the obligations, rights and benefits of, and shall be deemed for all purposes
hereunder, a Lender party hereto holding the Commitment and Loans (or portions
thereof) assigned to it (in addition to the Commitment and Loans, if any,
theretofore held by such assignee) and the assignor shall be released from such
obligations to such extent.
(c) Any Lender may sell to one or more other Persons a
participation in all or any part of the Commitment or any Loan held by it, in
which event each such participant shall be entitled to the rights and benefits
of the provisions of Article V and 9.01(h) with respect to its participation in
such Loan as if (and the Credit Parties shall be directly obligated to such
participant under such provisions as if) such participant were a "Lender" for
purposes of said Sections, but shall not have any other rights or benefits
under this Agreement or any other Loan Document (the participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement (the "Participation Agreement") executed by such Lender in favor
of such participant); provided that all amounts payable by any Credit Party to
any Lender and any participant under Article V in respect of any Loan shall be
determined as if such Lender had not sold any participations in such Loan and
as if such Lender were funding all of such Loan in the same way that it is
funding the portion of such Loan in which no participations have been sold. In
no event shall a Lender that sells a participation be obligated to any
participant under the Participation Agreement to take or refrain from taking
any action hereunder or under such Lender's Note (including the extension of
such Lender's Commitment pursuant to Section 2.09) except that such Lender may
agree in the Participation Agreement that it will not, without the consent of
the participant, agree to (i) the extension of any date fixed for the payment
of principal of or interest on the related Loan or Loans, (ii) the reduction of
any payment of principal thereof or (iii) the reduction of the rate at which
either interest is payable thereon or (if the participant is entitled to any
part thereof) Commitment Fee is payable hereunder
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to a level below the rate at which the participant is entitled to receive
interest or Commitment Fee, as the case may be, in respect of such
participation).
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06, any Lender may,
without the prior consent of the Borrower, the Administrative Agent, the
Issuing Bank or any Lender, assign and pledge all or any portion of its Loans
and its Note to any Federal Reserve Bank as collateral security. No such
assignment shall release the assigning Lender from its obligations hereunder.
(e) A Lender may, subject to Section 12.07, furnish any
information concerning any Credit Party or any of its Subsidiaries in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants).
SECTION 12.07. Confidentiality. The Administrative Agent, the
Issuing Bank and each of the Lenders hereby acknowledge that certain of the
information to be furnished to them pursuant to this Agreement may be
non-public information. The Administrative Agent, the Issuing Bank and each
Lender hereby agrees that it will keep all information so furnished to it
pursuant hereto confidential in accordance with its normal banking procedures
and, except in accordance with such procedures, will make no disclosure to any
other Person of such information until the same shall have become public,
except (a) in connection with matters involving this Agreement (including
litigation involving any Credit Party, the Administrative Agent, the Issuing
Bank or the Lenders) and with the obligations of any of the Administrative
Agent, the Issuing Bank or such Lender under law or regulation, (b) pursuant to
subpoenas or similar process, (c) to Governmental Authorities or examiners, (d)
to independent auditors or counsel, (e) to any parent or corporate Affiliate of
any of the Administrative Agent, the Issuing Bank or such Lender, or (f) to any
participant or proposed participant or assignee or proposed assignee hereunder
so long as such participant or proposed participant or assignee or proposed
assignee (i) is not in the same general type of business as the Borrower on the
date of such disclosure and (ii) agrees in writing to accept such information
subject to the restrictions provided in this Section 12.07; provided that in no
event shall any of the Administrative Agent, the Issuing Bank or such Lender be
obligated or required to return any materials furnished by the Borrower or any
of its Subsidiaries.
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SECTION 12.08. Survival. Without limiting the survival of any
other obligations of the Credit Parties and the Lenders hereunder, the
obligations of the Credit Parties under Sections 2.06, 5.01, 5.04, 5.05 and
12.03 and the obligations of the Banks under Sections 4.07, 11.05 and 12.07,
shall survive the repayment of the Loans and the termination of the
Commitments.
SECTION 12.09. Captions. Captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
SECTION 12.10. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart.
SECTION 12.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.12. JURISDICTION; WAIVER OF JURY TRIAL. EACH OF
THE CREDIT PARTIES HEREBY AGREES THAT:
(A) ANY SUIT, ACTION OR PROCEEDING AGAINST ANY CREDIT PARTY
WITH RESPECT TO THIS AGREEMENT, THE LOANS, THE NOTES, THE LETTERS OF
CREDIT, ANY OTHER LOAN DOCUMENT OR ANY DOCUMENTS RELATED HERETO OR
THERETO OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT HEREOF OR
THEREOF MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK,
COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK (COLLECTIVELY, THE "SUBJECT COURTS"), AS
THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY ELECT IN
ITS SOLE DISCRETION AND EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF THE SUBJECT
COURTS FOR THE PURPOSE OF ANY SUCH SUIT, ACTION, PROCEEDING OR
JUDGMENT. EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN ANY OF THE
SUBJECT COURTS BY THE MAILING THEREOF BY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR THE RESPECTIVE LENDER BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE APPLICABLE CREDIT PARTY ADDRESSED AS PROVIDED
IN SECTION 12.02. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY
LENDER TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW OR TO BRING PROCEEDINGS AGAINST ANY
CREDIT PARTY IN ANY COMPETENT COURT OF ANY OTHER JURISDICTION OR
JURISDICTIONS, AND IN SUCH MANNER, AS MAY BE PERMITTED BY APPLICABLE
LAW.
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(B) EACH OF THE CREDIT PARTIES HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING IN RESPECT OF THIS
AGREEMENT, THE NOTES, THE LETTERS OF CREDIT, ANY OTHER LOAN DOCUMENT
OR ANY OTHER DOCUMENTS IN CONNECTION HEREWITH OR THEREWITH, ANY
OBJECTION TO THE LAYING OF VENUE IN ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY OF THE SUBJECT COURTS, AND, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY CLAIM THAT SUCH SUIT, ACTION OR
PROCEEDING IN ANY OF THE SUBJECT COURTS HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 12.13. Severability. Any provision of this Agreement
or any other Loan Document that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
HSN, INC.,
as the Borrower,
by
/s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Office of the Chairman
0000 000xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Chief Financial Officer
with a copy to:
"Legal Department"
Attention of General Counsel
Telecopier No.: (000) 000-0000
108
102
SKTV, INC.,
SILVER KING BROADCASTING OF DALLAS,
INC.,
SILVER KING BROADCASTING OF HOLLYWOOD,
FLORIDA, INC.,
SILVER KING BROADCASTING OF HOUSTON,
INC.
SILVER KING BROADCASTING OF ILLINOIS,
INC., SILVER KING BROADCASTING OF MARYLAND,
INC., SILVER KING BROADCASTING OF
MASSACHUSETTS, INC.,
SILVER KING BROADCASTING OF NEW JERSEY,
INC.,
SILVER KING BROADCASTING OF NORTHERN
CALIFORNIA, INC.,
SILVER KING BROADCASTING OF OHIO, INC.,
SILVER KING BROADCASTING OF SOUTHERN
CALIFORNIA, INC.,
SILVER KING BROADCASTING OF TAMPA, INC.
SILVER KING BROADCASTING OF VINELAND,
INC.,
SILVER KING BROADCASTING OF VIRGINIA,
INC.,
SILVER KING INVESTMENT HOLDINGS, INC.,
SKC INVESTMENT, INC.,
SAVOY PICTURES ENTERTAINMENT, INC.,
SAVOY STATIONS INC.,
HOME SHOPPING NETWORK, INC.,
HOME SHOPPING CLUB, INC., and
HSN REALTY, INC.,
as Guarantors,
by
/s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: [Assistant] Secretary
0000 000xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Finance Department
with a copy to:
"Legal Department"
109
103
Attention of Borrower's General Counsel
Telecopier No.: (000) 000-0000
110
104
The Lenders
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent,
by
/s/ Xxxxxxxx Xxxxxxx, Xx.
---------------------------------
Name: Xxxxxxxx Xxxxxxx, Xx.
Title: Vice President
Lending Office for all Loans:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxxxx X. Xxxxxx
with a copy to:
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxx Xxxxxx
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105
LTCB TRUST COMPANY, individually and
as Co-Documentation Agent,
by
/s/ Xxxx X. Xxxx
--------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
Lending Office for ABR Loans:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Lending Office for Eurodollar Loans:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telex No.: 425722
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxxx Xxxxx
With a copy to:
The Long-Term Credit Bank of Japan,
Limited
Atlanta Representative Xxxxxx
000 Xxxxx Xxxx Xxxxxx Xxxxxx, X.X.,
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxx Xxxxxxx
112
106
THE BANK OF NEW YORK COMPANY, INC.,
individually and as Co-Documentation
Agent,
by
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signer
Lending Office for ABR Loans:
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lending Office for Eurodollar Loans:
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telex No.:
Telecopier No.:
Telephone No.:
Attention of
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107
FLEET BANK, N.A., individually and as
Co-Agent,
by
/s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: Senior Vice President
Lending Office for ABR Loans:
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Lending Office for Eurodollar Loans:
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Telex No.: [ ] Answer
Back[ ]
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Yin Xxxx Xxx
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108
THE MITSUBISHI TRUST AND BANKING
CORPORATION, individually and
as Co-Agent,
by
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
Lending Office for ABR Loans:
The Mitsubishi Trust and Banking
Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Lending Office for Eurodollar Loans:
The Mitsubishi Trust and Banking
Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
The Mitsubishi Trust and Banking
Corporation
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telex No.: 425078
Answer Back MTAB UI
Telecopier No.: (000) 000-0000 or
(000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxxx Xxxx
Loan Administration Dept.
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109
ALLIED IRISH BANKS, P.L.C.,
by
/s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
by
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
Lending Office for ABR Loans:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Lending Office for Eurodollar Loans:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telex No.:
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxx Xxxxx
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110
FIRST HAWAIIAN BANK,
by
/s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
Lending Office for ABR Loans:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Lending Office for Eurodollar Loans:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Address for Notices:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Telex No.:
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxxx Xxxxxxx
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111
THE FUJI BANK, LIMITED,
by
/s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Joint General Manager
Lending Office for ABR Loans:
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Lending Office for Eurodollar Loans:
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Address for Notices:
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telex No.: 215504
Answer Back FUJI UR
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of CP & A Group
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112
THE SUMITOMO BANK, LIMITED,
by
/s/ X. X. Xxxxxxxx
-------------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President
New York Office
by
/s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President &
Regional Manager (East)
Lending Office for ABR Loans:
Chicago Administration Center
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Lending Office for Eurodollar Loans:
Chicago Administration Center
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Address for Notices:
Tampa Representative Xxxxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx, XX 00000
Telex No.: N/A
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention of Xxxxx X. Xxxxxxx, Xx.
119
113
UNION BANK OF CALIFORNIA, N.A.,
by
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Lending Office for ABR Loans:
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Lending Office for Eurodollar Loans:
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Address for Notices:
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telex No.: [ ]
Answer Back [ ]
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000/7544
Attention of Xxxxxxx Xxxxxxxx/
Xxxxxxx Xxxx
120
Schedule 1.01(a)
LENDERS AND COMMITMENTS
Lenders Commitments
------- -----------
ADMINISTRATIVE AGENT
The Chase Manhattan Bank $ 64,285,714.28
CO-DOCUMENTATION AGENTS
The Bank of New York Company, Inc. 42,857,142.86
LTCB Trust Company 42,857,142.86
CO-AGENTS
Fleet Bank, N.A 25,000,000
The Mitsubishi Trust and Banking
Corporation 25,000,000
OTHER LENDERS
Union Bank of California, N.A 20,000,000
First Hawaiian Bank 15,000,000
The Fuji Bank, Limited 15,000,000
The Sumitomo Bank, Limited 15,000,000
Allied Irish Banks, P.L.C 10,000,000
============
Total $275,000,000
121
Schedule 1.01(b)
DESCRIPTION OF CREDIT CARD PROGRAM
Home Shopping has established a credit card program (the
"Program") with General Electric Capital Corporation ("GE Capital"). This
Program, which is now fully operative, provides the Home Shopping's customers
with a convenient way to make purchases through Home Shopping system and thus,
expands Home Shopping's market. Home Shopping is enthusiastic about the
Program, too, because it permits Home Shopping to receive, on the day after
each purchase through the Program, 99%(1) of the cash amount of that purchase.
The Program should reduce the credit card fees that Home Shopping and its
Subsidiaries currently pay if purchasers switch from traditional credit cards
to Home Shopping credit card, and Home Shopping also hopes to reduce the number
of purchases which are made by personal check. Personal checks not only delay
payment to Home Shopping but also have a 50% fall out rate.
The Program is created under a Credit Card Program Agreement,
dated as of February 16, 1994 (the "Program Agreement"), among Home Shopping,
GE Capital, Home Shopping Club, Inc. ("HSC") and certain other subsidiaries(2)
of Home Shopping that sell merchandise to retail customers (the "Participating
Subsidiaries"). That Agreement was structured with due regard to the terms of
the 1992 Revolving Credit Agreement, most of which are now incorporated into
the Credit Agreement.
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(1) The discount rate is fixed for the first year but thereafter is tied
to interest rates and outstanding balances under the Program.
(2) The subsidiaries subject to the Program Agreement, in addition to Home
Shopping are HSC, HSN Mail Order, Inc., World Rez, Inc. and Home
Shopping Network Outlets, Inc. Home Shopping expects that HSC will
comprise 98% of the sales.
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The Program contemplates that Home Shopping may issue credit
cards bearing its name to its customers ("Account Debtors") who satisfy GE
Capital's credit standards. GE Capital finances the charges on the credit cards
subject to the terms and conditions of the Program Agreement. Those principal
terms and conditions may be summarized as follows:
10 GE Capital will purchase from Home Shopping and the
Participating Subsidiaries certain accounts and Indebtedness (as defined below,
and related rights, in each case up to an aggregate amount not exceeding
$150,000,000 (or such other amount to which GE Capital and Home Shopping may
from time to time agree) at any one time. The term "Indebtedness" as used in
the Program Agreement means all obligations incurred by an Account Debtor with
respect to an account, whether or not billed, including charges for merchandise
purchased, finance charges, charges relating to credit insurance and any other
charges with respect to an account as such charges are accrued pursuant to GE
Capital's accounting practices.
GE Capital authorizes each credit transaction at the time of
purchase, and its obligation to purchase the relevant account and Indebtedness
from the Participating Subsidiary arises upon giving that authorization. As is
typical in credit card purchases, Home Shopping, HSC or any other Participating
Subsidiary, as the case may be, will not consummate a credit card sale of
merchandise without first obtaining GE Capital's authorization. Home Shopping
transmits sale and credit information from Home Shopping, HSC and all
Participating Subsidiaries to GE Capital on a daily basis for the preceding
day's sales and credits. GE Capital forwards to Home Shopping, on behalf of
Home Shopping, HSC and all Participating Subsidiaries, the purchase price for
the accounts and Indebtedness purchased, net of GE Capital's fees and
adjustments for merchandise return or credits. This is done by initiating a
wire transfer for the net purchase price, which normally will occur by 3:00
p.m. on the same business day after receipt by GE Capital of the transmission
from Home Shopping.
The purchases by GE Capital of the accounts and Indebtedness
are non recourse; none of Home Shopping, HSC or any Participating Subsidiary
will have liability whatsoever, contingent or otherwise, with respect to such
non recourse sales. The only exceptions are for customary credit card
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chargebacks(1) which are not cured by Home Shopping and for special programs
described in paragraph 2 below.
20 The Program contemplates that certain accounts may be
approved by GE Capital at the special request of Home Shopping, but only in an
aggregate amount not to exceed $150,000 at any one time. Home Shopping, HSC and
the other Participating Subsidiaries must unconditionally guarantee all amounts
due under those accounts, and accordingly, this part of the Program is known as
the "Guaranteed Program".
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(3)The following excerpt from the Program Agreement describes the chargeback
provisions: "Indebtedness incurred pursuant to an Account (a) as to which the
Account Debtor has, in apparent good faith, made a claim of (i) a breach of a
representation or warranty (either express or implied) by Home Shopping or any
Participating Subsidiary, (ii) a violation of a local, state, or federal law or
regulation by Home Shopping or any Participating Subsidiary or (iii) failure by
Home Shopping or any Participating Subsidiary to provide the Account Debtor
with the agreed-upon goods or services, (b) as to which Home Shopping or any
Participating Subsidiary has accepted a return of Merchandise from an Account
Debtor or has granted a partial credit with respect to Merchandise purchased
pursuant thereto other than in the ordinary course of business, (c) with
respect to which the Account Documentation has not been forwarded to GE Capital
in accordance with Section 2.05 hereof, (d) as to which there is a breach of
any representation, warranty or covenant of Home Shopping or any Participating
Subsidiary hereunder relating to an Account, or there would be such a breach if
such representation or warranty did not contain a requirement of materiality,
(e) where an Account Debtor has asserted that the Indebtedness was fraudulently
incurred and the claim of fraud is not frivolous; provided that such fraudulent
incurrence does not arise in connection with a fraudulent Credit Application,
(f) as to which any charges have been made which have not been authorized by GE
Capital pursuant to Section 3.01(b) hereof. With respect to subsection (c)
above, such event shall not be considered RPR Indebtedness if cured or resolved
by Home Shopping within two (2) Business Days after receiving notice from GE
Capital thereof." Home Shopping has 25 days to cure the chargebacks with
exception of subsection (c) above.
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In addition, the Program contemplates that certain accounts
that otherwise would fail to meet GE Capital's credit standards may nonetheless
be approved by GE Capital upon Home Shopping's election, pursuant to special
credit standards to be implemented specifically for Home Shopping. This is
known as the "Special Program", and it is limited in amount. GE Capital is not
required to purchase accounts or Indebtedness relating to the Special Program
to the extent that any such purchase would result in the aggregate Indebtedness
owed to GE Capital, by the charge-card holders, with respect to the Special
Program exceeding the greater of (i) the lesser of (A) $10,000,000 and (B) 50%
of the aggregate Indebtedness owned by GE Capital with respect to the whole
Program as of the date of such purchase and (ii) twenty percent (20%) of such
aggregate Indebtedness as of the date of such purchase. Special Program
accounts are sold with 95% recourse; as a result, Home Shopping, HSC and the
other Participating Subsidiaries bear the risk for losses in excess of 5% of
Special Program Indebtedness.
The Program Agreement provides that a reserve account (the
"Reserve Account") will be established to secure all amounts owed to GE Capital
by Home Shopping or any of the Participating Subsidiaries with respect to
accounts which are part of the Special Program and part of the Guaranteed
Program. The aggregate amount of funds required to be set aside in the Reserve
Account is determined in accordance with a formula which is based on the
aggregate amount of maximum Indebtedness that could arise under the accounts in
the Special Program and the Guaranteed Program end a targeted loss rate. GE
Capital will have the right to withdraw amounts from the Reserve Account to the
extent payments secured by the Reserve Account are not otherwise paid in a
timely manner to GE Capital.
30 GE Capital will service the Program and receive fees for
its services.
40 Each of Home Shopping, HSC and each of the other
Participating Subsidiaries will be jointly and severally liable for one
another's obligations pursuant to the Program Agreement, and will jointly and
severally guarantee one another's obligations to GE Capital. Since the sale of
accounts and Indebtedness under the Program is
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non-recourse (except as noted in paragraphs 1 and 2 above), such joint and
several liability could arise only in the context of (i) obligations of Home
Shopping, HSC or the Participating Subsidiaries under the Special Program or
the Guaranteed Program, (ii) customary credit card chargebacks, which are
routine and in the ordinary course of business or (iii) Home Shopping's failure
to pay fees due under the Program Agreement, a highly unlikely scenario as GE
Capital has the right to offset such amount against the purchase price.
50 GE Capital and Home Shopping may from time to time
mutually agree to include other Subsidiaries of Home Shopping as parties to the
Program Agreement.
60 GE Capital has been granted a security interest in the
following assets of Home Shopping and the Participating Subsidiaries (whether
now owned or hereafter acquired):
(i) all accounts and Indebtedness which are purchased by GE
Capital;
(ii) all documentation relating to the accounts and
Indebtedness purchased by GE Capital;
(iii) all general intangibles but only to the extent of
guarantees, claims, security interests or other security now held by
or hereafter granted to Home Shopping or any Participating Subsidiary
to secure payment by any Participating Subsidiary with respect to or
on account of any of the items listed in (i) above, and all proceeds
thereof;
(iv) all general intangibles consisting of credit balances
and reserves of whatever type or description created or established by
GE Capital in favor of or with respect to Home Shopping or any
Participating Subsidiary including the Reserve Account and the balance
in the Reserve Account;
(v) all accounts, accounts receivable, other receivables, all
contract rights, commercial paper, chooses in action, instruments,
documents, chattel paper, general intangibles (as each of those terms
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which is defined in the applicable UCC is so defined) and writings or
property, relating to accounts and Indebtedness purchased by GE
Capital pursuant to the Program Agreement;
(vi) all merchandise purchased by Account Debtors pursuant to
accounts in which GE Capital has an interest pursuant to the Program
Agreement, to the extent of the lien, if any, of Home Shopping or any
Participating Subsidiary thereon; and
(vii) all proceeds of any of the foregoing in any form
whatsoever.
The foregoing security interest is intended to secure the
obligations of Home Shopping and the Participating Subsidiaries (present and
future) to GE Capital pursuant to the Program Agreement.
70 The Special Program and the Guaranteed Program
unquestionably would create "Indebtedness" (as defined in the Credit Agreement)
in favor of GE Capital and a Lien on the accounts sold and on the Reserve
Account. Home Shopping can and will manage the programs in such a way that
those Liens will at all times comply with the $15,000,000 "basket" of permitted
Liens and the 150% test that are provided for in Section 9.05(j).
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Schedule 1.01(c)
CALCULATION OF FINANCIAL RATIOS
see attachment
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Schedule 1.01(d)
LIST OF MATERIAL SUBSIDIARIES
Home Shopping Club, Inc.
HSN Realty, Inc.
HSN Capital Corporation
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Schedule 8.10
CREDIT AGREEMENTS
(1) Subordinated Debentures
(a) Home Shopping's unsecured $100,000,000 5-7/8% Convertible
Subordinated Debentures due March 1, 2006, and convertible
into the Borrower's common stock after May 1, 1996, at a
conversion price of $26.67 per share.
(b) Savoy's unsecured $37,782,000 7% Convertible Subordinated
Debentures due July 1, 2003, and convertible into the
Borrower's common stock at a conversion price of $132.86 per
share.
(2) SFB Credit Agreement
Payable in 20 consecutive quarterly installments commencing on
September 30, 1997, subject to mandatory prepayment out of excess SF
Broadcasting cash flow (as defined). Outstanding principal balance is
$74,500,000. The interest rate was 8.3% at December 31, 1996. At the
Company's option, interest rate is tied to the ABR, or LIBOR, plus an
applicable margin.
(3) Agreement re: Salem Warehouse IRB
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Schedule 9.05
LIENS
Salem Warehouse Industrial Revenue Bonds due October 1, 1999.
Liens under SFB Credit Agreement.
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Schedule 9.07
INDEBTEDNESS
(1) Subordinated Debentures
(a) Home Shopping's unsecured $100,000,000 5-7/8% Convertible
Subordinated Debentures due March 1, 2006, and convertible
into the Borrower's common stock after May 1, 1996, at a
conversion price of $26.67 per share.
(b) Savoy's unsecured $37,782,000 7% Convertible Subordinated
Debentures due July 1, 2003, and convertible into the
Borrower's common stock at a conversion price of $132.86 per
share.
(2) SFB Credit Agreement
Payable in 20 consecutive quarterly installments commencing on
September 30, 1997, subject to mandatory prepayment out of excess SF
Broadcasting cash flow (as defined). Outstanding principal balance is
$74,500,000. The interest rate was 8.3% at December 31, 1996. At the
Company's option, interest rate is tied to the ABR, or LIBOR, plus an
applicable margin.
(3) Agreement re: Salem Warehouse IRB
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Schedule 9.17
INVESTMENTS
see attachments
