Exhibit 5
ASSUMPTION AGREEMENT
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THIS ASSUMPTION AGREEMENT, dated as of the 30th day of
September, 1997 (the "Agreement"), at 11:50 A.M. to the Credit Agreement
referred to below is entered into by and among C-TEC CORPORATION, a
corporation organized under the laws of New Jersey ("C-TEC"), CABLE MICHIGAN,
INC. ("CCSM"), a corporation organized under the laws of Pennsylvania, and
FIRST UNION NATIONAL BANK, a national banking association, as Administrative
Agent (the "Administrative Agent").
Statement of Purpose
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C-TEC Corporation, the Lenders and Administrative Agent are
parties to the $15,000,000 Credit Agreement dated as of June 30, 1997 (as
supplemented hereby and as further amended, restated or otherwise modified,
the "Credit Agreement").
Pursuant to Section 2.6 of the Credit Agreement and in
connection with the Mercom Contribution, CCSM is required to execute, among
other documents, an assumption agreement in order to become the Borrower under
the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the parties hereto hereby agree as follows:
1.01 Assumption to CCSM. Pursuant to Section 2.6 of the Credit
Agreement, CCSM hereby irrevocably and unconditionally assumes all
Obligations, whether now or hereafter outstanding, and agrees that it is the
Borrower under the Credit Agreement as if a signatory thereof on the Closing
Date. CCSM shall comply with and be subject to and have the benefit of all of
the terms, conditions, covenants, agreements and obligations set forth
therein. CCSM hereby agrees that each reference to the "Borrower" in the
Credit Agreement and other Loan Documents shall be a reference to CCSM. CCSM
acknowledges that it has received a copy of the Credit Agreement and that it
has read and understands the terms thereof.
2.01 Effectiveness. This Agreement shall become effective as
of the time indicated above upon receipt by the Administrative Agent of (i) an
originally executed Note for each Lender executed by CCSM in exchange for the
Notes issued thereto by C-TEC Corporation, (ii) an originally executed
counterpart hereof, (iii) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance satisfactory thereto
with respect to the validity and binding effect of this Assumption Agreement,
(iv) a supplement to the Mercom Pledge Agreement executed by CCSM to confirm
the pledge thereby of the stock of Mercom owned by CCSM and (v) such other
documents and closing certificates as may be reasonably requested by the
Administrative Agent consistent with the terms of Article IV of the Credit
Agreement to confirm that CCSM is the Borrower under the Credit Agreement.
3.01 General Provisions.
(a) Representations and Warranties. CCSM hereby represents and
warrants that as of the date hereof there are no claims or offsets against or
defenses or counterclaims to its obligations under the Credit Agreement or any
other Loan Document.
(b) Limited Effect. Except as supplemented hereby, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Agreement shall not be deemed (i) to be a
waiver of, or consent to , or a modification or amendment of, any other term
or condition of the Credit Agreement or (ii) to prejudice any right or rights
which the Agent or Lenders may now have or may have in the future under or in
connection with the Credit Agreement or the Loan Documents or any of the
instruments or agreements referred to therein, as the same may be amended or
modified from time to time.
(c) Costs and Expenses. CCSM hereby agrees to pay or reimburse
the Administrative Agent for all of its reasonable and customary out-of-pocket
costs and expenses incurred in connection with the preparation, negotiation and
execution of this Agreement, including, without limitation, the reasonable
fees and disbursements of counsel.
(d) Counterparts. This Agreement may be executed by one or
more of the parties hereto in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
(e) Definitions. All capitalized terms used and not defined
herein shall have the meanings given thereto in the Credit Agreement.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES
THEREOF.
IN WITNESS WHEREOF the undersigned hereby causes this Agreement
to be executed and delivered as of the date first above written.
[CORPORATE SEAL] C-TEC CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: SVP, Treasurer
[CORPORATE SEAL] CABLE MICHIGAN, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: SVP, Treasurer
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
