1
EXECUTION COPY
Exhibit 10.22
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SOURCE MEDIA, INC.
IT NETWORK, INC.
$20,676,895.06
SENIOR SECURED NOTES DUE MARCH 31, 2002
---------------
AMENDED AND RESTATED
NOTE AGREEMENT
---------------
Originally Dated as of March 28, 1996
Amended and Restated as of April 1, 1997
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TABLE OF CONTENTS
(Not Part of Agreement)
Page
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1. AUTHORIZATION OF ISSUE OF NOTES......................................-3-
2. PURCHASE, SALE AND DELIVERY OF NOTES;
DELIVERY OF WARRANTS.................................................-4-
2A. CLOSING........................................................-4-
2B. WARRANTS TO PURCHASE COMMON STOCK..............................-5-
3. CONDITIONS AT CLOSING................................................-7-
3A. CERTAIN DOCUMENTS..............................................-7-
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT....................-11-
3C. DUE DILIGENCE.................................................-11-
3D. PURCHASE PERMITTED BY APPLICABLE LAWS.........................-11-
3E. EXECUTION OF AGREEMENTS.......................................-11-
3F. FEES AND EXPENSES.............................................-11-
3G. PROCEEDINGS...................................................-11-
4. PREPAYMENTS.........................................................-11-
4A. REQUIRED PREPAYMENT...........................................-11-
4B. OPTIONAL PREPAYMENT...........................................-12-
4C. NOTICE OF OPTIONAL PREPAYMENT.................................-12-
4D. PARTIAL PAYMENTS PRO RATA.....................................-13-
4E. RETIREMENT OF NOTES...........................................-13-
5. AFFIRMATIVE COVENANTS...............................................-13-
5A. FINANCIAL STATEMENTS..........................................-13-
5B. INFORMATION REQUIRED BY RULE 144A.............................-16-
5C. INSPECTION OF PROPERTY........................................-15-
5D. PERFORMANCE OF OBLIGATIONS....................................-16-
5E. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE..............-16-
5F. MAINTENANCE OF PROPERTY; INSURANCE............................-16-
5G. FURTHER SECURITY INTEREST.....................................-17-
5H. FURTHER ASSURANCES............................................-17-
5I. ELECTION OF PECKS DESIGNEE....................................-18-
5J. TRANSFER OF INTELLECTUAL PROPERTY.............................-18-
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5K. CARRIAGE AGREEMENTS...........................................-19-
5L. MINIMUM CASH AND CASH EQUIVALENTS.............................-20-
5M. CASH BALANCE REPORTING REQUIREMENT............................-20-
6. NEGATIVE COVENANTS..................................................-20-
6A. INTEREST CHARGES COVERAGE RATIO...............................-20-
6B. ADJUSTED DEBT TO EBITDA RATIO.................................-21-
6C. LIMITATION ON DEBT. .........................................-21-
6D. LIMITATION ON LIENS...........................................-23-
6E. LIMITATION ON MERGERS AND REINCORPORATIONS....................-24-
6F. LIMITATION ON SALES OF PROPERTY. ............................-24-
6G. LIMITATION ON TRANSACTIONS WITH AFFILIATES....................-25-
6H. LIMITATION ON DIVIDENDS.......................................-25-
6I. LIMITATION ON CREDIT EXTENSIONS...............................-25-
6J. LIMITATION ON NEGATIVE PLEDGE CLAUSES.........................-25-
6K. LIMITATION ON LINES OF BUSINESS...............................-25-
6L. LIMITATION ON INVESTMENTS.....................................-26-
6M. LIMITATION ON ACTIVITIES OF CERTAIN
ICT SUBSIDIARIES.........................................-26-
6N. LIMITATION ON SETTLEMENTS OF SUITS............................-26-
7. EVENTS OF DEFAULT...................................................-26-
7A. ACCELERATION..................................................-26-
7B. RESCISSION OF ACCELERATION....................................-29-
7C. NOTICE OF ACCELERATION OR RESCISSION..........................-30-
7D. OTHER REMEDIES................................................-30-
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...........................-30-
8A. ORGANIZATION, ETC.............................................-30-
8B. FINANCIAL STATEMENTS..........................................-31-
8C. ACTIONS PENDING...............................................-31-
8D. OUTSTANDING DEBT..............................................-31-
8E. TITLE TO PROPERTIES...........................................-31-
8F. TAXES.........................................................-31-
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS......................-32-
8H. OFFERING OF NOTES.............................................-32-
8I. USE OF PROCEEDS...............................................-32-
8J. ERISA.........................................................-33-
8K. GOVERNMENTAL CONSENT..........................................-33-
8L. ENVIRONMENTAL COMPLIANCE......................................-33-
8M. DISCLOSURE....................................................-34-
8N. INTELLECTUAL PROPERTY.........................................-34-
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8O. SUBSIDIARIES..................................................-36-
8P. CAPITALIZATION; ETC...........................................-36-
8Q. SECURITIES LAWS FILINGS.......................................-36-
8R. CERTAIN MATTERS PERTAINING TO THE COMPANY,
THE CANADIAN SUBSIDIARY AND ICT..........................-37-
8S. CERTAIN MATTERS PERTAINING TO CERTAIN
ICT SUBSIDIARIES.........................................-37-
8T. CARRIAGE AGREEMENTS...........................................-37-
8U. RIGHTS TO TECHNOLOGY..........................................-37-
9. REPRESENTATIONS OF EACH PURCHASER...................................-38-
9A. NATURE OF PURCHASE............................................-38-
10. DEFINITIONS.........................................................-38-
10A. TERMS.........................................................-38-
10B. ACCOUNTING PRINCIPLES.........................................-44-
11. MISCELLANEOUS.......................................................-45-
11A. NOTE PAYMENTS.................................................-45-
11B. EXPENSES......................................................-45-
11C. CONSENT TO AMENDMENTS.........................................-46-
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES...............................................-46-
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS.........................-47-
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..-47-
11G. SUCCESSORS AND ASSIGNS........................................-47-
11H. DISCLOSURE TO OTHER PERSONS...................................-47-
11I. NOTICES.......................................................-48-
11J. PAYMENTS DUE ON NON-BUSINESS DAYS.............................-48-
11K. SATISFACTION REQUIREMENT......................................-48-
11L. GOVERNING LAW.................................................-48-
11M. SEVERABILITY..................................................-49-
11N. DESCRIPTIVE HEADINGS..........................................-49-
11O. COUNTERPARTS..................................................-49-
11P. LIMITATION ON INTEREST........................................-49-
11Q. SUBMISSION OF JURISDICTION; WAIVERS...........................-49-
11R. ACKNOWLEDGMENTS...............................................-50-
11S. WAIVERS OF JURY TRIAL.........................................-50-
11T. ACCOUNTING TERMS AND DETERMINATIONS...........................-50-
11U. LEGENDS ON NOTES..............................................-50-
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SCHEDULE 1 -- PURCHASER SCHEDULE
SCHEDULE 2 -- SECURITY DOCUMENTS
SCHEDULE 3 -- EXISTING ACQUISITION DEBT
SCHEDULE 4 -- EXISTING DEBT
SCHEDULE 5 -- EXISTING SUBSIDIARIES
SCHEDULE 6 -- EXISTING LITIGATION
SCHEDULE 7 -- MATERIAL LEASES
SCHEDULE 8 -- USE OF PROCEEDS
SCHEDULE 9 -- ENVIRONMENTAL COMPLIANCE
SCHEDULE 10 -- CLAIMS REGARDING INTELLECTUAL PROPERTY
SCHEDULE 11 -- EXISTING WARRANTS, OPTIONS AND OTHER RIGHTS
SCHEDULE 12 -- EXCEPTIONS TO SECURITIES LAW FILINGS
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF MANAGEMENT LOCK-UP AND
VOTING AGREEMENT
EXHIBIT C -- TRANSFER OF TECHNOLOGY AGREEMENT (ICT)
EXHIBIT D -- PATENT ASSIGNMENT AGREEMENT (ICT)
EXHIBIT E -- TRANSFER OF TECHNOLOGY AGREEMENT (ICT AND THE
BARBADIAN SUBSIDIARY)
EXHIBIT F -- PATENT ASSIGNMENT AGREEMENT (ICT AND THE
BARBADIAN SUBSIDIARY)
EXHIBIT G -- ASSIGNMENT OF TECHNOLOGY AGREEMENT
EXHIBIT H -- 1997 AMENDMENT
ANNEX I -- ASSETS AND PROPERTIES OF ICT SUBSIDIARIES
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Source Media, Inc.
IT Network, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Originally Dated As of March 28, 1996
Amended and Restated as of April 9, 1997
Northstar High Total
Return Fund
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Delaware State Employees' Retirement Fund
Declaration of Trust for Defined Benefit
Plan of Zeneca Holdings Inc.
Declaration of Trust for Defined Benefit
Plan of ICI American Holdings Inc.
The X.X. XxXxxxxxx Family Foundation
c/o Pecks Management Partners Ltd.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
$20,676,895.06 Senior Secured Notes
Ladies and Gentlemen:
The undersigned, Source Media, Inc. (the "COMPANY") entered into a Note
Agreement, dated as of March 28, 1996 (the "ORIGINAL NOTE AGREEMENT"), with
Northstar Advantage High Total Return Fund (now known as Northstar High Total
Return Fund, "NORTHSTAR"). Capitalized terms used herein, and not otherwise
herein defined, will have the meanings given such terms in the Original Note
Agreement.
On the terms and subject to the conditions of the Original Note
Agreement, Northstar purchased from the Company on April 3, 1996 (i) the secured
senior promissory note of the Company due March 31, 2001 (the "FIRST ORIGINAL
NOTE") in an aggregate principal amount of $5,000,000 for a purchase price of
$4,975,000 in cash and (ii) a warrant (the "ORIGINAL WARRANT") to purchase up to
500,000 shares of common stock, $.001 par value ("COMMON STOCK"), of the Company
for a purchase price of $25,000 in cash. In accordance with the Original Note
Agreement and the First Original Note, the Company issued to Northstar, in
payment of the interest due and payable on September 30, 1996 under the First
Original Note, a secured promissory note of the Company due March 31, 2001 (the
"SECOND ORIGINAL NOTE")
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in an aggregate principal amount of $326,805.56. In accordance with the
Original Note Agreement, the First Original Note and the Second Original Note,
the Company subsequently issued to Northstar, in payment of the interest due
and payable on March 31, 1997 under the First Original Note and the Second
Original Note, an additional secured promissory note of the Company due March
31, 2001 (the "THIRD ORIGINAL NOTE," and, together with the First Original Note
and the Second Original Note, the "ORIGINAL NOTES") in an aggregate principal
amount of $350,089.50.
At the time of the Initial Closing under the Original Note
Agreement, as a condition to Northstar's obligation to purchase and pay for the
Original Note, the Company executed and delivered to Northstar the various
documents set forth in paragraph 3A of the Original Note Agreement, among which
were (i) the Registration Rights Agreement, dated April 3, 1996 (the "ORIGINAL
REGISTRATION RIGHTS AGREEMENT"), between the Company and Northstar, pursuant to
which the Company granted certain registration rights to Northstar with respect
to "Restricted Stock" (as such term is defined in the Original Registration
Rights Agreement) and (ii) the Security Documents (hereinafter, the "ORIGINAL
SECURITY DOCUMENTS"), pursuant to which the Company and certain of its
Affiliates granted security interests and liens in pledge to secure or guarantee
the payment and performance of the Company's and certain other Persons' duties
and other obligations under the Note Purchase Documents (hereinafter, the
"ORIGINAL NOTE PURCHASE DOCUMENTS").
The Company and Northstar wish to amend and restate the Original
Note Agreement (as so amended and restated, the "AMENDED AND RESTATED NOTE
AGREEMENT") on the terms hereinbelow stated so as to provide, among other
things, for (i) the purchase of additional principal amounts of secured
promissory notes of the Company by each of Northstar, Delaware State Employees'
Retirement Fund ("DELAWARE"), Declaration of Trust for Defined Benefit Plan of
Zeneca Holdings Inc. ("ZENECA"), The X.X. XxXxxxxxx Family Foundation
("XXXXXXXXX") and Declaration of Trust for Defined Benefit Plan of ICI American
Holdings Inc. ("ICI;" and, together with Delaware, Zeneca and XxXxxxxxx
collectively, the "PECKS INVESTORS;" and, together with Northstar hereinafter
sometimes individually, a "PURCHASER" and collectively, the "PURCHASERS"), (ii)
the amendment and restatement of the Original Notes, (iii) the issuance of
additional warrants to Northstar and the issuance of warrants to the Pecks
Investors to purchase shares of Common Stock, (iv) certain amendments to the
terms and conditions of the Original Note Agreement (including, without
limitation, the addition of IT Network, Inc., a wholly-owned Subsidiary of the
Company as a co-borrower ("IT;" and, together with the Company, hereinafter
sometimes individually, a "SELLER" and collectively, the "SELLERS")) and (v) the
amendment and restatement of certain other of the Original Note Purchase
Documents (including, without limitation, the Original Warrant and certain of
the Original Security Documents). All references herein to "you" or "your"
shall, unless the context expressly provides otherwise, refer to all of the
Purchasers.
Accordingly, in consideration of the foregoing premises and the
mutual covenants herein contained, each of the Company and IT hereby agrees,
jointly and severally, with each of the Purchasers as follows:
PARAGRAPH 1. AUTHORIZATION OF ISSUE OF NOTES.
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1. AUTHORIZATION OF ISSUE OF NOTES. Each of the Company and IT will
authorize:
(i) in the case of Northstar, (x) the issue of a senior
secured promissory note of the Company and IT in the aggregate
principal amount of $5,000,000 (the "1997 NORTHSTAR NOTE") and (y)
the amendment and restatement of the terms governing the Original
Notes to evidence the joint and several obligation of the Company
and IT to pay the holder of such notes an aggregate $5,676,895.06
principal amount and otherwise to provide that such terms, as
amended and restated, will be identical to those governing the 1997
Northstar Note (the Original Notes, as so amended, restated and
combined into one secured promissory note, being hereinafter called
the "AMENDED AND RESTATED NORTHSTAR NOTE"); and
(ii) in the case of each of the Pecks Investors, the issue of
a senior secured promissory note of the Company and IT in the
aggregate principal amount of (w) $6,200,000 in the case of Delaware
(the "1997 DELAWARE NOTE"), (x) $1,200,000 in the case of Zeneca
(the "1997 ZENECA NOTE"), (y) $800,000 in the case of XxXxxxxxx (the
"1997 XXXXXXXXX NOTE") and (z) $1,800,000 in the case of ICI (the
"1997 ICI NOTE;" and together with the 1997 Delaware Note, the 1997
Zeneca Note and the 1997 XxXxxxxxx Note, hereinafter sometimes
individually, a "1997 PECKS INVESTORS NOTE" and, collectively, the
"1997 PECKS INVESTORS NOTES"),
each such Note (as defined below) (a) to be dated the date of issue thereof, (b)
to mature March 31, 2002, (c) to bear interest on the unpaid balance thereof
until such principal amount shall have become due and payable:
(A) from the date of issuance thereof until and including March 31,
1999, at the election of the Sellers, (aa) at the rate of twelve percent
(12%) per annum payable in cash or (bb) at the rate of thirteen percent
(13%) per annum payable in units consisting of (xx) an additional
promissory note of the Company and IT in substantially the form of the
Notes and in principal amount equal to the amount of interest due and
payable and (yy) warrants, substantially in the form of the Warrants (as
defined below), to purchase such number of additional shares of Common
Stock as is equal to .125 share of Common Stock per dollar of principal
amount of such additional promissory note;
(B) subject to the right of election of a holder of a Note as
provided in paragraph 2 thereof, thereafter until the date paid in full at
the rate of twelve percent (12%) per annum, in cash, and
(C) on overdue payments at the rate specified therein,
and (d) to be substantially in the form of Exhibit A attached hereto. The 1997
Northstar Note, the Amended and Restated Northstar Note, the 1997 Pecks
Investors Notes, each other senior promissory note delivered pursuant to any
provision of this Agreement, and each senior promissory note delivered in
substitution or exchange for any other Note pursuant to any such provision (in
each case, as the same may at any time and from time to time be hereafter
-3-
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amended, supplemented or modified), are herein sometimes referred to
individually as a "NOTE" and collectively as the "NOTES".
PARAGRAPH 2. PURCHASE, SALE AND DELIVERY OF NOTES; DELIVERY OF WARRANTS.
2A. CLOSING. Each of the Company and IT hereby agrees to sell to each of
you and, subject to the terms and conditions herein set forth, each of you
agrees to purchase from the Company, at 100% of the aggregate principal amount
thereof, a 1997 Note (i) in the case of Northstar, in the aggregate principal
amount of $5,000,000, (ii) in the case of Delaware, in the aggregate principal
amount of $6,200,000, (iii) in the case of Zeneca, in the aggregate principal
amount of $1,200,000, (iv) in the case of XxXxxxxxx, in the aggregate principal
amount of $800,000, and (v) in the case of ICI, in the aggregate principal
amount of $1,800,000. Each of the Company and IT will deliver to each of you, at
the offices of Northstar's counsel, Reboul, MacMurray, Xxxxxx, Xxxxxxx &
Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, a 1997 Note registered
in your name or the name of your nominee as set forth in the Purchaser Schedule
attached hereto, on April 9, 1997 (the "CLOSING" or the "DATE OF THE CLOSING"),
which 1997 Note shall be (a) in the case of Northstar, in the aggregate
principal amount of $5,000,000, (b) in the case of Delaware, in the aggregate
principal amount of $6,200,000, (c) in the case of Zeneca, in the aggregate
principal amount of $1,200,000, (d) in the case of XxXxxxxxx, in the aggregate
principal amount of $800,000 and (e) in the case of ICI, in the aggregate
principal amount of $1,800,000, immediately prior to payment of the purchase
price thereof by transfer of immediately available funds for credit to IT's
account #00-0000-0 at Texas Bank & Trust, N.A. on the Date of the Closing.
Each of the Company and IT hereby agrees with Northstar that the
aforesaid purchase price of the 1997 Northstar Note purchased by Northstar at
the Closing shall be $4,270,638. Each of the Company and IT hereby further
agrees with Northstar that the purchase price of the Northstar Warrant (as
defined below), delivered to Northstar at the Closing as provided in paragraph
2B hereof, shall be $729,362 in the aggregate and shall also be payable in
immediately available funds for credit to IT's account #00-0000-0 at Texas Bank
& Trust, N.A. on the Date of the Closing. Additionally, each of the Company and
IT agrees with Northstar that all tax returns and financial statements of the
Company, IT and Northstar shall be prepared in a manner consistent with the
respective purchase prices of the 1997 Northstar Note and the Northstar Warrant
set forth above.
Each of the Company and IT agrees with Delaware that the aforesaid
purchase price of the 1997 Delaware Note purchased by Delaware at the Closing
shall be $5,446,326. Each of the Company and IT further agrees with Delaware
that the purchase price of the Delaware Warrant (as defined below) delivered to
Delaware at the Closing as provided in paragraph 2B hereof, shall be $753,674
and shall also be payable in immediately available funds for credit to IT's
account #00-0000-0 at Texas Bank & Trust, N.A. on the Date of the Closing.
Additionally, each of the Company and IT agrees with Delaware that all tax
returns and financial statements of the Company, IT and, to the extent
applicable, Delaware shall be prepared in a manner consistent with the
respective purchase prices of the 1997 Delaware Note and the Delaware Warrant
set forth above.
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Each of the Company and IT agrees with Zeneca that the aforesaid
purchase price of the 1997 Zeneca Note purchased by Zeneca at the Closing shall
be $1,054,128. Each of the Company and IT further agrees with Zeneca that the
purchase price of the Zeneca Warrant (as defined below) delivered to Zeneca at
the Closing as provided in paragraph 2B hereof, shall be $145,872 and shall also
be payable in immediately available funds for credit to IT's account #00-0000-0
at Texas Bank & Trust, N.A. on the Date of the Closing. Additionally, each of
the Company and IT agrees with Zeneca that all tax returns and financial
statements of the Company, IT and, to the extent applicable, Zeneca shall be
prepared in a manner consistent with the respective purchase prices of the 1997
Zeneca Note and the Zeneca Warrant set forth above.
Each of the Company and IT agrees with XxXxxxxxx that the aforesaid
purchase price of the 1997 XxXxxxxxx Note purchased by XxXxxxxxx at the Closing
shall be $702,752. Each of the Company and IT further agrees with XxXxxxxxx that
the purchase price of the XxXxxxxxx Warrant (as defined below) delivered to
XxXxxxxxx at the Closing as provided in paragraph 2B hereof, shall be $97,248
and shall also be payable in immediately available funds for credit to IT's
account #00-0000-0 at Texas Bank & Trust, N.A. on the Date of the Closing.
Additionally, each of the Company and IT agrees with XxXxxxxxx that all tax
returns and financial statements of the Company, IT and, to the extent
applicable XxXxxxxxx shall be prepared in a manner consistent with the
respective purchase prices of the 1997 XxXxxxxxx Note and the XxXxxxxxx Warrant
set forth above.
Each of the Company and IT agrees with ICI that the aforesaid
purchase price of the 1997 ICI Note purchased by ICI at the Closing shall be
$1,581,191. Each of the Company and IT further agrees with ICI that the purchase
price of the ICI Warrant (as defined below) delivered to ICI at the Closing as
provided in paragraph 2B hereof, shall be $218,809 and shall also be payable in
immediately available funds for credit to IT's account #00-0000-0 at Texas Bank
& Trust, N.A. on the Date of the Closing. Additionally, each of the Company and
IT agrees with ICI that all tax returns and financial statements of the Company,
IT and, to the extent applicable, ICI shall be prepared in a manner consistent
with the respective purchase prices of the 1997 ICI Note and the ICI Warrant set
forth above.
At the Closing, and against delivery to the Company of the Original
Notes, the Company and IT will deliver to Northstar a duly executed Amended and
Restated Northstar Note.
2B. WARRANTS TO PURCHASE COMMON STOCK. In consideration of and as an
inducement to your respective purchase of the Notes, each of the Company and IT
also agrees as follows:
(i) That it will, on the Date of the Closing, deliver to
Northstar (a) a warrant (the "NORTHSTAR WARRANT") to purchase, at an
exercise price per share of $6.00, 750,000 shares of Common Stock
and (b) an amended and restated Original Warrant (as so amended and
restated, the "AMENDED AND RESTATED NORTHSTAR WARRANT") to purchase,
at an exercise price of $6.00 per share, 500,000 shares of Common
Stock.
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(ii) That it will, on the Date of the Closing, deliver to
Delaware a warrant (the "DELAWARE WARRANT"), registered in the name
of your nominee set forth in the Purchaser Schedule attached hereto,
to purchase, at an exercise price per share of $6.00, 775,000 shares
of Common Stock.
(iii) That it will, on the Date of the Closing, deliver to
Zeneca a warrant (the "ZENECA WARRANT"), registered in the name of
your nominee set forth in the Purchaser Schedule attached hereto, to
purchase, at an exercise price per share of $6.00, 150,000 shares of
Common Stock.
(iv) That it will, on the Date of the Closing, deliver to
XxXxxxxxx a warrant (the "XXXXXXXXX WARRANT"), registered in the
name of your nominee set forth in the Purchaser Schedule attached
hereto, to purchase, at an exercise price per share of $6.00,
100,000 shares of Common Stock.
(v) That it will, on the Date of the Closing, deliver to ICI
a warrant (the "ICI WARRANT;" and, together with the Northstar A
Warrant, the Northstar B Warrant, the Amended and Restated Northstar
Warrant, the Delaware Warrant, the Zeneca Warrant and the XxXxxxxxx
Warrant herein sometimes, individually, a "WARRANT" and
collectively, the "WARRANTS"), registered in the name of your
nominee set forth in the Purchaser Schedule attached hereto, to
purchase, at an exercise price per share of $6.00, 225,000 shares of
Common Stock.
Each of the Warrants to be delivered to each of you shall be in all respects
(including, without limitation, as to both form and substance) satisfactory to
you in your sole discretion and shall provide, among other things, that (i) the
Warrants shall be exercisable at any time after the Date of the Closing and
before Xxxxx 00, 0000, (xx) the number of shares that may be purchased upon the
exercise of the Warrants and the exercise price per share is subject to "full
ratchet" anti-dilution protections (that is to say an anti-dilution adjustment
that reduces the exercise price per share under the Warrants fully and
completely down to the price per share of a dilutive issuance), (iii) beginning
on the second anniversary of the Date of the Closing, the Company may purchase,
at a purchase price of $.01 per share, all (but not less than all) of the
Warrants then outstanding, on the later of (a) 60 days from the date the Company
provides notice of its election to make such purchase, or (b) 60 days from the
date a registration statement covering the shares that may be purchased upon
exercise of the Warrants becomes effective, provided, however, that the Common
Stock has traded at a price equal to or greater than 200% of the then existing
exercise price of the Warrants for 30 of the 40 days immediately preceding such
notice and (iv) in the event of a Change of Control, you shall be entitled to
sell the Warrants to the Company at a price per share equal to the greater of
(A) the fair market value of the Warrants or (B) a price per share that will
provide to you an internal rate of return on your total investment in the
Company and IT of 30%.
PARAGRAPH 3. CONDITIONS PRECEDENT.
3. CONDITIONS AT CLOSING. Your obligation to purchase and pay for the 1997
Notes to be purchased by you hereunder at the Closing is subject to the
satisfaction, on or before the Date of the Closing, of the following conditions:
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3A. CERTAIN DOCUMENTS. Each of you (unless otherwise specified below)
shall have received the following, each dated the Date of the Closing (unless
otherwise specified below), it being expressly understood and agreed by each of
the Sellers that each of the following shall be in all respects (including,
without limitation, as to both form and substance) entirely satisfactory to each
of you in your sole discretion and to your counsel:
(i) The 1997 Notes to be purchased by you on the Date of the
Closing.
(ii) The 1997 Security Documents (as defined below).
(iii) In the case of Northstar, the Amended and Restated Northstar
Note.
(iv) In the case of Northstar, (a) the Northstar Warrant and (b) the
Amended and Restated Northstar Warrant.
(v) In the case of the Pecks Investors, (a) in the case of Delaware,
the Delaware Warrant, (b) in the case of Zeneca, the Zeneca Warrant, (c)
in the case of XxXxxxxxx, the XxXxxxxxx Warrant and (d) in the case of
ICI, the ICI Warrant.
(vi) An amendment and restatement of the Original Registration
Rights Agreement (as so amended and restated, the "AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company shall amend
and restate the registration rights originally granted to Northstar and
grant certain registration rights to each of the Pecks Investors with
respect to the Common Stock underlying the Warrants, including, without
limitation, (a) two registrations on Form S-1 or its equivalent, (b)
unlimited registrations on Form S-3 and (c) unlimited incidental or
"piggyback" registrations, in each such case at the sole cost and expense
of the Company.
(vii) Certified copies of the resolutions of the respective Board of
Directors of each of the Company, IT and each of their respective
Subsidiaries which is a party to any of the 1997 Security Documents (a
"SUBSIDIARY PARTY") approving, as applicable, this Agreement, the Notes,
the Amended and Restated Registration Rights Agreement, the Warrants, the
Lockup and Voting Agreement (as defined below), the Intercreditor
Agreement (as defined below) and each 1997 Security Document to which it
is a party, and copies of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement, the Notes, the Warrants, the Amended and Restated Registration
Rights Agreement and the 1997 Security Documents (including, without
limitation, the authorization and reservation of shares of Common Stock
issuable upon exercise of the Warrants and, as provided by paragraph 5I
hereof, the election to the Board of Directors of the Company (and to the
certain committees of such board) of the Pecks Investors Designee (as
defined below).
(viii) A certificate of the Secretary or an Assistant Secretary of
the Company, IT and each Subsidiary Party certifying the names and true
signatures of the officers of the Company and each Subsidiary Party
authorized to sign this Agreement, the Notes, the Warrants, the 1997
Security Documents, the Amended and Restated Registration Rights Agreement
and all other documents to be delivered hereunder.
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13
(ix) Certified copies of the certificate of incorporation and bylaws
of the Company, IT and each Subsidiary Party.
(x) A favorable opinion of (a) Xxxxxxxx & Xxxxxx, P.C., special
counsel to the Company and IT, of (b) Xxxxxxx Xxxxx, corporate counsel to
the Company, IT and Cableshare US, (c) Xxxxxx, Xxxx & Xxxx, special
counsel to ICT (as defined below), the Canadian Subsidiary (as defined
below) and the Barbco Subsidiary (as defined below), (d) Chancery
Xxxxxxxx, special counsel to Barbco.
(xi) Certified copies of (a) Requests for Information or Copies
(Form UCC- 11), or equivalent reports, listing all effective financing
statements which name the Company, IT or any Subsidiary Party (under its
present name and any previous name) as debtor and which are filed with the
Secretaries of State of Arizona, California, Colorado, Florida, Indiana,
Kansas, Michigan, Missouri, North Carolina, Oklahoma, Pennsylvania, South
Carolina, Tennessee and Texas, and (b) Personal Property Security Act
search reports, or equivalent reports, listing all effective financing
statements which name ICT or the Canadian Subsidiary (under their
respective present names and previous names, if any) as debtor and which
are filed in Ontario, Canada.
(xii) Documents (including each Uniform Commercial Code financing
statement or its equivalent) required by law or reasonably requested by
you to be filed, registered or recorded, in order to create and perfect in
your favor a first priority security interest and Lien on all right, title
and interest held by the Company, IT and each Subsidiary Party, in, to and
under all of its tangible and intangible, real and personal properties and
assets, with no further action required on the part of the Company, IT or
any Subsidiary Party in order for you to file, register or record each
such document.
(xiii) Original certificates evidencing all of the issued and
outstanding shares of capital stock required to be pledged to you pursuant
to the 1997 Security Documents, which certificates shall be accompanied by
undated stock powers, duly executed in blank by each relevant pledgor and
with the signatures of such relevant pledgor being guaranteed by a
commercial bank or trust company reasonably satisfactory to each of you.
(xiv) Evidence that the Company has obtained all policies of
insurance called for by paragraph 5F hereof, naming each of you as loss
payee and additional named insured, as your respective interests may
appear.
(xv) (a) Consolidated statements of income and cash flows and
consolidated statements of stockholders' equity of the Company and its
Subsidiaries for the fiscal year ended December 31, 1996, and a
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such fiscal year, which financial statements shall have been
prepared in accordance with generally accepted accounting principles
consistently applied and shall be satisfactory to each of you, and (b) an
Officer's Certificate stating that to the Knowledge of the certifying
Responsible Officer, the report by the independent certified public
accountants of the Company to be delivered, within 10 days after the
Closing, in connection with such year-end financial statements will be
without limitation as to the scope of the audit, without a "going concern"
or like qualification or exception
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and that there is no basis for such limitation, qualification or
exception. Each of the Company and IT hereby covenant and agree to deliver
to each of the Purchasers within 10 days after the Closing such
unqualified report by the independent certified public accountants of the
Company relating to such year-end financial statements.
(xvi) Consent of the Board of Directors and shareholders of ICT to
the pledge of all capital stock of ICT owned by the Company, IT and the
Canadian Subsidiary.
(xvii) (a) Consent of the Board of Directors and shareholders of the
Canadian Subsidiary to the pledge of all capital stock of the Canadian
Subsidiary owned by IT Network, Inc. and the pledge of all capital stock
of ICT owned by the Canadian Subsidiary and (b) consent of the
shareholders of the Canadian Subsidiary approving (i) the execution and
delivery of each 1997 Security Document and the Intercreditor Agreement to
which each member of the ICT Group is a party and (ii) the taking of any
other action required hereunder to be taken by any member of the ICT
Group.
(xviii) An Amended and Restated Landlord Agreement with One Xxxx
Lakes, Ltd. and a Landlord Agreement with Metropolitan Life Insurance
Company, in each case substantially in form and substance as the original
Landlord Agreement dated as of March 28, 1996, between One Xxxx Lakes,
Ltd. and IT.
(xix) The Management Lock-Up and Voting Agreement substantially in
the form attached hereto as Exhibit B (the "LOCK-UP AND VOTING AGREEMENT")
among each of the members of the Company's management named in Schedule I
thereto, the Company and the Purchasers, providing, among other things,
that until all of obligations of the Company and IT under this Agreement,
the Notes and the 1997 Security Documents have been paid and satisfied in
full, each such member of the Company's management shall not transfer or
assign any shares of Common Stock or any rights to acquire shares of
Common Stock then owned or thereafter acquired so that, giving effect to
all such transfers or assignments during such period, such member owns of
record and beneficially fewer than 90% of the greatest number of shares of
Common Stock owned by such member during such period, except as otherwise
set forth in Schedule III thereto.
(xx) The Intercreditor Agreement (the "INTERCREDITOR AGREEMENT")
among Northstar, as Collateral Agent, the Purchasers, the Company and IT.
(xxi) Copies of the valuation reports (a) prepared by Ernst & Young
LLP with respect to certain Intellectual Property (as defined below) of
the Company, IT and their respective Subsidiaries, and (b) prepared by
KPMG Peat Marwick with respect to the assets and properties of ICT and the
ICT Subsidiaries.
(xxii) Executed copies of (a) the Transfer of Technology Agreement
among Barbco, ICT and Cableshare US in the form attached hereto as Exhibit
C, (b) the Patent Assignment Agreement between Barbco and ICT in the form
attached hereto as Exhibit D, (c) the Transfer of Technology Agreement
among Barbco, ICT, the Barbco Subsidiary and Cableshare US in the form
attached hereto as Exhibit E and (d) the Patent Assignment Agreement among
Barbco, ICT and the Barbco Subsidiary in the form
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15
attached hereto as Exhibit F, providing, pursuant to the terms and
provisions therein, for the valid and effective assignment, transfer and
conveyance outright of all right, title and interest held by Barbco, in,
to and under its properties and assets (which properties and assets
include, without limitation, the Intellectual Property owned by Barbco and
the other assets listed on Annex I hereto), to ICT and the Barbco
Subsidiary, free and clear of any liens, pledges, security interests,
claims, charges or other encumbrances of any kind except for the security
interests therein granted to each of you pursuant to the 1997 Security
Documents.
(xxiii) Evidence that (a) X.X. Xxxxxx Company, Inc. ("PENNEY") has
consented to the consummation of the transactions contemplated by clause
(xxii) of this paragraph 3A and to the grant of (A) a security interest to
each of you pursuant to the 1997 Security Documents in the assets subject
to the assignment, transfer and conveyance referred to in clause (xxii) of
this paragraph 3A and (B) the liens in pledge with respect to all issued
and outstanding shares of capital stock of the ICT Subsidiaries (other
than Cableshare BV) and (b) any and all rights that Penney had that might
otherwise impair or diminish the right fully to enforce such security
interest and liens in pledge have been terminated. Further, each of you
shall also have received evidence that Penney's security interests in the
assets of the ICT Subsidiaries have been terminated, which evidence shall
be accompanied by termination statements on Form UCC-3 (or on such other
forms as your counsel may advise are required), duly executed by Xxxxx and
in form and substance satisfactory for filing in all jurisdictions where
such filing is necessary or appropriate to give effect to the termination
of such security interests.
(xxiv) An executed copy of the Transfer of Technology Agreement
among ICT, Barbco, Cableshare BV and Cableshare US in the form attached
hereto as Exhibit G.
(xxv) Evidence that notwithstanding the consummation of the
transactions contemplated by clause (xxiv) of this paragraph 3, the
Company/IT License Agreements (as defined below) remain in full force and
effect.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 shall be true on and as of the Date of the
Closing; there shall exist on the Date of the Closing no Event of Default or
Default; and the Company shall have delivered to each of you an Officer's
Certificate, dated the Date of the Closing, to both such effects.
3C. DUE DILIGENCE. Each of you shall have completed and be satisfied in
your sole discretion with the results of your due diligence review of the
Company, IT and each of their respective Subsidiaries.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The offer by the Company and IT
of, and the purchase of and payment for the Notes to be purchased by each of you
on the Date of the Closing on the terms and conditions herein provided
(including the use of the proceeds of such Notes by the Company and IT in
accordance with paragraph 8I hereof) shall not violate any applicable law or
governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation G, T or X of the Board of Governors of the Federal
Reserve
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System) and shall not subject any of you to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation, and each of you shall have received such certificates or other
evidence as you may request to establish compliance with this condition.
3E. EXECUTION OF AGREEMENTS. Each of the other parties hereto shall have
executed and delivered each of the Note Purchase Documents to which it is a
party.
3F. FEES AND EXPENSES. All fees and expenses due and payable hereunder
(including, without limitation, the fees and expenses set forth in paragraph 11B
hereof) at the Closing by the Company or IT to you shall have been paid or
delivered in full.
3G. PROCEEDINGS. All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to each of you, and
each of you shall have received all such counterpart originals or certified or
other copies of such documents as you may reasonably request.
PARAGRAPH 4. PREPAYMENTS.
4. PREPAYMENTS. The Notes shall be subject to prepayment only with respect
to the required prepayments specified in paragraph 4A and the optional
prepayments permitted by paragraph 4B.
4A. REQUIRED PREPAYMENT. On March 31, 2001, the Company shall apply to the
prepayment of the Notes, without premium, an amount equal to thirty-three and
three tenths percent (33.3%) of the then outstanding principal amount of the
Notes, and such principal amount of the Notes, together with accrued and unpaid
interest thereon to the prepayment date, shall become due on such prepayment
date. The remaining outstanding principal amount of the Notes, together with
accrued and unpaid interest thereon, shall become due on the maturity date of
the Notes.
4B. OPTIONAL PREPAYMENT. (i) The Notes shall be subject to prepayment, in
whole at any time, or in part (in multiples of $100,000 on any date as of which
interest is payable under the Notes), at the option of the Company and IT, at
the following amounts:
(a) if the prepayment occurs before April 1, 1999, at a price equal
to 120% of the principal amount so prepaid plus accrued and unpaid
interest thereon to the prepayment date;
(b) if the prepayment occurs on or after April 1, 1999 but before
April 1, 2001, at a price equal to 110% of the principal amount so prepaid
plus accrued and unpaid interest thereon to the prepayment date; and
(c) if the prepayment occurs on or after April 1, 2001, at a price
equal to 100% of the principal amount so prepaid plus accrued and unpaid
interest thereon to the prepayment date.
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(ii) Notwithstanding clause (i) above, the Company and IT may otherwise
offer to prepay the Notes, in whole or in part (in multiples of $100,000 on any
date as of which interest is payable under the Notes), in the same proportion of
the aggregate principal amount of the Notes held by each holder and on the same
terms and conditions, by giving the holder of each Note irrevocable written
notice of the terms and conditions of such prepayment offer under this clause
(ii) (including, without limitation, the prepayment date, the principal amount
of the Notes held by such holder to be prepaid on such date and that such
prepayment is to be made pursuant to this clause (ii)) not less than 30 Business
Days' prior to the prepayment date specified in such notice. The holder of each
Note may, at its own discretion, elect to accept a prepayment offer of the
Company and IT under this clause (ii), by providing written notice to the
Company and IT of such acceptance not less than 10 Business Days' prior to the
specified prepayment date and, upon notice by such holder as aforesaid, the
principal amount of the Notes specified in such notice shall become due and
payable on such prepayment date on the terms specified in such notice.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company and IT shall give the
holder of each Note irrevocable written notice of any prepayment pursuant to
clause (i) of paragraph 4B not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date and the principal amount of the
Notes held by such holder to be prepaid on such date and stating that such
prepayment is to be made pursuant to clause (i) of paragraph 4B. Notice of
prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with accrued and unpaid interest thereon to
the prepayment date, shall become due and payable on such prepayment date. The
Company and IT shall, on or before the day on which they give written notice of
any prepayment pursuant to clause (i) of paragraph 4B, give telephonic notice of
the principal amount of the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient of such notices in
the Purchaser Schedule attached hereto or by notice in writing to the Company
and IT.
4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the Notes
pursuant to paragraph 4A or clause (i) of paragraph 4B, the principal amount so
prepaid shall be allocated to all Notes at the time outstanding (excluding any
Notes prepaid or otherwise purchased or acquired by the Company, IT or any of
their respective Subsidiaries or Affiliates) in proportion to the respective
outstanding principal amounts thereof.
4E. RETIREMENT OF NOTES. Neither the Company nor IT shall, nor shall
either permit any of its respective Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final maturity, or
purchase or otherwise acquire, directly or indirectly, Notes held by any holder
unless the Company, IT or such Subsidiary or Affiliate shall have offered to
prepay or otherwise retire or purchase or otherwise acquire, as the case may be,
the same proportion of the aggregate principal amount of Notes held by each
other holder of Notes at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or otherwise
acquired by the Company, IT or any of their respective Subsidiaries or
Affiliates shall not be deemed to be outstanding for any purpose under this
Agreement. It is understood and agreed that nothing contained in this paragraph
4E shall permit, or be construed to permit, the Company or IT optionally to
prepay any of the Notes otherwise than as expressly permitted by paragraph 4B
hereof.
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PARAGRAPH 5. AFFIRMATIVE COVENANTS.
5. AFFIRMATIVE COVENANTS.
So long as any Note shall remain unpaid, each of the Company and IT
covenants, jointly and severally, that it will comply in full with the following
covenants and cause each of its respective Subsidiaries so to comply with the
following covenants where compliance is called for in this paragraph 5 on the
part of Subsidiaries of the Company or IT.
5A. FINANCIAL STATEMENTS. The Company will deliver to each Significant
Holder in duplicate:
(i) as soon as practicable and in any event within 21 days after
each calendar month, the Company shall to deliver on a monthly basis
copies of all financial statements and other related financial reports
generated by the Company on a monthly basis for its own internal use;
(ii) as soon as practicable and in any event within 45 days after
the end of each quarterly calendar period (other than the last quarterly
calendar period) in each fiscal year, consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries
for the period from the beginning of the then current fiscal year to the
end of such quarterly period, and a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and satisfactory in form to the Required Holder(s), certified by a
Responsible Officer as having been prepared in accordance with generally
accepted accounting principles consistently applied and as fairly
presenting the consolidated financial condition and consolidated results
of operations of the Company and its Subsidiaries (subject to normal
year-end audit adjustments and the absence of certain footnotes);
provided, however, that delivery within the aforesaid 45-day period,
pursuant to clause (iv) below, of copies of the Quarterly Report on Form
10-Q of the Company for such quarterly period filed with the Securities
and Exchange Commission shall be deemed to satisfy the requirements of
this clause (ii) with respect to quarterly consolidated financial
statements;
(iii) as soon as practicable and in any event within 90 days after
the end of each fiscal year, consolidating and consolidated statements of
income and cash flows and a consolidated statement of stockholders' equity
of the Company and its Subsidiaries for such year, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in form to the Required Holder(s) and,
as to the consolidated statements, reported on by independent public
accountants of recognized national standing selected by the Company whose
report shall be without limitation as to the scope of the audit, and
satisfactory in substance to the Required Holder(s); provided, however,
that delivery within the aforesaid 90-day period, pursuant to clause (iv)
below, of copies of the Annual Report on Form 10-K of the Company for such
fiscal year filed with the
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Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (iii) with respect to consolidated financial
statements;
(iv) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders and copies of all registration statements
(without exhibits) and all reports which it files with the Securities and
Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);
(v) promptly upon receipt thereof, a copy of each other report
submitted to the Company, IT or any of their respective Subsidiaries by
independent accountants in connection with any annual, interim or special
audit made by them of the books of the Company or any Subsidiary;
(vi) as soon as practicable and in any event within five days after
any officer of the Company or IT obtains Knowledge (a) of any condition or
event which, in the opinion of management of the Company or IT, would have
a material adverse effect on the business, condition (financial or other),
assets, properties, operations or prospects of the Company, IT or any of
their respective Subsidiaries, (b) any Person giving any notice to the
Company, IT or any of their respective Subsidiaries of, or taking any
other action with respect to, a claimed default or event or condition of
the type referred to in paragraph 7A(iii), (c) the institution of any
litigation or other proceeding involving claims against the Company, IT or
any of their respective Subsidiaries equal to or greater than $250,000
with respect to any single cause of action or any adverse determination in
any proceeding in any litigation or arbitration involving a potential
liability to the Company, IT or any of their respective Subsidiaries equal
to or greater than $250,000 with respect to any single cause of action
which makes the likelihood of an adverse determination in such litigation
against the Company or such Subsidiary substantially more probable, (d)
any of the events set forth in Section 4043(b) of ERISA (a "REPORTABLE
EVENT"), or (e) of any regulatory proceeding which may have a material
adverse effect on the Company, IT or any of their respective Subsidiaries,
an Officer's Certificate specifying the nature and period of existence of
any such condition or event, or specifying the notice given or action
taken by such Person and the nature of any such claimed default, event or
condition, or specifying the details of such proceeding, litigation or
dispute and what action the Company, IT or any of their respective
Subsidiaries has taken, is taking or proposes to take with respect
thereto;
(vii) promptly after the filing or receipt thereof, copies of all
reports and notices which the Company, IT or any of their respective
Subsidiaries or ERISA Affiliates files under ERISA with the Internal
Revenue Service or the PBGC or the U.S. Department of Labor or which the
Company, IT or any of their respective Subsidiary or ERISA Affiliates
receives from such corporation; and
(viii) with reasonable promptness after request by any Significant
Holder, such other information respecting the condition or operations,
financial or otherwise, of the Company, IT or any of their respective
Subsidiaries as is reasonably available to any director of the Company.
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Together with each delivery of financial statements required by clauses (ii) and
(iii) above, the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance by
the Company, IT and any of their respective Subsidiaries with the provisions of
paragraphs 6A and 6B and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company proposes to take
with respect thereto.
Each of the Company and IT also covenants that immediately after any
Responsible Officer obtains Knowledge of an Event of Default or Default, it will
deliver to each Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company and IT
propose to take with respect thereto.
5B. INFORMATION REQUIRED BY RULE 144A. The Company will, upon the request
of the holder of any Note, provide such holder, and any qualified institutional
buyer designated by such holder, such financial and other information as such
holder may reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5B, the term "qualified institutional
buyer" shall have the meaning specified in Rule 144A under the Securities Act.
5C. INSPECTION OF PROPERTY. Each of the Company and IT will permit any
Person designated by any Significant Holder in writing to visit and inspect any
of the properties of the Company, IT and any of their respective Subsidiaries,
to examine the corporate books and financial records of the Company, IT and any
of their respective Subsidiaries and make copies thereof or extracts therefrom
and to discuss the affairs, finances and accounts of any of such corporations
with the principal officers of the Company, IT and their respective
Subsidiaries, and their respective independent public accountants, all at such
reasonable times and as often as such Significant Holder may reasonably request.
As long as no Default or Event of Default has occurred and is continuing, such
inspection shall be at such Significant Holder's expense.
5D. PERFORMANCE OF OBLIGATIONS. Neither the Company nor IT shall, nor
shall either permit any of its respective Subsidiaries to, fail to pay,
discharge or otherwise satisfy, at or before maturity or before they become
delinquent, as the case may be, all of its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with
generally accepted accounting principles with respect thereto have been provided
on the books of the Company, IT or such Subsidiary, as the case may be. Each of
the Company and IT and their respective Subsidiaries will comply with, all
material obligations under all leases, contracts and other agreements, and all
applicable material laws, rules and regulations (including, without limitation,
any of same (hereinafter "ENVIRONMENTAL LAWS") regulating, relating to or
imposing liability or standards of conduct concerning pollution or the
protection of the environment, as may now or hereafter be in effect), except to
the extent the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a material adverse effect on the business
operations, properties, assets or condition (financial or other) of each of the
Company, IT and their respective Subsidiaries.
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5E. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Each of the Company,
IT and their respective Subsidiaries will continue to engage in business of the
same general types as now conducted by it and preserve, renew and keep in full
force and effect its corporate existence and take all reasonable action to
maintain all material rights, privileges and franchises necessary or desirable
in the normal conduct of its business. In addition, the Company will use its
best efforts to effect the separation of its IT Network telephone and the
Interactive Channel businesses into distinct legal entities.
5F. MAINTENANCE OF PROPERTY; INSURANCE. Each of the Company, IT and their
respective Subsidiaries shall keep all material property useful and necessary in
its business in good working order and condition in accordance with applicable
law and industry practice; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts, with
such deductibles, and against at least such risks (but including in any event
casualty, public liability, product liability and business interruption) as are
usually insured against in the same general area by companies engaged in the
same or a similar business. Not later than the Date of the Closing, each such
insurance policy shall, where applicable, name each of you as an additional
insured and as loss payee in a standard endorsement. The Company shall, within
30 days after the beginning of each of its fiscal years, deliver to each
Significant Holder a report of a reputable insurance broker with respect to the
insurance maintained by the Company, IT and their respective Subsidiaries,
together with a certificate of insurance evidencing the effectiveness of all
such property insurance.
5G. FURTHER SECURITY INTEREST. In the event that the Company, IT or any
Subsidiary of the Company or IT at any time or from time to time shall form or
acquire any Subsidiary (a "NEW SUBSIDIARY") as may be permitted hereby (i) such
of the Company, IT or such Subsidiary, as the case may be, as is the beneficial
owner of the capital stock of the New Subsidiary shall promptly execute and
deliver to the holders of the Notes a supplement to that 1997 Security Document
under which the Company, IT or such Subsidiary has pledged shares of capital
stock to the holders of the Notes, in order that pursuant to such 1997 Security
Document, as supplemented, 100% of the issued and outstanding shares of capital
stock held beneficially by the Company, IT or such Subsidiary, as the case may
be, shall be pledged, (ii) the Company, IT or such Subsidiary, as the case may
be, shall promptly take all actions necessary and appropriate to perfect the
Liens of such pledge (including without limitation, the delivery of stock
certificates evidencing the shares of capital stock so pledged, accompanied by
undated stock powers in blank, duly executed and with signatures being
guaranteed by a commercial bank or trust company satisfactory to each holder of
the Notes) and (iii) the Company, IT or such Subsidiary, as the case may be,
shall promptly deliver to the holders of the Notes such legal opinions
respecting such 1997 Security Document, as so supplemented, and the pledge
granted thereby as the holders of the Notes shall reasonably request.
In the event that 100% of the capital stock of any New Subsidiary
having the power to elect directors shall be owned, directly or indirectly, of
record or beneficially by the Company, IT or any of their respective
Subsidiaries, (i) such of the Company, IT or such Subsidiaries, as the case may
be, as are the such record or beneficial owners of such capital stock shall
promptly cause such New Subsidiary to become a party to a security document
substantially in the form of the 1997 Security Document pursuant to which the
Company and IT have granted the holders of the Notes a Lien on all of their
respective assets and properties, (ii)
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such New Subsidiary shall promptly take all actions necessary and appropriate to
perfect the Liens of such security interests as are granted by such security
document which such New Subsidiary shall have entered into as aforesaid
(including, without limitation, the delivery to the holders of the Notes of
financing statements, executed by such New Subsidiary, and otherwise in form and
substance appropriate for filing in all appropriate jurisdictions) and (iii)
such New Subsidiary shall promptly deliver to the holders of the Notes such
legal opinions respecting such security document and the security interests
granted thereby as the holders of the Notes shall reasonably request.
5H. FURTHER ASSURANCES. Each of the Company and IT, at its own cost and
expense, will cause to be promptly duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as either of you may
from time to time reasonably request in order to carry out more effectively the
intent and purposes of this Agreement, the Notes, the Warrants, the Amended and
Restated Registration Rights Agreement and the 1997 Security Documents and the
transactions contemplated hereby and thereby. In furtherance, but not in
limitation of, the foregoing, each of the Company and IT agrees to deliver, and
to cause its respective Subsidiaries to deliver, all further instruments and
documents that may be necessary or desirable or that either of you may request
in order to grant, confirm and perfect first and prior Liens in any real or
personal property which is at such time Collateral (as defined in the 1997
Security Documents) or which was intended to be Collateral pursuant to any 1997
Security Document previously executed and not then released.
5I. ELECTION OF PECKS INVESTORS DESIGNEE. For so long as the number of
shares of Common Stock owned of record and beneficially by the Pecks Investors
or any Affiliate of the Pecks Investors is not fewer than 250,000 (appropriately
adjusted to reflect stock splits and dividends and stock combinations after the
Date of the Closing and treating for purposes of this paragraph 5I shares of
Common Stock issuable upon exercise of any Warrants held by the Pecks Investors
or any Affiliates of the Pecks Investors as being owned of record and
beneficially by such of the Pecks Investors or such Affiliates), the Company
shall take all steps necessary and appropriate and legally within its power to
cause a Person designated in writing by the Pecks Investors to the Company (the
"PECKS INVESTOR DESIGNEE") to be elected to the Board of Directors of the
Company and to each committee of such Board of Directors as the Pecks Investors
may request and shall use its best efforts to cause the number and composition
of the directors of the Board of Directors of each of its Subsidiaries to be
identical to that of the Company. Such steps on the part of the Company shall
include, but not be limited to, causing any and all amendments to the Company's
certificate of incorporation and by-laws as may be necessary to give effect to
the provisions of this paragraph 5I and causing the Pecks Investors Designee to
be duly nominated, with the affirmative recommendation of the management of the
Company, for election to the Board of Directors of the Company at each meeting
of the stockholders of the Company at which the election of members of such
Board of Directors (whether for the entire Board of Directors or any class in
which the Pecks Investors Designee may be included) is voted upon. In addition,
in the event that a Pecks Investors Designee shall, during any period when such
designee is entitled pursuant to the provisions of this paragraph 5I to serve on
the Board of Directors of the Company and committees thereof, refuse or become
unable to serve, the Company shall take all steps necessary and appropriate and
legally within its power to cause another Person designated in writing by the
Pecks Investors to the Company to be
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elected promptly to replace the aforesaid designee whose membership on the Board
of Directors of the Company or committees thereof has ceased.
The Company shall, on such terms and conditions that are no less
favorable than those applicable to other members of the Board of Directors of
the Company, (i) compensate the Pecks Investors Designee for serving as a
director of such Board of Directors and as a member of the committees thereof on
which he sits, (ii) reimburse the Pecks Investors Designee for all reasonable
costs and expenses incurred by him in so serving and (iii) provide the Pecks
Investors Designee with director's liability insurance coverage.
5J. TRANSFER OF INTELLECTUAL PROPERTY. (a) The Required Holders may at its
or their option, by notice in writing to the Company and IT, elect to require
the Barbadian Subsidiary to validly and effectively assign, transfer and convey
to ICT, within 60 days of such notice, all right, title and interest held by the
Barbco Subsidiary in, to and under the properties and assets transferred to it
by Barbco pursuant to clause (xxii) of paragraph 3 hereof, provided, that such
assignment and transfer shall be effected, in whole or in part, to the extent
that it does not cause ICT to incur, after taking into account all Tax Credits
(as defined below), aggregate out-of-pocket federal and provincial taxes in
excess of five hundred thousand Canadian dollars (C$500,000).
(b) As soon as practicable and in any event within 45 days after the
end of each quarterly period in each fiscal year, the Company will deliver to
each Significant Holder an Officer's Certificate, executed by a Responsible
Officer of ICT, setting forth the aggregate amount of tax loss carry-forwards,
investment tax credits and other amounts that under applicable law can be used
to offset Canadian federal or provincial taxes on income or gain (collectively,
"TAX CREDITS"), accumulated by ICT as of the end of such quarter.
(c) As soon as practicable after the Date of the Closing, the
Company and IT shall cause Cableshare US to validly and effectively assign,
transfer and convey all of its right, title and interest in, to and under its
properties and assets to ICT or the Barbco Subsidiary, it being agreed and
understood, however, that Cableshare US shall not be required to effect such
assignment and transfer if, in the reasonable opinion of the senior management
of the Company, IT and Cableshare US, such assignment and transfer would cause
Cableshare US to incur out-of-pocket foreign, federal, state and local tax
expenses in excess of $150,000. In furtherance of the foregoing, each of the
Company and IT agree to diligently investigate, and at the request of a
Significant Holder to report the results of such investigation to date, all
steps which lawfully minimize and avoid the imposition of any of the
aforementioned taxes so that the foregoing transfer can be effected.
5K. CARRIAGE AGREEMENTS. (a) The Company and IT shall maintain in full
force and effect Carriage Agreements with one or more multiple system cable
operators (such operators with whom the Company or IT have Carriage Agreements
in effect, being herein referred to collectively as, the "Cable Operators")
which in the aggregate provide cable service to at least 5,000,000 basic cable
subscribers. Within 10 days after the end of each calendar month, the Company
will deliver to each Significant Holder an Officer's Certificate certifying the
aggregate number of basic cable subscribers served by the Cable Operators as
reported by an authoritative industry publication. Within 30 days after the end
of each fiscal quarter, the Company will
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cause to be delivered to each Significant Holder a certificate from the
Company's independent public accountants of recognized standing certifying the
aggregate number of basic cable subscribers served by the Cable Operators as
reported by an authoritative industry publication. In the event the aggregate
number of basic cable subscribers served by the Cable Operators shall ever be
fewer than 5,000,000, the Company shall promptly deliver to each Significant
Holder notice thereof.
(b) The Company and IT agree that in any new Carriage Agreement or
in any renewal or modification of any existing Carriage Agreement, they shall
each use their best efforts to have included as a standard provision thereof, an
agreement on the part of the Cable Operator a party thereto that all right,
title and interest of the Company or IT in, to and under such Carriage Agreement
may be collaterally assigned to any Person making loans or providing any other
financial assistance to the Company or IT, whether such loans or other financial
assistance is then outstanding or is provided in the future, and that such
Person may, subject to reasonable requirements with respect to any transferee,
further transfer and assign such right, title and interest to another upon the
enforcement of such Person's rights in connection with the loans or other
financial assistance provided by it.
5L. MINIMUM CASH AND CASH EQUIVALENTS. As of the end of each calendar
month of the Company, the Company shall have on a consolidated basis aggregate
cash and cash equivalents ("MINIMUM OPERATING CASH RESERVES") in an amount at
least equal to (x) the aggregate amount of estimated operating expenses and
cash-based interest charges of the Company on a consolidated basis for the
Company's next three fiscal months (such operating expenses and interest charges
to be at least equal to those of the immediately preceding three fiscal months),
minus (y) 90% of the Company's accounts receivable on a consolidated basis
outstanding less than 90 days as of the end of the most recently completed
calendar month ("ELIGIBLE RECEIVABLES").
5M. CASH BALANCE REPORTING REQUIREMENT. Within 21 days after the end of
each calendar month of the Company, the Company shall deliver to each
Significant Holder an Officer's Certificate certifying, as of the end of such
month, the Company's (i) available bank balances of aggregate cash and cash
equivalents on a consolidated basis ("AVAILABLE CASH BALANCES"), (ii) fiscal
ledger balances of aggregate cash and cash equivalents on a consolidated basis
("LEDGER CASH BALANCES") and (iii) for the next three and six calendar month
respectively, the aggregate amount of estimated operating expenses and
cash-based interest charges of the Company on a consolidated basis minus 90% of
the Eligible Receivables. Within 30 days after the end of each of the first
eight fiscal quarters after the Closing, the Company will cause to be delivered
to each Significant Holder a certificate from its independent public accountant
of recognized standing certifying that such accountant has confirmed at least
95% of the Available Cash Balances as of the end of the most recently completed
fiscal quarter and has reviewed the Company's reconciliation of Available Cash
Balances and Ledger Cash Balances, noting no unusual or incorrect items.
PARAGRAPH 6. NEGATIVE COVENANTS.
6. NEGATIVE COVENANTS. So long as any Note shall remain unpaid, each of
the Company and IT covenants, jointly and severally, that it will comply with
the following
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covenants and cause each of its respective Subsidiaries so to comply with the
following covenants where compliance is called for in this paragraph 6 on the
part of Subsidiaries of the Company or IT:
6A. INTEREST CHARGES COVERAGE RATIO. The Interest Charges Coverage Ratio
for any period specified below shall not be less than the ratio set forth
opposite such period:
Period Ratio
------ -----
For the six-month periods ending December 31, 1999 2.0 to 1.0
and March 31, 2000
For the six-month period ending June 30, 2000 2.5 to 1.0
and September 30, 2000
For the six-month period ending December 31, 2000 3.0 to 1.0
and for each six-month period ending thereafter on a
March 31, June 30, September 30 or December 31 thereafter
6B. ADJUSTED DEBT TO EBITDA RATIO. The Adjusted Debt to EBITDA Ratio for
any period specified below shall not be greater than the ratio set forth
opposite such period:
Period Ratio
------ -----
For the six-month periods ending December 31, 1999 7.0 to 1.0
and March 31, 2000
For the six-month period ending June 30, 2000 6.0 to 1.0
and September 30, 2000
For the six-month period ending December 31, 2000 5.0 to 1.0
and March 31, 2001
For the six-month period ending June 30, 2001 4.0 to 1.0
and for each six-month period ending thereafter on a
March 31, June 30, September 30 or December 31 thereafter
If the Adjusted Debt to EBITDA Ratio for any period is greater than the ratio
set forth above for such period, the Company shall within fifteen (15) days
after obtaining Knowledge thereof cure such default by increasing the
consolidated amount of cash and cash equivalents owned by the Company and its
Subsidiaries and without increasing the Adjusted Debt.
6C. LIMITATION ON DEBT. Neither the Company nor IT shall, nor shall either
permit any of its respective Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Indebtedness, except:
(i) Debt of the Company and IT in respect of the Notes.
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(ii) Debt of the Company or IT to any of their respective
Subsidiaries and of any such Subsidiaries to the Company or IT or any
other of their respective Subsidiaries, subject to the limitations set
forth in xxxxxxxxx 0X.
(xxx) Debt of the Company, IT or any of their respective
Subsidiaries incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan, a Lease Financing or otherwise) in the
ordinary course of business outstanding on the Date of the Closing and
listed on Schedule 3 hereto, and any additional Debt of the Company, IT
and their respective Subsidiaries incurred to finance the acquisition of
fixed or capital assets (whether pursuant to a loan, a Lease Financing or
otherwise) after the date hereof, provided, that all such Debt shall be
equal to or less than the fair market value of the assets acquired with
the proceeds thereof, shall encumber only the assets so acquired and shall
otherwise be subject to the limitations set forth in xxxxxxxxx 0X.
(iv) Debt of a corporation, limited liability company, partnership
or other entity which becomes a Subsidiary of the Company or IT after the
date hereof, provided that (A) such Debt existed at the time such
corporation became a Subsidiary and was not created in anticipation
thereof, and (B) immediately after giving effect to the acquisition of
such corporation, limited liability company, partnership or other entity
by the Company or IT no Default or Event of Default shall have occurred
and continuing.
(v) Debt outstanding on the Date of the Closing (other than as
described in clause (iii) above), as set forth on Schedule 4 hereto and
any amendments or modifications thereof (but excluding any extension in
the maturity of or increase in the principal amount of such Debt).
(vi) Debt of the Company, IT or any of their respective
Subsidiaries with respect to financings of letters of credit issued to
support obligations of the Company, IT or such Subsidiaries for purchases
of equipment or inventory or to guarantee the performance of the
obligations of the Company, IT or such Subsidiaries in the ordinary course
of business.
(vii) Indebtedness of the Company, IT or any of their respective
Subsidiaries that was incurred by such Person on ordinary trade terms to
vendors, suppliers or other Persons providing goods and services for use
by such Person in the ordinary course of its business, unless and until
such Indebtedness is, or is agreed by its terms to be, outstanding more
than 120 days past the original invoice or billing date therefor.
(viii) Debt owed by the Company, IT or any of their respective
Subsidiaries which is unsecured and subordinated to the Notes upon terms
and conditions deemed in advance and in writing by the Required Holders to
be satisfactory to them in their sole and absolute discretion.
(ix) Indebtedness of the Company, IT or any of their respective
Subsidiaries for any deposit received by the Company, IT or such
Subsidiaries from any customer or client for services to be performed or
goods sold by the Company, IT or such
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Subsidiaries, unless the Company, IT or such Subsidiaries for any reason
becomes duly obligated to refund such deposit.
Notwithstanding anything to the contrary expressed or implied herein:
(A) Indebtedness or Debt otherwise permitted by clauses (i) through
(ix) of this paragraph 6C shall constitute, (x) Debt, for purposes of
calculating the Interest Charges Coverage Ratio and (y) Adjusted Debt, for
purposes of calculating the Adjusted Debt to EBITDA Ratio. Accordingly,
Indebtedness or Debt otherwise permitted by clauses (i) through (ix) of
this paragraph 6C shall be subject to the limitations of paragraphs 6A and
6B hereof.
(B) Debt (x) which is otherwise permitted by clause (iv) of this
paragraph 6C, but which is not cash collateralized, and (y) which is
otherwise permitted by clauses (vi) and (viii) of this paragraph 6C shall
be permitted only if, as at each date during the period from the Date of
the Closing through December 31, 1999 when any such Debt is incurred, the
ratio of consolidated Debt of the Company and its Subsidiaries to
Consolidated Tangible Net Worth is not greater than 1 to 1.
6D. LIMITATION ON LIENS. Neither the Company nor IT shall, nor shall
either permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(i) Liens created to secure the Notes.
(ii) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Company, IT or
their respective Subsidiaries, as the case may be, in conformity with
generally accepted accounting principles.
(iii) Carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are
bonded and being contested in good faith by appropriate proceedings.
(iv) Pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements.
(v) Deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business.
(vi) Easements, right-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property
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subject thereto or materially interfere with the ordinary conduct of the
business of the Company, IT or their respective Subsidiaries.
(vii) Liens securing Debt of the Company, IT and their respective
Subsidiaries permitted by paragraph 6C(iii) incurred to finance the
acquisition of fixed or capital assets, provided that (A) such Liens shall
be created substantially simultaneously with the acquisition of such fixed
or capital assets, (B) such Liens do not at any time encumber any property
other than (1) the property financed by such Debt and (2) pledges of cash
or cash equivalents and (C) the principal amount of Debt secured by any
such Lien shall at no time exceed 100% of the fair value (as determined in
good faith by the board of directors of the Company, IT or such
Subsidiaries) of the property acquired at the time it was acquired.
(viii) Liens on the property or assets of a corporation which
becomes a Subsidiary of the Company or IT after the date hereof, securing
Debt permitted by paragraph 6C(iv), provided that (A) such Liens existed
at the time such corporation became a Subsidiary and were not created in
anticipation thereof, (B) any such Lien is attached solely to property
owned by such corporation as at the date it became a Subsidiary and is not
spread to cover any property or assets of the Company, IT or any other of
their respective Subsidiaries, and (C) the amount of Debt secured thereby
is not increased.
(ix) Liens securing Debt of the Company, IT and their respective
Subsidiaries permitted by paragraph 6C(v).
(x) Licenses of patents and other technology owned by the
Company, IT or any of their respective Subsidiaries which is granted in
the ordinary course of business by the Company or any of its Subsidiaries.
(xi) Pledges of cash or cash equivalents securing Debt of the
Company or IT permitted by paragraph 6C(vi).
6E. LIMITATION ON MERGERS AND REINCORPORATIONS. Neither the Company nor IT
shall, nor shall either permit any of its Subsidiaries to, directly or
indirectly, enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of, all or
substantially all of its property, business or assets, make any material change
in its present method of conducting business, or reincorporate under the laws of
any jurisdiction other than the United States, Canada or any political
subdivision thereof, except:
(i) any Subsidiary of the Company or IT may be merged or
consolidated with or into the Company or IT (provided that the Company or
IT shall be the continuing or surviving corporation) or with or into any
one or more wholly-owned Subsidiaries of the Company or IT (provided that
the wholly-owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation), provided, that in each such case the continuing or
surviving corporation shall be organized and existing under the laws of
the United States, Canada or any political subdivision thereof; and
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(ii) any wholly-owned Subsidiary of the Company or IT may sell,
lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Company, IT or any other
wholly-owned Subsidiary.
6F. LIMITATION ON SALES OF PROPERTY. Neither the Company nor IT shall, nor
shall either permit any of its respective Subsidiaries to, directly or
indirectly, convey, sell, lease, assign, transfer or otherwise dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests) or any product line, whether now owned or hereafter
acquired, or, in the case of any such Subsidiaries, issue or sell any shares of
such Subsidiaries capital stock to any person other than the Company, IT or any
wholly-owned Subsidiary of the Company or IT, except:
(i) the sale or other disposition of inventory and equipment in the
ordinary course of business in commercial transactions.
(ii) as permitted by paragraph 6E(ii).
6G. LIMITATION ON TRANSACTIONS WITH AFFILIATES. Neither the Company nor IT
shall, nor shall either permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction (including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service)
with any Affiliate that is not a wholly-owned Subsidiary, unless such
transaction (i) is otherwise permitted hereunder, (ii) is in the ordinary course
of the Company's, IT's or such Subsidiaries business, and (iii) is on terms no
less favorable to the Company, IT or such Subsidiaries, as the case may be, than
it would obtain in a similar arm's-length transaction. Each of you hereby
agrees, severally and not jointly, that the 1992 Agreement and the 1995
Agreement (as such terms are defined below), true and correct copies of which
have been delivered to each of you, are permitted hereunder.
6H. LIMITATION ON DIVIDENDS. The Company shall not declare or pay any
dividend (other than dividends payable solely by the issue of its common stock)
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of its capital stock or any
warrants, options or other rights to acquire such stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of the
Company or any Subsidiary.
6I. LIMITATION ON CREDIT EXTENSIONS. Neither the Company nor IT shall, nor
shall either permit any of its Subsidiaries to, extend credit, make advances or
make loans (including, without limitation, loans or advances to directors,
officers or employees of the Company, IT or any of their respective
Subsidiaries) other than (i) normal and prudent extensions of credit to
customers buying goods and services in the ordinary course of business, which
extensions shall not be for periods longer than the lesser of 90 days or the
periods extended by similar businesses operated in a normal and prudent manner,
(ii) loans to the Company or IT and (iii) loans to ICT, so long as (a) the
outstanding aggregate principal amount of such loans to ICT at any time does not
exceed $2,000,000, (b) each and every such loan to ICT is made on terms and
conditions no less favorable to the lending party than would be the case if such
loan had been made on an arm's-length basis to a party which is not an Affiliate
of the lending party and (c) the entire
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amount of the proceeds of all such loans to ICT are used by ICT in the operation
of the line of business conducted by ICT as of the Date of the Closing.
6J. LIMITATION ON NEGATIVE PLEDGE CLAUSES. Neither the Company nor IT
shall, nor shall either permit any of its Subsidiaries to, enter into any
agreement with any Person, other than the holders of the Notes, which prohibits
or limits the ability of the Company, IT or their respective Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its properties,
assets or revenues, whether now owned or hereafter acquired, or prohibits or
limits the payment in cash of the obligations of the Company or IT hereunder.
6K. LIMITATION ON LINES OF BUSINESS. Neither the Company nor IT shall, nor
shall either permit any of its respective Subsidiaries to, enter into any
business other than (i) businesses utilizing ICT technology, (ii) interactive
telephone services, (iii) businesses providing data to computer based on-line
services, and (iv) database information services.
6L. LIMITATION ON INVESTMENTS. Neither the Company nor IT shall, nor shall
either permit any of its Subsidiaries to, purchase, hold or acquire beneficially
any stock, bonds, notes, debentures or other securities or any assets
constituting a business unit of, or make any other investment in, any Person,
except (i) as expressly permitted by paragraph 6I hereof, (ii) investments in
capital stock of ICT or any of the Subsidiaries listed in Schedule 5 hereto and
(iii) investments in joint ventures, partnerships and other entities in the
information services and communications business that have, for all such
investments taken together, an aggregate cost basis not greater than $1,000,000,
so long as no Default or Event of Default exists at the time of and after giving
effect to any such investment.
6M. LIMITATION ON ACTIVITIES OF CERTAIN ICT SUBSIDIARIES. Notwithstanding
anything else to the contrary contained herein, after giving effect to the
transfers referred to in clauses (xxii) and (xxiv) of paragraph 3 hereof,
neither the Company nor IT shall permit either Barbco or Cableshare BV (i) to
own any properties or assets (except, in the case of Barbco, for the shares of
capital stock of the Barbco Subsidiary owned by it), (ii) to incur any
liabilities (except, in the case of Barbco, for its obligations under the Note
Purchase Documents to which it is a party and the Promissory Note dated May 28,
1987 (the "BARBCO NOTE"), given by Barbco to ICT, in the aggregate principal
amount of $19,999,000) or (iii) to conduct any business. Neither the Company nor
IT shall permit Cableshare US (a) to own any properties, (b) to incur any
liabilities or (c) to conduct any business, other than activities relating
directly to the enforcement of its rights and the performance of its obligations
under the License Agreement, the US Agreement (as such terms are defined in
Exhibit G hereto) and the Company/IT License Agreements to which it is a party,
and its obligations under the Note Purchase Documents to which it is a party.
6N. LIMITATION ON SETTLEMENTS OF SUITS. Neither the Company nor IT shall
settle or compromise any claim of Xxxxxxx X. Xxxxxx set forth in Schedule 6
hereto (including any future claim brought by Mr. Little related thereto) for
cash or other property having a fair market value in excess of $75,000, without
the prior written consent of the Required Holders, which consent shall not be
unreasonably withheld.
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PARAGRAPH 7. EVENTS OF DEFAULT.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company or IT defaults in the payment of any principal of
any Note when the same shall become due, either by the terms thereof or
otherwise as herein provided; or
(ii) the Company or IT defaults in the payment of any interest on
any Note for more than 5 calendar days after the date due; or
(iii) the Company, IT or any of their respective Subsidiaries
defaults (whether as primary obligor or as guarantor or other surety) in
any payment of principal of or interest on any other obligation for money
borrowed (or any Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation issued
or assumed as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes payable or
drafts accepted representing extensions of credit) beyond any period of
grace provided with respect thereto, or the Company, IT or any of their
respective Subsidiaries fails to perform or observe any other covenant,
term or condition contained in any agreement under which any such
obligation is created (or if any other event of default thereunder or
under any other agreement shall occur and be continuing) and the effect of
such failure or other event of default is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due (or to be
repurchased by the Company, IT or any such Subsidiaries) prior to any
stated maturity, provided that the aggregate amount of all obligations as
to which such a payment default shall occur and be continuing or such a
failure or other event causing or permitting acceleration (or resale to
the Company, IT or any such Subsidiaries) shall occur and be continuing
exceeds $250,000; or
(iv) any representation or warranty made by the Company or IT
herein, or by the Company, IT or any of their respective officers in any
writing furnished in connection with or pursuant to this Agreement, shall
be false in any material respect on the date as of which made; or
(v) the Company or IT fails to perform or observe any term,
covenant or agreement contained in paragraph 6 hereof; or
(vi) the Company or IT fails to perform or observe any other
agreement, covenant, term or condition contained herein or in any other
Note Purchase Document and such failure shall not be remedied within 20
days after date such failure has occurred; or
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(vii) (a) the Company, IT or any of their respective Subsidiaries
shall commence any case, proceeding or other action (I) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (II) seeking
appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets,
or the Company, IT or any of their respective Subsidiaries shall make a
general assignment for the benefit of its creditors; or (b) there shall be
commenced against the Company, IT or any of their respective Subsidiaries)
any case, proceeding or other action of a nature referred to in clause (a)
above which (I) results in the entry of an order for relief or any such
adjudication or appointment or (II) remains undismissed, undischarged or
unbonded for a period of 30 days; or (c) there shall be commenced against
the Company, IT or any of their respective Subsidiaries) any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 30 days from the entry thereof; or (d) the Company,
IT or any of their respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (a), (b), or (c) above; not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(viii) any order, judgment or decree is entered in any proceedings
against the Company, IT or any of their respective Subsidiary decreeing a
split-up of the Company, IT or any such Subsidiaries which requires the
divestiture of assets representing a substantial part, or the divestiture
of the stock of a Subsidiary whose assets represent a substantial part, of
the assets of the Company, IT or any such Subsidiaries (determined in
accordance with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a Subsidiary, which shall
have contributed a substantial part of the consolidated net income of the
Company, IT or any such Subsidiaries (determined in accordance with
generally accepted accounting principles) for any of the three fiscal
years then most recently ended, and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(ix) any judgment or order, or series of judgments or orders, in
an amount in excess of $250,000 is rendered against the Company, IT or any
of their respective Subsidiaries and either (i) enforcement proceedings
have been commenced by any creditor upon such judgment or order or (ii)
within 60 days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged; or
(x) the Company, IT or any of their respective ERISA Affiliates,
in its capacity as an employer under a Multiemployer Plan, makes a
complete or partial withdrawal from such Multiemployer Plan resulting in
the incurrence by such withdrawing employer of a withdrawal liability in
an amount exceeding $250,000;
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(xi) (a) any Note Purchase Document entered into on or after the
Date of the Closing shall cease, for any reason, to be in full force and
effect or the Company, IT or any Subsidiary Party shall assert that any
such Note Purchase Document has ceased to be in full force and effect, (b)
the Liens created by any 1997 Security Document shall cease, for any
reason other than a release executed and delivered by each holder of the
Notes, to be enforceable and of the same effect and first priority
purported to be created thereby, or (c) any breach, other default or event
of default occurs under any Note Purchase Document, and the same is not
remedied within the applicable period of grace (if any) provided in such
Note Purchase Document;
(xii) to the Knowledge of the Company or IT, the aggregate number
of basic cable subscribers serviced by the Cable Operators shall be fewer
than 5,000,000 (the amount by which such aggregate number of cable
subscribers is fewer than 5,000,000 being called a "Shortfall"), and
neither the Company nor IT shall have entered into one or more Carriage
Agreements covering such number of basic cable subscribers as is equal to
or greater than the Shortfall within 135 days after (a) the date of
occurrence of the Shortfall if the Shortfall is caused by the cancellation
or termination of an existing Carriage Agreement, or (b) the end of the
month in which the Shortfall occurred if the Shortfall is caused by the
sale of transfer of basic cable subscribers serviced by any of the Cable
Operators;
(xiii) the occurrence of a Change of Control; and
(xiv) any one or more Persons whose name appears on Schedule A to
the Lock-Up and Voting Agreement shall fail to perform or observe any
term, covenant or agreement contained therein;
then (a) if such event is not an Event of Default specified in clause (vii),
(viii) or (xiii) of this paragraph 7A the Required Holder(s) may at its or their
option, by notice in writing to the Company and IT, declare all of the Notes to
be, and all of the Notes shall thereupon be and become, immediately due and
payable at par together with accrued and unpaid interest thereon, if any, with
respect to each Note, (b) if such event is an Event of Default specified in
clause (vii) or (viii) of this paragraph 7A, all of the Notes at the time
outstanding shall automatically become immediately due and payable at par
together with accrued and unpaid interest thereon and (c) if such event is an
Event of Default specified in clause (xiii) of this paragraph 7A the Required
Holder(s) may at its or their option, by notice in writing to the Company and
IT, declare all of the Notes to be, and all of the Notes shall thereupon be and
become, immediately due and payable at the then applicable prepayment price set
forth in clause (i) of paragraph 4B hereof, together with accrued and unpaid
interest thereon, if any, with respect to each Note, without, in each of clauses
(a) through (c) of this paragraph 7A, presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company and IT.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the Notes
shall have been declared immediately due and payable pursuant to paragraph 7A,
the Required Holder(s) may, by notice in writing to the Company and IT, rescind
and annul such declaration and its consequences if (i) the Company or IT shall
have paid all overdue interest on the Notes, the principal of any Notes which
have become due otherwise than by reason of such declaration, and
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interest on such overdue interest and overdue principal at the rate specified in
the Notes, (ii) the Company and IT shall not have paid any amounts which have
become due solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company and IT shall forthwith give written notice thereof to the holder of each
Note at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its rights
under this Agreement and such Note by exercising such remedies as are available
to such holder in respect thereof under applicable law, either by suit in equity
or by action at law, or both, whether for specific performance of any covenant
or other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.
PARAGRAPH 8. REPRESENTATIONS, COVENANTS AND WARRANTIES.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. Each of the Company and IT
represents, covenants and warrants, jointly and severally to each of you, as
follows:
8A. ORGANIZATION, ETC. Each of the Company, IT and their respective
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority, and the legal right, to own and operate its
properties, to lease the properties it operates under lease as lessee and to
conduct the business in which it is currently engaged and in which it proposes
to engage and (iii) is duly qualified and licensed as a foreign corporation, and
is in good standing, under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
licensing or qualification. The execution, delivery and performance by each of
the Company, IT and each Subsidiary Party of this Agreement, the Notes, the
Warrants, the Amended and Restated Registration Rights Agreement and each 1997
Security Document to which it is a party are within the Company's, IT's and such
Subsidiary Party's corporate powers and have been duly authorized by all
necessary corporate action.
Each of this Agreement, the Notes, the Warrants, the Amended and Restated
Registration Rights Agreement and the 1997 Security Documents has been duly
executed and delivered by the Company, IT and the Subsidiary Parties that are
parties thereto. Each of this Agreement, the Notes, the Warrants, the Amended
and Restated Registration Rights Agreement and the 1997 Security Documents
constitute the legal, valid and binding obligation of the Company, IT and
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the Subsidiary Party that is party thereto, and is enforceable against the
Company, IT and each such Subsidiary Party in accordance with its terms.
8B. FINANCIAL STATEMENTS. The Company has furnished each of you with the
following financial statements, certified by a principal financial officer of
the Company: a consolidated balance sheet of the Company and its Subsidiaries as
at December 31 in each of the years 1993 to 1996, inclusive, and consolidated
statements of income, stockholders' equity and cash flows of the Company and its
Subsidiaries for each such year, all reported on by Ernst & Young LLP. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present the consolidated condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the consolidated results of
the operations of the Company and its Subsidiaries and their cash flows for the
periods indicated. There has been no material adverse change in the business,
condition (financial or otherwise) or operations of the Company, IT and their
respective Subsidiaries taken as a whole since December 31, 1996.
8C. ACTIONS PENDING. Except as set forth on Schedule 6, there is no
action, suit, investigation or proceeding pending or, to the Knowledge of the
Company or IT, threatened against the Company, IT or any of their respective
Subsidiaries, or any properties or rights of the Company, IT any of their
respective Subsidiaries by or before any court, arbitrator or administrative or
governmental body which might result in a material adverse change in the
business, condition (financial or otherwise) or operations of the Company, IT
and their respective Subsidiaries taken as a whole. There is no action, suit,
investigation or proceeding pending or threatened against the Company, IT or any
of their respective Subsidiaries which purports to affect the validity or
enforceability of this Agreement, any Note, any Warrant, the Amended and
Restated Registration Rights Agreement or any 1997 Security Document.
8D. OUTSTANDING DEBT. Neither the Company, IT nor any of their respective
Subsidiaries has outstanding any Indebtedness except as permitted by paragraph
6C. There exists no default (or any event which, with the giving of notice or
the passage of time, could constitute a default) under the provisions of any
instrument evidencing such Indebtedness or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. Each of the Company, IT and their respective
Subsidiaries has good title to all of its respective properties and assets,
including the properties and assets reflected in the balance sheet as at
December 31, 1996 referred to in paragraph 8B (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of any kind
except Liens permitted by paragraph 6D. Set forth in Schedule 7 hereto, is a
description of all leases necessary in any material respect for the conduct of
the respective businesses of the Company, IT and their respective Subsidiaries
and all such leases are valid and subsisting and are in full force and effect.
8F. TAXES. Each of the Company, IT and their respective Subsidiaries has
filed all domestic and foreign income tax returns that are required to be filed,
and each has paid all taxes
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as shown on such returns, on all assessments received by it and all other taxes,
fees or other charges imposed by any governmental authority on it or on any of
its properties to the extent that have become due, except such taxes as are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with generally accepted
accounting principles. No tax Lien has been filed with respect to any said tax,
fee or other charge and, to the Knowledge of the Company, IT and each of their
respective Subsidiaries, no claim is being asserted with respect to any such
tax, fee and other charge.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company, IT nor
any of their respective Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial condition.
Neither the execution nor delivery of this Agreement, the Notes, the Warrants,
the Amended and Restated Registration Rights Agreement or the 1997 Security
Documents, nor the offering, issuance and sale of the Notes or the Warrants, nor
fulfillment of nor compliance with the terms and provisions hereof and of the
Notes, the Warrant, the Amended and Restated Registration Rights Agreement and
the 1997 Security Documents will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Company, IT or any of their respective Subsidiaries
pursuant to, the charter or by-laws of the Company, IT or any of their
respective Subsidiaries, any award of any arbitrator or any agreement (including
any agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company, IT or any of their respective
Subsidiaries is subject. Neither the Company , IT nor any of their respective
Subsidiaries is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of the Company, IT or such Subsidiaries,
any agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company or IT of the type to be evidenced by the
Notes.
8H. OFFERING OF NOTES. Neither the Company, IT nor any agent acting on
their behalf has, directly or indirectly, offered the Notes, the Warrants or any
similar security of the Company for sale to, or solicited any offers to buy the
Notes, the Warrants or any similar security of the Company or IT from, or
otherwise approached or negotiated with respect thereto with, any Person other
than accredited investors, and neither the Company, IT nor any agent acting on
their behalf has taken or will take any action which would subject the issuance
or sale of the Notes or the Warrants to the provisions of section 5 of the
Securities Act or to the provisions of any securities or Blue Sky law of any
applicable jurisdiction.
8I. USE OF PROCEEDS. The proceeds of sale of the Notes will be used for
the purposes and substantially in the manner set forth in Schedule 8 hereto.
None of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying (nor does
the Company, IT, nor any of their respective Subsidiaries own or have any
present intention of acquiring) any "margin stock" (as defined in Regulation G
(12 CFR Part 207) of the Board of Governors of the Federal Reserve System), or
for the purpose of maintaining, reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any stock that is currently a margin
stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of such Regulation G. Neither
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the Company, IT nor any agent acting on their behalf has taken or will take any
action which might cause this Agreement or the Notes to violate Regulation G,
Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the PBGC has been
or is expected by the Company, IT or any of their respective Subsidiaries or
ERISA Affiliates to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, IT or their respective Subsidiaries or ERISA
Affiliates which is or would be materially adverse to the business, condition
(financial or otherwise) or operations of the Company, IT and their respective
Subsidiaries taken as a whole. Neither the Company, IT nor any of their
respective Subsidiaries or any ERISA Affiliates has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, condition (financial or otherwise) or operations of the Company, IT
and their respective Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the issuance and sale of the Notes will be exempt from, or
will not involve any transaction which is subject to, the prohibitions of
section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the Company
and IT in the next preceding sentence is made in reliance upon and subject to
the accuracy of your representation in paragraph 9B. As of the Date of the
Initial Closing, neither the Company, IT nor any or their respective
Subsidiaries or ERISA Affiliates has established any Multiemployer Plan.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company, IT or any of
their respective Subsidiaries nor any of their respective businesses or
properties, nor any relationship between the Company, IT or any such
Subsidiaries and any other Person, nor any circumstance in connection with the
offering, issuance, sale or delivery of the Notes is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental or regulatory body
(other than routine filings after the Date of the Closing with the Securities
and Exchange Commission and/or state Blue Sky authorities) in connection with
the execution and delivery of this Agreement, the Notes, the Warrants, the
Amended and Restated Registration Rights Agreement, the 1997 Security Documents,
the offering, issuance, sale or delivery of the Notes or the Warrants or
fulfillment of or compliance with the terms and provisions hereof or of the
Notes or the Warrants.
8L. ENVIRONMENTAL COMPLIANCE. Except as set forth in Schedule 9 hereto,
the properties owned by the Company, IT and their respective Subsidiaries do not
contain any gasoline, petroleum or petroleum products, or any hazardous or toxic
materials, substances or waters, defined and regulated as such under any
Environmental Laws, in amounts or concentrations which could reasonably be
expected to give rise to liability under any Environmental Laws. The Company, IT
and their respective Subsidiaries, and all of their respective properties and
facilities, have complied at all times and in all respects with all foreign and
domestic statutes, laws, ordinances and judicial or administrative orders,
judgments, rulings and regulations relating to protection of the environment
except, in any such case, where failure
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to comply would not result in a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company, IT and their
respective Subsidiaries taken as a whole.
8M. DISCLOSURE. Neither this Agreement nor any other document, certificate
or statement furnished to either of you by or on behalf of the Company or IT in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the Company, IT or any
of their respective Subsidiaries which materially adversely affects or in the
future may (so far as the Company or IT can now foresee) materially adversely
affect the business, property or assets, or financial condition of the Company,
IT or any of their respective Subsidiaries and which has not been set forth in
this Agreement or in the other documents, certificates and statements furnished
to you by or on behalf of the Company or IT prior to the date hereof in
connection with the transactions contemplated hereby.
8N. INTELLECTUAL PROPERTY. (a) Set forth in Schedule 10 is a list and
brief description of all domestic and foreign patents, patent rights, patent
applications, trademark applications, service marks, service xxxx applications,
copyright registrations and trade names, and all applications for such which are
in the process of being prepared, owned by or registered in the name of the
Company, IT and each of their respective Subsidiaries or of which the Company,
IT or any of their respective Subsidiaries is a licensor or licensee or in which
the Company, IT or any such Subsidiaries has any right, and in each case a brief
description of the nature of such right. The Company, IT and each of their
respective Subsidiaries owns or possesses adequate licenses or other rights to
use all material patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, trade names, copyrights,
manufacturing processes, formulae, trade secrets, customer lists and know how
(collectively, "Intellectual Property") necessary to the conduct of its business
as now conducted and as proposed to be conducted, and, except as set forth in
Schedule 10, no claim is pending or, to the Company's or IT's Knowledge,
threatened to the effect that the operations of the Company, or IT or any of
their respective Subsidiaries infringe upon or conflict with the asserted rights
of any other person under any Intellectual Property, and, to the Company's or
IT's Knowledge, there is no basis for any such claim (whether or not pending or
threatened). Except as set forth in Schedule 10, the Company, IT and each of
their respective Subsidiaries owns or has rights in its Intellectual Property
free and clear of any Liens (other than Liens granted to Northstar in connection
with the transactions contemplated by the Original Note Agreement), except minor
imperfections of title and encumbrances, if any, which are not substantial in
amount, do not materially detract from the value of the Intellectual Property
subject thereto and do not impair the operations of the Company, IT or any such
Subsidiary. No claim is pending or, to the Company's or IT's Knowledge,
threatened to the effect that any such Intellectual Property owned or licensed
by the Company, IT or any of their respective Subsidiaries, or which the
Company, IT or any such Subsidiary otherwise has the right to use, is invalid or
unenforceable by the Company, IT or any such Subsidiary, and to the Company's or
IT's Knowledge, there is no basis for any such claim (whether or not pending or
threatened). To the Company's or IT's Knowledge, no other person or entity
(including, without limitation, any prior employer of any employee of the
Company) has any right to or interest in any inventions, improvements,
discoveries or other confidential information utilized by the Company, IT or any
of their respective Subsidiaries in its business, other than inventions,
improvements, discoveries or confidential information which are commercially
available or on reasonable terms.
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(b) All grants, registrations and applications for Intellectual
Property that are used in the conduct of the business of the Company, IT or any
of their respective Subsidiaries (i) are valid, subsisting, in proper form and
enforceable, and have been duly maintained, including the submission of all
necessary filings and fees in accordance with the legal and administrative
requirements of the appropriate jurisdictions and (ii) have not lapsed, expired
or been abandoned, and no application or registration therefor is the subject of
any pending or, to the Company's or IT's Knowledge, threatened legal or
governmental proceeding before any registration authority in any jurisdiction.
(c) Except as set forth on Schedule 10 and other than commercially
available Computer Software for which the Company, IT and each of their
respective Subsidiaries have obtained a license, the Company, IT and each such
Subsidiary solely owns or has the exclusive right to use all of the Intellectual
Property and Computer Software used by it or held for use by it in connection
with its business. To the Knowledge of the Company and IT, there are no
conflicts with or infringements of any such Intellectual Property or Computer
Software by any third party. The conduct of the business of the Company, IT and
each of their respective Subsidiaries as currently conducted does not conflict
with or infringe in any way any proprietary right of any third party, which
conflict or infringement would have a material adverse effect on the business,
operations or financial condition of the Company, IT and such Subsidiaries and
there is no claim, suit, action or proceeding pending or, to the Knowledge of
the Company or IT, threatened against the Company, IT or any such Subsidiary (i)
alleging any such conflict or infringement with any third party's proprietary
rights, (ii) challenging the ownership, use, right, validity or enforceability
of the Intellectual Property or Computer Software, or (iii) making any other
claim with respect to such Intellectual Property or Computer Software or any
license thereof, which, if adversely determined, would have a material adverse
effect on the business, operations or financial conditions of the Company, IT or
any such Subsidiary.
(d) The Computer Software used by the Company, IT and each of their
respective Subsidiaries, in the conduct of their business, other than
commercially available Computer Software for which the Company, IT or such
Subsidiaries have obtained a license, is either: (i) owned by the Company, IT or
such Subsidiary as a result of internal development by an employee of the
Company, IT or such Subsidiary, (ii) developed on behalf of the Company, IT or
such Subsidiary by a consultant or contractor and all ownership rights therein
have been assigned or otherwise transferred to or vested in the Company, IT or
such Subsidiary, or (iii) licensed or acquired from a third party pursuant to a
written license, assignment, contract, agreement or other instrument set forth
on Schedule 10 which is in full force and effect and of which the Company, IT or
such Subsidiary is not in material breach.
(e) For purposes of this Agreement, the term "Computer Software"
shall mean (i) any and all computer programs consisting of sets of statements
and instructions to be used directly or indirectly in computer software or
firmware, (ii) databases and compilations, including without limitation any and
all data and collections of data, whether machine readable or otherwise, (iii)
all versions of the foregoing (x) including without limitation all screen
displays and designs thereof, and all component modules of source code or object
code or natural language code therefor, and (y) whether recorded on papers,
magnetic media or other electronic or non-electronic device, (iv) all
descriptions, flow-charts and other work products used to
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design, plan, organize and develop any of the foregoing, and (v) all
documentation, including without limitation all technical and user manuals and
training materials, relating to the foregoing.
8O. SUBSIDIARIES. The Persons listed on Schedule 5 hereto constitute all
the Subsidiaries of the Company or IT and any Subsidiary of the Company or IT as
of the Date of Closing. Schedule 5 hereto also sets forth for each Person listed
thereon (i) the authorized capital stock of such Person, (ii) the number of
shares of such Person's capital stock that is outstanding, and (iii) the name of
each Person who owns of record and beneficially such outstanding shares of
capital stock and the number of such shares so owned by such Person.
8P. CAPITALIZATION; ETC. (i) The authorized capital stock of the Company
consists of (A) 50,000,000 shares of Common Stock, of which 11,335,418 shares
are validly issued and outstanding, fully paid and nonassessable and (B)
1,000,000 shares of preferred stock, $.001 par value, of which there are no
shares issued and outstanding. None of the outstanding capital stock of the
Company, IT and each of their respective Subsidiaries is subject to, nor was it
issued in violation of, any preemptive rights of stockholders or any right of
first refusal or other similar right in favor of any person. Except as set forth
in Schedule 11 hereto and except for the Warrants, (1) no subscription, warrant,
option, convertible security or other right (contingent or other) to purchase
any shares of capital stock of the Company, IT or any of their respective
Subsidiaries is authorized or outstanding, (2) there is not any commitment to
issue any shares, warrants, options or other such rights or to distribute to
holders of any class of capital stock of the Company, IT or any of their
respective Subsidiaries, in respect thereof, any evidences of indebtedness or
assets and (3) neither the Company, IT nor any of their respective Subsidiaries
has any obligation (contingent or other) to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof.
(ii) The shares of Common Stock issuable upon exercise of the Warrants
have been duly authorized and reserved for issuance and, when issued and
delivered in accordance with the Warrants, will be validly issued and
outstanding, fully paid and nonassessable shares of Common Stock.
8Q. SECURITIES LAWS FILINGS. Except as set forth in Schedule 12, each
report, statement and other filing made or required to be made by the Company
under the Securities Act or the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, has been timely made, is
complete and otherwise in compliance in all material respects with such Acts and
such rules and regulations and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading.
8R. CERTAIN MATTERS PERTAINING TO THE COMPANY, THE CANADIAN SUBSIDIARY AND
ICT. The Company owns no property or assets other than capital stock of IT and
ICT. The Canadian Subsidiary owns no property or assets other than capital stock
of ICT and has no liabilities. Each of ICT and the Canadian Subsidiary is, and
on the Date of the Closing the Barbco Subsidiary shall be, solvent for all
purposes under applicable Canadian law.
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8S. CERTAIN MATTERS PERTAINING TO CERTAIN ICT SUBSIDIARIES. After giving
effect to the the transfers referred to in clauses (xxii) and (xxiv) of
paragraph 3 hereof, each of Barbco and Cableshare BV (i) will own no property or
assets (except, in the case of Barbco, the shares of capital stock of the Barbco
Subsidiary owned by it), (ii) will have no outstanding liabilities (except, in
the case of Barbco, its obligations under the Note Purchase Documents to which
it is a party and the Barbco Note) and (iii) will not be conducting any
business. Cableshare US does not (a) own any properties, (b) have any
liabilities or (c) conduct any business, other than activities relating directly
to the enforcement of its rights and the performance of its obligations under
the License Agreement, the US Agreement and the Company/IT License Agreements to
which it is a party.
8T. CARRIAGE AGREEMENTS. Each of the existing Carriage Agreements with
Cablevision Systems Corporation, Century Communications Corporation and Marcus
Cable is in full force and effect and no party thereto is in material default in
the performance, observance or fulfillment of any of its obligations thereunder.
8U. RIGHTS TO TECHNOLOGY. Pursuant to an agreement dated June 11, 1992
(the "1992 AGREEMENT") between IT and ICT, IT was granted the non-exclusive
right to use ICT technology, existing at such time, including three United
States Patents and the then existing software operating system (the "OLD
TECHNOLOGY"), in the United States until the later to occur of 17 years from the
date of the 1992 Agreement and the expiration of the last valid ICT patent
subject to the 1992 Agreement. Effective April 1, 1995, the Company, IT and ICT
entered into an agreement (the "1995 AGREEMENT; and, together with the 1992
Agreement, the "COMPANY/IT LICENSE AGREEMENTS") pursuant to which IT and the
Company were granted the exclusive, worldwide right to use the Old Technology
and technology developed by ICT since the date of the 1992 Agreement, including
certain technology developed specifically for IT and the Company (the "NEW
TECHNOLOGY"). Prior to its stated December 31, 1996 expiration date, the 1995
Agreement was renewed by agreement of both parties until March 31, 1997. The
1995 Agreement was subsequently amended by a Second Amendment to Development and
Licensing Agreement dated as of March 17, 1997 (the "1997 AMENDMENT"), among the
Company, IT, ICT, Barbco and Cableshare US (a copy of which is attached hereto
as Exhibit H), to provide, among other things, that the term of the 1995
Agreement will continue until June 1, 2002. If the 1995 Agreement (as amended by
the 1997 Amendment) is terminated or not further renewed, IT will retain its
right to the Old Technology under the 1992 Agreement. Such termination or
failure to renew will not affect whatever rights the Company and IT have to
technology included in the New Technology developed specifically for the Company
and IT (such technology being that defined in the 1995 Agreement, a true and
complete copy of which has been delivered to Purchaser, as Headend Server
Software and ASICS (as defined in the 1995 Agreement)). The rights granted to
the Company and IT under both the 1992 Agreement and the 1995 Agreement are
subject to rights granted to Penney under a 1986 agreement (the "Penney
Agreement"). Pursuant to the Penney Agreement, Penney has the non-exclusive
right to use the Old Technology in home shopping and business-to-business
applications.
Each of the Company and IT hereby agree that neither party will
further amend the 1995 Agreement without the prior written consent of the
Required Holders.
PARAGRAPH 9. REPRESENTATIONS OF EACH PURCHASER.
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9A. NATURE OF PURCHASE. Each of you represents, severally and not
jointly, that you are not acquiring the Notes or the Warrants with a view to or
for sale in connection with any distribution thereof within the meaning of the
Securities Act, provided that the disposition of your property shall at all
times be and remain within your control.
PARAGRAPH 10. DEFINITIONS.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined in
the introductory paragraphs and in the foregoing paragraphs hereof shall have
the respective meanings specified therein, and the following terms shall have
the meanings specified with respect thereto below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
10A. TERMS.
"ADJUSTED DEBT" shall mean, with respect to any period, the
consolidated Debt of the Company and its Subsidiaries, minus Unrestricted Cash.
The term "Unrestricted Cash" shall mean the sum of Available Cash Balances plus
Ledger Cash Balances minus Restricted Cash.
"ADJUSTED DEBT TO EBITDA RATIO" shall mean, at any time, the ratio
of (a) Adjusted Debt on the consolidated balance sheet of the Company and its
Subsidiaries as of the last day of the month most recently ended on, or most
recently prior to, such time to (b) EBITDA for the six-full consecutive calendar
months ending on, or most recently ended prior to, such time multiplied by two.
"AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, the
Company or IT, except a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise, provided that in no event will you be deemed an Affiliate.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii)
of paragraph 7A
"BARBCO" shall mean Cable Xxxxx Xxxxxxxxxxxxx Inc., a corporation
organized under the laws of Barbados.
"BARBCO SUBSIDIARY" shall mean 1229501 Ontario Inc. a corporation
organized under the laws of Ontario, Canada and to be wholly-owned by Barbco.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in New York, Texas or Connecticut are
authorized or required by law to close.
"CABLESHARE BV" shall mean Cableshare B.V., a Netherlands
corporation.
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"CABLE OPERATORS" shall have the meaning specified in paragraph 5K.
"CABLESHARE US" shall mean Cableshare (U.S.) Limited, an Illinois
corporation.
"CANADIAN SUBSIDIARY" shall mean 997758 Ontario Inc., an Ontario,
Canada corporation.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation
which, under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"CARRIAGE AGREEMENTS" shall mean the Company's and IT's contracts
with Cable Operators governing the terms on which such operators may use the
products and services of the Company, IT and such Subsidiaries and Affiliates.
"CHANGE OF CONTROL" shall mean the occurrence of any of the
following: (i) the adoption of a plan relating to the liquidation or dissolution
of the Company, IT or any of their respective Subsidiaries (except any
liquidation or dissolution of any such Subsidiary into the Company, IT or any
other such Subsidiary), (ii) except as otherwise permitted herein, the sale,
lease or transfer, in one or a series of related transactions, of all or
substantially all of the assets of the Company, IT or any of their respective
Subsidiaries to any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act), (iii) except as otherwise permitted herein, the acquisition
by any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) of a direct or indirect interest in more than 25% of the voting power of
the capital stock of the Company, IT or any of their respective Subsidiaries (by
way of purchase, merger or consolidation or otherwise), (iv) the first day on
which a majority of the members of the Board of Directors of the Company, IT or
ICT are not Continuing Directors or (v) the consummation of any transaction the
result of which is that the Company owns (other than solely by virtue of the
ownership by Xxxxxxx Xxxxxx of all of the authorized, issued and outstanding
shares of Class Y Non-Voting Stock of the Canadian Subsidiary), directly or
through its Subsidiaries, less than 100% of the outstanding capital stock of any
of its Subsidiaries.
"CLOSING" or "DATE OF THE CLOSING" shall have the meaning specified
in paragraph 2A.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time in effect adopted pursuant thereto.
"COMPANY/IT LICENSE AGREEMENTS" shall have the meaning specified in
paragraph 6G.
"CONTINUING DIRECTORS" shall mean, as of any date of determination,
any member of the Board of Directors of the Company or any of its Subsidiaries
who (i) was a member of such Board of Directors on the date hereof or (ii) was
nominated for election or elected to such Board of Directors with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election.
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"CONSOLIDATED TANGIBLE NET BOOK VALUE" shall mean, as at any date of
determination, the excess of tangible assets over liabilities as shown on the
consolidated balance sheet of the Company and its Subsidiaries at such date
determined in accordance with generally accepted accounting principles.
Notwithstanding generally accepted accounting principles, for purposes of this
definition, the term "tangible assets" shall include the cost of any copyrights,
patents or other Intellectual Property reflected on such balance sheet.
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the creation thereof and is not directly or
indirectly renewable or extendible at the option of the debtor to a date more
than one year from the date of the creation thereof, provided that Indebtedness
for borrowed money outstanding under a revolving credit or similar agreement
which obligates the lender or lenders to extend credit over a period of more
than one year shall constitute Funded Debt and not Current Debt, even though
such Indebtedness by its terms matures on demand or within one year from the
date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"EBITDA" shall mean, with reference to any period, consolidated net
income of the Company and its Subsidiaries before extraordinary items plus
consolidated interest, taxes, depreciation and amortization of the Company and
its Subsidiaries, as determined in accordance with generally accepted accounting
principles consistently applied.
"ENVIRONMENTAL LAWS" shall have the meaning specified in paragraph
5D.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of
the same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, when none of such requirements has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any instrument
or agreement relating thereto matures, or which is otherwise payable or unpaid,
more than one year from, or is directly or indirectly renewable or extendible at
the option of the debtor to a date more than one year (including an option of
the debtor under a revolving credit or similar agreement obligating the
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lender or lenders to extend credit over a period of more than one year) from,
the date of the creation thereof.
"GUARANTEE" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"ICT" shall mean Interactive Channel Technologies Inc., an Ontario,
Canada corporation formerly known as Cableshare Inc.
"ICT GROUP" shall mean, collectively, ICT and the ICT Subsidiaries.
"ICT SUBSIDIARIES" shall mean, collectively, Barbco, Cableshare US,
Cableshare BV and the Barbco Subsidiary.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined (whether or not for borrowed money or for
the deferred purchase price of property or services and whether or not evidenced
by a note, bond, debenture or similar instrument), (ii) all indebtedness secured
by any Lien on any property or asset owned or held by such Person subject
thereto, whether or not the indebtedness secured thereby shall have been
assumed, (iii) all indebtedness of others with respect to which such Person has
become liable by way of a Guarantee, (iv) all Lease Financings, (v) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person or in respect of unreimbursed drawings under letters of
credit issued for the account of such Person, and (vi) all obligations of such
Person to refund any deposit made by any client or customer of such Person with
respect to services to be performed or goods sold by such Person.
"INTERCREDITOR AGREEMENT" shall have the meaning specified in para-
graph 3A(xx).
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"INTEREST CHARGES" shall mean, with respect to any period, the sum
(without duplication) of the following: (a) all amounts which, on a consolidated
basis in accordance with generally accepted accounting principles, would be
deducted as interest on Debt in determining the consolidated net income (or
loss) of the Company and its Subsidiaries for such period (including, without
limitation, the interest component of payments made under any Lease Financings),
and (b) all debt discount and expense amortized or required to be amortized in
accordance with generally accepted accounting principles in the determination of
the consolidated net income (or loss) of the Company and its Subsidiaries for
such period, in all cases whether or not payable in cash.
"INTEREST CHARGES COVERAGE RATIO" shall mean, at any time, the ratio
of (a) EBITDA for the six-full consecutive calendar months ending on, or most
recently ended prior to, such time to (b) Interest Charges for such period.
"KNOWLEDGE" shall mean (i) that a person or entity has actual
knowledge of a fact or (ii) knowledge of a fact that, from all facts and
circumstances that would otherwise be known to a person or entity who at the
time in question is acting with due diligence, such person or entity has reason
to know. Knowledge of a particular fact shall be attributed to an entity when
any person employed by such entity has actual knowledge of such fact or when, in
the exercise of due diligence by such person, such person has reason to know of
the existence of such fact, provided, such person is involved in an activity to
which such fact is material.
"LEASE FINANCINGS" shall mean all obligations of any Person under
any lease of property, real or personal, which are required in accordance with
generally accepted accounting principles to be capitalized on the balance sheet
of the lessee.
"LIEN" shall mean any mortgage, pledge, priority, security interest,
encumbrance, contractual deposit arrangement, lien (statutory or otherwise) or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or performance of an obligation.
"LOCK-UP AND VOTING AGREEMENT" shall have the meaning specified in
paragraph 3A(xix) hereof.
"MINIMUM OPERATING CASH RESERVES" shall have the meaning specified
in paragraph 5L hereof.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"1997 SECURITY DOCUMENTS" shall mean all instruments listed in
Schedule 2 hereto and all other security agreements, deeds of trust, mortgages,
pledges, guaranties, financing statements, continuation statements and other
agreements or instruments now, heretofore or hereafter delivered to holders in
connection with this Agreement to secure or guarantee the
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payment of any part of the Notes or the performance of the Company or any other
Person's other duties and obligations under the Note Purchase Documents.
"NOTE PURCHASE DOCUMENTS" shall mean this Agreement, the Notes, the
Warrants, the Amended and Restated Registration Rights Agreement, the 1997
Security Documents, the Intercreditor Agreement and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection herewith or therewith.
"NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name
of the Company or IT, as the case may be, by its President, one of its Vice
Presidents or its Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor entity.
"PERSON" shall mean and include an individual, a partnership, a
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.
"PLAN" shall mean any "employee pension benefit plan" (as such term
is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company or IT, as the case may be.
"RESTRICTED CASH" shall mean the aggregate sum of (a) Minimum
Operating Cash Reserves, (b) to the extent greater than zero, current
liabilities of the Company and its Subsidiaries on a consolidated basis as of
the end of the most recently completed calendar month minus Eligible
Receivables, (c) cash reserves established for any reason by the Company or any
of its Subsidiaries and (d) any cash of the Company or its Subsidiaries the use
of which is otherwise restricted for any reasons to one or more specific uses.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least
66.667% of the aggregate principal amount of the Notes from time to time
outstanding.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SIGNIFICANT HOLDER" shall mean (i) each of you, so long as you
shall hold any Note, or (ii) any other holder of at least 5% of the aggregate
principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power to
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elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly, through one
or more intermediaries, or both, by such Person; it being understood and agreed
that ICT and each other member of the ICT Group shall be deemed to be a
"Subsidiary" of each of the Company and IT for all purposes of this Agreement.
"SUBSIDIARY PARTY" shall have the meaning specified in clause (vii)
of paragraph 3A.
"TAX CREDITS" shall have the meaning specified in paragraph 5J.
"TRANSFEREE" shall have the meaning specified in paragraph 11D.
"VOTING STOCK" shall mean, with respect to any corporation, any
shares of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"WARRANTS" shall have the meaning specified in paragraph 2C.
10B. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in
this Agreement to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof.
PARAGRAPH 11. MISCELLANEOUS.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. So long as you shall hold any Notes, the Company and
IT will make payments of principal of and interest on payable with respect to
such Note, which comply with the terms of this Agreement, (i) in the case of
cash payments, by wire transfer of immediately available funds for credit (not
later than 12:00 noon, New York City time, on the date due) to your account or
accounts as specified in the Purchaser Schedule attached hereto, or such other
account or accounts in the United States as you may designate in writing, and
(ii) in the case of payments in securities of the Company and IT, by physical
delivery of such securities (not later than 12:00 noon, New York City time, on
the date due) to you, your agent or custodian as specified in the Purchaser
Schedule attached hereto, or such other Person designated by you in writing, in
each such case notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. You agree that, before disposing of any Note,
you will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid. Each of the Company and IT agrees to afford the benefits
of this paragraph 11A to any Transferee which shall have made the same agreement
as you have made in this paragraph 11A.
11B. EXPENSES. Each of the Company and IT agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay each of you and
your Transferees, and save
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each of you and any of your Transferees harmless against liability for the
payment of, all out-of-pocket expenses arising in connection with such
transactions, including, without limitation, (i) the costs and expenses for your
and any of your Transferees' attorneys and the costs and expenses of such
attorneys (including, without limitation, all document production and
duplication charges and the fees and expenses of any special counsel engaged by
either of you or such Transferees) in connection with this Agreement, the
transactions contemplated hereby, any subsequent proposed modification of, or
proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, and in connection
with the preparation, negotiation and execution of any subordination agreement
or other intercreditor agreement in connection with the incurrence of Debt
permitted by paragraph 6C(viii) hereby, and (ii) the costs and expenses,
including attorneys' fees, incurred by either of you or any such Transferees in
enforcing (or determining whether or how to enforce) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of your or such Transferee's
having acquired any Note, including, without limitation, costs and expenses
incurred in any bankruptcy case and (iii) any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever arising out of or in
any way in connection with any claim (whether or not asserted in a legal
proceeding), litigation, investigation, arbitration or proceeding relating to,
or any restructuring of the obligations of the Company. IT and their respective
Subsidiaries under, this Agreement, the Notes, the Warrants, the Amended and
Restated Registration Rights Agreement and the 1997 Security Documents;
provided, that neither the Company nor IT shall have any obligation under this
clause (iii) with respect to the indemnification of any Person in respect of
liabilities arising from such Person's gross negligence or willful misconduct.
The obligations of the Company and IT under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by you or any
Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the Company
and IT may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company and IT shall obtain the prior
written consent to such amendment, action or omission to act, of the Required
Holder(s) except that, without the prior written consent of the holder or
holders of all Notes at the time outstanding, no amendment to this Agreement
shall change the maturity of any Note, or change the principal of, or the rate
or time of payment of interest on any Note, or affect the time, amount or
allocation of any prepayments, change the proportion of the principal amount of
the Notes required with respect to any consent, amendment, waiver or
declaration, amend, modify or waive any provision of this paragraph 11C, reduce
the percentage specified in the definition of Required Holders or consent to the
assignment or transfer by the Company, IT or any of their respective
Subsidiaries of their respective rights and obligations under this Agreement,
the Notes, the Warrants, the Amended and Restated Registration Rights Agreement
or the 1997 Security Documents. Each holder of any Note at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and IT, on the one hand,
and any holder of any Note, on the other hand, nor any delay in exercising any
rights hereunder or under any Note shall operate as a waiver of any rights of
any holder of such Note. This Agreement may not be
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50
changed orally, but (subject to the provisions of paragraph 11C) only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought. Any waiver delivered in connection
herewith shall be in writing and shall be effective only in the specific
instance and for the specific purpose for which it is given. As used herein and
in the Notes, the term "this Agreement" and references thereto shall mean this
Amended and Restated Note Agreement, as now in effect and as it may at any time
and from time to time hereafter be amended, supplemented or modified.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The
Notes are issuable as registered notes without coupons in denominations of at
least $1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Each of you shall have the right to transfer any Note to any
other Person (each such other Person is herein called a "TRANSFEREE"). Upon
surrender for registration of transfer of any Note at the principal office of
the Company or to its agent, the Company and IT shall, at their expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such Transferee or Transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company or to its agent. Whenever any Notes are so surrendered for exchange,
the Company and IT shall, at their expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder of
such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company and IT will
make and deliver a new Note, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registration of transfer, the Company and IT may treat the Person in whose name
any Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
and IT shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
such Note to any Person on such terms and conditions as may be determined by
such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained in the Original Note Agreement or made
in writing by or on behalf of the Company and IT in connection therewith shall
for the benefit of Northstar survive the execution and delivery of this
Agreement and the Notes. Further, all representa-
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51
tions and warranties contained herein or made in writing by or on behalf of the
Company and IT in connection herewith shall survive the execution and delivery
of this Agreement and the Notes, the transfer by either or both of you of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of you or any Transferee. Subject to the preceding
sentences, this Agreement and the Notes embody the entire agreement and
understanding between each of you and the Company and IT and supersede all prior
agreements and understandings relating to the subject matter hereof.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not. Notwithstanding the foregoing, neither the Company, IT nor any of their
respective Subsidiaries shall assign or transfer any of their respective rights
and obligations under this Agreement, the Notes, the Warrants, the Amended and
Restated Registration Rights Agreement or the 1997 Security Documents.
11H. DISCLOSURE TO OTHER PERSONS. Each of the Company and IT acknowledges
that the holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose any other information
disclosed to such holder, by or on behalf of the Company or any Subsidiary in
connection with or pursuant to this Agreement to (i) such holder's directors,
officers, employees, agents and professional consultants, (ii) any other holder
of any Note, (iii) any Person to which such holder offers to sell such Note or
any part thereof, (iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note, (v) any Person from which such
holder offers to purchase any security of the Company, (vi) any federal or state
regulatory authority having jurisdiction over such holder, or (vii) any other
Person to which such delivery or disclosure may be necessary or appropriate (a)
in compliance with any law, rule, regulation or order applicable to such holder,
(b) in response to any subpoena or other legal process or informal investigative
demand or (c) in connection with any litigation to which such holder is a party.
11I. NOTICES. All notices or other communications provided for hereunder
(except for the telephonic notice required by paragraph 4C) shall be in writing
and sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to you, addressed to you at the address specified
for such communications in the Purchaser Schedule attached hereto, or at such
other address as you shall have specified to the Company and IT in writing, (ii)
if to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified to the Company in writing or,
if any such other holder shall not have so specified an address to the Company,
then addressed to such other holder in care of the last holder of such Note
which shall have so specified an address to the Company, and (iii) if to the
Company or IT, addressed to it at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, Attention: Xxxxxxx X. Xxxx, or at such other address as the Company
shall have specified to the holder of each Note in writing with a copy to
Xxxxxxxx & Knight, P.C., 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due
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52
on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall be included in the computation of the interest payable on such Business
Day.
11K. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to either or both you or to the Required Holder(s),
the determination of such satisfaction shall be made by either or both of you,
as the case may be, or the Required Holder(s), as the case may be, in the sole
and exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.
11L. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF NEW YORK AND THE LAWS OF THE UNITED STATES OF
AMERICA, (INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT
EXCLUDING ALL OTHER PRINCIPLES OF CONFLICTS OF LAW).
11M. SEVERABILITY. Any provision of this Agreement which 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, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11O. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by each of the other
parties hereto.
11P. LIMITATION ON INTEREST. The Company, IT and each holder of a Note
intends to contract in strict compliance with applicable usury law from time to
time in effect. In furtherance thereof such Persons stipulate and agree that
none of the terms and provision contained herein or in the Notes shall ever be
construed to provide for interest in excess of the maximum amount of interest
permitted to be charged by applicable law form time to time in effect. Neither
the Company, IT nor any of their respective Subsidiaries nor any present or
future guarantors, endorsers, or other Persons hereafter becoming liable for
payment of any obligations hereunder or under the Notes shall be required to pay
interest thereon in excess of the maximum amount that may be lawfully charged
under applicable law from time to time in effect, and the provisions of this
paragraph shall control over all other provisions herein or in the Notes which
may be in conflict or apparent conflict herewith.
11Q. SUBMISSION OF JURISDICTION; WAIVERS. (a) Each of the Company and IT
on behalf of itself and each of its respective Subsidiaries hereby irrevocably
and unconditionally:
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53
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement, the Notes, the Warrants, the
Amended and Restated Registration Rights Agreement, the 1997 Security
Documents and the other documents executed and delivered in connection
herewith to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in or determined pursuant to
paragraph 11I or at such other address of which the holders of the Notes
shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this paragraph 11Q any punitive or exemplary damages and any damages
which are not proximately caused by or the reasonably foreseeable result
of the breach which is the subject of such action or proceeding.
11R. ACKNOWLEDGMENTS. Each of the Company and IT hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Notes, the Warrants, the Amended and
Restated Registration Rights Agreement, the 1997 Security Documents and
the other documents related hereto;
(ii) neither of you has any fiduciary relationship with or duty to
the Company or IT arising out of or in connection with this Agreement, the
Notes, the Warrants, the Amended and Restated Registration Rights
Agreement, the 1997 Security Documents or any other documents related
hereto, and the relationship between each of you, on one hand, and the
Company and IT, on the other hand, in connection herewith or therewith is
solely that of creditor and debtor; and
(iii) no joint venture exists between either of you, on the one
hand, and the Company and IT and on the other hand.
11S. WAIVERS OF JURY TRIAL. THE COMPANY, IT AND EACH SUBSIDIARY OF THE
COMPANY OR IT AND EACH HOLDER OF NOTES HEREBY
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IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES, THE WARRANTS, THE AMENDED AND
RESTATED REGISTRATION RIGHTS AGREEMENT OR ANY 1997 SECURITY DOCUMENTS AND FOR
ANY COUNTERCLAIM THEREIN.
11T. ACCOUNTING TERMS AND DEFINITIONS. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (iii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in paragraph 8B.
11U. LEGENDS ON NOTES. Each of the Company and IT acknowledges and agrees
that any Purchaser may, at the time it initially transfers any of the Notes held
by it, affix thereto the following legend; it being further agreed that the
"issue price" and "OID" called for by such legend shall be inserted into a
completed legend in accordance with paragraph 2A hereof and that the "per annum
yield to maturity" shall be calculated in a manner consistent with the "issue
price" and "OID" referred to above:
"THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
AS DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE FOLLOWING INFORMATION IS
PROVIDED PURSUANT TO THE INFORMATION REPORTING
REQUIREMENTS SET FORTH IN TREASURY REGULATION SECTION 1.1275-3.
THE ISSUE PRICE OF THIS DEBT INSTRUMENT IS $[ ]
THE AMOUNT OF OID ON THIS DEBT INSTRUMENT IS $[ ]
THE ISSUE DATE OF THIS DEBT INSTRUMENT IS APRIL 9, 1997
THE PER ANNUM YIELD TO MATURITY OF THIS DEBT INSTRUMENT
IS [ ]% COMPOUNDED QUARTERLY."
THIS WRITTEN AGREEMENT, THE NOTES AND THE OTHER NOTE PURCHASE DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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55
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the Company and IT, whereupon this Agreement, subject to paragraph 11O, shall
become a binding agreement between the Company, IT and each of you.
Very truly yours,
SOURCE MEDIA, INC.
By:________________________
Xxxxxxx X. Xxxx
Chief Financial Officer
and Treasurer
IT NETWORK, INC.
By:_________________________
Xxxxxxx X. Xxxx
Chief Financial Officer
and Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
NORTHSTAR HIGH TOTAL RETURN FUND
By:_________________________
Xxxxxx Xxx Dial
Vice President
DELAWARE STATE EMPLOYEES' RETIREMENT FUND
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:_________________________
Xxxxxx X. Xxxxxx
Managing Director
56
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLAN OF ZENECA HOLDINGS INC.
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:_________________________
Xxxxxx X. Xxxxxx
Managing Director
DECLARATION OF TRUST FOR DEFINED BENEFIT
PLAN OF ICI AMERICAN HOLDINGS INC.
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:_________________________
Xxxxxx X. Xxxxxx
Managing Director
THE X.X. XXXXXXXXX FAMILY FOUNDATION
By: Pecks Management Partners Ltd.,
its Investment Advisor
By:_________________________
Xxxxxx X. Xxxxxx
Managing Director
57
AGREEMENT OF GUARANTORS
Each of the undersigned agrees to be bound by all of the covenants and
agreements set forth in paragraphs 5 and 6 of the foregoing Amended and Restated
Note Agreement, to the extent that such covenants and agreements by their terms
refer to obligations of the undersigned by name or obligations applicable to a
Subsidiary or Subsidiaries of the Company and IT.
CABLE XXXXX XXXXXXXXXXXXX INC.
By:________________________
Xxxxxxx X. Xxxx
Director
By:________________________
Xxxxxxx Xxxxx
Director and Secretary
CABLESHARE (U.S.) LIMITED
By:________________________
Xxxxxxx X. Xxxx
Director
58
SCHEDULE 1
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
1997 Notes 1997
to be Note Denom-
Purchased ination(s)
---------- -----------
NORTHSTAR HIGH TOTAL RETURN FUND $5,000,000 $5,000,000
(1) Securities to be registered in the name of:
Northstar High Total Return Fund
(2) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: 0000-0000
Xxxxx Xxxxxx Bank and Trust Co.
Boston, Massachusetts
ABA No.: 000000000 (BNF# WJ18 - Northstar High Total Return Fund)
Each such wire transfer shall set forth the name
of the Company, a reference to "Senior Notes
due 3/31/02", and the due date and application
(as among principal and interest of the payment being made).
(3) Address for all notices relating to payments or otherwise:
Northstar Investment Management
Two Pickwick Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
(4) Recipient of telephonic prepayment notices:
Name: Xx. Xxxxxx Ole Dial
Number: (000) 000-0000
(5) Tax Identification No.: 000000000
59
(6) Physical delivery of securities:
Chemical Bank
4 New York Plaza
Ground Floor Window
Attn: Xxxxxxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ref. Fund #: WJ18 - Northstar High Total Return Fund
60
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
1997 Notes 1997
to be Note Denom-
Purchased ination(s)
---------- -----------
DELAWARE STATE EMPLOYEES' RETIREMENT FUND $6,200,000 $6,200,000
(1) Securities to be registered in the name of:
Nap & Company
(2) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: 0000000
Mercantile Safe Deposit & Trust Company
0 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxxx Xxxxxxx
ABA No.: 052-000618 for State of Delaware account
Each such wire transfer shall set forth the name
of the Company, a reference to "Senior Notes
due 3/31/02", and the due date and application
(as among principal and interest of the payment being made).
(3) Address for all notices relating to payments or otherwise:
c/o Pecks Management Partners, Ltd.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(4) Recipient of telephonic prepayment notices:
Name: Xx. Xxxxxx X. Xxxxxx
Number: (000) 000-0000
(5) Tax Identification No.: 00-0000000
61
(6) Physical delivery of securities:
Mercantile Safe Deposit & Trust Company
0 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx - Incoming Securities
62
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
1997 Notes 1997
to be Note Denom-
Purchased ination(s)
---------- -----------
DECLARATION OF TRUST FOR DEFINED BENEFIT PLAN $1,200,000 $1,200,000
OF ZENECA HOLDINGS INC.
(1) Securities to be registered in the name of:
Fuelship & Company
(2) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: JG10 (DDA: 00000000)
State Street Bank & Trust Company
One Enterprise Drive
Xxxxxxx Xxxxxxx Xxxxxxxx, 0X
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
ABA No.: 0110-00028 for Master Trust/State Street Bank
& Trust Company, Xxxxxx, Xxxxxxxxxxxxx 00000,
BNF Zeneca Holdings
Each such wire transfer shall set forth the name
of the Company, a reference to "Senior Notes
due 3/31/02", and the due date and application
(as among principal and interest of the payment being made).
(3) Address for all notices relating to payments or otherwise:
c/o Pecks Management Partners, Ltd.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(4) Recipient of telephonic prepayment notices:
Name: Xx. Xxxxxx X. Xxxxxx
Number: (000) 000-0000
(5) Tax Identification No.: 000-000000
63
(6) Physical delivery of securities:
State Street Bank & Trust Company
000 Xxxxxxxx Xxxxxx
Incoming Securities, Concourse Level
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Mr. Xxxxx Xxx
Account: Zeneca Holdings
Account No.: JG10
64
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
1997 Notes 1997
to be Note Denom-
Purchased ination(s)
---------- -----------
DECLARATION OF TRUST FOR DEFINED BENEFIT PLAN $1,800,000 $1,800,000
OF ICI AMERICAN HOLDINGS INC.
(1) Securities to be registered in the name of:
Northman & Co
(2) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: I510 (DDA: 00000000)
State Street Bank & Trust Company
One Enterprise Drive
Xxxxxxx Xxxxxxx Xxxxxxxx, 0X
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
ABA No.: 0110-00028 for Master Trust/State Street Bank
& Trust Company, Xxxxxx, Xxxxxxxxxxxxx 00000,
BNF ICI Americas
Each such wire transfer shall set forth the name
of the Company, a reference to "Senior Notes
due 3/31/02", and the due date and application
(as among principal and interest of the payment being made).
(3) Address for all notices relating to payments:
c/o Pecks Management Partners, Ltd.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(4) Recipient of telephonic prepayment notices:
Name: Xx. Xxxxxx X. Xxxxxx
Number: (000) 000-0000
(5) Tax Identification No.: 000-000-000
65
(6) Physical delivery of securities:
State Street Bank & Trust Company
000 Xxxxxxxx Xxxxxx
Incoming Securities, Concourse Level
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Mr. Xxxxx Xxx
Account: ICI Americas
Account No.: I510
66
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
1997 Notes 1997
to be Note Denom-
Purchased ination(s)
---------- -----------
THE X.X. XXXXXXXXX FAMILY FOUNDATION $800,000 $800,000
(1) Securities to be registered in the name of:
Royal Trust Corporation of Canada
fbo/X.X. XxXxxxxxx Family Foundation
(2) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No.: 298324
Account Name: Royal Trust (40-7000/1.20)
Royal Trust Corporation of Canada
Group Retirement Savings
X.X. Xxx 000, X-X Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
ABA No.: 000000000 (Bank of New York)
Each such wire transfer shall set forth the name
of the Company, a reference to "Senior Notes
due 3/31/02", and the due date and application
(as among principal and interest of the payment being made).
(3) Address for all notices relating to payments:
c/o Pecks Management Partners, Ltd.
Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(4) Recipient of telephonic prepayment notices:
Name: Xx. Xxxxxx X. Xxxxxx
Number: (000) 000-0000
(5) Tax Identification No.: Non-taxable
67
(6) Physical delivery of securities:
The Bank of New York
0 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Special Processing Department
Re: ACCOUNT 298324
