Exhibit 10.19
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$1,900,000,000
CREDIT AGREEMENT,
dated as of
June 21, 1999,
among
BLOCKBUSTER INC.,
AS BORROWER,
THE BANKS NAMED HEREIN,
AS BANKS,
CITIBANK, N.A.,
AS THE ADMINISTRATIVE AGENT,
THE BANK OF NEW YORK,
AS THE DOCUMENTATION AGENT,
and
BANK OF AMERICA NT&SA,
and
CHASE SECURITIES INC.,
AS THE SYNDICATION AGENTS
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC., BANC OF AMERICA
SECURITIES LLC, BNY CAPITAL MARKETS, INC., CHASE
SECURITIES INC. AND ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
AS ARRANGERS
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
AS LEAD ARRANGER AND BOOK MANAGER
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms............................................................1
1.2. Computation of Time Periods.............................................17
1.3. Accounting Terms........................................................17
ARTICLE II
THE TRANCHE A LOANS
2.1. The Tranche A Loans.....................................................17
2.2. Making the Tranche A Loans..............................................18
2.3. Termination/Reduction of the Tranche A Loan Commitments.................20
2.4. Repayment of the Tranche A Loan.........................................21
2.5. Optional Prepayments of the Tranche A Loan..............................21
2.6. Limitation on use of Tranche A Loan Proceeds............................21
ARTICLE III
THE TRANCHE B LOANS
3.1. The Tranche B Loans.....................................................21
3.2. Making the Tranche B Loans..............................................22
3.3. Repayment of the Tranche B Loans........................................23
3.4. Optional Prepayments of the Tranche B Loans.............................24
ARTICLE IV
THE TRANCHE C LOANS
4.1. The Tranche C Loans.....................................................24
4.2. Making the Tranche C Loans..............................................25
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4.3. Termination/Reduction of the Tranche C Loan Commitments.................27
4.4. Repayment of the Tranche C Loan.........................................27
4.5. Optional Prepayments of the Tranche C Loan..............................27
ARTICLE V
CONVERSION, INTEREST, PAYMENTS, FEES, ETC.
5.1. Conversion/Continuation Option..........................................28
5.2. Interest................................................................28
5.3. Interest Rate Determination and Protection..............................29
5.4. Fees....................................................................30
5.5. Increased Costs.........................................................30
5.6. Illegality..............................................................32
5.7. Capital Adequacy........................................................32
5.8. Payments and Computations...............................................33
5.9. Sharing of Payments, Etc................................................34
5.10. Replacement Banks......................................................35
5.11. Mandatory Prepayment...................................................35
ARTICLE VI
CONDITIONS OF LENDING
6.1. Conditions Precedent to the Effectiveness of this Agreement.............36
6.2. Additional Conditions Precedent to the Making of the Initial Loans......37
6.3. Conditions Precedent to the Making of Each Loan.........................37
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Corporate Existence; Compliance with Law................................38
7.2. Corporate Power; Authorization; Enforceable Obligations.................38
7.3. Taxes...................................................................39
7.4. Financial Information...................................................40
7.5. Litigation..............................................................40
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7.6. Margin Regulations......................................................40
7.7. ERISA...................................................................40
7.8. No Defaults.............................................................41
7.9. Investment Company Act..................................................41
7.10. Insurance..............................................................41
7.11. Environmental Protection...............................................42
7.12. Title and Liens........................................................42
7.13. Trademarks, Copyrights, Etc............................................42
7.14. Franchises.............................................................42
7.15. Year 2000 Issue........................................................42
7.16. Disclosure.............................................................42
ARTICLE VIII
FINANCIAL COVENANTS
8.1. Total Leverage Ratio....................................................44
8.2. Fixed Charge Coverage Ratio.............................................44
ARTICLE IX
AFFIRMATIVE COVENANTS
9.1. Compliance with Laws, Etc...............................................45
9.2. Payment of Taxes, Etc...................................................45
9.3. Maintenance of Insurance................................................45
9.4. Preservation of Corporate Existence, Etc................................45
9.5. Books and Access........................................................45
9.6. Maintenance of Properties, Etc..........................................45
9.7. Application of Proceeds.................................................46
9.8. Financial Statements....................................................46
9.9. Reporting Requirements..................................................47
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ARTICLE X
NEGATIVE COVENANTS
10.1. Liens, Etc.............................................................49
10.2. Mergers................................................................49
10.3. Substantial Asset Sale.................................................50
10.4. Transactions with Affiliates...........................................50
10.5. Margin Stock...........................................................50
10.6. Subsidiary Indebtedness................................................50
10.7. Other Restrictions on Indebtedness.....................................50
10.8. Dividends and Purchase of Stock........................................50
10.9. Limitation on Transfers of Assets to Subsidiary........................51
10.10. Loans and Investments.................................................51
ARTICLE XI
EVENTS OF DEFAULT
11.1. Events of Default......................................................51
ARTICLE XII
THE ARRANGERS AND THE FACILITY AGENTS
12.1. Authorization and Action...............................................54
12.2. Arrangers' and Facility Agents' Reliance, Etc..........................55
12.3. Citibank, N.A., The Bank of New York, Bank of America NT&SA, Chase
Securities Inc., ▇▇▇▇▇▇ Guaranty Trust Company of New York and
their Affiliates.......................................................55
12.4. Bank Credit Decision...................................................56
12.5. Determinations Under Sections 6.1, 6.2 and 6.3.........................56
12.6. Indemnification........................................................56
12.7. Successor Facility Agents..............................................57
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ARTICLE XIII
MISCELLANEOUS
13.1. Amendments, Etc........................................................57
13.2. Notices, Etc...........................................................58
13.3. No Waiver; Remedies....................................................58
13.4. Costs; Expenses; Indemnities...........................................58
13.5. Right of Set-Off.......................................................60
13.6. Binding Effect.........................................................60
13.7. Assignments and Participations; Additional Banks.......................61
13.8. Promissory Notes ......................................................62
13.9. GOVERNING LAW; SEVERABILITY............................................62
13.10. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL......................63
13.11. Confidentiality.......................................................63
13.12. Section Titles........................................................64
13.13. Execution in Counterparts.............................................64
SCHEDULES
Schedule I - Commitments
Schedule 10.6 - Facilities in Existence on the Date of this Agreement
EXHIBITS
Exhibit A - Form of Notice of Borrowing
Exhibit B - Form of Notice of Conversion or Continuation
Exhibit C-1 - Form of Shearman & Sterling Opinion
Exhibit C-2 - Form of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Opinion
Exhibit D - Form of Assignment and Acceptance
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CREDIT AGREEMENT, dated as of June 21, 1999, (this "Agreement") among
BLOCKBUSTER INC., a Delaware corporation (the "Borrower"), the Bank parties
hereto from time to time, CITIBANK, N.A., as the Administrative Agent, THE BANK
OF NEW YORK, as the Documentation Agent, THE BANK OF AMERICA NT&SA, as a
Syndication Agent and CHASE SECURITIES INC., as a Syndication Agent.
W I T N E S E T H:
WHEREAS, the Borrower has requested the Banks to commit to lend to the
Borrower (i) up to $700 million on a 5-year revolving basis ("Tranche A") and
(ii) up to $600 million in term loans ("Tranche B") for refinancing of certain
existing indebtedness of the Borrower and for general corporate purposes; and
WHEREAS, the Borrower has requested the Tranche C Loan Banks to commit to
lend to the Borrower up to $600 million on a 364-day revolving basis ("Tranche
C") for refinancing of certain existing indebtedness of the Borrower and for
general corporate purposes; and
WHEREAS, the Banks are willing to make available such commitments on the
terms and conditions provided herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. DEFINED TERMS. As used in this Agreement, the following terms have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"AFFILIATE AGREEMENTS" means the Initial Public Offering and Split-Off
Agreement among the Borrower, Viacom International Inc. and Viacom Inc., the
Release and Indemnification Agreement between the Borrower and Viacom Inc., the
Transition Services Agreement between the Borrower and Viacom Inc., the
Registration Rights Agreement between the Borrower and Viacom Inc., each of
which is described in the Preliminary Prospectus, and the Tax Matters Agreement.
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"ADMINISTRATIVE AGENT" means Citibank, N.A., in its capacity as the
Administrative Agent, or any successor in such capacity.
"AFFILIATE" means, as to any Person, any Subsidiary of such Person and
any other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of any Person, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Credit Agreement, as modified, amended or
supplemented from time to time.
"APB 16 AND 17" means Accounting Principles Board Opinions Nos. 16 and 17
as in effect at the time that any addition or adjustment required thereunder is
to be made to the financial statements of a Person.
"APPLICABLE EURODOLLAR RATE MARGIN" shall mean on any date the percentage
set forth below opposite the Total Leverage Ratio applicable to the Borrower on
such date:
TOTAL LEVERAGE RATIO LIBOR SPREAD
-------------------- ------------
greater than 4.50x 2.25%
equal to or greater than 3.75x but less than or equal to 4.50x 1.75%
equal to or greater than 3.00x but less than 3.75x 1.50%
less than 3.00x 1.25%
; PROVIDED, HOWEVER, that until the first anniversary of the Initial Funding
Date, the LIBOR Spread shall be the greater of (x) the percentage specified
above and (y) 1.75%.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank, its
Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"ARRANGERS" means each of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Banc of America
Securities LLC, BNY Capital Markets, Inc., Chase Securities Inc. and ▇.▇. ▇▇▇▇▇▇
Securities Inc., acting in such capacity.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section 13.7(a).
"BANKS" means the lenders listed on the signature pages hereof, and such
other lenders as may become parties hereto from time to time pursuant to Section
13.7.
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"BASE RATE" means, for any day, a fluctuating interest rate per annum as
shall be in effect for such day, which rate per annum shall be equal at all
times to the higher of
(a) the rate of interest announced publicly by the
Administrative Agent in New York, New York as the Administrative
Agent's base rate in effect for such day; and
(b) the Federal Funds Rate for such day plus 1/2 of one
percent per annum.
"BASE RATE LOAN" means any Loan or portion thereof that bears interest
with reference to the Base Rate.
"BORROWER" has the meaning specified in the recitals hereof.
"BORROWING" means a Tranche A Loan Borrowing, a Tranche B Loan Borrowing
or a Tranche C Loan Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized to close in New York City and, if the applicable Business Day relates
to a Eurodollar Rate Loan, a day on which dealings are also carried on in
Dollars in the London interbank market.
"CAPITAL LEASE PRINCIPAL PAYMENTS" means, for any period, amounts
recorded as principal payments of capitalized leases on the financial statements
of the Borrower prepared in accordance with GAAP.
"CAPITALIZED LEASES" means, as applied to any Person, any lease of
property by such Person recorded as a capitalized lease on the financial
statements of such Person prepared in accordance with GAAP.
"CAPITAL MARKET TRANSACTION" means the issuance or incurrence of any
Indebtedness for borrowed money (other than borrowings hereunder) or the
issuance of any Equity or other securities, excluding Commercial Paper, in each
case whether by means of any public offering or private placement but excluding
debt to commercial banks or other investors, a principal investment objective of
which is extending credit by making or purchasing bank loans, or debt that is
syndicated in the commercial bank market.
"CASH EQUIVALENTS" means (i) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States government or any agency thereof, (ii) certificates of deposit,
time deposits, bankers'
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acceptances and repurchase agreements of any commercial bank rated at least A-3
by Moody's, (iii) negotiable Eurodollar certificates of deposit and time
deposits issued by a London affiliate of a U.S. commercial bank or Canadian bank
qualified under the preceding clause (ii) if such affiliate's long-term debt is
rated A-3 or better by Moody's and (iv) commercial paper of an issuer rated at
least A-1+ by S&P or P-1 by Moody's, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments.
"CODE" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"COMBINED CARVE OUT FINANCIAL STATEMENTS" has the meaning specified in
Section 7.4(a).
"COMMERCIAL PAPER" means (i) any unsecured promissory note of the
Borrower with a maturity at the time of issuance not exceeding nine months,
exclusive of days of grace, issued by the Borrower pursuant to a commercial
paper program and (ii) any unsecured borrowing by Borrower due within 9 months,
exclusive of days of grace, pursuant to money market or other similar short term
uncommitted credit lines.
"COMMITMENT" means, as to any Bank, such Bank's aggregate Tranche A Loan
Commitment, Tranche B Loan Commitment and/or Tranche C Loan Commitment and
"Commitments" means, as to all of the Banks, the aggregate of the Tranche A Loan
Commitments, Tranche B Loan Commitments and Tranche C Loan Commitments of all
the Banks.
"COMMITMENT FEE" has the meaning specified in Section 5.4(a).
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum derived
substance or waste, or any constituent of such substance or waste, including any
substance regulated under any Environmental Law.
"CONTINUING DIRECTORS" means the directors of the Borrower on the
Effective Date and each other director, if such other director's nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"CORE BUSINESS" means the Borrower's operation as a domestic and
international retailer of rentable home videocassettes, DVDs, video games, and
allied and successor products.
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"DEFAULT" means any event which with the passing of time or the giving of
notice or both would become an Event of Default.
"DOCUMENTATION AGENT" means The Bank of New York, in its capacity as the
Documentation Agent, or any successor in such capacity.
"DOLLARS" and the sign "$" each mean the lawful money of the United
States of America.
"DOMESTIC LENDING OFFICE" means, with respect to any Bank, the office of
such Bank as such Bank may from time to time specify to the Borrower and the
Administrative Agent.
"EARNINGS FROM OPERATIONS" means, at any time, for the Borrower and its
Subsidiaries, revenues PLUS equity in earnings of affiliated companies, LESS (i)
operating costs and expenses (including any payments under guarantees of leases)
and (ii) cost of sales.
"EBITDA" means, at any time , the Earnings from Operations of the
Borrower and its Subsidiaries on a consolidated basis as set forth in the
statement of operations of the Borrower and its Subsidiaries for the immediately
preceding four Fiscal Quarters (adjusted for all Fiscal Quarters in such period
to account for material dispositions during such four Fiscal Quarters to third
parties other than franchisees), PLUS (to the extent previously deducted) (a)
the sum of the following expenses of the Borrower and its Subsidiaries for such
period: (i) depreciation expense, (ii) amortization expense (including all
amortization expenses recognized in accordance with APB 16 and 17 but excluding
amortization of videocassettes), (iii) in the event that, during such period,
the Borrower or any of its Subsidiaries acquires all or substantially all of the
assets or Equity of any other Person or any Equity in any other Person that is
reported on an equity basis, the EBITDA of such Person, as determined in
accordance with the terms of this defini tion, shall be included in the EBITDA
of the Borrower for all Fiscal Quarters during such period, (iv) all other
non-cash charges and (v) interest charges related to securitization and
financing transactions, the accounting treatment of which is governed by any
Financial Accounting Standards Board statement LESS (b) the proportional EBITDA
of the interests held by any other Person in entities fully consolidated with
the Borrower and its Subsidiaries, as determined in accordance with the terms of
this definition.
"ENVIRONMENTAL LAW" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 eT Seq.), the Hazardous
Material Transportation Act (49 U.S.C. ss. 1801 eT Seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 eT Seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 eT Seq.), the Clean Air Act (42 U.S.C.
ss. 7401 ET seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 eT
Seq.), and the Occupational Safety and
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Health Act (29 U.S.C. ss. 651 eT Seq.), in each case as amended or
supplemented from time to time, and any analogous future federal or present
or future state or local statutes, including, without limitation, transfer of
ownership notification statutes such as the New Jersey Environmental Cleanup
Responsibility Act (N.J. Stat. ▇▇▇. ss. 13:1K-6 eT Seq.) and the Connecticut
Industrial Transfer Law of 1985 (Conn. Gen. Stat. ss. 22a-134 eT Seq.) and
the regulations promulgated pursuant thereto.
"ENVIRONMENTAL LIABILITIES AND COSTS" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all reasonable fees, disbursements and expenses
of counsel, expert and consulting fees, and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand, by any Person, whether based in contract, tort,
implied or express warranty, strict liability, any criminal or civil statute,
including any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental, health or
safety conditions, or the Release or threatened Release of a Contaminant into
the environment, resulting from the past, present or future operations of such
Person or its Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"EQUITY" means all shares, options, equity interests, general or limited
partnership interests, joint venture interests or participations or other
equivalents (regardless of how designated) of or in a corporation, partnership
or other entity, whether voting or non-voting, and including, without
limitation, common stock, preferred stock, purchase rights, warrants or options
for, or any security substantially similar to, any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or any
successor legislation thereto) and the rules and regulations promulgated
thereunder, as amended from time to time.
"ERISA AFFILIATE" shall mean a corporation, partnership or other entity
which is considered one employer with the Borrower under Section 4001 of ERISA
or Section 414 of the Code.
"ERISA EVENT" means (i) a Reportable Event with respect to a Title IV
Plan; (ii) the withdrawal of the Borrower, any of its Subsidiaries or any ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (iii) the filing of a
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notice of intent to terminate a Title IV Plan or the treatment of a plan
amendment as a termination under Section 4041 of ERISA; or (iv) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D.
"EURODOLLAR LENDING OFFICE" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule I (or, if no such office is specified, its Domestic Lending Office) or
such other office of such Bank as such Bank may from time to time specify to the
Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period, the rate of interest
per annum determined by the Administrative Agent to be the offered rate per
annum at which deposits in Dollars appears on the Telerate Page 3750 (or any
successor page) as of 11:00 A.M. (London time), or in the event such offered
rate is not available from the Telerate Page, the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rates offered by the principal office of each of the Reference
Banks in London, England to prime banks in the London interbank market at 11:00
A.M. (London time), two Business Days before the first day of such Interest
Period for deposit in dollars in an amount substantially equal to the aggregate
Eurodollar Rate Loans to which such Interest Period relates and for a period
equal to such Interest Period.
"EURODOLLAR RATE LOAN" means any Loan or portion thereof that bears
interest at a rate determined with reference to the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Bank for any Interest
Period, the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under Regulation D for determining the actual
reserve requirement incurred by such Bank (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 11.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FACILITY AGENTS" means each of the Administrative Agent, the
Documentation Agent and the Syndication Agents.
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"FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate per
annum equal for such day to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FINAL JUDGMENT" has the meaning specified in Section 11.1(f).
"FISCAL QUARTER" means any three month period ending March 31, June 30,
September 30 or December 31 of any Fiscal Year.
"FISCAL YEAR" means each twelve-month period ending December 31.
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of the sum
of EBITDA for the immediately preceding four Fiscal Quarters PLUS Operating
Lease Payments for such four Fiscal Quarters to the sum of Interest Payments for
the immediately preceding four Fiscal Quarters PLUS Operating Lease Payments for
such four Fiscal Quarters PLUS Capital Lease Principal Payments for such four
Fiscal Quarters PLUS the greater of the actual dividends paid on any class of
Equity during the preceding four Fiscal Quarters and 60% of the maximum
permitted dividends payable pursuant to Section 10.8 during such four Fiscal
Quarters.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time and set forth in the rules,
regulations, opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession and which are applicable to the circumstances as of
the date of determination.
"GAAS" means generally accepted auditing standards in the United States
of America as in effect from time to time and set forth in the rules,
regulations, opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession and which are applicable to the circumstances as of
the date of determination.
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"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GRANTING BANK" has the meaning specified in Section 13.7(h).
"INDEBTEDNESS" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money (including, without
limitation, in the case of the Borrower, the obligations of the Borrower for
borrowed money under this Agreement), (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of Property or
services, except as provided below, (iv) all obligations of such Person as
lessee under Capitalized Leases, (v) all Indebtedness of others secured by a
Lien on any Property of such Person, whether or not such Indebtedness is assumed
by such Person, (vi) all Indebtedness of others directly or indirectly
guaranteed or otherwise assumed by such Person, including any obligations of
others 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 Indebtedness 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, or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such obligation,
but excluding guarantees of Capitalized Leases of other Persons in an aggregate
amount not in excess of $50 million and (vii) all obligations of such Person as
issuer, customer or account party under letters of credit or bankers'
acceptances that are either drawn or that back financial obligations that would
otherwise be Indebtedness; provided, however, that in each of the foregoing
clauses (i) through (vii), Indebtedness shall not include obligations (other
than under this Agreement) with respect to the production, distribution and
acquisition of motion pictures or other programming rights, talent or publishing
rights which obligations are specifically secured by such rights or by an
assignment of payments from the exploitation of such rights.
"INDEMNIFIED LIABILITY" has the meaning specified in Section 13.4(b).
"INDEMNIFIED PERSON" has the meaning specified in Section 13.4(b).
"INFORMATION MEMORANDUM" means the confidential information memorandum,
dated May, 1999, and the attachments thereto.
"INITIAL FUNDING DATE" means the date on which the conditions set forth
in Sections 6.1, 6.2 and 6.3 are satisfied or waived and the initial Loans are
made hereunder.
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"INTEREST PAYMENTS" means, for any period, consolidated cash interest
expense (including interest expense attributable to Capitalized Leases) of the
Borrower and its Subsidiaries with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries.
"INTEREST PERIOD" means, (a) in the case of Base Rate Loans, the period
commencing on the date such Loans are made or on the date of conversion of such
Loans from Eurodollar Rate Loans and ending on the last day of each Fiscal
Quarter, and (b) in the case of Eurodollar Rate Loans, (i) initially, the period
commencing on the date such Loans are made or on the date of conversion of such
Loans or portions thereof from Base Rate Loans and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Borrowing or
Notice of Conversion or Continuation given to the Administrative Agent pursuant
to Section 2.2, 3.2, 4.2 or 5.1, as the case may be, and (ii) thereafter, if
such Loans are renewed, in whole or in part, as Eurodollar Rate Loans pursuant
to Section 5.1, the period commencing on the last day of the immediately
preceding Interest Period therefor and ending one, two, three or six months
thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 5.1, subject,
however, to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension for any
Eurodollar Rate Loan would be to extend such Interest Period into another
calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period in respect of Eurodollar Rate Loans that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of a
calendar month;
(iii) no Interest Period may extend beyond the applicable
Termination Date;
(iv) the Borrower may not select any Interest Period in respect of
Loans in an aggregate amount less than $5,000,000; and
(v) there shall be outstanding at any one time no more than 10
Interest Periods in the aggregate.
"IRS" means the Internal Revenue Service, or any successor thereto.
10
"INVESTMENT GRADE RATING" means (i) a rating of BBB- or higher by S&P and
(ii) a rating of Baa3 or higher by Moody's on the Borrower's unsecured senior
debt.
"LEAD ARRANGER" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., acting in such capacity.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement.
"LOAN DOCUMENTS" means this Agreement and any notes that have been issued
hereunder.
"LOANS" means, collectively, the Tranche A Loans, Tranche B Loans and
Tranche C Loans.
"MAJORITY BANKS" means, at any time, unless otherwise indicated in this
Agreement, the vote of Banks having at least 51% of the aggregate amount of the
Tranche A Loan Commitments, the Tranche B Loan Commitments and the Tranche C
Loan Commitments, taken together and voting as a single group; PROVIDED,
HOWEVER, that, for purposes of this definition, if the Commitment of any Bank
shall have been terminated, or any Bank has defaulted in its obligation to fund
any Loan hereunder, the then aggregate unpaid principal amount of the
outstanding Loans of such Bank hereunder shall be deemed to be such Bank's
Commitment.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means a change that has resulted or would
result in a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, financial condition, operations or Properties of the Borrower and its
Subsidiaries taken as a whole.
"MATERIAL CREDIT AGREEMENT CHANGE" means a change that has materially
adversely affected or would materially adversely affect the legality, validity
or enforceability of any payment obligation of the Borrower.
"MATERIAL SUBSIDIARY" of any Person means any "significant subsidiary" of
such Person as defined in Regulation S-X, as amended from time to time,
promulgated under the Securities Act of 1933, as amended.
11
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate is making, is obligated to make, has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"NET CASH PROCEEDS" means:
(a) in reference to asset sales, proceeds in cash as and when
received by the Borrower or any of its Subsidiaries (including cash paid
in respect of any Indebtedness received) from the sale by the Borrower or
any of its Subsidiaries to any Person (other than the Borrower or any of
its wholly owned Subsidiaries or its franchisees) of any asset outside of
the ordinary course of business (including, without limitation, the sale
of any facility, division, plant or other real property or interest in
real property), net of the direct costs relating to such sale, including,
without limitation, (i) legal, accounting and investment banking fees and
sale commissions, (ii) taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements in each case arising directly from such sale), (iii)
amounts required to be applied to the repayment of Indebtedness relating
to the asset that is the subject of such sale and not otherwise provided
for by the terms of such sale, and (iv) reasonable reserves for purchase
price adjustments; PROVIDED, HOWEVER, that cash proceeds of any asset
sale shall not be deemed "Net Cash Proceeds" until a period of 9 months
has elapsed following the Borrower's receipt thereof without the
reinvestment of such proceeds (A) in a manner not prohibited by Section
10.10(a)(ii) or (B) in capital expenditures for new store construction in
excess of budgeted amounts for the relevant period (or, in each case,
binding contracts to make such investments have been entered into within
such period); and
(b) in reference to Capital Market Transactions by any Person, the
proceeds in cash received from such Capital Market Transactions, net of
all issuance costs.
For purposes of this definition, proceeds received by any Subsidiary of the
Borrower other than a wholly owned Subsidiary shall be deemed to be Net Cash
Proceeds received by the Borrower only in an amount proportionate to the equity
ownership interest of the Borrower in the Subsidiary receiving such proceeds.
"NOTICE OF BORROWING" means a notice of the Borrower substantially in the
form of Exhibit A hereto specifying therein (i) the date of the proposed
Borrowing, (ii) the aggregate amount of such proposed Borrowing, (iii) the
amount thereof, if any, requested to be Eurodollar Rate Loans, (iv) the initial
Interest Period or Interest Periods
12
for any such Eurodollar Rate Loans and (v) whether such Borrowing is to be a
Tranche A Loan Borrowing, a Tranche B Loan Borrowing or a Tranche C Loan
Borrowing.
"NOTICE OF CONVERSION OR CONTINUATION" has the meaning specified in
Section 5.1.
"OPERATING LEASE PAYMENTS" means, for any period, amounts recorded as
operating lease expenses on the financial statements of the Borrower prepared in
accordance with GAAP.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PENSION PLAN" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, and which the
Borrower, any of its Subsidiaries or any ERISA Affiliate now or in the future
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"PERMIT" means any permit, approval, authorization, license, variance or
permission required from a Governmental Authority under an applicable
Requirement of Law.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or Governmental Authority.
"PLAN" shall mean an employee benefit plan as defined in Section 3(3) of
ERISA which is maintained or contributed to by the Borrower or an ERISA
Affiliate.
"PRELIMINARY PROSPECTUS" means the preliminary prospectus contained in
the Form S-1 filed by the Borrower with the SEC on May 6, 1999, as such may have
been amended prior to the date hereof.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible, including, without
limitation, the right to use, transmit, display, license or otherwise
temporarily or permanently benefit from the possession of, control of or access
to any film, television program, trademark, trade name, copyright, service ▇▇▇▇
or any other type of intellectual or intangible property.
13
"QUALIFIED PLAN" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which the Borrower, any of its Subsidiaries or any ERISA
Affiliate now or in the future maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"RATABLE PORTION" means, with respect to any Bank, (i) with respect to
the Tranche A Loans, Tranche B Loans and Tranche C Loans, respectively, the
percentage obtained by dividing the amount of such Bank's Tranche A Loan
Commitment, Tranche B Loan Commitment or Tranche C Loan Commitment, as the case
may be, by the aggregate amount of all of such Tranche A Loan Commitments,
Tranche B Loan Commitments or Tranche C Loan Commitments of all the Banks,
respectively, and (ii) with respect to the aggregate amount of all Commitments,
the percentage obtained by dividing the aggregate Commitment of such Bank by the
aggregate amount of all Commitments of all the Banks PROVIDED, HOWEVER, that,
for purposes of this definition, if any Bank has defaulted in its obligation to
fund any Loan hereunder, the then aggregate unpaid principal amount of the
outstanding Loans of such Bank hereunder, shall be deemed to be such Bank's
Commitment.
"REFERENCE BANKS" means Citibank, N.A., The Bank of New York, Bank of
America NT&SA, Chase Securities Inc., ▇▇▇▇▇▇ Guaranty Trust Company of New York.
"REGISTER" has the meaning specified in Section 13.7(g) hereof.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System (or any successor thereto), as in effect from time to
time, or any successor thereto.
"REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System (or any successor thereto), as in effect from time to
time, or any successor thereto.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System (or any successor thereto), as in effect from time to
time, or any successor thereto.
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System (or any successor thereto), as in effect from time to
time, or any successor thereto.
14
"RELEASE" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, disbursal, leaching or
migration into the indoor or outdoor environment or into or out of any property
owned by such Person, including the movement of Contaminants through or in the
air, soil, surface water, ground water or property.
"REMEDIAL ACTION" means all actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"REPORTABLE EVENT" means any of the events described in Section
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"REQUIREMENTS OF LAW" means all applicable laws, including federal, state
and local laws, rules, regulations, orders, decrees or other determinations of
an arbitrator, court or other Governmental Authority, and including the
requirements of ERISA and Environmental Law.
"RESPONSIBLE FINANCIAL OFFICER" means any of the chief financial officer,
treasurer, assistant treasurer or controller.
"S&P" means Standard & Poor's Ratings Group.
"SCHEDULED TRANCHE A LOAN COMMITMENT REDUCTION DATE" has the meaning
specified in Section 2.3(a).
"SEC" means the Securities and Exchange Commission.
"SINGLE-EMPLOYER PLAN" shall mean a single-employer plan as defined in
section 4001(a)(15) of ERISA which is subject to the provisions of Title IV of
ERISA.
"SPC" has the meaning specified in Section 13.7(h).
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
Equity having ordinary voting power to elect a majority of the board of
directors of such entity (irrespective of whether, at the time, Equity of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency) is, or of which more than 50% of the
interests in which are, at the time, directly or indirectly, owned by such
Person and/or one or more Subsidiaries of such Person. In addition, with
15
respect to the Borrower, "Subsidiary" shall be deemed at all times to include
each company identified as a subsidiary in the consolidated financial statements
of the Borrower included in the Preliminary Prospectus whether or not at the
date of such financial statements such company's Equity, or a portion thereof,
is owned by an Affiliate of the Borrower.
"SYNDICATION AGENTS" means each of Bank of America NT&SA and Chase
Securities Inc., acting in such capacity, or any successor in such capacity.
"TAX AFFILIATE" means, as to any Person, (i) any Subsidiary of such
Person, or (ii) any Affiliate of such Person with which such Person files or is
required to file consolidated, combined or unitary tax returns.
"TAX MATTERS AGREEMENT" means the Tax Matters Agreement to be entered
into between Viacom Inc. and Borrower, as amended from time to time, which is
described in the Preliminary Prospectus.
"TERMINATION DATE" means (i) as to any Tranche A Loan Commitment, the
Tranche A Loan Commitment Termination Date, (ii) as to any Tranche B Loan
Commitment, the Tranche B Final Repayment Date, or (iii) as to any Tranche C
Loan Commitment, the Tranche C Loan Commitment Termination Date, as the case may
be.
"TITLE IV PLAN" means a Pension Plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA.
"TOTAL DEBT" of the Borrower and its Subsidiaries means, on any date, the
total outstanding Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis; PROVIDED that for purposes of calculating the Total Leverage
Ratio, Total Debt shall be reduced by 65% of cash, Cash Equivalents and
short-term investments held by the Borrower and its Subsidiaries on a
consolidated basis.
"TOTAL LEVERAGE RATIO" means the ratio of Total Debt to EBITDA.
"TRANCHE" means any of Tranche A, Tranche B, or Tranche C.
"TRANCHE A" has the meaning specified in the recitals to this Agreement.
"TRANCHE A LOAN" means a Loan made to the Borrower pursuant to Section
2.1.
"TRANCHE A LOAN BORROWING" means a borrowing by the Borrower consisting
of Tranche A Loans made on the same day by the Banks ratably according to their
respective Tranche A Loan Commitments.
16
"TRANCHE A LOAN COMMITMENT" has the meaning specified in Section 2.1(a).
"TRANCHE A LOAN COMMITMENT TERMINATION DATE" means the earlier of (i)
July 1, 2004 and (ii) the date of the earlier termination in whole of the
Tranche A Loan Commitments pursuant to the terms hereof, including pursuant to
Section 11.1.
"TRANCHE B" has the meaning specified in the recitals to this Agreement.
"TRANCHE B LOAN" means a Loan made to the Borrower pursuant to Section
3.1.
"TRANCHE B LOAN BORROWING" means a borrowing by the Borrower consisting
of Tranche B Loans made on the same day by the Banks ratably according to their
respective Tranche B Loan Commitments.
"TRANCHE B LOAN COMMITMENT" has the meaning specified in Section 3.1(a).
"TRANCHE C" has the meaning specified in the recitals to this Agreement.
"TRANCHE C LOAN" means a Loan made to the Borrower pursuant to Section
4.1.
"TRANCHE C LOAN BORROWING" means a borrowing by the Borrower consisting
of a Tranche C Loan made on the same day by Tranche C Loan Banks.
"TRANCHE C LOAN COMMITMENT" has the meaning specified in Section 4.1.(a)
"TRANCHE C LOAN COMMITMENT TERMINATION DATE" means the earlier of (i)
June 19, 2000 and (ii) the date of the earlier termination in whole of all of
the Tranche C Loan Commitments pursuant to the terms hereof, including pursuant
to Section 11.1.
"WITHDRAWAL LIABILITY" means, as to any Person, at any time, the
aggregate amount of the liabilities, if any, of such Person pursuant to Section
4201 of ERISA.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding" and the word "through" means "to and including".
17
1.3. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
The parties hereto agree, however, that in the event that any change in
accounting principles from those used in the preparation of the financial
statements referred to in Section 7.4(a) is hereafter occasioned by the
promulgation of rules, regulations, pronouncements, opinions and statements by
or required by the Financial Accounting Standards Board or Accounting Principles
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and such change materially affects
the calculation of any component of any financial covenant, standard or term
contained in this Agreement, the Administrative Agent and the Borrower shall
negotiate in good faith to amend such financial covenants, standards or terms
found in this Agreement (other than in respect of financial statements to be
delivered hereunder) so that, upon adoption of such changes, the criteria for
evaluation of the Borrower's and its Subsidiaries' financial condition shall be
the same after such change as if such change had not been made; PROVIDED,
HOWEVER, that (i) any such amendments shall not become effective for purposes of
this Agreement unless approved by the Majority Banks and (ii) if the Borrower
and the Majority Banks cannot agree on such an amendment, then the calculations
under such financial covenants, standards or terms shall continue to be computed
without giving effect to such change in accounting principles.
ARTICLE II
THE TRANCHE A LOANS
2.1. THE TRANCHE A LOANS. (a) THE TRANCHE A LOANS. On the terms and
subject to the conditions contained in this Agreement, each Bank severally
agrees to make Tranche A Loans to the Borrower from time to time on any Business
Day during the period from the Initial Funding Date until the Tranche A Loan
Commitment Termination Date in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite such Bank's name on Schedule I as its
"Tranche A Loan Commitment" (as adjusted from time to time by reason of
assignments in accordance with the provisions of Section 13.7 and as such amount
may be reduced pursuant to Section 2.3, such Bank's "Tranche A Loan
Commitment"); PROVIDED, HOWEVER, that, following the making of each such
proposed Tranche A Loan, the aggregate amount of all Tranche A Loans, together
with the aggregate face amount of Commercial Paper outstanding, shall not exceed
the aggregate amount of the Tranche A Loan Commitments of the Banks at such
time. Within the limits of each Bank's Tranche A Loan Commitment, amounts
borrowed under this Section 2.1(a) and prepaid pursuant to Section 2.5 may be
reborrowed under this Section 2.1(a).
18
(b) EVIDENCE OF DEBT. (i) Each Bank shall maintain in accordance with its
usual practice an account or accounts evidencing the Indebtedness to such Bank
resulting from each Tranche A Loan made by such Bank to the Borrower from time
to time, including the amounts of principal and interest payable and paid to
such Bank from time to time hereunder.
(ii) The Register maintained by the Administrative Agent pursuant to
Section 13.7(g) shall include a "Tranche A Loan contract control account" for
each Bank, in which account shall be recorded (A) the date and amount of each
Tranche A Loan Borrowing hereunder, (B) the amount and type of each Bank's
Tranche A Loan comprising such Borrowing and any Interest Period applicable
thereto, (C) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Bank with respect to each such
Tranche A Loan hereunder and (D) the amount of any sum received by the
Administrative Agent from the Borrower with respect to such Tranche A Loans
hereunder and each Bank's Ratable Portion thereof.
(iii) The entries made in the Register in respect of the Tranche A Loans
shall be conclusive and binding for all purposes, absent manifest error.
2.2. MAKING THE TRANCHE A LOANS. (a) Each Tranche A Loan Borrowing shall
be made upon receipt of a Notice of Borrowing, given by the Borrower to the
Administrative Agent not later than (i) 9:30 A.M. (New York City time) on the
Business Day of the proposed Tranche A Loan Borrowing, in the event such Tranche
A Loan Borrowing is to be comprised of Base Rate Loans, and (ii) 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Tranche A Loan Borrowing, in the event such Tranche A Loan Borrowing is to be
comprised of Eurodollar Rate Loans.
(b) The Administrative Agent shall give to each Bank prompt notice (but
in any event on the same day) of its receipt of a Notice of Borrowing in respect
of Tranche A Loans and, if Eurodollar Rate Loans are properly requested in such
Notice of Borrowing, upon its determination thereof, notice of the applicable
interest rate under Section 5.3(b). Each Bank shall, before 11:00 A.M. (or in
the case of a Tranche A Loan Borrowing being made on the same day, before 12:00
noon) (New York City time) on the date of the proposed Tranche A Loan Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 13.2, in immediately
available funds, such Bank's Ratable Portion of such proposed Tranche A Loan
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article VI, the
Administrative Agent will make such funds available to the Borrower at the
Administrative Agent's aforesaid address.
19
(c) Each Tranche A Loan Borrowing pursuant to this Section 2.2 shall be
in an aggregate amount of not less than $5,000,000 or an integral multiple of
$5,000,000 in excess thereof.
(d) Each Notice of Borrowing pursuant to this Section 2.2 shall be
irrevocable and binding on the Borrower. In the case of any proposed Tranche A
Loan Borrowing comprised of Eurodollar Rate Loans, the Borrower shall indemnify
each Bank against any loss, cost or expense incurred by such Bank as a result of
any failure to fulfill on or before the date specified in such Notice of
Borrowing for such proposed Borrowing the applicable conditions set forth in
Article VI, including, without limitation, any loss (excluding loss of the
margin payable in accordance with Section 5.2 on the amount of principal not
borrowed as a result of such failure), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Bank to
fund any Eurodollar Rate Loan to be made by such Bank as part of such proposed
Tranche A Loan Borrowing when such Eurodollar Rate Loan, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any proposed Tranche A Loan Borrowing pursuant to this
Section 2.2 that such Bank will not make available to the Administrative Agent
such Bank's Ratable Portion of such Tranche A Loan Borrowing, the Administrative
Agent may assume that such Bank has made such Ratable Portion available to the
Administrative Agent on the date of such Tranche A Loan Borrowing in accordance
with this Section 2.2 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such Ratable Portion
available to the Administrative Agent and the Administrative Agent has so made
available such amount, such Bank and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Tranche A Loan comprising such Tranche A Loan Borrowing and (ii) in
the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Tranche A Loan as part of such Borrowing for purposes of
this Agreement. If the Borrower shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Bank of any obligation
it may have to the Borrower hereunder.
(f) The failure of any Bank to make the Tranche A Loan to be made by it
as part of any Tranche A Loan Borrowing pursuant to this Section 2.2 shall not
relieve any other Bank of its obligation, if any, hereunder to make its Tranche
A Loan on the date
20
of such Borrowing, but no Bank shall be responsible for the failure of any
other Bank to make the Tranche A Loan to be made by such other Bank on the date
of any such Tranche A Loan Borrowing.
2.3. TERMINATION/REDUCTION OF THE TRANCHE A LOAN COMMITMENTS. (a)
OPTIONAL REDUCTIONS. The Borrower shall have the right, upon at least three
Business Days' prior notice to the Administrative Agent, to terminate in whole
or permanently reduce ratably in part the unused portions of the respective
Tranche A Loan Commitments of the Banks; PROVIDED, HOWEVER, that each partial
reduction shall be in the aggregate amount of not less than $5,000,000 or an
integral multiple of $5,000,000 in excess thereof; optional reductions may be
allocated against Scheduled Tranche A Loan Commitment Reduction Dates in any
manner requested by the Borrower.
(b) PAYMENT OF COMMITMENT FEE. Simultaneously with any termination or
reduction of the Tranche A Loan Commitments pursuant to this Section 2.3, the
Borrower shall pay to the Administrative Agent for the account of each Bank the
applicable Commitment Fee, if any, on the amount of the Tranche A Loan
Commitments so terminated or reduced and owed to such Bank through the date of
such termination or reduction.
2.4. REPAYMENT OF THE TRANCHE A LOAN. The Borrower shall repay the
aggregate outstanding principal amount of the Tranche A Loans (together with all
accrued but unpaid interest thereon) in full on the Tranche A Loan Commitment
Termination Date.
2.5. OPTIONAL PREPAYMENTS OF THE TRANCHE A LOAN. The Borrower may, upon
at least three Business Days' prior notice (or at least one Business Day's prior
notice in the case of Base Rate Loans), to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the aggregate outstanding principal
amount of the Tranche A Loans comprising a part of the same Tranche A Loan
Borrowing, in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; PROVIDED, HOWEVER, that
the Borrower shall indemnify the Banks pursuant to Section 13.4(c) in the event
that any prepayment of any Eurodollar Rate Loans shall be made on a day other
than the last day of an Interest Period for such Loans; and PROVIDED FURTHER,
HOWEVER, that each partial prepayment permitted under this Section 2.5 shall be
in an aggregate amount not less than $5,000,000 or integral multiples of
$1,000,000 in excess thereof.
2.6. LIMITATION ON USE OF TRANCHE A LOANS. Borrower may not directly or
indirectly use the proceeds of any Tranche A Loans to repay any portion of
outstanding Tranche C Loans except (A) after the Borrower shall have completed
an initial public offering of its common stock, (B) following the application of
all Net Cash Proceeds
21
from such initial public offering of its common stock and other Capital Market
Transactions occurring prior to or simultaneously with such initial public
offering as set forth in Section 5.11(b)(i) and (c)(i), respectively, and (C) in
an amount not to exceed $1.2 billion less the aggregate outstanding principal
amount of Tranche A Loans and Tranche B Loans prior to the closing of an initial
public offering of the Borrower's common stock.
ARTICLE III
THE TRANCHE B LOANS
3.1. THE TRANCHE B LOANS. (a) THE TRANCHE B LOANS. On the terms and
subject to the conditions contained in this Agreement, each Bank severally
agrees to make a Tranche B Loan to the Borrower on the Initial Funding Date in
an amount not to exceed the amount set forth opposite such Bank's name on
Schedule I as its "Tranche B Loan Commitment" (as adjusted from time to time by
reason of assignments in accordance with the provisions of Section 13.7 as such
amount may be reduced pursuant to Section 3.3, such Bank's "Tranche B Loan
Commitment").
(b) EVIDENCE OF DEBT. (i) Each Bank shall maintain in accordance with its
usual practice an account or accounts evidencing the Indebtedness to such Bank
resulting from the Tranche B Loan made by such Bank to the Borrower, including
the amounts of principal and interest payable and paid to such Bank from time to
time hereunder.
(ii) The Register maintained by the Administrative Agent pursuant to
Section 13.7(g) shall include a "Tranche B Loan contract control account" for
each Bank, in which account shall be recorded (A) the date and amount of any
Tranche B Loan Borrowing hereunder, (B) the amount and type of each Bank's
Tranche B Loan comprising such Borrowing and any Interest Period applicable
thereto, (C) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Bank with respect to each such
Tranche B Loan hereunder and (D) the amount of any sum received by the
Administrative Agent from the Borrower with respect to such Tranche B Loans
hereunder and each Bank's Ratable Portion thereof.
(iii) The entries made in the Register in respect of Tranche B Loans
shall be conclusive and binding for all purposes, absent manifest error.
3.2. MAKING THE TRANCHE B LOANS. (a) The Tranche B Loan Borrowing shall
be made upon receipt of a Notice of Borrowing, given by the Borrower to the
Administrative Agent not later than (i) 9:30 A.M. (New York City time) on the
Initial Funding Date, in the event the Tranche B Loan Borrowing is to be
comprised of Base Rate Loans, and (ii) 11:00 A.M. (New York City time) on the
third Business Day prior to
22
the Initial Funding Date, in the event the Tranche B Loan Borrowing is to be
comprised of Eurodollar Rate Loans.
(b) The Administrative Agent shall give to each Bank prompt
notice (but in any event on the same day) of its receipt of a Notice of
Borrowing in respect of Tranche B Loans and, if Eurodollar Rate Loans are
properly requested in such Notice of Borrowing, upon its determination thereof,
notice of the applicable interest rate under Section 5.3(b). Each Bank shall,
before 11:00 A.M. (or in the case of a Tranche B Loan Borrowing being made on
the same day, before 12:00 noon) (New York City time) on the date of the
proposed Tranche B Loan Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at its address referred to
in Section 13.2, in immediately available funds, such Bank's Ratable Portion of
such proposed Tranche B Loan Borrowing. After the Administrative Agent's receipt
of such funds and upon fulfillment of the applicable conditions set forth in
Article VI, the Administrative Agent will make such funds available to the
Borrower at the Administrative Agent's above-referenced address.
(c) The Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of a proposed Tranche B Loan Borrowing comprised of
Eurodollar Rate Loans, the Borrower shall indemnify each Bank against any loss,
cost or expense incurred by such Bank as a result of any failure to fulfill on
or before the date specified in the Notice of Borrowing the applicable
conditions set forth in Article VI, including, without limitation, any loss
(excluding loss of the margin payable in accordance with Section 5.2 on the
amount of principal not borrowed as a result of such failure), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Eurodollar Rate Loan to be made by such Bank
as part of the proposed Tranche B Loan Borrowing when such Eurodollar Rate Loan,
as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of the proposed Tranche B Loan Borrowing that such
Bank will not make available to the Administrative Agent such Bank's Ratable
Portion of the Tranche B Loan Borrowing, the Administrative Agent may assume
that such Bank has made such Ratable Portion available to the Administrative
Agent on the date of the Tranche B Loan Borrowing in accordance with this
Section 3.2 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Bank shall not have so made such Ratable Portion available
to the Administrative Agent and the Administrative Agent has so made available
such amount, such Bank and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable at the time to
the Tranche B Loans
23
comprising the Tranche B Loan Borrowing and (ii) in the case of such Bank, the
Federal Funds Rate. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Tranche
B Loan as part of such Borrowing for purposes of this Agreement. If the Borrower
shall repay to the Administrative Agent such corresponding amount, such payment
shall not relieve such Bank of any obligation it may have to the Borrower
hereunder.
(e) The failure of any Bank to make its Tranche B Loan shall
not relieve any other Bank of its obligation, if any, hereunder to make its
Tranche B Loan on the date of such Borrowing, but no Bank shall be responsible
for the failure of any other Bank to make the Tranche B Loan to be made by such
other Bank.
3.3. REPAYMENT OF THE TRANCHE B LOANS. The principal amount of
the Tranche B Loan of each Bank shall be payable in quarterly installments on
January 1, April 1, July 1 and October 1 of each year, commencing April 1, 2002,
and ending on July 1, 2004 (the "Tranche B Final Repayment Date"), in an amount
equal to such Bank's Ratable Portion of the quarterly amounts set forth in
column (y) below opposite the period specified in column (x) during which such
date occurs:
(x) (y)
Required Quarterly Amounts
Quarter of Tranche B Loan Reductions
------- ----------------------------
April 1, 2002 50,000,000
July 1, 2002 50,000,000
October 1, 2002 50,000,000
January 1, 2003 50,000,000
April 1, 2003 75,000,000
July 1, 2003 75,000,000
October 1, 2003 75,000,000
January 1, 2004 75,000,000
April 1, 2004 50,000,000
July 1, 2004 50,000,000
The amounts under (y) shall be adjusted in the amounts and in the manner
required under Section 3.4.
3.4. OPTIONAL PREPAYMENTS OF THE TRANCHE B LOANS. The Borrower
may, upon at least three Business Days' prior notice (or at least one Business
Day's prior notice in the case of Base Rate Loans) to the Administrative Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding principal
amount of the Tranche B Loans, in whole or in part, together with accrued
interest to the date of such prepayment; PROVIDED, HOWEVER, that the Borrower
shall indemnify the Banks pursuant to Section 13.4(c) in the event that
24
any prepayment of any Eurodollar Rate Loans shall be made on a day other than
the last day of an Interest Period for such Loans. Amounts borrowed under
Section 3.1(a) and prepaid pursuant to this Section 3.4 may not be reborrowed.
Upon any prepayment of the Tranche B Loans, the Tranche B Loan Commitment shall
be reduced by the amount of any such prepayment.
ARTICLE IV
THE TRANCHE C LOANS
4.1. THE TRANCHE C LOANS. (a) THE TRANCHE C LOANS. On the
terms and subject to the conditions contained in this Agreement, each Bank
severally agrees to make Tranche C Loans to the Borrower from time to time on
any Business Day during the period from the Initial Funding Date until the
Tranche C Loan Commitment Termination Date in an aggregate amount not to exceed
at any time outstanding the amount set forth opposite such Bank's name on
Schedule I as its "Tranche C Loan Commitment" (as adjusted from time to time by
reason of assignments in accordance with the provisions of Section 13.7 and as
such amount may be reduced pursuant to Section 4.3 the "Tranche C Loan
Commitment"). Within the limits of the Tranche C Loan Commitment, amounts
borrowed under this Section 4.1(a) and prepaid pursuant to Section 4.5 may be
reborrowed under this Section 4.1(a).
(b) EVIDENCE OF DEBT. (i) Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
Indebtedness resulting from each Tranche C Loan made by such Bank to the
Borrower from time to time, including the amounts of principal and interest
payable and paid to such Bank from time to time hereunder.
(ii) The Register maintained by the Administrative Agent
pursuant to Section 13.7(g) shall include a "Tranche C Loan contract control
account", in which account shall be recorded (A) the date and amount of each
Tranche C Loan Borrowing hereunder, (B) the amount and type of each Bank's
Tranche C Loan comprising such Borrowing and any Interest Period applicable
thereto, (C) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Bank with respect to each such
Tranche C Loan hereunder and (D) the amount of any sum received by the
Administrative Agent from the Borrower with respect to such Tranche C Loans
hereunder and each Bank's Ratable Portion thereof.
(iii) The entries made in the Register in respect of the
Tranche C Loans shall be conclusive and binding for all purposes, absent
manifest error.
25
4.2. MAKING THE TRANCHE C LOANS. (a) Each Tranche C Loan
Borrowing shall be made upon receipt of a Notice of Borrowing, given by the
Borrower to the Administrative Agent not later than (i) 9:30 A.M. (New York City
time) on the Business Day of the proposed Tranche C Loan Borrowing, in the event
such Tranche C Loan Borrowing is to be comprised of Base Rate Loans, and (ii)
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Tranche C Loan Borrowing, in the event such Tranche C Loan
Borrowing is to be comprised of Eurodollar Rate Loans.
(b) The Administrative Agent shall give each Bank prompt
notice (but in any event on the same day) of its receipt of a Notice of
Borrowing in respect of Tranche C Loans and, if Eurodollar Rate Loans are
properly requested in such Notice of Borrowing, upon its determination thereof,
notice of the applicable interest rate under Section 5.3(b). Each Bank shall,
before 11:00 A.M. (or in the case of a Tranche C Loan Borrowing being made on
the same day, before 12:00 noon) (New York City time) on the date of the
proposed Tranche C Loan Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at its address referred to
in Section 13.2, in immediately available funds, the amount of the Tranche C
Loan Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article VI, the
Administrative Agent will make such funds available to the Borrower at the
Administrative Agent's aforesaid address.
(c) Each Tranche C Loan Borrowing pursuant to this Section 4.2
shall be in an aggregate amount of not less than $5,000,000 or an integral
multiple of $5,000,000 in excess thereof.
(d) Each Notice of Borrowing pursuant to this Section 4.2
shall be irrevocable and binding on the Borrower. In the case of any proposed
Tranche C Loan Borrowing comprised of Eurodollar Rate Loans, the Borrower shall
indemnify each Bank against any loss, cost or expense incurred by it as a result
of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such proposed Borrowing the applicable conditions set forth in
Article VI, including, without limitation, any loss (excluding loss of the
margin payable in accordance with Section 5.2 on the amount of principal not
borrowed as a result of such failure), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Bank to
fund any Eurodollar Rate Loan to be made by it as part of such proposed Tranche
C Loan Borrowing when such Eurodollar Rate Loan, as a result of such failure, is
not made on such date.
(e) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any proposed Tranche C Loan Borrowing pursuant
to this Section 4.2 that it will not make available to the Administrative Agent
funds for such Tranche C Loan Borrowing, the Administrative Agent may assume
that such Bank has
26
made such funds available to the Administrative Agent on the date of such
Tranche C Loan Borrowing in accordance with this Section 4.2 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Bank shall not have so made such funds available to the Administrative Agent and
the Administrative Agent has so made available such amount, such Bank and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Tranche C Loan
comprising such Tranche C Loan Borrowing and (ii) in the case of such Bank, the
Federal Funds Rate. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Tranche
C Loan as part of such Borrowing for purposes of this Agreement. If the Borrower
shall repay to the Administrative Agent such corresponding amount, such payment
shall not relieve such Bank of any obligation it may have to the Borrower
hereunder.
(f) The failure of any Bank to make its Tranche C Loan shall
not relieve any other Bank of its obligation, if any, hereunder to make its
Tranche C Loan on the date of such Borrowing, but no Bank shall be responsible
for the failure of any other Bank to make the Tranche C Loan to be made by such
other Bank.
4.3. TERMINATION/REDUCTION OF THE TRANCHE C LOAN COMMITMENTS.
(a) OPTIONAL REDUCTIONS. The Borrower shall have the right, upon at least three
Business Days' prior notice to the Administrative Agent, to terminate in whole
or permanently reduce ratably in part the unused portions of the Tranche C Loan
Commitment; PROVIDED, HOWEVER, that each partial reduction shall be in the
aggregate amount of not less than $5,000,000 or an integral multiple of
$5,000,000 in excess thereof.
(b) PAYMENT OF COMMITMENT FEE. Simultaneously with any
termination or reduction of the Tranche C Loan Commitment pursuant to this
Section 4.3, the Borrower shall pay to the Administrative Agent for the account
of each Bank the applicable Commitment Fee, if any, on the amount of the Tranche
C Loan Commitment so terminated or reduced and owed to such Bank through the
date of such termination or reduction.
4.4. REPAYMENT OF THE TRANCHE C LOAN. The Borrower shall repay
the outstanding principal amount of the Tranche C Loan (together with all
accrued but unpaid interest thereon) in full on the Tranche C Loan Commitment
Termination Date.
4.5. OPTIONAL PREPAYMENTS OF THE TRANCHE C LOAN. The Borrower
may, upon at least three Business Days' prior notice (or at least one Business
Day's prior notice in the case of Base Rate Loans), to the Administrative Agent
stating the proposed date
27
and aggregate principal amount of the prepayment, and if such notice is given
the Borrower shall, prepay the outstanding principal amount of the Tranche C
Loan comprising a part of the same Tranche C Loan Borrowing, in whole or ratably
in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; PROVIDED, HOWEVER, that the Borrower shall indemnify
the Banks pursuant to Section 13.4(c) in the event that any prepayment of any
Eurodollar Rate Loans shall be made on a day other than the last day of an
Interest Period for such Loans; and PROVIDED FURTHER, HOWEVER, that each partial
prepayment permitted under this Section 4.5 shall be in an aggregate amount not
less than $5,000,000 or integral multiples of $1,000,000 in excess thereof.
ARTICLE V
CONVERSION, INTEREST, PAYMENTS, FEES, ETC.
5.1. CONVERSION/CONTINUATION OPTION. The Borrower may elect (i) at any
time to convert Base Rate Loans or any portion thereof to Eurodollar Rate Loans
or (ii) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof as Eurodollar Rate
Loans for an additional Interest Period; PROVIDED, HOWEVER, that the aggregate
of the Eurodollar Rate Loans of the Borrower so converted or so continued for
each Interest Period must be in the amount of $5,000,000 or an integral multiple
of $5,000,000 in excess thereof. Each such election shall be in substantially
the form of Exhibit B hereto (a "Notice of Conversion or Continuation") and
shall be made by giving the Administrative Agent at least one Business Day's, in
the case of a conversion to a Base Rate Loan, and three Business Days', in the
case of a conversion to or a continuation of a Eurodollar Rate Loan, prior
written notice thereof specifying (A) the amount and type of conversion or
continuation, (B) in the case of a conversion to or a continuation of Eurodollar
Rate Loans, the Interest Period therefor, and (C) in the case of a conversion
the date of conversion (which date shall be a Business Day and, if a conversion
from a Eurodollar Rate Loan, shall also be the last day of the Interest Period
therefor). The Administrative Agent shall promptly (but in any event on the same
day) notify each Bank of its receipt of a Notice of Conversion or Continuation
and of the contents thereof. Notwithstanding the foregoing, no conversion in
whole or in part of Base Rate Loans to Eurodollar Rate Loans, and no
continuation in whole or in part of Eurodollar Rate Loans upon the expiration of
any Interest Period therefor, shall be permitted at any time at which an Event
of Default shall have occurred and be continuing. If, within the time period
required under the terms of this Section 5.1, the Administrative Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing an
election to continue all or any portion of the Eurodollar Rate Loans for an
additional Interest Period or to convert all or any portion of such Loans, then,
upon the expiration of the Interest Period therefor, such Loans or the portions
thereof for which an
28
election to continue or convert has not been made will be automatically
converted to Base Rate Loans. Each Notice of Conversion or Continuation shall be
irrevocable.
5.2. INTEREST. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(a) BASE RATE LOANS. For Base Rate Loans, at a rate per annum
equal at all times to the Base Rate in effect from time to time,
payable quarterly in arrears on the last day of each September,
December, March and June, and on the date any Base Rate Loan is
converted or paid in full.
(b) EURODOLLAR RATE LOANS. For Eurodollar Rate Loans, at a
rate per annum equal at all times during the applicable Interest Period
for each Eurodollar Rate Loan to the sum of the Eurodollar Rate for
such Interest Period plus the Applicable Eurodollar Rate Margin,
payable in arrears (i) on the last day of such Interest Period and (ii)
if such Interest Period has a duration of more than three months, on
each day during such Interest Period that occurs every three months
from the first day of such Interest Period.
(c) DEFAULT RATE OF INTEREST. If any amount of principal of
any Loan is not paid when due, whether at stated maturity, by
acceleration or otherwise, the interest rate applicable to any such
amount shall be increased by 2.00% per annum, payable on demand, and if
any interest, fee or other amount payable hereunder is not paid when
due, such amount shall bear interest at a rate per annum equal at all
times to the Base Rate in effect from time to time plus 2.00% per annum
payable on demand.
5.3. INTEREST RATE DETERMINATION AND PROTECTION. (a) In the
event that the Eurodollar Rate is not available from the Telerate Page, the
Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be
determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the Reference Banks
two Business Days before such Interest Period. Each Reference Bank agrees to
furnish to the Administrative Agent timely information for the purpose of
determining each Eurodollar Rate. If any of the Reference Banks shall not
furnish such timely information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent shall determine
such interest rate on the basis of timely information furnished by the other
Reference Bank or Reference Banks.
29
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Banks of the applicable interest rate determined by the
Administrative Agent for purposes of Section 5.2(a) or (b), and the applicable
rate, if any, furnished by each Reference Bank for the purpose of determining
the applicable interest rate under Section 5.2(b).
(c) If, with respect to Eurodollar Rate Loans, the Majority
Banks determine in good faith and notify the Administrative Agent that the
Eurodollar Rate for any Interest Period will not adequately reflect the cost to
such Banks of making such Loans or funding or maintaining their respective
Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Banks, whereupon
(i) each Eurodollar Rate Loan will automatically, on the last
day of the then existing Interest Period therefor, convert into a Base
Rate Loan unless the Majority Banks notify the Administrative Agent
that the circumstances causing such conversion no longer exist and the
Borrower delivers a timely Notice of Conversion or Continuation with
respect to such Loans; and
(ii) the obligations of the Banks to make Eurodollar Rate
Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Administrative Agent shall notify the Borrower and
the Banks that the circumstances causing such suspension no longer
exist.
5.4. FEES. (a) The Borrower will pay on the last day of each
Fiscal Quarter to each of the Banks in arrears a fee (the "Commitment Fee")
accruing from the Initial Funding Date, in the case of each Bank listed on the
signature pages hereof, and from any later effective date of the assignment
pursuant to which it became a Bank, in the case of each other Bank, until the
applicable Termination Date, on such Bank's aggregate average daily unused
Commitment as in effect from time to time at the rate set forth below opposite
the Total Leverage Ratio applicable to the Borrower on such date:
Total Leverage Ratio Commitment Fee
-------------------- --------------
greater than 4.50x 0.50%
equal to or greater than 3.75x but less than or equal to 4.50x 0.40%
equal to or greater than 3.00x but less than 3.75x 0.35%
less than 3.00x 0.25%
; PROVIDED, HOWEVER, that until the first anniversary of the Initial Funding
Date, the Commitment Fee shall be the greater of (x) the percentage specified
above and (y) 0.40%.
30
(b) The Borrower has agreed to pay to the Banks and Arrangers
certain other fees which are earned on the date of the signing of this Agreement
and payable on the Initial Funding Date as separately agreed.
5.5. INCREASED COSTS. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in, or in the interpretation of, any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost (other than with respect to income, franchise or
withholding taxes or other taxes of a similar nature) to any Bank of agreeing to
make or making, funding or maintaining any Eurodollar Rate Loans, then (A) such
Bank shall, as soon as such Bank becomes aware of such increased cost, but in
any event not later than 60 days after such increased cost was incurred, deliver
to the Borrower and the Administrative Agent a certificate stating (1) the
actual amount of such increased cost incurred by such Bank and (2) that it is
such Bank's customary practice, from and after the date of this Agreement, to
charge its borrowers for increased costs incurred by it; (B) the Borrower shall,
within 30 days after its receipt of such certificate, at its sole option, either
(1) pay to the Administrative Agent for the account of such Bank amounts
sufficient to compensate such Bank for the increased cost incurred by it as set
forth in the certificate referred to above or (2) replace such Bank in
accordance with the provisions of Section 5.10, PROVIDED that if the Borrower
does not exercise the option specified in clause (2) above within 30 days after
receipt of the certificate referred to above, then (x) such Bank shall deliver
to the Borrower and the Administrative Agent a second certificate stating the
increased cost incurred by such Bank and (y) the Borrower shall promptly upon
receipt of such second certificate pay to the Administrative Agent for the
account of such Bank amounts sufficient to compensate such Bank for such
increased cost; and (C) such Bank shall use its reasonable best efforts to
designate another of its then existing offices as its Applicable Lending Office
if the making of such designation would, without any detrimental effect to such
Bank, avoid the need for, or reduce the amount of, future increased costs which
are probable of being incurred by such Bank. The amount of increased costs
payable by the Borrower to any Bank as stated in any such certificate delivered
to the Borrower and the Administrative Agent pursuant to the provisions of this
Section 5.5(a) shall be conclusive and binding for all purposes, absent manifest
error. In determining any such amount, such Bank may use reasonable averaging
and attribution methods. If the Borrower so notifies the Administrative Agent
within five Business Days after receipt of any certificate delivered to the
Borrower pursuant to the provisions of this Section 5.5(a), the Borrower may
either (x) prepay in full all Eurodollar Rate Loans of such Bank then
outstanding in accordance with Section 5.8 and, additionally, reimburse such
Bank for such increased cost in accordance with this Section 5.5(a) or (y)
convert all Eurodollar Rate Loans of all Banks then outstanding into Base Rate
Loans in accordance with Section 5.1 and, additionally, reimburse such Bank for
such increased cost in accordance with this Section 5.5(a).
31
(b) If any Bank shall be required under Regulation D to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, then (i) such Bank shall, within 60 days
after the end of any Interest Period with respect to any Eurodollar Rate Loan
during which such Bank was so required to maintain such reserves, deliver to the
Borrower and the Administrative Agent a certificate stating (A) that such Bank
was required to maintain reserves and as a result such Bank incurred additional
costs in connection with making Eurodollar Rate Loans, (B) in reasonable detail,
such Bank's computations of the amount of additional interest payable by the
Borrower pursuant to the provisions of this Section 5.5(b) and (C) that it is
such Bank's customary practice, from and after the date of this Agreement, to
charge its borrowers for reserves so maintained by it, and (ii) the Borrower
shall, promptly upon receipt of any such certificate, pay to the Administrative
Agent, for the account of such Bank, additional interest on the unpaid principal
amount of each Eurodollar Rate Loan of such Bank outstanding during the Interest
Period with respect to which the above-referenced certificate was delivered to
the Borrower, at a rate per annum equal to the difference obtained by
subtracting (x) the Eurodollar Rate for such Interest Period from (y) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such Interest Period.
The amount of interest payable by the Borrower to any Bank as stated in any
certificate delivered to the Borrower and the Administrative Agent pursuant to
the provisions of this Section 5.5(b) shall be conclusive and binding for all
purposes, absent manifest error.
(c) The payments required under Sections 5.5(a) and (b) are in
addition to any other payments and indemnities required under this Agreement.
5.6. ILLEGALITY. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation, in each case after the date hereof, shall make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Bank or its Eurodollar Lending Office to make Eurodollar
Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on
notice thereof and demand therefor by such Bank to the Borrower through the
Administrative Agent, (i) the obligation of such Bank to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until such Bank through the Administrative Agent shall notify
the Borrower that the circumstances causing such suspension no longer exist and
(ii) the Borrower shall forthwith prepay in full all Eurodollar Rate Loans of
such Bank then outstanding, together with interest accrued thereon, unless the
Borrower, within five Business Days of such notice and demand, converts all
Eurodollar Rate Loans of all Banks then outstanding into Base Rate Loans in
accordance with the notice periods of Section 5.1; PROVIDED, HOWEVER, that
before making any such demand, each Bank agrees to use its reasonable best
efforts to designate another of its then existing offices as its Applicable
Lending Office if the making of such a designation would, without any
32
detrimental effect to such Bank, cause the making of Eurodollar Rate Loans to
not be subject to this Section 5.6.
5.7. CAPITAL ADEQUACY. If any Bank shall, at any time,
reasonably determine that (a) the adoption (i) after the date of this Agreement,
of any capital adequacy guidelines or (ii) at any time, of any other applicable
law, government rule, regulation or order regarding capital adequacy of banks or
bank holding companies, (b) any change in (i) any of the foregoing or (ii) the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency or (c) compliance with any policy,
guideline, directive or request regarding capital adequacy (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) of any Governmental Authority, central bank or comparable agency,
would have the effect of reducing the rate of return on the capital of such Bank
to a level below that which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration the policies of such Bank with
respect to capital adequacy in effect immediately before such adoption, change
or compliance) and (x) such reduction is as a consequence of the Commitment of,
or the making, converting or continuing of any Loans by, such Bank hereunder and
(y) such reduction is reasonably deemed by such Bank to be material, then (1)
such Bank shall deliver to the Borrower and the Administrative Agent a
certificate stating the reduction in the rate of return such Bank will in the
future suffer as a result of its Commitment or the making, converting or
continuing any Loans by it to the Borrower hereunder and (2) the Borrower shall,
within 30 days after its receipt of such certificate, at its sole option, either
(A) pay to the Administrative Agent for the account of such Bank from time to
time as specified by such Bank such amount as shall be sufficient to compensate
such Bank for such reduced return, or (B) replace such Bank in accordance with
the provisions of Section 5.10; PROVIDED, HOWEVER, that if the Borrower does not
exercise the option specified in clause (B) above within 30 days after receipt
of the certificate referred to above, then (1) such Bank shall deliver to the
Borrower and the Administrative Agent a second certificate stating the reduction
in the rate of return of such Bank and (2) the Borrower shall promptly pay, as
specified by such Bank, to the Administrative Agent for the account of such Bank
amounts sufficient to compensate such Bank for the reduction in its rate of
return. The amount stated in any certificate delivered to the Borrower pursuant
to the provisions of this Section 5.7 shall be conclusive and binding for all
purposes, absent manifest error. In determining any such amount, such Bank may
use reasonable averaging and attribution methods. The payments required under
this Section 5.7 are in addition to any other payments and indemnities required
hereunder.
5.8. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment payable by it hereunder not later than 11:00 A.M. (New York City
time) on the day when due, in Dollars, to the Administrative Agent at its
address referred to in Section 13.2 in immediately available funds without
set-off or counterclaim. The Administrative Agent will promptly thereafter (but
in any event on the same day) cause to be distributed
33
like funds relating to the payment of principal or interest or fees ratably
(other than amounts payable pursuant to Section 5.5, 5.6 or 5.7) to the Banks
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Bank to such Bank for
the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Payment received by the
Administrative Agent after 11:00 A.M. (New York City time) shall be deemed to be
received on the next Business Day; PROVIDED, HOWEVER, that the Administrative
Agent shall use its reasonable best efforts to invest any amounts so received by
the Administrative Agent in overnight investments satisfactory to the Borrower,
and any earnings on any such investments shall be for the Borrower's account and
may be credited against any interest payable hereunder during such period.
(b) All computations of the Commitment Fee or of interest
based on the rate of interest specified in clause (a) of the definition of Base
Rate and of fees shall be made by the Administrative Agent on the basis of a
year of 365 or 366 days, as the case may be, and all computations of interest
based on the Eurodollar Rate or the Federal Funds Rate shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. All
computations of the Commitment Fee shall be based on the aggregate average daily
unused Commitment of each Bank. Each determination by the Administrative Agent
of an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
34
5.9. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans made by it (other than pursuant
to Section 5.5, 5.6 or 5.7) in excess of its Ratable Portion of payments on
account of the Loans obtained by all the Banks, such Bank shall forthwith
purchase from the other Banks such participations in the Loans made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank, such purchase
from each Bank shall be rescinded and each such Bank shall repay to the
purchasing Bank the purchase price to the extent of such recovery together with
an amount equal to such Bank's ratable share (according to the proportion of (i)
the amount of such Bank's required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 5.9 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.
5.10. REPLACEMENT BANKS. Upon the election of the Borrower to
replace any Bank pursuant to the provisions of Section 5.5(a)(B)(2) or
5.7(2)(B), the Borrower shall provide to the Administrative Agent a notice
setting forth the replacement Bank or Banks, and the Bank being so replaced
shall take all actions as may be necessary to transfer to such replacement Bank
or Banks all of the rights and obligations of such Bank hereunder and such
replacement Bank or Banks shall pay to the Bank being so replaced the amount
outstanding of all Loans made by such Bank hereunder (with appropriate
provisions for other amounts due to the Bank being replaced), all as though such
replacement Bank or Banks were an assignee or assignees of such Bank to which
such Bank were making an assignment in accordance with the provisions of Section
13.7.
5.11. MANDATORY PREPAYMENT. (a) The Borrower shall prepay
Tranche A Loans and Tranche C Loans to the extent necessary to ensure that (i)
the aggregate amount of all Tranche A Loans and Tranche C Loans outstanding will
not at any time exceed the Tranche A Loan Commitments and Tranche C Loan
Commitments, respectively, of the Banks and (ii) the aggregate amount of all
Tranche A Loans, together with the aggregate face amount of Commercial Paper
outstanding, will not at any time exceed the aggregate amount of the Tranche A
Loan Commitments of the Banks. Any prepayments required to assure that the
aggregate unused amount of the Tranche A Loan Commitments is not less than the
face amount of outstanding Commercial Paper shall be applied to the Tranche A
Loans.
35
(b) If the Borrower issues Equity in one or more transactions
(other than issuances of common stock in connection with the exercise of stock
options issued pursuant to employee stock option plans), it shall prepay the
Loans and permanently reduce Commitments as follows: (i) the Tranche C Loan
Commitment shall be permanently reduced by 100% of the amount of Net Cash
Proceeds from such Equity issuance until the Tranche C Loan Commitment has been
reduced to zero and (ii) after the Tranche C Loan Commitment has been reduced to
zero, at any time while the Borrower shall not have an Investment Grade Rating,
the Tranche A Loan Commitment shall be permanently reduced and the Tranche B
Loans shall be repaid, pro rata between such Tranches and pro rata among the
remaining scheduled reductions within each Tranche, in an aggregate amount equal
to 25% of the Net Cash Proceeds from such Equity issuance until the aggregate
amount of all such Tranche A Commitment reductions and Tranche B Loan
prepayments, hereunder and under (c)(ii) below, shall equal $400 million.
(c) If the Borrower incurs Indebtedness in a Capital Market
Transaction, it shall prepay the Loans and permanently reduce Commitments
hereunder as follows: (i) up to the first $300 million of Net Cash Proceeds from
such Capital Market Transaction shall be applied to reduce the Tranche C Loan
Commitment until the Tranche C Loan Commitment has been reduced to zero, and
(ii) following such reduction, at any time while the Borrower shall not have an
Investment Grade Rating, the Tranche A Loan Commitment shall be permanently
reduced and the Tranche B Loans shall be repaid, pro rata between such Tranches
and pro rata among the remaining scheduled reductions within each Tranche, in an
aggregate amount equal to 75% of the Net Cash Proceeds from such Capital Markets
Transaction until the aggregate amount of all such Tranche A Commitment
reductions and Tranche B Loan prepayments, hereunder and under (b)(ii) above,
shall equal $400 million.
(d) If there shall be a simultaneous issuance of Equity under
(b) above and an incurrence of Indebtedness under (c) above, for purposes of
this Section 5.11, the issuance of Equity shall be deemed to occur first and the
Loans and Commitments will be prepaid and reduced accordingly.
(e) The Borrower shall prepay the Loans and permanently reduce
Commitments hereunder with Net Cash Proceeds from asset sales other than to
franchisees as follows: (i) the first $100 million of such Net Cash Proceeds
from such sales may be retained by Borrower without making any related loan
repayment or Commitment reduction, and (ii) at any time that the Borrower shall
not have an Investment Grade Rating, the Tranche A Loan Commitment shall be
permanently reduced and the Tranche B Loans shall be prepaid, pro rata between
such Tranches and pro rata among the remaining scheduled reductions within each
Tranche, in an aggregate amount equal to 50% of the amount of such Net Cash
Proceeds from such sales in excess of $100 million until the aggregate amount of
reduction and prepayments under this clause (e) from Net Cash Proceeds of such
sales equals $500 million.
36
ARTICLE VI
CONDITIONS OF LENDING
6.1. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT. The effectiveness of this Agreement is subject to satisfaction of the
conditions precedent that the Administrative Agent shall have received the
following, in form and substance satisfactory to the Administrative Agent, and
in sufficient copies for each Bank that requests a copy:
(a) Certified copies of (i) appropriate resolutions of the
Board of Directors (or authorized committee thereof) of the Borrower
approving each Loan Document and (ii) all documents evidencing any
other necessary corporate action and required governmental and any
third party approvals, licenses and consents with respect to each Loan
Document.
(b) A copy of the certificate of incorporation of the Borrower
certified as of a recent date by the Secretary of State of the
jurisdiction of its incorporation, together with certificates of such
official attesting to the good standing of the Borrower, and a copy of
the By-Laws of the Borrower certified by its Secretary or one of its
Assistant Secretaries.
(c) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of its
officers who have been authorized to execute and deliver each Loan
Document and each other document and certificate to be executed or
delivered hereunder on behalf of the Borrower.
(d) Favorable opinions of Shearman & Sterling, counsel to the
Borrower and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel of the Borrower, in
substantially the form of Exhibit C-1 and C-2 hereto, respectively.
6.2. ADDITIONAL CONDITIONS PRECEDENT TO THE MAKING OF THE
INITIAL LOANS. The effectiveness of this Agreement and making of any Loans
simultaneously thereunder and thereafter is subject to the further conditions
precedent that on the date of such Loans the following statements shall be true:
(a) The Borrower shall have paid all costs, accrued and unpaid
fees and expenses referred to in Sections 5.4(b) and 13.4 (including,
without limitation, the legal fees and expenses referred to in Section
13.4(a)), in each case to the extent then due and payable.
37
(b) All Indebtedness of the Borrower under (i) the $1.4
billion note dated December 31, 1998, (ii) the $76,262,875 note dated
January 11, 1999, and (iii) the $399,435 note dated February 24, 1999,
each from the Borrower to Viacom International Inc. shall have been (or
shall simultaneously be) repaid.
6.3. CONDITIONS PRECEDENT TO THE MAKING OF EACH LOAN. The
obligation of each Bank to make any Loan, including the initial Loans (unless
otherwise indicated), shall be subject to the further conditions precedent that
the following statements shall be true on the date of such Loan, before and
after giving effect thereto and to the application of the proceeds therefrom
(and the acceptance by the Borrower of the proceeds of such Loan shall
constitute a representation and warranty by the Borrower that on the date of
such Loan such statements are true):
(a) The representations and warranties contained in Article
VII hereof (other than those stated to be made as of a particular date)
are true and correct in all material respects on and as of such date as
though made on and as of such date.
(b) No event has occurred and is continuing, or would result
from the Loans being made on such date, which constitutes a Default or
an Event of Default.
(c) Except on the date of the Initial Funding Date, after
giving effect to the application of the proceeds from the Loans being
requested, the Borrower owns, directly or indirectly, 100% of the
Equity of all companies identified as "subsidiaries" of the Borrower in
the combined financial statements of Borrower that were filed with the
Preliminary Prospectus.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement, the Borrower
represents and warrants to the Banks as follows:
7.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Borrower
and each Material Subsidiary (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; (ii) is duly qualified and in good standing as a foreign
corporation under the laws of each other jurisdiction in which the failure so to
qualify is reasonably probable to have a Material Adverse Effect; (iii) has all
requisite corporate power and authority to conduct its business as now being
38
conducted and as proposed to be conducted; (iv) is in compliance with its
articles or certificate of incorporation and by-laws; and (v) is in compliance
with all applicable Requirements of Law except such non-compliance as would not
have a Material Adverse Effect.
7.2. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
(a) The execution, delivery and performance by the Borrower of this Agreement or
any other Loan Document:
(i) are within its corporate powers;
(ii) have been duly authorized by all necessary corporate
action;
(iii) do not (A) contravene its certificate of incorporation
or by-laws, (B) violate any law or regulation (including, without
limitation, Regulations T, U or X of the Board of Governors of the
Federal Reserve System), or any order or decree of any court or
governmental instrumentality, except those as to which the failure to
comply would not have a Material Adverse Effect, (C) conflict with or
result in the breach of, or constitute a default under, any instrument,
document or agreement binding upon and material to the Borrower, or (D)
result in the creation or imposition of any Lien upon any of the
Property of the Borrower or any of its Subsidiaries; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental
Authority (except for filing copies of Loan Documents with the
Securities and Exchange Commission).
(b) This Agreement and each other Loan Document has been duly
executed and delivered by the Borrower, and is the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with its terms,
except where such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or equitable principles relating to enforceability.
7.3. TAXES. All federal, and all material state, local and
foreign tax returns, reports and statements required to be filed by the Borrower
or any of its Subsidiaries have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and statements are
required to be filed. All consolidated, combined or unitary returns which
include the Borrower or any of its Subsidiaries have been filed with the
appropriate governmental agencies in all jurisdictions in which such returns,
reports and statements are required to be filed except where such filing is
being contested or may be contested. All federal, and all material state, local
and foreign taxes, charges and other impositions of the Borrower, its
39
Subsidiaries or any consolidated, combined or unitary group which includes the
Borrower or any of its Subsidiaries which are due and payable have been timely
paid prior to the date on which any fine, penalty, interest, late charge or loss
may be added thereto for non-payment thereof except where contested in good
faith and by appropriate proceedings if adequate reserves therefor have been
established on the books of the Borrower or such Subsidiary in accordance with
GAAP. Proper and accurate amounts have been withheld by or on behalf of the
Borrower and each of its Subsidiaries from their respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
governmental agencies, in all material respects. Neither the Borrower nor any of
its Tax Affiliates has agreed or has been requested to make any adjustment under
Section 481(a) of the Code by reason of a change in accounting method or
otherwise relating to the Borrower or any of its Subsidiaries which will affect
a taxable year of the Borrower or a Tax Affiliate ending after December 31,
1998, which has not been reflected in the financial statements delivered
pursuant to Section 9.8 and which would have a Material Adverse Effect. The
Borrower has no obligation under any tax sharing agreement or other tax sharing
arrangement, other than the Tax Matters Agreement and tax sharing agreements or
other tax sharing arrangements providing for payments to Subsidiaries of the
Borrower which are Tax Affiliates, which do not have a Material Adverse Effect.
7.4. FINANCIAL INFORMATION. (a) The combined financial
statements of the Borrower presented on a carve out basis and reflecting the
combined historical results of operations, financial position and cash flows of
the Borrower including entities currently owned by the Borrower or to be
purchased from Viacom Inc. or its Subsidiaries in the case of certain of its
international operations (the "Combined Carve Out Financial Statements") for the
Fiscal Year ended December 31, 1998, for the Fiscal Quarter ended March 31, 1999
and any other quarterly or annual Combined Carve Out Financial Statements are
respectively complete and correct in all material respects as of such respective
dates, and have been prepared in accordance with GAAP and fairly present the
financial condition and results of operations of the Borrower and its
Subsidiaries on a combined basis as of such respective dates (subject, in the
case of such interim reports, to changes resulting from normal year-end
adjustments).
(b) Since December 31, 1998, there has been no Material
Adverse Change or Material Credit Agreement Change.
(c) None of the Borrower or any Subsidiary of the Borrower had
at December 31, 1998 any obligation, contingent liability, or liability for
taxes or long-term leases material to the Borrower and its Subsidiaries taken as
a whole which is not reflected in the balance sheets referred to in subsection
(a) above or in the notes thereto.
40
7.5. LITIGATION. There are no pending, or to the best
knowledge of the Borrower threatened, actions, investigations or proceedings
against or affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator in which, individually or in the aggregate,
there is a reasonable probability of an adverse decision that could have a
Material Adverse Effect or result in a Material Credit Agreement Change.
7.6. MARGIN REGULATIONS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock, and no proceeds of any Borrowing will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock in violation of Regulation U.
7.7. ERISA. (a) No liability under Sections 4062, 4063, 4064
or 4069 of ERISA has been or is expected by the Borrower to be incurred by the
Borrower or any ERISA Affiliate with respect to any Plan which is a
Single-Employer Plan in an amount that could reasonably be expected to have a
Material Adverse Effect.
(b) No Plan which is a Single-Employer Plan had an accumulated
funding deficiency, whether or not waived, as of the last day of the most recent
fiscal year of such Plan ended prior to the date hereof. Neither the Borrower
nor any ERISA Affiliate is (A) required to give security to any Plan which is a
Single-Employer Plan pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA, or (B) subject to a Lien in favor of such a Plan under Section 302(f)
of ERISA.
(c) Each Plan of the Borrower, each of its Subsidiaries and
each of its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code, except where the failure to comply
would not result in any Material Adverse Effect.
(d) Neither the Borrower nor any of its Subsidiaries has
incurred a tax liability under Section 4975 of the Code or a penalty under
Section 502(i) of ERISA in respect of any Plan which has not been paid in full,
except where the incurrence of such tax or penalty would not result in a
Material Adverse Effect.
(e) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate has incurred or reasonably expects to incur any Withdrawal Liability
under Section 4201 of ERISA as a result of a complete or partial withdrawal from
a Multiemployer Plan which will result in Withdrawal Liability to the Borrower,
any of its Subsidiaries or any ERISA Affiliate in an amount that could
reasonably be expected to have a Material Adverse Effect.
41
7.8. NO DEFAULTS. Neither the Borrower nor any of its
Subsidiaries is in breach of or default under or with respect to any instrument,
document or agreement binding upon the Borrower or such Subsidiary which breach
or default is reasonably probable to have a Material Adverse Effect or result in
the creation of a Lien on any Property of the Borrower or its Subsidiaries.
7.9. INVESTMENT COMPANY ACT. The Borrower is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. The making of the Loans by the
Banks, the application of the proceeds and repayment thereof by the Borrower and
the consummation of the transactions contemplated by this Agreement will not
violate any provision of such act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.
7.10. INSURANCE. All policies of insurance of any kind or
nature owned by the Borrower and its Subsidiaries are maintained with
financially sound and reputable insurers. The Borrower currently maintains
insurance with respect to its Properties and business and causes its
Subsidiaries to maintain insurance with respect to their Properties and business
against loss or damage of the kinds customarily insured against by corporations
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations including, without limitation, workers' compensation
insurance.
7.11. ENVIRONMENTAL PROTECTION. (a) There are no known
conditions or circumstances associated with the currently or previously owned or
leased properties or operations of the Borrower or its Subsidiaries or tenants
which may give rise to any Environmental Liabilities and Costs which would have
a Material Adverse Effect; and
(b) No Environmental Lien has attached to any Property of the
Borrower or any of its Subsidiaries which would have a Material Adverse Effect.
7.12. TITLE AND LIENS. Each of the Borrower and each of its
Subsidiaries has good and marketable title to its owned real properties and owns
or leases all its other material Properties, in each case, as shown on its most
recent balance sheet, and none of such Properties is subject to any Lien except
as permitted under this Agreement.
7.13. TRADEMARKS, COPYRIGHTS, ETC. The Borrower and each of
its Subsidiaries own or have the rights to such trademarks, service marks, trade
names, copyrights, licenses or rights in any thereof, as in the aggregate are
adequate in the reasonable judgment of the Borrower for the conduct of the
business of the Borrower and its Subsidiaries as now conducted.
42
7.14. FRANCHISES. The Borrower (i) is not in default under any
franchise agreement or area development agreement between the Borrower and any
of its franchisees, and (ii) is in compliance with all state and federal
franchise laws applicable to the Borrower, except in each case as would not have
a Material Adverse Effect.
7.15. YEAR 2000 ISSUE. The Borrower has reviewed its
operations and that of its Subsidiaries and has inquired of any third parties
with which the Borrower or any of its Subsidiaries has a material relationship
to evaluate the extent to which the business or operations of the Borrower or
any of its Subsidiaries will be affected by the Year 2000 Issue. As a result of
such review and inquiry, the Borrower has no reason to believe, and does not
believe, that the Year 2000 Issue will have a Material Adverse Effect or result
in any material loss or interference with the Borrower's consolidated business
or operations. The "Year 2000 Issue" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems of
any kind will not, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
7.16. DISCLOSURE. (a) All written information relating to the
Borrower and its Subsidiaries which has been delivered to the Banks by or on
behalf of the Borrower in connection with the Loan Documents prior to the
Initial Funding Date (other than the Information Memorandum, as to which
representations are made in paragraph (b) below) was complete and correct in all
material respects, taken as a whole. Any financial projections and other
information regarding anticipated future plans or developments contained therein
was based upon good faith estimates and assumptions believed by the Borrower to
be reasonable at the time made, it being recognized by the Banks that such
projections and other information regarding future events are not to be viewed
as facts and that actual results or developments during the period or periods
covered may differ from the delivered projections and other prospective
information.
(b) The Borrower has reviewed the Information Memorandum and
confirms that the estimates and projections with respect to the Borrower and its
business (and the assumptions used to reach such projections) contained therein
were, to the extent prepared or provided by or on behalf of the Borrower, (i)
prepared by the management of the Borrower in good faith, and (ii) are believed
by such management to be reasonable. Notwithstanding the foregoing, such
estimates and projections (and the assumptions used for each such projection)
may or may not prove to be correct and the Borrower makes no representation or
warranty as to such information.
43
The Borrower also confirms that, as of the date of the
Information Memorandum, to the best of the Borrower's knowledge, all other
information contained in the Information Memorandum (except as described below),
to the extent concerning the Borrower and its business and to the extent
contained in the Preliminary Prospectus is correct in all material respects and
does not contain any untrue statements of material fact or omit to state a
material fact necessary in order to make the statement contained therein not
materially misleading in light of the circumstances under which such statements
were made. It is understood that during the course of the registration process
with the SEC, the information contained in the Preliminary Prospectus may have
been, and may be amended or supplemented pursuant to amendments filed with the
SEC, and the Borrower has provided and will provide to the Banks any such
amendments for the purpose of updating the information contained in the
Information Memorandum. To the extent that any such amendments update or change
information contained in the Information Memorandum, the Information Memorandum
shall be deemed amended with respect to such information, and the representation
above will only apply to the Information Memorandum, as so amended.
ARTICLE VIII
FINANCIAL COVENANTS
As long as any of the Loans shall remain unpaid or any Bank
shall have any Commitment hereunder, unless otherwise agreed by the written
consent of the Majority Banks:
8.1. TOTAL LEVERAGE RATIO. The Total Leverage Ratio shall not
exceed, as of the last day of any Fiscal Quarter during the periods described
below, the amount specified with respect to such period:
Total Leverage Ratio
--------------------
June 30, 1999-December 31, 2000 4.75x
March 31-December 31, 2001 4.50x
March 31-December 31, 2002 4.25x
March 31-December 31, 2003 4.00x
March 31, 2004 and thereafter 3.75x
; PROVIDED, HOWEVER, that if the Borrower issues common stock in an initial
public offering, then the Total Leverage Ratio shall not exceed, as of the last
day of any Fiscal Quarter during the periods described below, the amount
specified with respect to such period:
44
Total Leverage Ratio
--------------------
June 30, 1999-December 31, 2000 4.00x
March 31-December 31, 2001 3.75x
March 31, 2002 and thereafter 3.50x
8.2. FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio shall
not be less than, as of the last day of any Fiscal Quarter during the periods
described below, the amount specified with respect to such period:
Fixed Charge
Coverage Ratio
--------------
June 30, 1999-March 31, 2000 1.15x
June 30, 2000-March 31, 2001 1.20x
June 30, 2001-March 31, 2002 1.25x
June 30, 2001-March 31, 2003 1.30x
June 30, 2003-March 31, 2004 1.35x
June 30, 2004 and thereafter 1.40x
ARTICLE IX
AFFIRMATIVE COVENANTS
As long as any of the Loans shall remain unpaid or any Bank shall have
any Commitment hereunder, unless otherwise agreed by the written consent of the
Majority Banks:
9.1. COMPLIANCE WITH LAWS, ETC. The Borrower shall comply, and cause each
of its Subsidiaries to comply, in all material respects with all Requirements of
Law and all franchises except such non-compliance as would not have a Material
Adverse Effect or result in a Material Credit Agreement Change.
9.2. PAYMENT OF TAXES, ETC. The Borrower and any consolidated, combined
or unitary group which includes the Borrower or any of its Subsidiaries shall
pay and discharge, and cause each Subsidiary of the Borrower to pay and
discharge, before the same shall become delinquent, all lawful claims, taxes,
assessments and governmental charges or levies except where contested in good
faith, by proper proceedings, and where adequate reserves therefor have been
established on the books of the Borrower or such Subsidiary in accordance with
GAAP.
45
9.3. MAINTENANCE OF INSURANCE. The Borrower shall maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates. The Borrower will furnish to the Administrative Agent
from time to time such information as may be requested as to such insurance.
9.4. PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower
shall preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, their respective corporate existences; PROVIDED, HOWEVER, that the
corporate existence of any Subsidiary may be terminated if, in the good faith
judgment of the board of directors or the chief financial officer of the
Borrower, such termination is in the best interest of the Borrower and such
termination would not have a Material Adverse Effect.
9.5. BOOKS AND ACCESS. The Borrower shall, and shall cause
each of its Subsidiaries to, keep proper books of record and accounts in
conformity with GAAP, and upon reasonable notice and at such reasonable times
during the usual business hours as often as may be reasonably requested, permit
representatives of the Administrative Agent, at its own initiative or at the
request of any Bank, to make inspections of its Properties, to examine its
books, accounts and records and make copies and memoranda thereof and to discuss
its affairs and finances with its officers or directors and independent public
accountants.
9.6. MAINTENANCE OF PROPERTIES, ETC. The Borrower shall
maintain and preserve, and cause each of its Subsidiaries to maintain and
preserve, all of its Properties which are used or useful in the conduct of its
business in good working order and condition and, from time to time make or
cause to be made all appropriate repairs, renewals and replacements, except
where the failure to do so would not have a Material Adverse Effect.
9.7. APPLICATION OF PROCEEDS. The Borrower shall use the
proceeds of the Loans (i) to refinance certain Indebtedness existing at the date
hereof of the Borrower and (ii) for other general corporate purposes.
9.8. FINANCIAL STATEMENTS. The Borrower shall furnish to the
Banks:
(a) as soon as available but not later than sixty (60) days
after the close of each of the first three (3) Fiscal Quarters of each Fiscal
Year of the Borrower during which the Borrower is not subject to the reporting
requirements of the Exchange Act, the Combined Carve Out Financial Statements as
at the end of such Fiscal Quarter and (in the case of the second and third
Fiscal Quarters) for the period from the beginning of the then
46
current Fiscal Year to the end of such Fiscal Quarter, setting forth in each
case in comparative form the combined figures for the corresponding periods of
the previous Fiscal Year, all in reasonable detail and certified by a
Responsible Financial Officer of the Borrower as fairly presenting, in
accordance with GAAP, the financial condition and results of operations of the
Borrower and its Subsidiaries on a combined basis, subject to changes resulting
from normal year-end audit adjustments;
(b)(i) as soon as is available but no later than one hundred
twenty (120) days after the close of each Fiscal Year of the Borrower during
which the Borrower is not subject to the reporting requirements of the Exchange
Act, Combined Carve Out Financial Statements as at the end of such year, setting
forth in each case in comparative form the combined figures for the previous
Fiscal Year, all in reasonable detail and certified in the case of the combined
financial statements by PricewaterhouseCoopers LLP or another firm of nationally
recognized independent public accountants, which report shall state without
qualification as to the scope of the audit or as to going concern that such
combined financial statements present fairly the financial position and the
results of operations as at the dates and for the periods indicated in
conformity with GAAP and that the audit by such accountants in connection with
such combined financial statements has been made in accordance with GAAS, and
(ii) as soon as available but not later than one hundred twenty (120) days after
the close of each Fiscal Year of the Borrower, a certificate from such
accounting firm in the course of the regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted by such accounting firm
in accordance with GAAS, such accounting firm obtained no knowledge that an
Event of Default or Default has occurred and is continuing or, if in the opinion
of such accounting firm, an Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof.
(c) as soon as available but not later than sixty (60) days
after the close of each of the first three (3) Fiscal Quarters of each Fiscal
Year of the Borrower during which the Borrower is subject to the reporting
requirements of the Exchange Act, ▇▇▇▇▇▇▇ dated balance sheets of the Borrower
and its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of operations, the consolidated statement of
shareholders' equity and the consolidated statement of cash flows of the
Borrower and its Subsidiaries for such Fiscal Quarter and (in the case of the
second and third Fiscal Quarters) for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter (along with business
segment information customarily prepared by the Borrower), setting forth in each
case in comparative form the consolidated figures for the corresponding periods
of the previous Fiscal Year, all in reasonable detail and certified by a
Responsible Financial Officer of the Borrower as fairly presenting, in
accordance with GAAP, the financial condition and results of operations of the
Borrower and its Subsidiaries, subject to changes resulting from normal year-end
audit adjustments;
47
(d) (i) as soon as available but no later than one hundred
twenty (120) days after the close of each Fiscal Year of the Borrower during
which the Borrower is subject to the reporting requirements of the Exchange Act,
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such year and the related consolidated statements of operations, the
consolidated statement of shareholders' equity and the consolidated statement of
cash flows of the Borrower and its Subsidiaries for such year (along with
business segment information customarily prepared by the Borrower), setting
forth in each case in comparative form the consolidated figures for the previous
Fiscal Year, all in reasonable detail and certified in the case of the
consolidated financial statements by PricewaterhouseCoopers LLP or another firm
of nationally recognized independent public accountants, which report shall
state without qualification as to the scope of the audit or as to going concern
that such consolidated financial statements present fairly the financial
position and the results of operations as at the dates and for the periods
indicated in conformity with GAAP and that the audit by such accountants in
connection with such consolidated financial statements has been made in
accordance with GAAS, and (ii) as soon as available but not later than one
hundred twenty (120) days after the close of each Fiscal Year of the Borrower, a
certificate from such accounting firm that in the course of the regular audit of
the business of the Borrower and its Subsidiaries, which audit was conducted by
such accounting firm in accordance with GAAS, such accounting firm obtained no
knowledge that an Event of Default or Default has occurred and is continuing or,
if in the opinion of such accounting firm, an Event of Default or Default has
occurred and is continuing, a statement as to the nature thereof;
(e) together with each delivery of financial statements of the
Borrower pursuant to clauses (a), (b), (c) and (d) above, a certificate issued
by a Responsible Financial Officer of the Borrower (i) demonstrating compliance
at the end of the accounting period described in such statements with the
financial covenants contained herein and (ii) containing in reasonable detail
the component figures contained in the respective total figures stated in such
certificate; and
(f) together with each delivery of financial statements of the
Borrower and its Subsidiaries pursuant to clauses (a), (b), (c) and (d) above, a
certificate signed by a Responsible Financial Officer of the Borrower stating
that (i) such officer is familiar with both this Agreement and the business and
financial condition of the Borrower, and (ii) no Event of Default or Default has
occurred and is continuing or if an Event of Default or Default has occurred and
is continuing a statement as to the nature thereof, and whether or not the same
shall have been cured.
9.9. REPORTING REQUIREMENTS. The Borrower shall furnish to
the Administrative Agent for distribution to the Banks:
48
(a) from time to time as the Administrative Agent may
reasonably request, copies of such statements, lists of Property, accounts,
budgets, forecasts, reports or information prepared by or for the Borrower or
within the Borrower's control;
(b) promptly and in any event within thirty (30) days after
the Borrower, any of its Subsidiaries or any ERISA Affiliate knows that any
ERISA Event has occurred (other than a Reportable Event for which notice to the
PBGC is waived), a written statement of a Responsible Financial Officer of the
Borrower describing such ERISA Event and the action, if any, which the Borrower,
any of its Subsidiaries or any ERISA Affiliate proposes to take with respect
thereto, and a copy of any notice filed with the PBGC or the IRS pertaining
thereto;
(c) promptly and in any event within thirty (30) days after
notice or knowledge thereof, notice that the Borrower or any of its Subsidiaries
becomes subject to the tax on prohibited transactions imposed by Section 4975 of
the Code, together with a copy of Form 5330;
(d) promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
against or affecting the Borrower or any of its Subsidiaries, in which there is
a reasonable probability of an adverse decision which would have a Material
Adverse Effect;
(e) promptly upon the Borrower or any of its Subsidiaries
learning of (i) any Event of Default or any Default, or (ii) any Material Credit
Agreement Change, telephonic notice specifying the nature of such Event of
Default, Default or Material Credit Agreement Change, including the anticipated
effect thereof, which notice shall be promptly confirmed in writing within five
days;
(f) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to its security holders generally, and
copies of all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange;
(g) promptly upon, and in any event within 30 days of, the
Borrower or any of its Subsidiaries learning of any of the following:
(i) notice that any Property of the Borrower or any of its
Subsidiaries is subject to any Environmental Liens individually or in
the aggregate which would have a Material Adverse Effect; or
49
(ii) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of Property, or any other action by the Borrower
or any of its Subsidiaries in which there is a reasonable probability
that the Borrower or any of its Subsidiaries would be subject to any
material Environmental Liabilities and Costs, PROVIDED that, in the
event of any such proposed acquisition or lease, the Borrower must
furnish to the Banks evidence in a form acceptable to the Banks that
the proposed acquisition will not have a Material Adverse Effect;
(h) prior to the effectiveness thereof, information relating
to any proposed change in the accounting treatment or reporting practices of the
Borrower and its Subsidiaries the nature or scope of which materially affects
the calculation of any component of any financial covenant, standard or term
contained in this Agreement; and
(i) from time to time, such other information and materials as
the Administrative Agent may reasonably request.
ARTICLE X
NEGATIVE COVENANTS
So long as any of the Loans shall remain unpaid or any Bank
shall have any Commitment hereunder, without the written consent of the Majority
Banks:
10.1. LIENS, ETC. The Borrower shall not, directly or
indirectly, create or suffer to exist, or permit any of its Subsidiaries to
create or suffer to exist, any Lien upon or with respect to any of its
Properties, whether now owned or hereafter acquired, or assign, or permit any of
its Subsidiaries to assign, any right to receive income, in each case to secure
or provide for the payment of any Indebtedness of any Person, except:
(i) purchase money Liens or purchase money security interests
upon or in any Property acquired or held by the Borrower or any
Subsidiary of the Borrower in the ordinary course of business to secure
the purchase price of such Property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of such Property;
(ii) Liens existing on Property at the time of its acquisition
(other than any such Lien created in contemplation of such
acquisition);
(iii) Liens on Property of Persons which become Subsidiaries
after the Initial Funding Date securing Indebtedness existing, with
respect to any such Person, on the date such Person becomes a
Subsidiary (other than any such Lien created in contemplation of such
Person becoming a Subsidiary);
50
(iv) Liens on Property of Persons which become Subsidiaries
after the Initial Funding Date securing Indebtedness incurred by such
Person after the date such Person becomes a Subsidiary; PROVIDED,
HOWEVER, that the aggregate principal amount of Indebtedness referred
to in this clause (iv) secured by Liens shall not exceed $10,000,000 at
any time outstanding; and
(v) any Lien securing the renewal, extension or refunding of
any Indebtedness secured by any Lien permitted by clause (i), (ii),
(iii) or (iv) above.
10.2. MERGERS. The Borrower shall not, nor shall it permit any
of its Subsidiaries representing a substantial portion of the assets of the
Borrower and its Subsidiaries taken as a whole to, merge or consolidate in any
transaction in which such entity is not the surviving Person other than in
mergers of any Subsidiary into the Borrower or any other wholly owned Subsidiary
of the Borrower.
10.3. SUBSTANTIAL ASSET SALE. The Borrower shall not, and
shall not permit any of its Subsidiaries to, sell, in one or one or more related
transactions, assets constituting all or a substantial portion of consolidated
assets of the Borrower and its Subsidiaries taken as a whole to any Person.
10.4. TRANSACTIONS WITH AFFILIATES. The Borrower shall not
engage in, and will not permit any of its Subsidiaries to engage in, any
transaction with an Affiliate of the Borrower or of such Subsidiary (other than
transactions in the ordinary course of business between a Subsidiary and its
parent or among Subsidiaries of the Borrower and other than transactions
pursuant to the Affiliate Agreements) except on terms no less favorable to the
Borrower or such Subsidiaries than as would be obtained in a comparable
arm's-length transaction.
10.5. MARGIN STOCK. The Borrower shall not permit more than
twenty-five percent (25%) of the value, within the meaning of Regulation U, as
determined by any reasonable method, of the assets of the Borrower and its
Subsidiaries, to be Margin Stock, nor will the Borrower use the proceeds of any
Loan to purchase or carry any Margin Stock in violation of Regulation U.
10.6. SUBSIDIARY INDEBTEDNESS. The Borrower shall not permit
any of its Subsidiaries to incur Indebtedness other than (a) under existing
facilities identified on Schedule 10.6 to this Agreement or any replacement
facilities thereto which in the aggregate do not exceed the amounts of the
commitments on such Schedule, (b) Indebtedness for borrowed money in an
aggregate amount at any time outstanding of not more than $75 million (less the
aggregate amount outstanding under Section 10.7(b)) and (c) Indebtedness for
Capitalized Leases incurred in the ordinary course of its business.
51
10.7. OTHER RESTRICTIONS ON INDEBTEDNESS. The Borrower shall
not incur Indebtedness maturing earlier than six months after the last then
applicable Commitment Termination Date other than (a) Commercial Paper and (b)
up to $75 million at any time outstanding (less the aggregate amount outstanding
under Section 10.6(b)) and on terms no more onerous than the terms hereof.
10.8. DIVIDENDS AND PURCHASE OF STOCK. The Borrower shall not
declare any dividends (other than dividends payable in common stock of the
Borrower) on any shares of any class of its common stock, or apply any of its
property or assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
redemption or other retirement of, or make any other distribution by reduction
of common stock or otherwise in respect of, any shares of any class of common
stock of the Borrower, or permit any Subsidiary so to do, or permit any
Subsidiary to purchase or acquire any shares of any class of common stock of the
Borrower, except for amounts applied to the payment of quarterly ordinary common
stock dividends that on an annualized basis do not exceed an aggregate of $90
million in the first four Fiscal Quarters following any initial public issuance
of its common stock, $115 million for the next following four Fiscal Quarters,
$130 million for the next following four Fiscal Quarters, $145 million for the
next following four Fiscal Quarters and $160 million for the next following four
Fiscal Quarters; PROVIDED, HOWEVER, that the Borrower shall not pay any such
dividends if there then exists, or the payment thereof should cause, a breach in
the financial covenants set forth in Article VIII.
10.9. LIMITATION ON TRANSFERS OF ASSETS TO SUBSIDIARY. The
Borrower shall not convey, assign, contribute or otherwise transfer any of its
property, business or assets, whether now owned or hereinafter acquired to any
Subsidiary (except for insignificant and de minimus transfers made in the
ordinary course of its business operations).
10.10. LOANS AND INVESTMENTS. (a) The Borrower shall not
purchase or acquire the obligations or stock of, or any other interest in, or
make loans or advances to, any Person (an "Investment"), or permit any
Subsidiary so to do, other than Investments in (i) Cash Equivalents and (ii) any
Investment that is reasonably related to its operation of or growth strategy for
its Core Business, provided however, that the Borrower may make, or permit a
Subsidiary to make, an Investment that is not reasonably related to its
operation of or growth strategy for its Core Business (a "Non-core Investment")
if, after giving pro forma effect to the making of such Non-core Investment, the
Core Business and businesses that are reasonably related thereto continue to
represent the significant preponderance of the Borrower's consolidated business
and operations, taken as a whole.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any interest rate cap agreements, interest rate swap
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts or other similar agreements or arrangements
for speculative purposes (but such
52
agreements may be entered into for purposes of hedging in the ordinary course of
business).
ARTICLE XI
EVENTS OF DEFAULT
11.1. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay (i) any principal when due
in accordance with the terms and provisions of this Agreement or any
other Loan Document, or (ii) any interest on any amounts due hereunder
or thereunder, or any fee or any other amount due hereunder or
thereunder within three Business Days after the same becomes due and
payable; or
(b) Any representation or warranty made by the Borrower in
this Agreement or any other Loan Document or by the Borrower (or any of
its officers) in connection with this Agreement or any other Loan
Document shall prove to have been incorrect in any material respect
when made; or
(c) The Borrower shall fail to perform or observe (i) the
provisions of Section 10.2, 10.3 or 10.8, or (ii) any other term,
covenant or agreement contained in this Agreement or any other Loan
Document, which failure in this clause (ii) shall remain unremedied for
fifteen days after the earlier of the date on which (A) telephonic
notice thereof shall have been given to the Administrative Agent by the
Borrower pursuant to Section 9.9(e), or (B) written notice thereof
shall have been given to the Borrower by the Administrative Agent or
any Bank; or
(d) The Borrower or any of its Subsidiaries shall fail to pay
any principal of, or premium or interest on, any Indebtedness in an
aggregate principal amount of $25,000,000 or more (excluding
Indebtedness hereunder) of the Borrower or such Subsidiary, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness or to terminate any commitment to lend;
or any such Indebtedness shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof and, with respect to
all of the foregoing, after the expiration of any applicable grace
period or the giving of any required notice or both; PROVIDED, HOWEVER,
that no extension of any grace
53
period applicable to any such Indebtedness shall be taken into
account for the purposes of this subsection (d); or
(e) The Borrower or any of its Material Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or any proceedings
shall be instituted by or against the Borrower or any of its Material
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or
for a material part of its Property employed in its business or any
writ, attachment, execution or similar process shall be issued or
levied against a material part of the Property employed in the business
of the Borrower and its Subsidiaries taken as a whole, and, in the case
of any such proceedings instituted against the Borrower or any of its
Material Subsidiaries (but not instituted by it), either such
proceedings shall remain undismissed or unstayed for a period of 60
days or any of the actions sought in such proceedings shall occur; or
the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in
this subsection (e); or
(f) Any order for the payment of money or judgment of any
court, not appealable or not subject to certiorari or appeal (a "Final
Judgment"), which, with other outstanding Final Judgments, exceeds an
aggregate of $25,000,000 shall be rendered against the Borrower or any
of its Material Subsidiaries and, within 60 days after entry thereof,
such Final Judgment shall not have been discharged; or
(g) (i) With respect to any Plan, a final determination is
made that a prohibited transaction within the meaning of Section 4975
of the Code or Section 406 of ERISA occurred which results in direct or
indirect liability of the Borrower or any of its Material Subsidiaries,
(ii) with respect to any Title IV Plan, the filing of a notice to
voluntarily terminate any such plan in a distress termination, (iii)
with respect to any Multiemployer Plan, the Borrower, any of its
Material Subsidiaries or any of its or their ERISA Affiliates shall
incur any Withdrawal Liability, or (iv) with respect to any Qualified
Plan, the Borrower, any of its Material Subsidiaries or any of its or
their ERISA Affiliates shall incur an accumulated funding deficiency or
request a funding waiver from the IRS; PROVIDED, HOWEVER, that the
events listed in clauses (i)-(iv) hereof shall constitute Events of
Default only if the liability, deficiency or waiver request of the
Borrower, any of its Material Subsidiaries or any of its or their ERISA
Affiliates, as finally determined, exceeds $25,000,000 in any case set
forth in clauses (i)-(iv) above, or exceeds $25,000,000 in the
aggregate for all such cases; and, PROVIDED
54
FURTHER, HOWEVER, that with respect to the events listed in clauses
(i), (iii) and (iv) hereof there shall be no Event of Default if the
liability of the Borrower, the relevant Material Subsidiary or the
relevant ERISA Affiliate is satisfied in full or in accordance with the
due dates therefor; or
(h) This Agreement or any other Loan Document shall cease to
be valid or enforceable for any reason in any material respect; or
(i) (i) any Person or group of Persons shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the SEC under the Exchange Act) of 50% or more of the outstanding
shares of common stock of the Borrower other than Viacom Inc. or
National Amusements, Inc.; or (ii) the Board of Directors of the
Borrower shall not consist of a majority of Continuing Directors; or
(iii) any Person or group of Persons (within the meaning of Section 13
or 14 of the Exchange Act) shall have entered into a merger or purchase
agreement with the Borrower pursuant to which such Person or Persons
shall have acquired a present power to exercise, directly or
indirectly, control over the management or policies of the Borrower;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Majority Banks, by notice to the Borrower,
declare the obligation of each Bank to make Loans to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Banks, by notice to the Borrower, declare all
amounts due under this Agreement and all interest thereon to be forthwith due
and payable, whereupon all amounts due under this Agreement and all such
interest and all such amounts shall become and be forthwith due and payable;
PROVIDED, HOWEVER, that if Borrower shall fail to make payment as provided in
Section 11.1(a) above with respect to the Tranche C Loan only, then for taking
action authorized hereby for such violation of Section 11.1(a) (and not with
respect to any other action that may be authorized hereby for a breach of any
other paragraph in Section 11.1 as a result of the Borrower's failure),
"Majority Banks" shall mean either of (i) the vote of Banks having at least 51%
of the aggregate amount of the Tranche C Loan Commitments, taken together and
voting as a single group or (ii) the vote of Banks having at least 51% of the
aggregate amount of the Tranche A Loan Commitments, Tranche B Loan Commitments
and Tranche C Loan commitments, taken together and voting as a single group; and
PROVIDED, FURTHER, HOWEVER, that upon an actual or deemed entry of an order for
relief with respect to the Borrower or any of its Material Subsidiaries under
the federal Bankruptcy Code, (A) the obligation of each Bank to make Loans shall
automatically be terminated and (B) all amounts due under this Agreement and all
such interest and all such amounts shall automatically and without further
notice become and be due and payable. In addition to the remedies set forth
above, the Administrative Agent may exercise any other remedies provided for by
this Agreement in accordance with the terms hereof or any other remedies
provided by applicable law.
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ARTICLE XII
THE ARRANGERS AND THE FACILITY AGENTS
12.1. AUTHORIZATION AND ACTION. Each Bank hereby appoints and
authorizes each Facility Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to such Facility
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement, no Facility Agent shall be required to exercise any discretion or
take any action, but each shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Banks (or when expressly required hereunder, all
the Banks), and such instructions shall be binding upon all Banks; PROVIDED,
HOWEVER, that no Facility Agent shall be required to take any action that
exposes such Facility Agent to personal liability or that is contrary to this
Agreement or applicable law. Each Facility Agent agrees to give to each Bank
prompt notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
12.2. ARRANGERS' AND FACILITY AGENTS' RELIANCE, ETC. Neither
the Arrangers, the Facility Agents, their Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement,
except for its own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, (i) any Arrangers or Facility Agent may consult
with legal counsel (including counsel to the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) neither the Arrangers nor
the Facility Agents make any warranty or representation to any Bank and none of
them shall be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement; (iii) neither the
Arrangers nor the Facility Agents shall have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement on the part of the Borrower or to inspect the Properties
(including the books and records) of the Borrower; (iv) neither the Arrangers
nor the Facility Agents shall be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (v)
neither the Arrangers nor the Facility Agents shall incur liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, cable or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
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12.3. CITIBANK, N.A., THE BANK OF NEW YORK, BANK OF AMERICA
NT&SA, CHASE SECURITIES INC., ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK AND
THEIR AFFILIATES. With respect to the Commitments of Citibank, N.A., The Bank of
New York, Bank of America NT&SA, Chase Securities Inc. and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, respectively, and the Loans made by each of them, each of
Citibank, N.A., The Bank of New York, Bank of America NT&SA, Chase Securities
Inc. and ▇▇▇▇▇▇ Guaranty Trust Company of New York shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not an Arranger or Facility Agent, as the case may be; and the
term "Bank" or "Banks" shall, unless otherwise expressly indicated, include each
of Citibank, N.A., The Bank of New York, Bank of America NT&SA, Chase Securities
Inc. and ▇▇▇▇▇▇ Guaranty Trust Company of New York in their individual
capacities. Each of Citibank, N.A., The Bank of New York, Bank of America NT&SA,
Chase Securities Inc. and ▇▇▇▇▇▇ Guaranty Trust Company of New York and their
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank, N.A., The
Bank of New York, Bank of America NT&SA, Chase Securities Inc. and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as the case may be, were not an Arranger or
Facility Agent, as the case may be, and without any duty to account therefor to
the Banks.
12.4. BANK CREDIT DECISION. Each Bank acknowledges that it
has, independently and without reliance upon the Facility Agents, the Arrangers,
or any other Bank, and based on the financial statements referred to in Article
VII and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Facility Agents, the Arrangers, or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
12.5. DETERMINATIONS UNDER SECTIONS 6.1, 6.2 AND 6.3. For
purposes of determining compliance with the conditions specified in Sections
6.1, 6.2 and 6.3, each Bank shall be deemed to have consented to, approved or
accepted, or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Banks unless an officer of the Administrative Agent responsible for the
transactions contemplated by this Agreement shall have received notice from such
Bank prior to the applicable Borrowing specifying its objection thereto (unless
such objection shall have been withdrawn by notice to the Administrative Agent
to that effect or such Bank shall have made available to the Administrative
Agent such Bank's ratable portion of such Borrowing).
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12.6. INDEMNIFICATION. Each Bank agrees to indemnify the
Facility Agents, the Arrangers and their respective Affiliates, and their
respective directors, officers, employees, agents and advisors (to the extent
not reimbursed by the Borrower), ratably according to such Bank's Ratable
Portion of the Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (including, without limitation, fees and disbursements
of legal counsel) of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, any such Person in any way relating to or
arising out of this Agreement or any action taken or omitted by any such Person
under this Agreement; PROVIDED, HOWEVER, that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from any such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse any such Person promptly upon demand
for its ratable share of any out-of-pocket expenses (including fees and
disbursements of one counsel) incurred by such Person in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that such Person is not reimbursed for such expenses by the
Borrower.
12.7. SUCCESSOR FACILITY AGENTS. Any Facility Agent may resign
at any time by giving written notice thereof to the Banks and the Borrower and
may be removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor to such Facility Agent. If no successor to such Facility Agent shall
have been so appointed by the Majority Banks, and shall have accepted such
appointment, within 30 days after retiring Facility Agent's giving of notice of
resignation or the Majority Banks' removal of such retiring Facility Agent, then
such retiring Facility Agent on behalf of the Banks, shall appoint a successor
Facility Agent (which successor Facility Agent shall be a Bank or another
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000). Upon the acceptance of any appointment as a Facility Agent
hereunder by any successor Facility Agent, such successor Facility Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Facility Agent, and such retiring Facility Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Facility Agent's resignation or removal hereunder, the provisions
of this Article XII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Facility Agent.
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ARTICLE XIII
MISCELLANEOUS
13.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Majority Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that, in addition to such approval by the Majority Banks, no amendment,
waiver or consent shall, unless in writing signed by all the Banks in a
particular Tranche hereof, do any of the following: (a) waive any of the
conditions specified in Section 6.1, 6.2 or 6.3 with respect to Loans to be made
under such Tranche; (b) increase the Commitments of such Banks or subject such
Banks to any additional obligations; (c) change the principal of, or decrease
the interest on, any amounts payable hereunder with respect to such Tranche or
reduce the amount of any Commitment Fee payable to such Banks hereunder; (d)
postpone any date fixed for any scheduled payment of any Commitment Fee, or
scheduled payment of principal of, or interest on, any amounts, payable with
respect to the Tranche of such Banks; provided that all the Tranche C Loan Banks
may extend the Tranche C Loan Commitment Termination Date (in one or more
extensions) by (i) a total of 180 days (for all extensions taken together)
without Majority Bank approval, and (ii) more than 180 days only with the
approval of 51% of the aggregate amount of the Tranche A Loan Commitments and
Tranche B Loan Commitments, taken together and voting as a single group,
PROVIDED, FURTHER, HOWEVER, that no amendment, waiver or consent shall modify
the allocations set forth in Section 5.11 unless signed by 51% of the aggregate
amount of the particular Tranche affected by such amendment, waiver or consent
taken together and voting as a single group. In addition, no amendment shall,
unless in writing signed by all the Banks, do any of the following: (a) change
the definition of Majority Banks; (b) amend this Section 13.1; or (c) amend
clause (i) of Section 13.6; and PROVIDED FURTHER, that no amendment, waiver or
consent shall at any time, unless in writing and signed by the Administrative
Agent in addition to the Persons required above to take such action, affect the
rights or duties of the Administrative Agent under this Agreement.
13.2. NOTICES, ETC. Except as otherwise set forth herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopy or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered by hand, if to the
Borrower, at its address at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn:
Treasurer, with a copy to Viacom at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer; if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I; and if to the Administrative Agent,
at its address at ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or his successor; or, as to the Borrower, any Bank or the
Administrative Agent, at such other address as shall be designated by such party
in a
59
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails, delivered to the telegraph company, confirmed by telex
answerback, telecopied with confirmation of receipt, delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, except
that notices and communications to the Administrative Agent pursuant to Article
II, III, IV, V or XIII shall not be effective until received by the
Administrative Agent.
13.3. NO WAIVER; REMEDIES. No failure on the part of any Bank,
the Arrangers or any Facility Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
13.4. COSTS; EXPENSES; INDEMNITIES. (a) The Borrower agrees to
pay on demand all costs and expenses in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the other Loan Documents and the other documents to be delivered
hereunder or thereunder, including, without limitation, the specified reasonable
fees and out-of-pocket expenses of one counsel to the Facility Agents and the
Arrangers with respect thereto and with respect to advising the Facility Agents
and the Arrangers as to their rights and responsibilities under this Agreement,
and all costs and expenses of the Arrangers, the Facility Agents and the Banks
(including, without limitation, reasonable counsel fees and expenses) in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the other Loan Documents and the other
documents to be delivered hereunder and thereunder.
(b) The Borrower agrees to defend, indemnify and hold harmless
each of the Facility Agents, the Arrangers and the Banks and their respective
affiliates and their respective directors, officers, attorneys, agents,
employees, successors and assigns (each, an "Indemnified Person") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, claims, judgments, suits, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, fees and disbursements of
counsel of the Facility Agents, the Arrangers or the Banks) which may be
incurred by or asserted or awarded against any Indemnified Person, in each case
arising in any manner of or in connection with or by reason of this Agreement,
the other Loan Documents, the Commitments or any undertakings in connection
therewith, or the proposed or actual application of the proceeds of the Loans
(all of the foregoing collectively, the "Indemnified Liabilities") and will
reimburse each Indemnified Person on a current basis for all expenses (including
counsel fees as they are incurred by such party) in connection
60
with investigating, preparing or defending any such action, claim or suit,
whether or not in connection with pending or threatened litigation irrespective
of whether such Indemnified Person is designated a party thereto; PROVIDED that
the Borrower shall not have any liability hereunder to any Indemnified Person
with respect to Indemnified Liabilities which are determined by a final and
nonappealable judgment of a court of competent jurisdiction to have arisen
primarily from the gross negligence or willful misconduct of such Indemnified
Person; and PROVIDED FURTHER, that if the Borrower has determined in good faith
that such Indemnified Liabilities were primarily the result of such Indemnified
Person's gross negligence or willful misconduct, it shall not be obligated to
pay such Indemnified Liabilities until a court of competent jurisdiction has
determined whether such Indemnified Person acted with gross negligence or
willful misconduct. If for any reason the foregoing indemnification is
unavailable to an Indemnified Person or insufficient to hold an Indemnified
Person harmless, then the Borrower shall contribute to the amount paid or
payable by such Indemnified Person as a result of any Indemnified Liability in
such proportion as is appropriate to reflect not only the relative benefits
received by the Borrower and each Facility Agent, each Arranger and each Bank,
but also the relative fault of the Borrower and each Facility Agent, each
Arranger and each Bank, as well as any other relevant equitable considerations.
The foregoing indemnity shall be in addition to any rights that any Indemnified
Person may have at common law or otherwise, including, but not limited to, any
right to contribution.
(c) If any Bank receives any payment of principal of, or is
subject to a conversion of, any Eurodollar Rate Loan other than on the last day
of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the maturity of the amounts
due under this Agreement pursuant to Section 11.1 or for any other reason, the
Borrower shall, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Bank any amounts required to compensate such Bank for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment or
conversion, including, without limitation, any loss (excluding loss of the
margin payable in accordance with Section 5.2 on the amount of principal so
paid, or any loss), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund or
maintain such Loan. The foregoing obligations of the Borrower contained in
paragraphs (a), (b) and (c) of this Section 13.4, and the obligations of the
Borrower contained in Sections 5.5(b) and 5.7, shall survive the payment of the
Loans.
13.5. RIGHT OF SET-OFF. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 11.1 to authorize the
Administrative Agent to declare all amounts under this Agreement due and payable
pursuant to the provisions of Section 11.1 or the automatic acceleration of such
amounts pursuant to the proviso to that Section, each Bank is hereby authorized
at any time and from time to time, to the fullest extent
61
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement irrespective of whether or not such Bank shall have made
any demand under this Agreement and although such obligations may be unmatured.
Each Bank agrees promptly to notify the Borrower after any such set-off and
application made by such Bank; PROVIDED, HOWEVER, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Bank under this Section 13.5 are in addition to any other rights and
remedies (including, without limitation, any other rights of set-off) which such
Bank may have.
13.6. BINDING EFFECT. Subject to Article VI hereunder, this
Agreement shall become effective when it shall have been executed by the
Borrower and each of the Facility Agents and when the Administrative Agent shall
have been notified by each of the Banks that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
of the Facility Agents and each of the Banks and their respective successors and
assigns, except that (i) the Borrower shall have no right to assign its rights
or obligations hereunder or any interest herein (and any such purported
assignment shall be void) without the prior consent of the Banks except in
connection with any (x) merger or consolidation permitted under Section 10.2 or
(y) merger, consolidation or sale of assets consented to by the Majority Banks,
and (ii) no Bank may sell, transfer, assign, pledge or grant participations in
any of its Loans or any of its rights or obligations hereunder except in
accordance with Section 13.7 or as expressly required hereunder.
13.7. ASSIGNMENTS AND PARTICIPATIONS; ADDITIONAL BANKS. (a)
Any Bank may, at any time, by notice substantially in the form of Exhibit D
hereto (each, an "Assignment and Acceptance") delivered to the Administrative
Agent for its acceptance and recording, together with a recording fee in the
amount of $2,500, assign all or any part of its rights and obligations and
delegate its duties under this Agreement (A) to any other Bank or any Affiliate
of any Bank which actually controls, is controlled by, or is under common
control with such Bank or to any Federal Reserve Bank (in either case without
limitation as to amount), or (B) with the prior consent of the Administrative
Agent and Borrower (such consent not to be unreasonably withheld), to any other
Person (but if in part, in a minimum amount of $5,000,000 or, if less, the
balance of such Bank's Commitment; PROVIDED, HOWEVER, that unless otherwise
consented to by the Administrative Agent and Borrower (such consent not to be
unreasonably withheld), each assigning Bank must assign an identical percentage
of a Loan and its related Commitment.
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(b) Any Bank may at any time sell or grant participations in
its Commitment, or the obligations owing to or from any Person existing under
this Agreement; PROVIDED, HOWEVER, that (i) as between such Bank and the
Borrower, the existence of such participations shall not give rise to any direct
rights or obligations between the Borrower and the participants; (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations; (iii) the Borrower, the Facility Agents and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement; and (iv) no such sale
or grant of a participation shall, without the consent of the Borrower, require
the Borrower to file a registration statement with the Securities and Exchange
Commission or apply to qualify the Commitments or the Loans under the securities
laws of any state.
(c) If an assignment is made by any Bank in accordance with
the provisions of paragraph (a) above, upon acceptance and recording by the
Administrative Agent, and approval by the Borrower, where applicable, of each
Assignment and Acceptance, (i) the assignee thereunder shall become a party to
this Agreement and the Borrower shall release and discharge the assigning Bank
from its duties, liabilities or obligations under this Agreement to the extent
the same are so assigned and delegated by such Bank, PROVIDED that no such
consent, release or discharge shall have effect until the Borrower shall have
received a fully executed copy of the Assignment and Acceptance relating to such
assignment and (ii) Schedule II shall be deemed amended to give effect to such
assignment. The Borrower agrees that each such disposition will give rise to a
direct obligation of the Borrower to any such assignee.
(d) The Borrower authorizes each Bank to disclose to any
prospective assignee or participant and any assignee or participant any and all
financial information in such Bank's possession concerning the Borrower and this
Agreement; PROVIDED, HOWEVER, that, prior to any such disclosure, the assignee
or participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Bank in accordance with Section 13.10.
(e) Any Bank which sells or grants participations in any Loans
or its Commitment may not grant to the participants the right to vote other than
on amendments, consents, waivers, modifications or other actions which change
the principal amount of, postpone the scheduled maturity of, or decrease the
interest rates applicable to, any Loans under, or increase the amount of, such
Commitment (except with respect to participating Affiliates actually controlled
by, controlling or under common control with, such Bank); PROVIDED, HOWEVER,
that as between the Bank and the Borrower, only the Bank shall be entitled to
cast such votes.
63
(f) No participant in any Bank's rights or obligations shall
be entitled to receive any greater payment under Section 5.5 or 5.7 than such
Bank would have been entitled to receive with respect to the rights
participated, and no participation shall be sold or granted to any Person as to
which the events specified in Section 5.6 have occurred on or before the date of
participation.
(g) The Administrative Agent shall maintain at its address
referred to in Section 13.2 a copy of each Assignment and Acceptance received by
it and a register, containing the terms of each Assignment and Acceptance, for
the recordation of the names and addresses of each Bank and the Commitment of,
and principal amount of the Loans owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Banks and the Facility
Agents may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower, any Bank or any Facility Agent at any reasonable
time and from time to time upon reasonable prior notice.
(h) Notwithstanding anything to the contrary contained herein,
any Bank (a "GRANTING BANK") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Administrative Agent and the Borrower, the option to provide to the Borrower
all or any part of any Borrowing that such Granting Bank would otherwise be
obligated to make to the Borrower pursuant to this Agreement; PROVIDED THAT, (i)
nothing herein shall constitute a commitment by any SPC to make any Borrowing,
and (ii) if SPC elects not to exercise such option or otherwise fails to provide
all or any part of such Borrowing, the Granting Bank shall be obligated to make
such Borrowing pursuant to the terms hereof. The making of a Borrowing by a SPC
hereunder shall utilize the Commitment of the Granting Bank to the same extent,
and as if, such Borrowing were made by such Granting Bank. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Bank), as long as and to the extent that the Granting Bank provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
state thereof. In addition, notwithstanding anything to the contrary contained
in this Section 13.7, any SPC may with notice to, and with the prior written
consent (not to be unreasonably withheld) of, the Borrower and the
Administrative Agent, assign all or a portion of its interests in any Borrowing
to the Granting Bank or to any financial institutions (consented to by the
Borrower and Administrative Agent) providing liquidity and/or credit support to
or for the account of such SPC to support the funding or
64
maintenance of Borrowings. The Granting Bank shall not disclose any confidential
information to the SPC unless the SPC has been made aware of Section 13.11 of
the Agreement and shall have agreed to be bound by the provisions of said
Section 13.11 as if it were a party to this Agreement. This section may not be
amended without the written consent of each Granting Bank, all or any part of
whose advance is being funded by a SPC at the time of such amendment. No SPC,
whether or not such SPC shall have funded any portion of any Borrowing
hereunder, shall be deemed a Bank hereunder for any purpose, including but not
limited to, the granting of any amendment or waiver of any provision of this
Agreement or the other Loan Documents, or the taking of any action pursuant to
this Agreement, and shall not be entitled to direct its Granting Bank with
respect to any such consent, waiver, or action, and its Granting Bank shall be
deemed the Bank hereunder for all such purposes.
13.8. PROMISSORY NOTES. At the request of a Lender in writing
addressed to the Administrative Agent, with a copy to the Borrower, accompanied
by a processing fee of $2,500, the Borrower's obligations to repay any Loans by
a Bank shall be evidenced by one or more notes, in a form customary for large
syndicated commercial loan transactions. Such note shall be in the maximum
aggregate principal amount of the Loans evidenced thereby, or, if less, the
unpaid principal amount thereof at the due date of such Loans and stated to
mature on the applicable Termination Date, and bear interest from its date until
paid in full on the principal amount of the Loans outstanding thereunder payable
at the rates and in the manner provided herein. Transfer of such notes, and the
Loans evidenced thereby, shall be subject to the provisions of Section 13.7.
13.9. GOVERNING LAW; SEVERABILITY. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. WHEREVER POSSIBLE, EACH
PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT
SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
AGREEMENT.
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13.10. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(b) The Borrower irrevocably consents to the service of
process of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage prepaid,
to the Borrower at its address specified for notices in or pursuant to Section
13.2 hereof, such service to become effective 30 days after such mailing.
(c) Nothing contained in this Section 13.9 shall affect the
right of any Arrangers, any Facility Agent or any Bank to serve process in any
other manner permitted by law or commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
(d) Each of the parties hereto waives any right it may have to
trial by jury in any proceeding arising out of this Agreement.
13.11. CONFIDENTIALITY. Each Bank, each Arranger and each
Facility Agent agrees to keep confidential information obtained by it pursuant
hereto (or otherwise obtained from the Borrower in connection with this
Agreement) confidential in accordance with such Person's customary practices and
agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (i) to such Person's employees, counsel, representatives
and agents who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who in each case agree to be bound by the provisions of this sentence, (ii)
to the extent that disclosure by such Person is required, or to the extent that
such Person has been advised by counsel that disclosure is required, in order to
comply with any law, regulation or judicial order or requested or required by
bank regulators or auditors or other Governmental Authority, (iii) to assignees
or participants of the Loans or Commitments
66
or potential assignees or participants of the Loans or Commitments who in each
case agree in writing to be bound by the provisions of this sentence or (iv) to
the extent that such information has otherwise been disclosed or made public
other than by such Person, or such Person's employees, counsel, representatives
or agents, in violation of this Section 13.10.
13.12. SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
13.13. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed as of the date first above written.
BLOCKBUSTER INC., as Borrower
By: /s/ ▇▇▇▇▇ ▇. Zine
----------------------------------
Name: ▇▇▇▇▇ ▇. Zine
Title: Executive Vice President
and Chief Financial Officer
THE BANK OF NEW YORK, as the
Documentation Agent and a Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A., as the Administrative Agent
and a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Attorney-in-fact
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA NT&SA, as a Syndication
Agent and a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
CHASE MANHATTAN BANK, as a Syndication
Agent and a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Authorized Signatory
BANK ONE, TEXAS, N.A., as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
BANKBOSTON, N.A., as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
CREDIT SUISSE FIRST BOSTON, as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
FIRST UNION NATIONAL BANK, as a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., as
a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Authorized Signatory
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
SOCIETE GENERALE, NEW YORK BRANCH,
as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA, as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
THE MITSUBISHI TRUST AND BANKING
CORPORATION, as a Bank
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE I
Commitments
-----------------------------------------------------------------------------------------
INVESTOR Tranche A Tranche B Tranche C Total
Loan Commitments Loan Commitments Loan Commitments
---------------------- --------------------- ---------------------- --------------------
ARRANGERS
Citibank, N.A. $ 102,307,692.31 $ 87,692,307.69 $ 600,000,000.00 $ 790,000,000.00
Bank of America NT&SA $ 53,846,153.85 $ 46,153,846.15 $ $ 100,000,000.00
The Bank of New York $ 53,846,153.85 $ 46,153,846.15 $ $ 100,000,000.00
Chase Manhattan Bank $ 53,846,153.85 $ 46,153,846.15 $ $ 100,000,000.00
▇▇▇▇▇▇ Guaranty Trust Company $ 53,846,153.85 $ 46,153,846.15 $ $ 100,000,000.00
of New York
MANAGING AGENT
The Bank of Nova Scotia $ 40, 384,615.38 $ 34,615,384.62 $ $ -75,000,000.00
Bank One, Texas, N.A. $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
BankBoston, N.A. $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
Bear ▇▇▇▇▇▇▇ Corporate Lending $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
Inc.
Credit Suisse First Boston $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
First Union National Bank $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
Industrial Bank of Japan, Limited $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
Societe Generale, New York Branch $ 40,384,615.38 $ 34,615,384.62 $ $ 75,000,000.00
PARTICIPANTS
Royal Bank of Canada $ 13, 461,538.46 $ 11,538,461.54 $ $ 25,000,000.00
The Mitsubishi Trust and Banking $ 5,384,615.38 $ 4,615,384.62 $ $ 10,000,000.00
Corporation
---------------------- --------------------- ---------------------- --------------------
TOTAL $ 700,000,000.00 $ 600,000,000.00 $ 600,000,000.00 $1,900,000,000.00
---------------------- --------------------- ---------------------- --------------------
SCHEDULE 10.6
EXISTING BLOCKBUSTER FACILITIES
WITH MATURITIES LESS THAN ONE YEAR
AND/OR AVAILABLE TO SUBSIDIARIES
US$ EQUIVALENT
--------------
A) Blockbuster UK/Ireland/Europe $ 65,000,000
B) Blockbuster Canada $ 35,000,000
-------------
Total $ 100,000,000
EXHIBIT A
FORM OF NOTICE OF BORROWING
[DATE]
Citibank, N.A.
as Administrative Agent for
the Banks parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, dated as of June 21,
1999, among Blockbuster Inc., as Borrower ("Blockbuster"), the Banks named
therein, as Banks, Cititbank, N.A., as the Administrative agent; The Bank of New
York, as the Documentation agent, Bank America NT&SA, a Syndication Agent, and
Chase Securities Inc., as a Syndication Agent (such agreement, as it may be
amended, supplemented or otherwise modified being the "Credit Agreement", the
terms defined therein being used herein as therein defined), and hereby gives
you notice, irrevocably, pursuant to Section [2.2], [3.2] and [4.2] of the
Credit Agreement that the undersigned hereby requests a [Tranche A Loan
Borrowing] [Tranche B Loan Borrowing] [Tranche C Loan Borrowing] under the
Credit Agreement, and in that connection sets forth below the information
relating to such proposed [Tranche A] [Tranche B] [Tranche C] Borrowing as
required by Sections [2.2(a)], [3.2(a)] and [4.2(a)], of the Credit Agreement:
(i) The Business Day of the proposed [Tranche A] [Tranche B] [Tranche C]
Loan Borrowing is .
A-1
(ii) The aggregate amount of the Borrowing constituting the Proposed
[Tranche A] [Tranche B] [Tranche C] Loan Borrowing is $ principal amount of
[Eurodollar] [Prime] Rate Loans [having an Interest Period of ].
Very truly yours,
BLOCKBUSTER INC.
By:
-----------------------------------
Name:
Title:
A-2
EXHIBIT B
FORM OF CONVERSION OR CONTINUATION
----------------------------------
[DATE]
Citibank, N.A.
as Administrative Agent for
the Banks parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, dated as of June 21,
1999, among Blockbuster Inc., as Borrower ("Blockbuster"), the Banks named
therein, as Banks, Cititbank, N.A., as the Administrative agent, The Bank of New
York, as the Documentation agent, Bank America NT&SA, a Syndication Agent, and
Chase Securities Inc., as a Syndication Agent (such agreement, as it may be
amended, supplemented or otherwise modified being the "Credit Agreement", the
terms defined therein being used herein as therein defined), this notice
represents the Borrower's request pursuant to Section 5.1 of the Credit
Agreement to [convert] [continue] $ in principal amount of presently outstanding
Loans bearing interest at a rate based on the [Base Rate] [Eurodollar Rate
having a Interest Period of and ending on ], to Loans bearing interest rate at a
rate based on the [Base Rate], [Eurodollar Rate], on [ ] [the last day of such
Interest Period]. [The Interest Period for such amounts requested to be
converted to bear interest at a rate based on the Eurodollar Rate is month(s).]
B-1
The undersigned certifies that, before and after giving effect to the
foregoing, no Event of Default ▇▇▇▇ occurred and is continuing or would result
therefrom.
BLOCKBUSTER INC.
By:
-----------------------------------
Name:
Title:
B-2
EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE
---------------------------------
Reference is made to the Credit Agreement, dated as of June ___, 1999 (as
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT"),
among Blockbuster Inc., and the Banks, Documentation Agent, Administrative
Agent, and Syndication Agents. Capitalized terms defined in the Credit Agreement
are used herein with the same meanings.
Section 1. ASSIGNMENT AND ACCEPTANCE. The Assignor identified in ANNEX 1
hereto (the "ASSIGNOR") hereby sells and assigns, without recourse, to the
Assignee identified in ANNEX 1 hereto (the "ASSIGNEE"), and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Effective Date set forth in ANNEX 1 hereto, the interests set forth on Annex 1
hereto (the "ASSIGNED INTEREST") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth on
ANNEX 1 in the Commitment of the Assignor on such Effective Date and the Loans
owing to the Assignor which are outstanding on the Effective Date. From and
after the Effective Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
Section 2. OTHER DOCUMENTATION. This Assignment and Acceptance is being
delivered to the Administrative Agent together with a properly completed
Administrative Questionnaire, attached as ANNEX 2 hereto, if the Assignee is not
already a Bank under the Credit Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR. The Assignor
(i) represents and warrants that, as of the date hereof, it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is held by it free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, or any other
instrument or document executed or furnished pursuant thereto;
and (iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto.
D-1
Section 4. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE. The Assignee
(a) confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements delivered on or before the date hereof
pursuant to Sections 7.4 and 9.8 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (b) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under the Loan Documents; (c) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Bank; and (e) if the Assignee is organized
under the laws of a jurisdiction outside the United States, confirms to the
Borrower (and is providing to the Administrative Agent and the Borrower Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service) that (i) the Assignee is entitled to
benefits under an income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under the Credit Agreement or
(ii) that the income receivable pursuant to the Credit Agreement is effectively
connected with the conduct of a trade or business in the United States.
SECTION 5. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES, HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
ANNEX 1 hereto.
D-2
ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment (may not be fewer than two Business Days after the
Date of Assignment):
Principal Amount Assigned Percentage Assigned of Loan
------------------------- ---------------------------
Commitment Assigned: $ %
Tranche A Loans: $ Percentage assigned (set forth, to at
least 8 decimals, as percentage of the
aggregate Loans and the aggregate
Commitments, as applicable of all
Banks thereunder).
Tranche B Loans: $
Tranche C Loans: $
The terms set forth above
are hereby agreed to: Consent given:
_________________, as Assignor ______________, as Administrative Agent
By:__________________________ By:______________________
Name: Name:
Title: Title:
_________________, as Assignee BLOCKBUSTER INC.
By:__________________________ By:__________________________
Name: Name:
Title: Title:
ANNEX 2 TO ASSIGNMENT AND ACCEPTANCE
LEGAL NAME OF ASSIGNEE TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION
DOMESTIC LENDING OFFICE:
Institution Name:
Street Address:
City, State, Country, Zip Code:
EURODOLLAR LENDING OFFICE:
Institution Name:
Street Address:
City, State, Country, Zip Code:
CONTACTS/NOTIFICATION METHODS
CREDIT CONTACTS:
Primary Contact:
Street Address:
City, State, Country, Zip Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Country, Zip Code:
Phone Number:
FAX Number:
ADMINISTRATIVE CONTACTS -- BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
Street Address:
City, State, Country, Zip Code:
Phone Number:
FAX Number:
PAYMENT INSTRUCTIONS
Name of bank where funds are to be transferred:
Routing Transit/ABA number of bank where funds are to be transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
TAX WITHHOLDING
Non Resident Alien ________ Y* ________ N
* Form 4224 Enclosed
Tax ID Number ___________________________
MAILINGS
Please specify who should receive financial information:
Name:
Street Address:
City, State, Country, Zip Code: